Gov 2 Chapter 26 Outsourcing- “ I just lost my job to a call center in India!!!

Definition  When a company contracts with another company to provide services that otherwise would be done in- house  Ex- Call centers, customer service, payroll and benefits-handled by outside companies

Why outsourcing?  1. Saves $$$$  2. Less costs in salaries and benefits  3. Focus on bigger issues –markets opened and Research and Development  4. Uses less technology  5. Allows companies to expand  6. Promotes free trade among nations

Why not?  1. Eliminates communication between companies and clients  2. Dissatisfaction with companies  3. Time wasted on looking for new outsource partners.  4. Leads to a lack of control over business  5. Costs and unreliable employees

Pro’s  1. Creates jobs in developing nations  2. Raises standard of living in dev. Nations  3. Expands growth and educational opportunities  4. Expands technolgy

Con’s  1. Dead end jobs with no future  2. Little or no upward mobility  3. Drain on work force

Solutions- see article also.  1. Government promote free trade around globe  2. Tax breaks for businesses here.  3. Gov’t investment in markets around the world  4.Isolationism/high tariffs  5. Protectionism-taxes on companies who outsource  6. High taxes on foreign companies.