Globalization causes job dislocation in Asian countries

SOURCE: Asia Times: White-collar Asia feels outsourcing pinch

There is a perception that outsourcing threatens American jobs. Statistics show that “the average American worker now has a one-in-six chance of seeing his or her income drop by 50% or more from one year to the next.” American corporations attempts to reduce cost often result in sending jobs overseas to countries where hourly wages are significantly less. Furthermore, economists estimate that the US economy has lost about 1 million service-industry jobs to overseas outsourcing. Ultimately, this will have a lasting impact on the economic growth rate in the United States.

There are signs that outsourcing is now becoming a growing concern in Asian countries. Outsourcing, a major component of economic globalization, has expanded to include white-collar service jobs in Asia as well as America. For example, Singapore has lost many high-end jobs in the electronic and semiconductor-producing areas. These jobs have moved to countries such as China, Thailand, Vietnam and the Phillipines. As a result, there is a concern that Singapore’s strong economic growth is covering up the increasing loss of white-collar jobs. In another example, Japan has tried to resist the outsourcing trend. However, other countries, such as China, appear to be pirating Japan’s research and development technologies. To keep costs competitive, Japan faces increasing pressure to outsource these R&D efforts.

Discussion Questions:
Do you agree that outsourcing is a main factor in loss of white-collar jobs in the United States and some of the highly developed Asian countries? Does outsourcing research and development processes hinder economic innovation? Will outsourcing strain relations between Asian countries to the detriment of those countries?