going to White Collar Jobs

Trade restrictions and globalization

Trade restrictions have decreased recently thanks to globalization. In consequence, relationships between businesses have improved as a result of their sharing of manufacturing methods, organizational structures, and employment practices. As a result of globalization, several multinational firms have created more offshore centers in developing nations. Support for information technology, bookkeeping, and data entry are a few of the activities outsourced. Outsourcing, however, presents advantages as well as difficulties to the parties involved because of the complexity involved (Dash, 2005). In order to respond to the quick changes in the global environment, companies must grasp the elements that may affect outsourcing activities. The paper will discuss the benefits and disadvantages of outsourcing for both the developing country and the mother country of the organization.

Benefits

Outsourcing creates job opportunities in the developing countries (Dash, 2005). For instance, outsourcing in Mexico has offered employment opportunities to millions of trained laborers. In turn, Mexico’s national income has increased, and the employees’ living standards have also improved. Besides, increased employment leads to increase in demand for goods and services because of increased expenditure. Also, the companies often supply cheap goods and services in the host countries. Therefore, consumers can save some money by purchasing the cheaper goods or services and thus have some extra money to spend on additional goods (Jackson, 2013). Moreover, the employees in the developing countries acquire new skills and knowledge by working in the offshore companies, which in turn they use to start their businesses.

Losers

The people who lose in this process are the producers that supply the goods or services to the company which outsources. Besides, employees in the developed nations lose their jobs as the companies reduce workers due to cheap labor from the developing countries.

Impact on developed nations

Developed nations like the US suffer from the loss of skilled and high paying jobs to developing nations because of various reasons. For example, people who receive high salaries contribute towards the economy by paying taxes. When they relocate to the developing countries, the companies do not refill the vacancies and therefore increase unemployment. In turn, more people enrol for social programs (Jackson, 2013). Consequently, they bring in less income tax; therefore, increasing closures on housing and low living standards. Besides, the massive brain-drain benefits the developing countries and leaves the host country deficient of skilled labor required to boost productivity.

Addressing the issue

Transferring high-paying white collar jobs is different from transferring blue-collar jobs in that the former involve highly skilled personnel in specific disciplines, while the latter are often semi-skilled. Therefore, the highly skilled individuals transfer their skills to the new country while the people with blue-collar jobs can only provide casual labor (Marvin, 2011). Therefore, the government should create strategies to start in-sourcing the employees working in developing countries to bring back skilled and qualified labor. For instance, they should offer these individuals attractive incentives such as increased salaries, promotions, and career advancement opportunities to entice them to come back to their countries. In turn, the government will increase the number of qualified and skilled workers who will help in improving production.

Conclusion

Globalization has reduced trade barriers; as a result, increasing outsourcing among numerous multinational companies. The developing countries benefit mostly from the increase in employment rates, improved lifestyles, increased demand for goods and services that boost the countries’ economies. However, developed countries lose when employees who have white-collar jobs are outsourced because these activities increase brain-drain and unemployment; thus, reducing income tax. Transferring white-collar jobs is different from transferring blue-collar jobs in that the individuals who have the former are highly qualified and skilled while individuals with blue-collar jobs are semi-skilled.

References

Dash, S. (2005). The Economic Implications of Outsourcing. Institute of Integrated Learning and Management.

Jackson, J. K. (2013). Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data. Congressional Research Service.

Marvin, K. T. (2011). Global Trends in Outsourcing and their Impact. Doctoral dissertation, WORCESTER POLYTECHNIC INSTITUTE.