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Introduction: Outsourcing has affected the local personnel as well as national economy.
Bottom Line: In today’s highly globalized economy, multinational firms operate in a world marketplace that increasingly makes national borders meaningless and irrelevant, as firms capitalize on hyper-efficient global supply chains that add enormous value, and ultimately result in lower costs and higher quality for the goods that consumers buy here and around the world.
In the recent Trump-era discussions on US manufacturing, the outsourcing of production and jobs overseas, and the supposed “theft” of our jobs by Mexico, China and Japan, we lose sight of another big part of the global economy: the America by the 6,100 US-based affiliates of foreign multinational companies that operate here and employ millions of our workers.
At the same time, the world wide cost competition cannot be compensated by the individuals.
Therefore, compensating measures should be taken from the government to the industries that are outsourcing their jobs and transferring their businesses outside U. A for cheap cost of doing business and high profits.
Here are some key statistics on jobs insourced to the U. that highlight some of the significant economic benefits to the U. economy from the thousands of foreign-based firms that outsource jobs and production the US has a significant and positive impact on our economy, and yet this huge economic stimulus gets almost no attention.
All we ever hear about from Team Trump is the jobs that are allegedly being “stolen” from us by China, Japan, Europe and Mexico.In addition, those global companies serve retail markets in hundreds of countries around the globe.Just like it makes economic and business sense for thousands of foreign companies to outsource jobs and production foreign countries, perhaps also because overseas markets now represent more than 50% of retail sales for many US-based companies like Apple (63% of 2016 sales were in foreign markets), Procter and Gamble (58% sales were overseas), GE (62% foreign sales) and Pfizer (56% overseas sales).We’ve heard a lot of criticism over the last several years, especially from President Trump and many of his economic advisers and supporters, about US firms outsourcing factory jobs overseas, along with accusations that countries like Mexico, China, and Japan are “stealing US jobs” (see more than 20,000 Google search results for “Trump” “stealing jobs”).Further, Trump warned after he was elected that his administration would punish US companies seeking to move operations and jobs overseas with “consequences.” What we don’t hear very much about from Team Trump are the jobs that are “insourced” into every US state by foreign companies, even though those insourced jobs totaled more than 7.1 million Americans and represented 5.6% of all private sector US jobs in 2016 based on new preliminary data released this week by the Bureau of Economic Analysis on “Activities of U. Affiliates of Foreign Multinational Enterprises in 2016.” The map above (thanks to AEI’s Allison Torban for assistance) shows the thousands (and in half of the US states the hundreds of thousands) of insourced jobs in each US state in 2016. subsidiaries of global companies have operations in the state, and those companies insourced 209,000 jobs (6% of total private sector employment) in 2014, including 131,000 factory jobs in Michigan.Just like it makes economic and business sense for thousands of foreign companies to outsource jobs and production foreign countries, perhaps also because overseas markets now represent more than 50% of retails sales for many U.Second reason is availability of highly skilled work force in large amount. While the underdeveloped counties like India has dragged enormously the business of software development, customer services, and assistance from U. Therefore, in fact, the factor of efficiency and cost effective solution has manipulated the businesses of U. Why India is doing outsourced work on the cheap rates?Actually these two reasons are the major factors of substantial outsourcing. Nowadays and in near future, outsourcing will be the major challenge for U. Because, their currency is much weak against the dollar, therefore a handsome conversion of exchange gain is actually the reason behind cheap rates. Availability of skilled work force: Skillful and quality labor is fundamental need for outsourcing.But, the lucrative offers from the employers outside have dragged them to do job for them.However, it boosted the economic activity of their native country as well.