3.18.2004

Answers on Outsourcing: A finance professor argues against placing blind faith in outsourcing. CNNMoney.com (3/12)
"The argument that we will create new jobs in highly paying fields simply is not true. We have no comparative advantage or superiority in innovation. To assume that we are inherently more creative than our foreign competitors is both arrogant and naive. We are currently empowering our competition with the resources to innovate equally as well as we."

[snip]

A company that decides to move its production overseas cuts its costs in many ways, including the following:

1. Extremely low wage rates

2. The circumvention or avoidance of organized labor

3. No Social Security or Medicare benefit payments

4. No federal or state unemployment tax

5. No health benefits for workers

6. No child labor laws

7. No OSHA or EPA costs or restrictions

8. No worker retirement benefits or pension costs

Besides cutting costs, there are other benefits to exporting jobs, including the following:

1. Tax incentives provided by our government

2. Incentives from foreign governments

3. The creation of new international markets for the company's products (which ultimately empowers the company to turn a deaf ear to this country's problems and influence)

4. The continued benefits of our legal system and the freedoms that we provide

Still think Offshoring/outsourcing is a good thing?

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