Outsourcing trend

But with the developments of new jobs are still the lingering calls for opposition to these measures. In the arguments put forth by Paul Samuelson, there is the reality that jobs are really lost, some of them permanently (Olian, 2004). University of California-Santa Cruz economics professor Dr. Lori Kletzer, Ph. D. , researched on the area of the manufacturing sector in the period between 1979 and 1999 (Olian, 2004). In her research, Kltezer (2004) found out that about a third of the workers displaced by the outsourcing trend did not find new employment for three years after getting terminated (Kletzer, 2004).

The other two-thirds that did find new jobs faced wage cuts of up to 15 percent (Olian, 2004). The report by Kletzer (2004) is reinforced by findings that the textile industry alone, one of the sectors taken into consideration by Kletzer (Olian, 2004), as it was born out that it already has lost about 700,000 jobs since 1994 (Sundquist, 2006). Other sectors have been taking some form of decrease in their manpower totals. The United States medical transcription sector is estimated to lose 10 percent of their business to other countries such as India and Pakistan (Sundquist, 2006).

Some industry analysts put the figure at bout 30 percent (Sundquist, 2006). Goldman Sachs, whose executive Kenneth Courtis spoke highly of outsourcing (Friedman), approximates that about 1 million jobs in the manufacturing sector have been shipped abroad since 2001 (Sundquist, 2006). In another report, Goldman estimates the number of information technology (IT) jobs lost to companies abroad number around 200,00 (Sundquist, 2006).

In his report to the Congress about the issue of outsourcing, President Bush (2004) said that the trend was a phase of the positive transformation that will ultimately meliorate the economy of the United States over a certain time frame, even at the cost of short -term suffering and economic dislocation (Lindsay McLaughlin & Brian Davidson, 2004).

Bush (2004) was supported by his senior economics strategist, Mankiw, who added that outsourcing is a new form of trade (McLaughlin & Davidson, 2004).

But facts that President Bush considers as a positive phase in the history of the United States economy are quite the opposite to some critics (McLaughlin & Davidson, 2004). Since the President took office, the United States has lost 3 million jobs in the manufacturing sector alone (McLaughlin & Davidson, 2004). Local governments face the prospect of losing IT contracts, from $10 billion in 2004, jumping to $23 billion ion 2008 (McLaughlin & Davidson, 2004). The Democrats have unleashed a backlash at the efforts of the President to continue the policy of outsourcing American jobs to foreign countries (CNN, 2004).

Massachusetts Senator John Kerry has criticized the Bush administration of offering little resistance to stop this outflow of jobs (Cook & Nyhan, 2004). In the aftermath of battle over outsourcing, several things remain clear. One, corporate finances and the company stockholders are reaping the benefits of outsourcing (Olian, 2004). Two, prices are considerably lower because of outsourcing (Olian, 2004). But as the Federal Reserve Chairman Ben Bernanke puts it, not everyone benefits from the trend of outsourcing (CNN, 2004).

References

Access My Library. (2008). Professor Kenneth S. Courtis to join Goldman Sachs. Retrieved September 10, 2008, from http://www. accessmylibrary. com/coms2/summary_0286-27407901_ITM Bhagwati, J. (2004). Outsourcing of US jobs: good or bad? http://seattlepi. nwsource. com/business/205207_outsourcedebate27. html Boland, B. , Block, W. (1997). The benefits of outsourcing. The Freeman Volume 47 number 1 http://www. fee. org/publications/the-freeman/article. asp? aid=2855 Bush, G. W. (2004). Outsourcing American jobs.