Offshoring Creates More U.S. Jobs Than It Kills Research Paper

Offshoring Creates More U.S. Jobs Than It Kills - Research Paper Example In an event that a firm relocates its relatively inefficient production parts abroad, where they can be more cheaply produced, it can be able to expand its output through the stages that it has comparative advantage. As a product, the average productivity of the remaining employees increases due to the change in the workforce composition. In addition, structural changes that boost the remaining workers’ productivity are also likely. These benefits emerge due to offshoring service or material inputs because of the access to new varieties of input (McCarthy 70). Offshoring of businesses abroad by United States firms enhances the likelihood of more benefits that can lead to job creation locally. Offshoring service inputs such as information and computing services from other local firms is more likely to enhance the prospects of job creation in the country. The impacts of material and service offshoring on productivity translate into job creation locally (Wei and Amiti 4). This is because offshoring could lead to higher labor demand due to scale effects. Due to higher productivity, lower prices will be reduced and therefore enhancing competitiveness of the United States companies. The effect of this outcome is that US firms will be able to expand and create more jobs abroad and more importantly locally due to the rise in demand of their goods (Wei and Amiti 4). High productivity companies are more likely to engage in global production strategies that could help reverse the jobs lost locally. Offshoring tends to boost productivity and reduce costs, thus prompting firms to expand domestic hiring to offset the lost jobs to overseas workers. Several studies have established that offshoring has no impact on native... The above discussion clearly supports the argument that offshoring creates more jobs in the United States rather than killing job creation. It points to the reality that while offshoring may be a painful endeavor particularly in the short run, it is a necessary occurrence for long-term benefits. As has been noted, offshoring helps to create jobs through various aspects such as enhanced productivity, reduced cost of production and boosting national economy among other ways. This report makes a conclusion that the realities of globalization and other developments around the world inform the need for American companies to engage in offshoring as a means of not only remaining competitive, but also of improving the United States overall economy. American companies, like other companies in the world, have to adjust to new realities in the world. They should, on one hand support real global competition, and on the other hand, support local workers and national companies. Offshoring provides this unique opportunity for these companies to achieve this goal. Offshoring prompts American firms to do broad adjustments in attitudes and knowledge regarding changes in the global economy in order to reach the right balance of policies that promote the ideal long-term global competition, and adopts near term measures that counter policies that threaten creation of jobs domestically. Strategies adopted by American firms should protect domestic workers, but at the same ti me ensure that it boost national economy in order to increase job opportunities among the national population (Heineman para16). This will also be important in enabling the United States workers to engage and pursue higher-level jobs.