Course Project Parts 1-3
ITT Technical Institute
GE 273 Microeconomics

How outsourcing affects the US economy and contributes to political stability in developing economies is a matter of great debate. Many people think this practice will have an overall positive effect on the US economy, since it saves money for companies, opens up opportunities for greater entrepreneurship in the US, and leads to more Americans holding higher level jobs. Jobs that companies outsource to save money besides medical and manufacturing include copy writing jobs for publishing companies, administrative jobs, and data entry jobs for insurance companies. Critics suggest hiring foreign workers has an immediate effect on the US economy by stripping many Americans of jobs they would have performed, particularly by semi-skilled or skilled laborers. Further, many argue that giving jobs to workers in less developed countries improves those countries economically and increases trade for US products. It also increases a country’s ability to pay back debts to the US, and may promote better political relationships. Companies economically benefit by selling their products in other countries. This means they can hire more people in the US, lower their prices on products for US consumers.
Comparative advantage and efficiency takes place when countries, individuals, and firms have lower opportunity costs in the production of a good or service with comparison to that of their competitors. This creates more opportunities for employers to have a lesser work load on employee’s and allows a company to focus more on the core competencies of their business. Outsourcing has painful and destabilizing consequences for the hundreds of thousands of workers who find themselves laid off. Their recommendations tend to center on helping these workers find new jobs and adjust to the shifting labor market via