Changes

Although some have observed that offshored/outsourced workers are not always as productive as the workers they replace<ref>Preston, Julia. "U.S. Farmers Go Where Workers Are: Mexico." September 4, 2007. The New York Times. http://www.nytimes.com/2007/09/04/world/americas/04iht-export.4.7380436.html</ref>, if this is the case, the reduction in labor costs must outweigh the loss of [[productivity]], otherwise a [[capitalist]]ic firm would not take this action. Reducing costs by offshoring jobs increases firms' [[profits]], and this increases economic growth according to the [[trickle down theory]], for the same reason tax cuts do. On the other hand, offshoring causes economic hardships for the workers whose jobs are displaced, especially minimally skilled labor jobs<ref>"How Outsourcing Affects the U.S. Economy." http://www.dirjournal.com/business-journal/how-outsourcing-affects-the-us-economy/</ref>. It is debatable whether or not these negative effects outweigh the positive economic effects. In cases where the net economic benefit is positive, it can be thought of as [[creative destruction]], which is a necessary occurrence as [[technology]] advances in a free market economy. Indeed, it is technology (communication, transportation, etc.) that often makes it possible for offshoring to occur.

Although some have observed that offshored/outsourced workers are not always as productive as the workers they replace<ref>Preston, Julia. "U.S. Farmers Go Where Workers Are: Mexico." September 4, 2007. The New York Times. http://www.nytimes.com/2007/09/04/world/americas/04iht-export.4.7380436.html</ref>, if this is the case, the reduction in labor costs must outweigh the loss of [[productivity]], otherwise a [[capitalist]]ic firm would not take this action. Reducing costs by offshoring jobs increases firms' [[profits]], and this increases economic growth according to the [[trickle down theory]], for the same reason tax cuts do. On the other hand, offshoring causes economic hardships for the workers whose jobs are displaced, especially minimally skilled labor jobs<ref>"How Outsourcing Affects the U.S. Economy." http://www.dirjournal.com/business-journal/how-outsourcing-affects-the-us-economy/</ref>. It is debatable whether or not these negative effects outweigh the positive economic effects. In cases where the net economic benefit is positive, it can be thought of as [[creative destruction]], which is a necessary occurrence as [[technology]] advances in a free market economy. Indeed, it is technology (communication, transportation, etc.) that often makes it possible for offshoring to occur.

== External Links ==

== External Links ==

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[[category:employment]]

 

 

[[Category : Threats]]