Originally posted by Charles Hickman:
Employees in the US pay taxes and creating consumptions and investment within the country.
Off-shore outsourcing deprives the country of such economic benefits.
Accordingly, the answer appears to be crystal clear: Hiring workers
in the foreign countries who would not contribute to this country's
employment and economy.
Though it is true that outsourcing might affect US economy upto a certain extent, as Capablanca Kepler already pointed out, it will be only a small percentage.
Besides, economy of nations is far more complex than that. No country in today's world can stay isolated. No country can be completely self-sufficient, so you need to import and export.
If you consider that the paper US uses is mostly made from the forests in third world countries, ecause it is much cheaper and convenient to get it done there, if you have to use forests from US itself, you'd probably think 10 times before using toilet paper. This is how MNCs work, they only know one thing - "value for money" (some put it as exploitation), but that's the smart way. If they can dump their outdated technology in India coz there's a market there, they'll do that. If they can buy cheap raw material and hire cheap labour in India and produce finished goods in US and europe, they'll do that. That't how it works...
Let's look at this in this way - if an american comapny (say Ford) gets its work done from India (or any other cheaper country), they pay amount X-Y instead of X that they would have paid in US. So they save the amount 'Y'. Now that saved amount might result in decreased car price or increased
profit!
Got it?
I can foresee an argument - that 'X' would have stayed in US itself.... But in globalization the money circulates globally and not locally. And this can get into a recursive argument -- likewise would you like if OIL stays only in the middle east countries producing oil? (OPEC stuff)
And if you don't have enough oil (remember it's a limited resoucrce), you won't be probably driving those cars coz OPEC desides not to give oil to other countries. This is not how it works...
India realized that knowledge is indeed its power and the Indian IT sector is giving good value for money to the clients (not only US, but also europe and Japan -- but frankly it is US centric, again mainly due to language problems), so there will be MNCs who will outsource the projects. If one state bans outsourcing, they'll have their registered office in another state and process orders from there!
And like most economic experts are saying, it won't affect your economy much.