Offshoring
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Offshoring is the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Offshoring can be seen in the context of either production offshoring or services offshoring.
The economic logic is to reduce costs, sometimes called labor arbitrage, to improve corporate profitability. Jobs are added in the destination country providing the goods or services (generally a lower-cost labor country), but are subtracted in the higher-cost labor country. The increased safety net costs of the unemployed may be absorbed by the government (taxpayers) in the high-cost country or by the company doing the offshoring.[1]
Contents
Controversy
Notwithstanding the claims of neo-liberal economists, the empirical results of offshoring as opposed to the theoretical results are:[2][3][4][5][6][7][8][9][10][11][12][13]
- Declining US GDP
- Declining US tax base with increasing municipal, state and federal budget deficits
- Declining US consumer income and subsequent market decline
- Stagnation of US wages
- Declining career opportunities and upward mobility
- Worsening income distribution with a declining working and middle class
- Increasing trade deficits
- Loss of innovation
- Depreciation of the US dollar, a potential US national security issue
- Increasing safety net costs furthering federal and state budget deficits
- Increasing technology transfer to developing countries
Articles and resources
Related SourceWatch articles
References
- ↑ http://en.wikipedia.org/wiki/Offshoring
- ↑ Josh Bivens, "Truth and consequences of offshoring", Economic Policy Institute, August 1, 2005
- ↑ Paul Craig Roberts, "A Nobel Economist Says Globalism Is Costly For Americans", OpEdNews, September 31, 2011.
- ↑ Dr. Alan S. Blinder, "How Many U.S. Jobs Might Be Offshorable?, CEPS working paper no. 142 (PDF)", Princeton University, March 2007.
- ↑ Paul Craig Roberts, "America R.I.P.", Institute for Political Economy, October 16, 2012.
- ↑ Statistical Abstract of the United States "Table 1308. U.S. Exports and General Imports by Selected SITC Commodity Groups: 2000 to 2010 (PDF)", US Census Bureau, 2012.
- ↑ Paul Craig Roberts, "When Truth Is Suppressed Countries Die ", Institute for Political Economy, March 14, 2013.
- ↑ Richard A. McCormack, "MIT: America's Manufacturing Sector Has Lost The Ability To Turn Innovative Products Into Volume Production", Manufacturing & Technology News, March 5, 2013.
- ↑ "Committee on Science and Technology U.S. House of Representatives, Full Committee Hearing - The Globalization of R&D and Innovation", June 12, 2007
- ↑ "Prof. Alan S. Blinder Testimony to the Committee on Science and Technology, U.S. House of Representatives (PDF)", June 12, 2007
- ↑ "Ralph E. Gomory Testimony to the Committee on Science and Technology, U.S. House of Representatives (PDF)", June 12, 2007
- ↑ "Committee on Science and Technology U.S. House of Representatives, Subcommittee on Investigation and Oversight Hearing - American Decline or Renewal? - Globalizing Jobs and Technology", May 22, 2008
- ↑ "Ralph E. Gomory Testimony to the Committee on Science and Technology - Subcommittee on Investigations and Oversight, U.S. House of Representatives (PDF)", May 22, 2008
External resources
- Economic Policy Institute: Trade and Globalization
- Public Citizen - Globalization & Trade
- Alan S. Blinder Bio
- Ralph E. Gomory Bio
- Ralph E. Gomory, "Role of the Corporation - article series", Huffington Post, June 2007 - October 2013.
- Ralph E. Gomory, "Role of the Corporation - article series (PDF)", Alternative site, June 2007 - October 2013.
- Ralph E. Gomory Website
- Wikipedia: Paul Craig Roberts
- Uwe E. Reinhardt Bio
External articles
- Kimberly Blanton, "An honest, disturbing look at outsourcing", Boston Globe, July 10, 2005.
- William Greider, "A Challenger to the Church of Free Trade", Alternet, April 22, 2007.
- Alan S. Blinder, "Free Trade's Great, but Offshoring Rattles Me", Washington Post, May 6, 2007.
- Harold Meyerson, "Building a Better Capitalism", Washington Post, March 12, 2009.
- Jack Rasmus, "The Real Deficit Culprits: Offshoring and Corporate Tax Evasion", In These Times, April 21, 2011.
- Lori Montgomery, "Anti-outsourcing bill fails in Senate", Washington Post, September 29, 2010.
- Josh Boak, "The CEO got a huge raise. You didn't. Here's why.", Miami Herald, September 29, 2010.
- David Markiewicz, "Sides disagree on benefits of outsourcing jobs", Atlanta Journal-Constitution, September 29, 2010.
- Uwe E. Reinhardt, "How Convincing Is the Case for Free Trade?", Economix', February 18, 2011.
- John Nichols, "Bankrupting Democracy in Detroit", The Nation, July 31, 2013.
