Outsourcing

Outsourcing is "the transfer or delegation to an external service provider the operation and day-to-day management of a business process. The customer receives a service that performs a distinct business function that fits into the customer's overall business operations.[1]

"There are two principal types: 'traditional' outsourcing and 'greenfield' outsourcing.

"In 'traditional' outsourcing, employees of an enterprise cease to perform the same jobs to the enterprise. Rather, tasks are identified that need to be performed, and the employees are normally hired by the service provider. For example, an information technology outsourcing may include a transfer of responsibility for management of data centers and networks (LAN, WAN, and telecommunications). In the field of facilities management, individuals acting as property managers might become employees of a facilities management company.

"In 'greenfield' outsourcing, the enterprise changes its business processes without any hiring of personnel by the service provider. For example, the enterprise might hire a startup company to provide a new service, such as wireless remote computing, that was not previously managed internally."

"Outsourcing came to the forefront as a management tool more than a decade ago in response to a compelling need to make organizations more productive, more competitive and more profitable."[2]

Outsourcing is Good for You

After stonewalling for a year and a half, the U.S. Commerce Department has released a report on the issue of offshore outsourcing of service-sector jobs and high-tech industries. "But the 12-page document represented by the agency as its final report is not what was written by its analysts," writes Richard McCormack of Manufacturing and Technology News (MTN). [3]

"Rather, it was crafted by political appointees at Commerce and at the White House, according to those familiar with it. At an estimated cost of $335,000 -- or $28,000 per page -- the document MTN received from the Commerce Department's Technology Administration contains no original research and forsakes its initial intent of providing a balanced view of outsourcing. ... According to those who have tracked the report's whereabouts, it was completed well before the November 2004 presidential election but was delayed for clearance by the White House and the Republican-controlled Congress due to the controversial nature of the subject." [4]

Related SourceWatch Resources

• Coalition for Economic Growth and American Jobs
• company police agencies
• Competitive Sourcing Initiative
• defense contractors
• DynCorp
• Fair Competition Coalition
• federal contractors
• free trade
• globalization
• illegal immigration
• Jobs Growth in the U.S.
• military-industrial complex
• prison-industrial complex
• privatization
• Private Federal Corporation
• Private Military Corporations
• State of the Union 2004
• U.S. budget deficit
• U.S. economy
• U.S. presidential election, 2004
• U.S. unemployment

External links

News Links

• "Outsourcing Statistics in Perspective", Center for American Progress, March 16, 2004.
• Government Computer News.
• Washington Technology.
• CNN has compiled an alphabetical listing of companies it has "confirmed are Exporting America. These are U.S. companies either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers."

General Information

• Outsourcing Law, Bierce & Kenerson, P.C.
• Outsourcing Summit, February 23-25, 2004, Walt Disney World, Lake Buena Vista, FL. Contact Michael F. Corbett & Associates, Ltd., "Outsourcing Global Resource".

Articles & Commentary

2001

• Judi Hasson, "Bush adviser goes to Lockheed," FCW.com, July 13, 2001: "'No name is more associated with effective government and outsourcing than Stephen Goldsmith's,' said IMS president and chief executive officer John Brophy. 'He has introduced technology into virtually every imaginable government arena ? outsourcing more than 80 government functions.'"

2002

• Troy Skeels, "Outsourcing War," Eat the State, September 25, 2002.

2003

• Brian Behlendorf, "How outsourcing will save the world. The growth of white-collar jobs in developing nations is essential to global peace and prosperity," Salon, July 8, 2003.
• Anthony Bianco, Stephanie Anderson Forest, Stan Crock, and Thomas F. Armistead, "Outsourcing War. An inside look at Brown & Root, the kingpin of America's new military-industrial complex," BusinessWeek, September 15, 2003.
• Jeffrey St. Clair, "US Workers Charge Treason. Outsourcing US Missile Technology to China," CounterPunch, October 25, 2003.

2004

• Robert J. Samuelson, "The Specter of Outsourcing," Washington Post, January 14, 2004.
• "Outsourcing may not always be best answer," Silicon Valley/San Jose BusinessJournal, January 15, 2004: "A new study by a Stanford University Graduate School of Business faculty member says manufacturers should not automatically think that sending their plant operations overseas is the best solution to growing the business."
• Naeem Mohaiemen, "The Dark Side of the Outsourcing Revolution," AlterNet, January 25, 2004.
• Greg Schneider, "Anxious About Outsourcing. States Try to Stop U.S. Firms From Sending High-Tech Work Overseas," Washington Post, January 31, 2004.
• Daniel H. Pink, "The New Face of the Silicon Age. How India became the capital of the computing revolution," Wired News, February 2004.
• Ali Davis, "Outsourcing rejection. I screened job applicants over the phone for a company I didn't work for. My favorite part: Arrogant middle managers who suddenly began to grovel when they realized I wasn't the receptionist," Salon, February 4, 2004.
• Saritha Rai, "Indians Fearing Repercussions of U.S. Technology Outsourcing," New York Times, February 9, 2004.
• Cecil E. Bohanon and T. Norman Van Cott, "Perils of Outsourcing," Ludwig von Mises Institute, February 11, 2004.
• Chidanand Rajghatta, "Bush blesses outsourcing to India," The Times of India, February 11, 2004.
• "Dennis Hastert Faults Report on Exporting Jobs," New York Times, February 12, 2004.
• "Bush adviser backs off pro-outsourcing comment," CNN, February 12, 2004: "Gregory Mankiw, chairman of the president's Council of Economic Advisers, said Monday in a White House briefing on Bush's 2004 Economic Report that outsourcing of jobs by U.S. companies is something that is 'probably a plus' for the economy in the long run. ... 'Now, to get back to the question about outsourcing, I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run,' Mankiw said. ... Speaking in Harrisburg, Pennsylvania, President George W. Bush tried Thursday to quell the potential controversy simmering over Mankiw's statements. ... 'People are looking for work because jobs have gone overseas and we need to act in this country. We need to act to make sure there are more jobs at home,' Bush said as he touted his '21st century' job plan in a state that has lost 85,000 jobs since Bush took office. ... Bush did not mention Mankiw by name, but two Bush advisers conceded privately the president's intention was to distance himself from Mankiw's remarks."
• Sue Kirchoff, "Jobs take center stage in Wisconsin primary," USA Today, February 16, 2004: "MANITOWOC (Wisconsin) This city got its name from the Chippewa word for 'place of the good spirit.' To mayor Kevin Crawford, it now signifies something else. ... 'You know what Manitowoc means? It means, 'We're all getting laid off,' ' says Crawford, blaming the local 9.2 percent unemployment rate on trade policies that he says encourage companies to wander the world for cheap labor and land."
• Neal St. Anthony, "Outsourcing hits legal services," Star Tribune, February 16, 2004: "First it was the apparel workers -- the working class -- who saw their $10-an-hour jobs go overseas. ... More recently, the United States has started to export to India the $35,000-a-year customer-service center jobs from the likes of American Express Financial Advisors and $50,000 technical-support positions from IBM and ADC Telecommunications to India and elsewhere where educated, English-speaking workers are hired for a tenth of the cost to communicate with U.S. customers by phone and over the Internet. ... Now, six-figure lawyers and legal support staffs are starting to sweat."
• Op-Ed: "Political Timing, Outsourced," New York Times, February 17, 2004.
• "More U.S. Jobs Shipped Overseas," CBS News, March 15, 2004: "The economy is not producing nearly enough jobs to replace the ones that are being lost to a cheaper workforce overseas."
• Paul Craig Roberts, "Outsourcing Innovation...And Everything Else. America's Has-Been Economy," CounterPunch, March 16, 2004.
• Sharon Otterman, "TRADE: Outsourcing Jobs", Council on Foreign Relations, February 20, 2004.

2005

• Thomas L. Friedman, "It's a Flat World, After All," New York Times, April 3, 2005.
• Richard McCormack, "Political Appointees Re-Write Commerce Department Report On Offshore Outsourcing; Original Analysis Is Missing From Final Version", Manufacturing and Technology News, October 12, 2005.
• Indrajit Basu, "Outsourcing: India's golden egg starts to crack," Asia Times, December 16, 2005.

2006

• Paul Krugman, Op-Ed: "Outsourcer in Chief," New York Times (GuerillaWomenTN Blogspot), December 10, 2006; also posted by jurassicpork at Welcome to Pottersville Blog.

2008

• Robert E. Scott, "The China trade toll: Widespread wage suppression, 2 million jobs lost in the U.S.," Economic Policy Institute, July 28, 2008: "The growth of U.S. trade with China since China entered the World Trade Organization in 2001 has had a devastating effect on U.S. workers and the domestic economy. Between 2001 and 2007 2.3 million jobs were lost or displaced, including 366,000 in 2007 alone. New demographic research shows that, even when re-employed in non-traded industries, the 2.3 million workers displaced by the increase in China trade deficits in this period have lost an average $8,146 per worker/year. In 2007, these losses totalled $19.4 billion."

• Kim Geiger, "Trade, outsourcing and tariffs top '08 concerns," MSNBC.com, August 4, 2008: "In a poll conducted last month by the Pew Research Center, 80 percent of respondents said that the global economy has influence over the U.S. economy. Of those who thought it did, 63 percent said it was negative. The political tide seems to be running against those who want to lower trade barriers. "

2010

• Mike Elk, "Obama Solution to Stop Outsourcing - Stop Counting Jobs Outsourced (No, Seriously!)," Huffington Post, March 3, 2010: "Since 2000, the U.S. has lost 5.5 million manufacturing jobs, with 2.1 million of those jobs being lost in the last two years alone. Since 2001, over 42,400 factories have closed in the U.S., and another 90,000 are considered at severe risk of closing. The last time so few were employed in manufacturing was in 1941, before World War II spending pulled that sector out of its Great Depression slump. Numbers like these make me want to cry. So President Obama has come up with a big and bold solution to deal with the problem. He's going to shut down the federal office that counts how many jobs are being shipped overseas. It's like ignoring a bully that picks on you in grade school. If we just ignore companies like Whirlpool that take stimulus money and ship jobs overseas--maybe they will stop doing it."