Outsourcing: leading to long-term damage to American-held jobs and the American economy

The current trend in outsourcing is likely to continue, potentially
leading to long-term damage to American-held jobs and the American economy.
While standard economic theory holds that outsourcing is good for the U.S.
economy, there are several important and negative implications, of the
current outsourcing trend.The outsourcing trend is thought to contribute
to the jobless recovery, resulting in a relative reduction in jobs, even as
owners of capital benefit from outsourcing.A decrease in consumer
confidence and increased unemployment and retraining costs are also part of
the costs of outsourcing.While the creation of new higher-skilled jobs in
a dynamic economy is often touted as a solution to the woes of outsourcing,
there is a problem inherent in expecting Americans to develop skills needed
for these higher-end jobs in a market where entry- and mid-level jobs have
been outsourced.Nonetheless, the best-case scenario to resolve the
problems of outsourcing likely lies in a future with such a dynamic economy
The driving factors for outsourcing are clear:reduced costs.
Mieszkowski (2004) notes that a computer programmer in India makes $5,880
to $11,000, while an American computer programmer earns between $60,000 and
$80,000 (in U.S dollars).American businesses stand to save significant
Today, estimates of job loss in the United States suggest that in the
last few years between 400,000 to 500,000 information-technology-processing
jobs have been outsourced.While this represents a relatively small
portion of the U.S. labor force of about 130 million workers (Tyson),
concerns over the loss of highly-skilled jobs and predictions that the
outsourcing trend will continue to grow have made outsourcing an important
The wave of outsourcing is likely to continue, making the potential
impact of outsourcing on the United States an issue that is unlikely to go

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