Essay --

Globalization: Jobs: How Foreign Laborers Can Affect the U.S. Economy The economy is becoming increasingly global. Business face complex decisions when conducting operations, as business boundaries are no longer stated in national terms, but instead in global terms. For instance, management for companies ranging from medical information technology to software engineering must ask questions, such as: From what company should our company purchase input parts for our latest medical diagnostic equipment? Or should we outsource our manufacturing process for laptop computers overseas? Or how will globalization affect return to our investors for our latest software development subsidiary? Outsourcing is among one of the economic decisions businesses of all sizes must face. U.S. Corporations have high incentive to outsource job functions to foreign markets, as the wages of a foreign worker are a fraction of the domestic counterpart. The incentive is especially high to outsource to emerging markets such as China and India. According to a study conducted by the U.S. Bureau of Labor Statistics in 2010, a production worker in India would work for an average of 92 cents an hour as compared to a U.S. worker who would not be able to legally obtain employment for any less than the U.S. minimum wage of $7.25 an hour (U.S. BLS, 2010). At that time, India labor cost just 13% of U.S. labor. Imagine a U.S. corporation competing with businesses that incur labor costs that are only 13% of the U.S. equivalent; in order for that business to remain profitable, they would outsource as many functions as possible. Outsourcing trends are unlikely to change, at least in the short-term futu re. Historically, outsourcing has occurred in labor intensive indust... ...oduct, is a formula that economists use to measure economic growth. GDP in China has grown at an average ___, whereas U.S. GDP has grown at ___ for the same period of ___. A reason behind this phenomenon is that developing countries typically grow at a faster economic pace than more industrialized nations. When the United States economy was industrializing, GDP grew at a pace of†¦. Modern economic theory demonstrates that some developing nations will eventually approach the economic wealth of more developed nations. In may not happen for at least fifty years, but eventually wage differences will substantially lessen, at least in terms of national boundaries. Foreign labor cost is currently a factor that aids firms in achieving an advantage in the market place. In the far future it is unlikely that the price of labor will be much different across national boundaries.