Offshoring Paper Essay
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This article talks about a trend that started as far back as the 1980’s when companies began sending many jobs abroad mainly because of cheap labor. However, that trend is quickly changing. Companies are discovering that the wage gap is narrowing and many of the disadvantages are now starting to outweigh benefits of sending jobs abroad. One of the points mentioned in the article is that wages in china have risen 10-20% in the last 10 years, whereas wages in America and Europe have remained about the same.
Also, another disadvantage of send production abroad is that shipping can be very expensive. In recent years shipping costs have gotten higher such that the cost of producing elsewhere and shipping to the US is no longer as cheap as it used to be. The time factor is also a big issue. Many times transit takes as long as six weeks which makes it hard for companies to fulfill their orders in a timely manner.
In conclusion, the article makes a note that a lot of companies are now rethinking their decision about going offshore. Opinion
Most of the companies went offshore to save money, and I can see where they are coming from after all the whole goal of having a business is to make profits however in my opinion many of the companies did not take the time to properly analyze the other costs involved in moving jobs offshore. Many also forgot to consider how it will affect the quality of their service when it comes to shipping time and sometimes the quality of the product. I am very happy that many jobs are coming back and I think the government needs to do more to encourage the companies.
They should offer tax reductions where necessary so that America will be able to compete in the global market. I also like the point the article makes, that just because companies are tending towards reducing offshoring does not mean they will be less global, infact distributing their activities more evenly around the globe will make most companies more efficient.