For a majority of Americans, outsourcing has been given a negative connotation.  The implication that American jobs are being shipped overseas in favor of laxer labor or environmental standards and an inexpensive workforce has been the echo in terms of outsourcing.  Most have heard a story of the process of United States factories being disassembled bolt by bolt and reassembled in a foreign location in an effort to cut costs on products sold back to the U.S. consumer, however this is an ignorant stance on the issue.  Outsourcing, as with most business decisions, has pros and cons.  The primary objective of businesses is to maximize profits, not to maximize national employment, so some of the demonization of outsourcing is true.  This also means that the goal of companies is not to minimize wages, so the thought that businesses are shipping jobs overseas because of cheaper labor is simply untrue. 

            So, what are the primary advantages of outsourcing?

            Economic Growth.  First and foremost, the main utility of outsourcing jobs to foreign countries is the economic stimulus it provides.  As previously stated, the goal of firms is to maximize profits.  According to Forbes.com, U.S. multinationals made over $6 trillion of revenue selling goods or services in the countries in which they operate.  Of these revenues, only 7 to 10 percent of goods are sold in the United States, meaning 90 to 93 percent of foreign goods are sold overseas.  These profits are funneled back to the parent company, increasing profits for U.S. firms and providing stimulus to the economy overall.  According to washingtonpost.com, the Economic Policy Institute (EPI) attributed 450,000 jobs lost to China between 2008 and 2010, and estimates this figure would be higher had it not been for an economic downturn.  While 450,000 jobs is a staggering number, the estimation that more jobs would be lost had it not been for an economic slowdown implies that since the economy had been worse off, more jobs were created or saved!  Since the unemployment rate is indicative of the economy, drawing the conclusion that a slower economy somehow nourishes job growth is paradoxical, if not dangerous.

            Foreign Investment.  Another strong argument in favor of outsourcing is foreign investment, whether it is U.S. companies investing overseas or foreign companies investing on domestic soil. U.S. companies currently have $4.1 trillion overseas, 75 percent of which are in rich countries in Europe, Japan, and Canada among others (Forbes.com).  This shatters the misconception about outsourcing being allocated solely in China and other third world countries.  This is due to the fact that firms maximize profits, and look at all areas of the capabilities of a country to do so, such as a country's infrastructure or proximity to market.  Foreign countries have outsourced to the U.S. as well, in fact at the end of 2010, foreign direct investment in the United States totaled over $2.3 trillion (Forbes).  As a result, over 5.3 million Americans are employed by these foreign subsidiaries.  Where foreign countries have taken jobs from the United States, they have also provided jobs through their own companies.

            Cheaper Goods.  The simplest and possibly most effective argument in favor of outsourcing is that of cheaper domestic goods.  Firms are constantly competing with one another, whether it be Coca-Cola versus Pepsi, Nike versus Reebok, or some other firm.  Thus, in most cases it is in a firm's best interest to have the lowest possible price on their products since that will drive up sales and achieve the company's ultimate goal of (you guessed it) maximizing profits.  The American consumer saved $66 billion in 2003 alone on clothing, a heavily outsourced product (Evans).  Although the textile manufacturing industry has been hurt in the United States, the consumers have benefitted, which provides a stimulus to the economy.

Most Americans imagine outsourcing as the decision of greedy executives looking to fatten their pockets with cheaper labor in some destitute foreign location, but the facts are against this assumption.  Businesses are not looking to minimize wages but to minimize total costs.  These costs can be attributed to a variety of factors ranging from politics to economics.  The fact of the matter is that outsourcing can benefit the U.S. in a number of ways.  The increased profits from shipping jobs overseas and imports benefit the economy as a whole.  The foreign relations gained through outsourcing benefit Americans with jobs with foreign subsidiaries.  The lower prices of goods benefit the American consumers.

In some cases outsourcing is destructive.  In industries such as textile/apparel U.S. manufacturing has plummeted, but the United States is still the world's largest manufacturing economy, producing 18.2 percent of global manufactured products (nam.org).  Whatever your opinion on outsourcing may be, it is clear that the problem is not as bad as you think.

Sources:

            Evans, Michael K. "Outsourcing Could Hurt, Help The U.S." Industry Week 253.4

(Apr. 2004): 80.  Print.

            http://www.nam.org/Statistics-And-Data/Facts-About-Manufacturing/Landing.aspx

            http://www.forbes.com/sites/danikenson/2012/07/11/outsourcing-for-dummies-including-the-willfully-ignorant/

            http://www.washingtonpost.com/business/economy/obamas-record-on-outsourcing-draws-criticism-from-the-left/2012/07/09/gJQAljJCZW_story_1.html