Topic 9: The Myth of Outsourcing's Effect

To define outsourcing is basically when a company or firm decided to use or import the resources and labors from other countries instead of their own country, and that mainly happens because of cheaper labors and cheaper price to produce goods and services in general. For instance, the society today, we can barely find cheap toys or clothes that are not made in China, meaning the majority of the firms or companies are manufacturing and producing their products in China instead of their own countries, and mainly this occurs due to the cheaper labor in China. But if we try and go back to track what is the main cause of outsourcing, it would be “globalization“. Without globalization, countries do not even interact with other countries; without interaction how are they even going to trade or even do tradeoffs. Some may criticize outsourcing saying that the opportunity cost of outsourcing is the relatively high unemployment rate in their own country, because no all jobs that should be done by those workers in their home country are know transferring to get done by other countries with cheaper labor. But the thing is, outsourcing is very efficient especially with lowering prices. Once the price of goods or services decrease, it significantly increases the demand of goods and services.