Offshoring

From dKosopedia

Category: Trade

Offshoring is the process of corporations moving jobs from their home country (in most of these discussions, the United States) to another country, typically with far lower wages.

Offshoring in Manufacturing

This was first recognized primarily in manufacturing where goods once produced in American factories are now produced in Mexico and China, to use to prominent examples. Workers in American factories often were paid as much per hour as Mexican factory workers are paid in a day. Likewise, factory workers in Mexico after often paid as much per hour as Chinese factory workers are paid in a day.

Moreover, workers in countries that receive offshored jobs often lack the labor union and labor law protections found in the United States and other developed countries, and the environmental standards maintained by offshore manufacturing operations are often war weaker than in the United States. For example, many foreign factory workers are children, something not allowed in the United States.

Foreign factories have been decried as "sweatshops", after similiar operations in England and the 19th century United States which have since been banned in those countries and the rest of the developed world.

Most progressives are skeptical of the economic benefits of offshoring, justified largely through the economic "law of comparative advantage", because the rules that apply to production in different parts of the world are very different. This has led to opposition to economic globalism, expressed through protests at World Trade Organization meetings and other international trade institutions. Instead, they favor "fair trade" which calls for treating foreign workers by standards which are more in line with developed world norms.

This movement is motivated by both concerns of developed world workers who want to save their jobs, and of undeveloped world workers who are concerned about exploitation in countries with immature regulatory systems.

Virtual Offshoring and White Collar Jobs

Until the advent of the internet and cheap telecommunications, offshoring was primarily a concern of manual, blue collar workers. But, in the information economy, just about any information related work that doesn't have to be done in person can be exported, tarrif free to low wage nations with skilled English speakers. Many phone bank jobs, often in customer service, have been moved to [[India], which has a large population of educated English speakers, but wages far lower than those found in the more developed nations. Likewise, many jobs in the computer industry have been exported to countries like India and Russia which have low wages, but significant numbers of computer professionals.

External Links

Top White House aide defends outsourcing -The Business Times (Singapore)