Changes

== Economics ==

== Economics ==

The main reasons for offshoring are minimizing costs<ref>Wadhwa, Vivek; Gereffi, Gary; Rissing, Ben and Ong, Ryan. "Where the Engineers Are." Issues in Science and Technology, Spring 2007. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1015843</ref> and maximizing revenue (by increasing productivity<ref>"Outsourcing Innovation." March 21, 2005. Bloomberg Businessweek. http://www.businessweek.com/magazine/content/05_12/b3925601.htm</ref>), both of which are consistent with the behavior of a competitive firm in a [[free market]]. A more specific reason for offshoring may be the relatively high corporate taxes in the U.S. compared to other developed nations<ref>Tamny, John. "Hillary Clinton's Backwards 'Progressive Vision'." June 8, 2007. National Review Online. http://www.nationalreview.com/articles/221224/hillary-clintons-backwards-progressive-vision/john-tamny</ref><ref>Atkins, Chris and Hodge, Scott A. "U.S. Lagging Behind OECD Corporate Tax Trends." May 5, 2006. The Tax Foundation. http://www.taxfoundation.org/news/show/1466.html</ref>. Also, some think offshoring is being used as a way to break up unions<ref>"Outsourcing and the Unions." August 6, 2007. http://www.globalenvision.org/library/3/1712</ref>.

The main reasons for offshoring are minimizing costs<ref>Wadhwa, Vivek; Gereffi, Gary; Rissing, Ben and Ong, Ryan. "Where the Engineers Are." Issues in Science and Technology, Spring 2007. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1015843</ref> and maximizing revenue (by increasing productivity<ref>"Outsourcing Innovation." March 21, 2005. Bloomberg Businessweek. http://www.businessweek.com/magazine/content/05_12/b3925601.htm</ref>), both of which are consistent with the behavior of a competitive firm in a [[free market]]. A more specific reason for offshoring may be the relatively high corporate taxes in the U.S. compared to other developed nations.<ref>Tamny, John. "Hillary Clinton's Backwards 'Progressive Vision'." June 8, 2007. National Review Online. http://www.nationalreview.com/articles/221224/hillary-clintons-backwards-progressive-vision/john-tamny</ref><ref>Atkins, Chris and Hodge, Scott A. "U.S. Lagging Behind OECD Corporate Tax Trends." May 5, 2006. The Tax Foundation. http://www.taxfoundation.org/news/show/1466.html</ref> Also, some think offshoring is being used as a way to break up unions.<ref>"Outsourcing and the Unions." August 6, 2007. http://www.globalenvision.org/library/3/1712</ref>

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 ==

[http://www.bcs.org/server.php?show=ConWebDoc.3960 BCS Site on Off shoring opportunities]

* [http://www.bcs.org/server.php?show=ConWebDoc.3960 BCS Site on Off shoring opportunities]

 

* [http://www.offshoringtimes.com/Pages/2006/offshore_news504.html Pro Off-shoring site read with reservations]

[http://www.offshoringtimes.com/Pages/2006/offshore_news504.html Pro Off-shoring site read with reservations]

* [http://www.outsourcemagazine.co.uk/index.php?page=news-analysis Analysis of a trend of reversing off shoring]

 

[http://www.outsourcemagazine.co.uk/index.php?page=news-analysis Analysis of a trend of reversing off shoring]

== References ==

== References ==

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[[category:employment]]

[[Category:Employment]]