Essay on Job transference

Talking about current economic recession in U.S. most of experts outline high rate of unemployment as one of the core items to prove long lasting economic failure. However, it seems that financial crisis is not the only reason to generate lack of jobs today. There is absolutely reasonable idea that the impact of job transference and outsourcing is not less significant. In this paper, we’ll try to take a look at blue collar job transfer from U.S to developing countries.

To begin with, it is important to emphasize that blue collar jobs involves mostly manufacturing activities that are determined as low or no skilled. In fact, it rather popular delusion that blue collar jobs are not so influenced by contemporary globalization trend as white collar are. For example, such idea is presented by Kevin Murray in his web posted article “Blue Collar Jobs Can’t be Moved Offshore”:

“Blue color jobs can’t be outsourced to Bangalore or any other location anywhere in the world. The work involved in blue collar jobs is done on site with human hands and as marvelous as the accomplishments of technology have been, the ability to replace that involvement probably won’t come in our lifetimes, or even many lifetimes to come” (Murray).

Seemingly, this approach can’t be called objective as it represent some kind of local market view, not including some macroeconomic rates. Talking about the economy of U.S.A. in general, it worth being mentioned that the trend towards transfer of jobs began with blue collar outsourcing. The experts state that during the last two decades U.S. labor market lost 150 000 blue collar jobs in general annually. Mainly, they are outsourced by China, Mexico, India etc. The biggest share of these jobs accounted for huge brand U.S. manufacturers that replaced their factories form U.S.A. to markets of cheaper manual labor. As for indicative facts, we may remind names of GM, Dell, Ibm, Sara Lee/Hanes and Maytag, which already moved pretty impressive part of their businesses to Central America with more that 1 500 000 transferred blue collar jobs (Reh). Talking about premises of this trend, there is only one to be noted – globalization. Robert Morely defines globalization as the increased mobility of goods, services, labor, technology and capital throughout the world; outsourcing is the performance of a production activity in another country that was previously done by a domestic firm or plant (Morely). In other words, contemporary business is able to get the accesses to more beneficial producing markets. This ability is generated by the delay of legal restrictions that were broken last few years. Talking about some particular samples, NAFTA (North America Free Trade Agreement) and CAFTA (Central America Free trade Agreement) are the most significant ones. Largely due to these international agreements Mexico became world leader in auto manufacturing today. So, what are the eventual results of globalization to blue collar jobs transfer from U.S.? Next quantities are best to show them:

India – 400 outsourced U.S. blue collar jobs;
China – 500 outsourced U.S. blue collar jobs;
Central America – 700 outsourced U.S. blue collar jobs;
Mexico – 1 200 000 outsourced U.S. blue collar jobs (Reh).

Answering the question what make American employers to seek for abroad producing, economical benefits to business are obvious to be called those. Thinking about what economic benefits are obtained by U.S. business with jobs transference, there is still no need in comprehensive and deep discussion. The main and the most significant attractor is much cheaper labor. To get the general imagination about profits obtained by U.S. business with outsourcing, the words of Richard Benson are extremely useful:

“The Chinese will work seven days a week for us $0.50 to us$1 an hour with no benefits for social security, health care, vacations, a pension or worker safety. … In America, the going wage would be 10 to 20 times higher including all benefits” (Morely).

A simple calculation will show that the volume of labor reducing costs is pretty impressive. Talking about the transfer of jobs, we may not state that this problem addresses the blue collar category only. Really, the start of appropriate trend was made with blue collar jobs, however, contemporary white collar labor market of developing countries became much more competitive then it was a decade before. Considering the differences of labor costs in U.S. and abroad states, one more point to be worried about white color jobs transference is incredible progress of higher education in such countries as China and India, with annual 650 and 300 English speaking high qualified graduators respectively. In comparison, U.S. graduate only 70, 000 white collar specialists a year (Morely). Conclusions are obvious. Outsourcing is not just a problem of a blue collar labor market anymore. This trend became the real threat to all American people, with their aim to get financially rewarded careers.

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