Paper Example on Labor Outsourcing

Introdcution

Labor outsourcing refers to a situation when the government of the United States hires foreign workers to execute labor activities instead of American citizens. The first part of this paper identified labor outsourcing as a problem and how it affects the American economy. The second part of this paper recognized the solution to the problem of labor outsourcing through the establishment of a government body to regulate the operations of companies and individuals involved. This paper identifies the disadvantages of setting up a government body to monitor labor outsourcing and seeks to get answers to the problem. The article will include relevant visuals to help to illustrate the possible solutions and disadvantages of labor outsourcing.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

One of the disadvantages of establishing a government body to regulate outsourcing labor is that the agency will face the challenge of handling increased unemployment in the United States. In the U. S., organizations hire many overseas workforces to help with indigenous promotion, acquaintances, and language (Schniederjans, Schniederjans & Schniederjans, 2015). There is an assumption that the unemployed in this environment have the skills needed for these positions and the body may find it hard to find a balance. The American citizens, on the other hand, would not be eager to receive the low salaries rewarded to the imported workers. American regulars will be required to pay upper fees to increase the required revenue to fund these outsourced laborers.

In his book, Potrafke (2013) suggests that setting up a regulatory body will also increase more taxes on the American Citizens. At the moment, American citizens are grappling with waning sales and high tax revenues. In as much as setting the body will provide employment opportunities for those people, who will run it, the agency will require funds to run. It means that the national budget will be increased to accommodate this and other new bodies. It means that the individual taxes will have to rise to enable the government to achieve these objectives.

Also, the established institution may not be in a position to have metrics in place to prove that the government loses resources through outsourcing. Complications from poorly perceived bonds might arise and generate cost intensifications that exceed the cost of local services. The setting up of the agency can erode accountability and transparency (Potrafke, 2013). As a result of this, the government can plunge itself into debts. Loans and grants from international donors run most of these agencies. The solution for this is imposing laws and policies to restrict outsourcing.

Formulating laws and policies would make the companies in the United States to be less competitive. The pressure to engage in outsourcing may lead companies to move their operations, including their headquarters to other places. As a result, they will not be in a position to compete with higher costs and this situation may force them out of business.

Figure 1: Outsourcing and Cost Increase

According to Hasan and Jandoc (2013), many industries and businesses engage in outsourcing simply because outsourcings increases cost savings. It is one of the advantages of implementing the concept of outsourcing in the economies. In most cases, companies outsource to a vendor who specializes explicitly in a given function. Such vendors perform the task more efficiently than companies could do it, by virtue of transaction volume. Despite cost savings, there is a high chance of companies experiencing poor quality control, decreased loyalty and loss of strategic alignment.

Conclusion

In conclusion, this entire project managed to look at the challenge of organizations outsourcing employment opportunities to foreign nations that lack fair labor regulations. The task managed to identify a solution to the problems created by job outsourcing by local organizations to other companies with no employees' unions or government labor regulations is the United States through establishing a body that regulates the operations of companies and individuals involved. The paper has also managed to look into the advantages and disadvantages of this proposed solution.

References

Hasan, R., & Jandoc, K. (2013). Labor Regulations and Firm Size Distribution in Indian Manufacturing. Reforms and economic transformation in India, 15-48.

Potrafke, N. (2013). Globalization and labor market institutions: International empirical evidence. Journal of Comparative Economics, 41(3), 829-842.

Schniederjans, M. J., Schniederjans, A. M., & Schniederjans, D. G. (2015). Outsourcing and insourcing in an international context. Routledge