<p>For every dollar that a US company spends on outsourcing a service job to India, how much net value is returned to the US? </p>
<p>The correct answer is:
1.13 </p>
<p>Each dollar that a US company spends on outsourcing a service job to India an estimated 1.13 USD in net value for the US, according to a recent study in the current edition of the Milken Institute Review (reg. req’d). The study also estimated that India gains 0.33 USD in net value from local wages, profits earned by local outsourcing companies and their suppliers, and taxes collected from all the local companies involved in the operation.
The net value generated by the outsourcing is returned to the US through several different channels. The outsourcing company can immediately recognize cost savings through lower wages, and many companies have seen additional cost savings from efficiency gains. US consumers benefit from the resulting lower prices. Outsourcing can also boost US exports to India, as the company builds the infrastructure to support the outsourced jobs. The Milken Institute points out, “A call center in Bangalore is likely to be filled with HP computers, Microsoft software and telephones from Lucent, and to be audited by PriceWaterHouseCoopers.” The newly employed workers also have more money to spend on goods imported from the US. In 2003 the US exported 5b USD to India, an increase of 1.3b USD from the 2000 total. </p>
<p>I don’t think too many people can deny the economic good outsourcing does but that won’t change US workers’ qualms with it. No matter how good it might be for the economy, “sending jobs overseas” won’t put food on the dinner table for US working families, and that’s the problem so many lower-middleclass Americans have with it.</p>
<p>i agree, just because something is good for the economy doesnt mean that it is good for American as individuals. while a good economy is important for the nation, if indiviuals are going hungry, then what good is the economy? perhaps outsourcing gradually and in a more “controlled” manor would be more beneficial, rather than dumping millions of unemployed Americans on the job marked at once.</p>
<p>this is like saying “is it good for yacht makers when there are more rich people?” (or any group that caters to a wealthy crowd)</p>
<p>my reasoning is that with outsourcing comes more wealth for the country getting the work (not that the country sending it looses as was shown above), and when these countries get more money, guess who they trade with more. The richest country in the world, us. That was part of the rationale behind the Marshall Plan. We were giving them a hand-out, but when they developed into modern nations with thriving economies, the money would come back. and it did.</p>
<p>i think americans are too smart to answer phones all day(i do it at home and i dont get paid), and anyways outsourcing make hurt some poel, but in the long run it helps everyone,(paying 1 american $35k, against paying 20 indians$500) more can be done, which lets the computer people lower their prices on comps, even if its like 10$ it still helps</p>
<p>Being Indian, but living in the U.S., I look at both sides on the news. American news makes it look like these are important 100k/year jobs. The truth is that the huge majority of these are jobs aren’t all that great. The people losing their jobs aren’t real engineers. Its usually just low end programming or tech support. It’s the same as losing blue collar manufacturing jobs to Mexico and I don’t see people complaining about that.</p>
<p>there are plenty of people complaining about that. esp in this area with a lot of the old steal and iron works jobs which used to lay the tables in SE PA gone to Mexico in the 1980s.</p>