Analysis Of Economic Affect Towards Outsourcing

1984 words - 8 pages

Throughout history hundreds of jobs have been outsourced to other countries for the benefit of cheap labor. American outsourcing has been blamed for the constant lack of American jobs causing a controversy between the labor force and businesses that benefit from outsourcing. In the introduction of, Does Outsourcing Harm America?, outsourcing is defined as a “business practice in which a company hires service providers, usually located outside of the country, to do work that the company believes can be performed more efficiently and less expensively by these outside contractors” (7). Although many people believe that outsourcing is a recent practice in business, this is not true. Outsourcing ...view middle of the document...

Forever 21 for example started manufacturing their apparal here in the US, but when the workers complained of the sweatshop conditions Forever 21 changed the production locations to Asia. Outsourcing provides the company with lower labor costs, which gives the company the ability to lower their product’s prices. Melanie Hicken posted an article online in “Business Insider” which claims Forever 21’s ability to still make a considerable profit while sell $10 jeans is due to their rapid production with cheaper labor. Similarly, Target and Sears provide their costumers with affordable designer outfits, which is available because of the cheap labor they are provided with. Although outsourcing clothing production is a great benefit to the companies, many US citizens do not agree with outsourcing, because they believe that it creates unemployment. Unemployment in the US often fluctuates drastically, and many US citizens blame the instability of unemployment to companies outsourcing hundreds of jobs at a time. When the American employee’s of Forever 21 complained of working under sweatshop like conditions Forever 21 began looking for production elsewhere. US workers are not accustomed to working under certain conditions and often end their employment willingly, but other countries are accustomed of demanding working conditions and are eager to do the work. Forever 21 is not the only company to test its benefits with outsourcing, Apple has begun outsourcing as well.
Apple’s former CEO Steve Jobs was once so proud to declare that the iPhone and all Apple products were made in the USA, but as the demand for production increased, manufacturers were unable to keep up with the high demand. In the article “How the U.S. Lost Out on iPhone Work” written by Charles Duhigg and Keith Bradsher, the authors discuss how Apple made the difficult decision to begin outsourcing. A former executive talked about how Steve Jobs decided to redesign the glass screen for the iPhone that were due to debut in just a few weeks. Apple then decided that American manufacturing plants could not produce the necessary amount of iPhone screens by the date of the intended release, so they reached out to a Chinese factory. According to the executive, “A Forman immediately roused 8,000 workers insider the company’s dormitories. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. The speed and flexibility is breathtaking, there’s no American plant that can match that.” The former executive is right, there is no American plant that would work under those conditions. Companies would not be able to rely on American plants to produce that many iPhones is such a short time, therefore they rely elsewhere to fulfill their needs. Although outsourcing seems like a major benefit that all companies should be doing, there...

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