How Outsourcing Jobs Affects the U.S. Economy

American companies send IT jobs to India and China because the skills are similar while the wages are much lower. A company only has to pay an entry-level IT worker $7,000 a year in China and $8,400 in India. Companies in Silicon Valley outsource tech jobs by offering H-1 visas to foreign-born workers.  More

In the past 20 years, many call centers have been outsourced to India and the Philippines. That's because the workers there speak English. However, that trend is changing. Unlike technology outsourcing, there is a much smaller discrepancy between call center workers in the U.S. and emerging markets. Thanks to the recession, wages in India are catching up to those in the United States. Average call center workers only make 15% more than their counterparts in India. As a result, some of these jobs are coming back. More

Human resources outsourcing reduces costs by pooling thousands of businesses. This lowers the price of health benefit plans, retirement plans, workers’ compensation insurance, and legal expertise. Human resource outsourcing particularly benefits small businesses by offering a wider range of benefits. Surprisingly, the recession may cause some human resource outsourcing firms to hire American workers. More

President Reagan envisioned NAFTA to help North America compete against the European Union. Unfortunately, it also sent at least 500,000 manufacturing jobs to Mexico. Hardest hit were California, New York, Michigan and Texas.  More

Mexico is now the seventh largest auto manufacturer in the world. But did that growth come at the expense of U.S. auto workers? Or is something else the real reason? Like 44 free trade agreements, perhaps? More

India has three qualities that attract American companies. First, the labor force already speaks English. Second, its universities are among the highest-ranked in the world. Third, its legal system is similar to the United States, since both are rooted in the British system. More

China is the world's largest exporter. One reason is that a lot of U.S. companies manufacture there. The raw materials are shipped over, and the final goods are shipped back. One reason is that companies must manufacture in China before selling products to its 1.37 billion people. Perhaps the United States should do the same thing.

China does a lot of manufacturing for foreign businesses, including U.S. companies. The raw materials are shipped to China, where factory workers build the final products and ship them back to the U.S. In this way, a lot of China's so-called "exports" are really for American companies.

One-quarter of American workers make less than $10 per hour, or are living in poverty. Meanwhile, the top 1% of workers earned more in income than the bottom 40% of workers. This was in 2005, when the economy was still booming. Outsourcing is just one reason. Technology, globalization and a passion for "low prices" above all else are others. Find out why income inequality has dramatically risen in the last 20 years. More

Is globalization the real reason jobs have been outsourced? Will protectionism create jobs for Americans? According to the authors of this book, the answer is no. Instead, they point to research that shows that technology is the real culprit. Workers in many manufacturing industries have been replaced by robots. To compete, these workers must be retrained to operate the robots. Another point the authors make is that innovations in technology are what actually allowed U.S. companies to move call centers to India. If technology is the culprit, it is also the answer. It's made the U.S. more competitive as a nation. Education, rather than protectionism, is the best way to both take advantage of technology and create jobs for U.S. workers. More

The freelance economy means that companies are laying off full-time, often older, workers and replacing them with part-timers, temp help and freelance workers. Here's how to find jobs in the freelance economy. More