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Advice and Perspectives from HR Leaders

Outsourcing is said to enable the participating companies to reduce the cost of manufacturing without compromising on the quality. This has enabled the United States’ consumers to enjoy goods and services manufactured by foreign countries at a lower cost. Outsourcing of some services is said to enhance development of the sectors aligned to these services. For example it is viewed that outsourcing of health care services and jobs helps to save and reduce the rising cost of health and medical care.

This has a positive impact on the economy as money that is saved could be used to carry out some other development projects. Outsourcing has contributed to the development of free trade agreements. Free trade enables a country to identify, focus and specialize in some other areas of production that are unique and will give it competitive advantage over the other countries in the market. This enhances job specialization and increases the exports of the country which eventually improves the living standards of the citizens hence a positive effect on the economy of the country (Economist Newspaper Ltd. , 1882, p. 82).

Outsourcing has led to the creation of trade blocks which are free trade markets. An example is the North

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American Free Trade Agreement (NAFTA). This has several advantages to the economy of the United States. NAFTA is considered to be the largest free trade area in the world linking more than 426 million people in a single market. It is also said to generate the highest GDP amongst all trade blocks (Laing & Rahn, 1983, p. 80). It has enabled volume of trade to grow amongst its partners.

The United States has been able to increase its manufacturing output through this trade block. This has resulted to income gains and tax cuts for the families in the United States. This in turn the economy of the United States to grow(Burkholder et al. , 2003, 100). The trade deficits that exist as a result of outsourcing agreements are not healthy for the growth of the economy. An example of this situation is one that exists between the United States and China. The United States buys so much of China products while China imports only a small percentage of United States products.

This is not healthy as the country ends up importing so much at the expense of its home products. This could kill the home industries as they have a small market to take their products to. Death of home industries will have drastic effects on the economy. Outsourcing has increased the differences between the rich people and the poor. This is because the rich save on cost of production as it is cheaper to produce abroad than it is in the United States. They then bring these products to the United States market and make a lot of profits (Burkholder et al. , 2003, 100).

The poor people who usually are the workers in these industries lose their jobs when the plant is shipped to another country. Due to desperation they take up other jobs that pay lower as their job bargaining power is lowered. This reduces their income hence making them poorer. The growing economic margin between the rich and the poor is not good for the economy as it usually slows down growth. Word Count: 1827 Works Cited Burkholder, C. , Edwards, J. & Sartain, L. (2003). On staffing: Advice and Perspectives from HR Leaders.

John Wiley and Sons, p. 100. Economist Intelligence Unit (Great Britain). (1982). Quarterly Economic Review of Malaysia, Brunei. Economist Intelligence Unit Ltd, p. 29. Economist Newspaper Ltd. , (1882). The Economist : Item notes: v. 373, nos. 8395-8399. University of California. p. 82 Fernandez, R. (2000). America’s Banquet of Cultures: Harnessing Ethnicity, Race, and Immigration in the Twenty-first century. Greenwood Publishing Group, p. 189. Hale, J. (2005). Outsourcing Training and Development: Factors for Success. John Wiley and Sons, pp. 165 – 170

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