Out of Control Policy Blog

Offshore Outsourcing

Reported by The Economic Times.

According to Robert Reich, former Labour Secretary, as US based companies paid workers in India, China and the Philippines almost USD 10 billion last year for services that can be performed more cheaply by them than Americans, the job crisis in US should be blamed on changing technology and not on outsourcing.

According to Reich most job losses over the last three years have not been due to American jobs 'moving' elsewhere.

Reich pointed out that job losses go well beyond the factory floor, with digitization, high speed data networks and improved global bandwidth, a lot of back office work can now be done more cheaply abroad.

Reich said, "America 's long term problem, is not too few jobs but the widening income gap between personal service workers and symbolic analysts, the long term solution is to help spur upward mobility by getting more Americans a good education, including access to college. Rather than fret about 'losing jobs' to others, we ought to be fretting about the growing number of our young people who are losing their footing in the emerging economy".


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