a. Who benefits from outsourcing skilled white collar jobs to developing nations? Who are the losers? The developing nations which the skilled white collar jobs that will be outsource from, it create employment in that developing country. Secondly, the company which outsourced the jobs from developing too will stand to gain from lower cost in terms of cheaper labor cost, hence give the company more competitive advantage in global market.
There will be a loss of employment in the native country of the company which it resides. The white collar workers whom are being employed by those companies at a very high cost will lose their jobs when the companies start to outsource white collar jobs from developing countries due to cheaper labor cost. b. Will developed nations like the United States suffer from the loss of high skilled and high paying jobs to countries like India and China?
Certainly and initially developed nations like the United States will suffer from the loss of high skilled and high paying jobs to countries as unemployment will increase. However, when costs are lowered, these companies will have a more competitive advantage globally. Revenues and profits increased, and the company will have more resources to expand hence, as company grows, jobs will be created. Jobs that are not outsourced will also increase thus creating new employment opportunity in developed nations like United States. c.
Is there a difference between transferring high paying white collar jobs, such as computer programming and accounting, and low paying blue collar jobs to developing nations? If so, what is the difference, and should the government do anything to stop the flow of white collar jobs out of the country to countries like India? There is an obvious difference between the two, outsourcing blue collar jobs to developing countries is more on transferring of capital and labor intensive industries from a high wage area to a lower wage area in order to reduce production cost.
Of course, there will a loss of jobs in the high wage area and more job opportunity in the lower wage areas, however goods exported from the lower wage area will be much cheaper, and overall benefit the consumers not only in the high wage areas but also globally, making goods cheaper and more accessible to more people. As these developing countries moving towards industrialization, these countries will invest in hi tech machinery to facilitate their mass production to improve productivity and efficiency.
And usually these hi-tech machinery are sourced from companies in the developed nations, hence these companies would experience an increase order for these machineries from abroad. Jobs in high tech sector would increase due to surge in demand for their hi-tech goods. In addition to that, the company that outsource, will find their labor cost lowered, and profit and revenues increased, thus more resources can be channel into R&D which these companies would still station their R&D dept in their native country.