How has outsourcing jobs to China negatively impacted the US economy?

	How has outsourcing jobs to China negatively impacted the US economy? I'm writing an essay on it and I need three supporting details. I can't really come up with any specific reasons I can use though. Does anyone have any suggestions? Asked By: Vanessa - 10/7/2012

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Too soon to say. It's possible that your premise is wrong. Here's three points to consider... First,we tend to lump together outsourcing to China, and competition from China. Apple outsources the manufacture of the iPhone and iPad to China and other offshore locations, definitely outsourcing. But LG phones (and PCs and other consumer goods) are owned designed and manufactured by this Chinese manufacturer. Some might say, then let just close our borders to Chinese or other foreign companies. But, if we did that, every other country could do the same thing to US products (and there are some countries that would want to do this). That would hurt us far more than China or any other country in the world. Second, the products of outsourcing are bought by Americans. Walmart is often cited as the biggest example of outsourcing. They moved to Chinese manufactures, or forced US suppliers to outsource to China. But Americans chose to buy the cheaper Chinese products, rejecting more expensive American products in Walmart and in other stores. Why did they do this? Because they saw the Chinese product as a better value. As a result of so many cheap Chinese products, every American reaped a huge financial benefit. the US saw a huge drop in the cost of products from the 90's to the present. People from other countries are aware of the incredibly low price of goods in the US, and take vacations here just to shop. The #1 tourist spot in New York City is Bloomingdale's. What is the financial benefit to America for these lower prices and the additional money from foreign tourists. Third, Japan gives us hints about our future relationship with China. Today we are afraid of outsourcing from China. In the 80's we were afraid of manufacturing from Japan. For decades a Japanese car was a better car than an American car... at least according to every American car magazine and show. Americans still buy a lot of Japanese cars, but the are ALL manufactured in the USA, mainly in Kentucky. China is now building car factories in Kentucky. That's the way the outsourcing cycle goes. There are many reasons, including the cost and time needed for shipping, but firms tend (eventually) to build factories where the market is. Outsourcing isn't a simple event. It's a complex series of actions and reactions. How this particular cycle plays out has yet to be determined, but it is way too soon to tell where we are headed. Google some of the worst cars that the US was building in the 70's. When big corporations are not periodically challenged by "outside" forces, they eventually build very bad products in very large numbers. The very existence of America is based on Europeans looking for cheaper sources of products and materials than what they had back at home, a primitive form of outsourcing before there was real manufacturing. The answer to your question depends on how wide a perspective you take. Answered By: C Niccolls - 10/7/2012

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I will copy and paste the URL for your reference. I had a p***l who told me some things about the United States giving all the money to China (in all theaters including the trade relations) but I don't have that p*l any more to ask him for clarifications. (He unfortunately was killed, it's a painful subject, but I loved him.) According to a webpage that I just read from The Council on Foreign Relations, from the United States' point of view (I do not know if this point of view is completely accurate) the problems are in part: REF: http://www.cfr.org/china/uneasy-us-chinese-trade-relationship/p10482 1. Trade Volume -- China produces and exports too many goods thus flooding the entire US market and other countries' markets to buy Chinese goods. 2. Trade Imbalance -- China produces and exports almost exclusively and imports very little into their own country thus it does not open its doors to other countries' products including the US's products. Thus the US has a surplus of goods that it "wastes" because it doesn't have a market. (Gosh - it could maybe hire some Yanks to use them...) 3. Currency Value Exchange Between China and the United States - the Chinese Currency is not of the same value as the US currency or of other countries' currencies thus it devalues the US Currency and other countries' currencies. 4. Protectionism (a very complicated subject to my mind and one that has such political connotations that I am not always sure what it means. Start with the dictionary (such as Websters Merriam for a definition) to avoid some of the didactic propaganda regarding this word. (I sure do miss that p***l I had). I don't understand this concept to try to explain it. 5. Intellectual Property Rights - a less complicated subject - in other words the Chinese do spin offs on ideas (including ones they only hear about and then figure out what it means and make something under their idea of the concept) and then mass produce inferior products according to this website. This further floods the market with Chinese inferior products but people would rather buy a cheap item that they can afford as opposed to something really expensive that they do not understand anyway (such as plates for the dinner table which are already too expensive at the 99 Cents Only Store but cheaper than from Germany). To be more helpful, I am really ANGRY at the United States right now, except that I am also angry at China in this topic but that is because China keeps threatening Taiwan and I think they should stop. But the United States always likes to hire bullies - like China versus Taiwan - just because the US is always meddling and then the US starts bossing China around regarding Taiwan which is why there is any peace between those two countries because the US is a two timing backstabber which should stay out of Asian affairs directly anyway. The US should go home and stay home - sorry - I'm BIASED.) I hope that you can access the URL. I do not know how to post a link. Key words for finding the webpage are Council on Foreign Relations "The Uneasy U.S.-Chinese Trade Relationship" Source(s): The Council on Foreign Affairs Answered By: Amy - 10/8/2012

It increases the number of unemployed Americans which has a big domino effect - people who are unemployed won't spend as much and this means that many other businesses are affected by a fall in demand. A fall in demand may then cause more people to be made redundant and this will decrease consumer spending futher. When there are less people in work and businesses aren't doing as well, the amount that the US Government recieves in taxation will drop and this will cause an increase an increase in government debt. The government will also be forced to decrease spending and this may include making government employees redundant or freezing their wage. It will increase poverty which may also increase crime which will in turn cause policing costs to rise if extra police are needed to tackle it. There are too many things too list, really. Answered By: Deformed Pigeon - 10/7/2012

Sounds like you are coming to a conclusion before looking at the data - always a dangerous thing to do, as well as being intellectually dishonest. In general, it hasn't. http://www.nakedcapitalism.com/2012/09/debunking-the-its-chinas-fault-that-american-worker-real-wages-are-falling-myth.html When and where China has a real comparative advantage, offshoring is a net benefit to the U.S. And if not to China, then to other countries: http://www.csmonitor.com/World/Asia-Pacific/2010/0912/Vietnam-seeks-gains-as-China-labor-costs-rise http://www.npr.org/blogs/money/2010/03/how_much_does_a_pair_of_jeans.html But, when jobs are off-shored for other reasons, that does impact the U.S. economy in a negative way: A. When the U.S. government subsidizes companies to shift production overseas: http://www.exponentialimprovement.com/cms/offshoresubsidies.shtml http://www.taxjustice.net/cms/upload/pdf/Sheppard_1208_Transfer_Pricing.pdf B. When the Chinese government subsidizes exports: http://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/ But the bottom line is that the more wealthy an economy, the more different goods it wants to consume. Since it can't produce all of them efficiently, it is better off off-shoring those in which does not have a comparative advantage while keeping those in which it does. http://aidontheedge.info/2011/11/03/the-atlas-of-economic-complexity/ http://en.wikipedia.org/wiki/Complexity_economics http://chidalgo.com/Papers/HidalgoHausmann_PNAS_2009_PaperAndSM.pdf And the key to developing new jobs, to economic growth, etc. is to develop greater complexity: innovating new products, using the technology you have in new ways, etc. Answered By: simplicitus - 10/7/2012

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