Impact+of+Outsourcing

 Outsourcin g What impact does outsourcing have on: 1- local economies (and examples)? 2-corporations?

1a. When outsourcing, local economies, where the business use to be, usually exprience an increase in their unemployment rate. This is because when the business moves elsewhere, the employees cannot always be able to move with the company and are forced to be layed off. Also, the local economy usually exeriences an increase in gross tax rate because these former employees are not always able to find work soon, so the governments tax dollars are given to the unemployed to stabilize the local and national economy. If there are enough unemployed, federal funding may be cut to companies and research. Thus, the local economies may experience a downfall in progress/growth. Then again, while the former employees don't do well, the company does well. This can help the local economy because by saving money via outsourcing, the business can then cut the price of the product back home. This means that the product will be more accessible to others looking for cheaper products, and that the people will have more money to buy other things, thus stimulating multiple businesses. __Info from__: [], and []. 1b. On the other hand, the local economies, where the business moves to, usually experiences a decrease in unemployment and, thus, an increase in employment. This is because the new company usually lacks employees at first and needs to hire new ones. And the easiest ne employees to hire are local ones. These locals may also be favorable to the company because they may have useful skills the company needs. Because the employment rate increases, it also will stimulate the economy because now people have money to spend and enjoy new products. Many examples can be found in China's economy where many companies have outsourced. "The first half of 2009, China's service outsourcing revenues reached 3.3 billion U.S. dollars, an increase of 43%"([]) An increase of 43% has really made a difference in the Chinese economy. __Info from__: []

2. Outsourcing almost always benefits corporations. I mean, isn't that why they outsource in the first place? Yes. They outsource to beneift themselves. When companies outsource, they do it to make an even greater profit. Outsourcing increases their profit in many different ways. One way it increases their profit is through employment. Alot of times companies outsource so they can employ new people for cheaper wages. This is especially true for companies that outsource to China. Because China is ran by a socialist like government, the people have lower, but more equal wages. Thus, the corporation that outsourced saves money by paying their employees less. It's a little cruel for the employees, but the corporations are happy. Although, recently wages have increased in the outsourced companies because some companies are experiencing a shortage in labor since there are so many companies in China in need of labor. Another reason corporations benefit from outsourcing is because companies may be able to complete new projects quicker. This is because where the company has outsourced to, the new employees may be more skillful and be able to train easier. This makes production go along quicker and thus the product will be sold money. In other words, the company is now making money quicker and therfore is growing quicker. One other reason corporations benefit from outsourcing is because they may have better access to needed resources. When corporations outsource, sometimes they place their new companies near easy to access resources. This makes shipping costs cheaper and also keeps the resource fresh which is important for products like food. __Info from__: [], and [].