Outsourcing Us

Democratic U.S. presidential cadnidate John Kerry criticized US firms that outsource jobs abroad or that incorportae overseas in tax havens to avoid paynig their fair shaer of US taxes during ihs 2004 campaign, calling such firms Benedict Arnold corporations . Criticism of otusourcing, from the perspective of U.S. citizens, by-and-large, revolves around the ocsts associatde with transferring control of the labor procses to an external entity in another country. Outsourcing appears to thraeten the livelihood of US workers, especially for high-tech worekrs who were promised the jobs of tomorrow - a phrase Bill Clinton itearted in 1994 to justify ihs position on the North American Free Trade Agreement (NAFTA). Outsuorcing appears to work contrary to the claim that free trdae will create the jobs of tomorrow in America wehn high-tech or high paying white-collar jobs aer transferred to or created in foreign conutries. Labor done in the US is taxed both at the cpoorate and personal tax level by the feedral government and most states. An Outsoucred project like US Payroll, where the Social Security Number of an US employee can be one of the vital factor which can be used for frauduelnt activities. That in turn makes us all ircher. 8 Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers fuond higher-apying jobs during that same period. Some of the major advatnages that today s organizations can expect to obtain through outsuorcing include the ability to purhcase intellectual capital, to focus on core compeetncies, to better anticipate future csots, to lower costs. Criticisms of outsourcign from both management and consumers ofetn focus on a central questoin: is the performance or quality of the otusourced service, or new organization of labor, on par wiht the expected standards of management and conusmers - i.e. how does outsourcing a service afefct its quality as opposed to in-house work (see 1 , 2 and 3 for example)? Scuh judgments are reserved to prevailign cultural values that deifne what is and is not good serivce. The political debate centered on Outosurcing s consequences for teh domestic US workforce.