The Fallacy of Outsourcing: Reality check, no one is stealing American jobs besides America.

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In a free economy, jobs are not definite and workers are always susceptible to termination for a plethora of reasons. That is just something that comes with the freedom of the free-market. Termination rather brings a transfer of employment, whether it being in the same industry or transfer to another industry. The ability to remain mobile in the labor market is a privilege, not a burden.

People tend to forget the benefits of outsourcing, or rather are never even exposed to the truth of what outsourcing truly means for an economy. The media and government officials alike have painted a picture of what outsourcing is, or what they want us to believe it is. Countless times I hear how “they” are stealing our jobs. I can’t help but to roll my eyes every time I hear this ridiculous accusation. This is a half-truth assumption made by candidates in the running for governmental positions in order to attract voters.

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No one is “stealing” our jobs; rather, there is a shift in demand for a particular job market in the United States. The reason for this is simply because there exists a more efficient way of creating high quality products for a lower cost, which sometimes calls for different means of production, elsewhere.

Manufacturing is only one component of an economy, and sometimes it is just not feasible to continue certain processes in a particular location. Demands change and the supply of resources shift, creating the need for change. A once abundant resource in one location may have been depleted creating the need to move. Outsourcing is the solution to scarcity in many instances.

By imposing barriers to foreign trade and imposing strict regulations on domestic business, government has indeed assisted in the suppression of domestic job creation. Corporate taxes and antitrust laws have only restricted the growth of business, causing disinvestment in the United States economy. With so many restrictions and taxes imposed, resources have become more expensive and the costs of labor have become too high, thus creating incentive to relocate business elsewhere in many instances.

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It is important to understand that economic growth stems from consumption and investment, not just production itself. To highlight this in more detail, economist, John Maynard Keynes, who was infamous for his production theories, once said, “The government should pay people to dig holes in the ground and then fill them up.” People replied, “that’s stupid, why not pay people to build roads and schools” Keynes responded saying, “Fine, pay them to build schools. The point is, it doesn’t matter what they do, as long as the government is creating jobs”.

There is absolutely no economic growth to this ideology. Government “job creation”, as seen in this example, is merely a redistribution of income from taxpayers. There is no economic stimulation being presented, only a transfer of wealth taking place while much of taxpayers’ money has been wasted through senseless and undocumented bureaucratic activity and administration fees.

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In addition, outsourcing has reduced the price of goods, therefore increasing consumption and investment within the United States while being a fundamental source of wealth in a developed economy. People tend to forget that the United States is not the only country to outsource. What about the foreign businesses that have come to the U.S. and have supplied jobs to countless Americans? It looks like the media failed to inform the people of the benefits that come with internal outsourcing.

Have you forgotten companies such as British Royals Royce in Virginia, or Siemens, a German company, manufacturing the North Carolina? Foreign investment in the United States has contributed to nearly $500 billion annually to the economy, supplying hundreds of thousands of jobs to Americans. Do you still think it’s a good idea to restrict international trade? I bet not.

Cover Photo: Transition Voice

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Senior at Florida State University, majoring in Economics with a minor in business, concentrating in Markets and Institutions.

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