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Reality: Offshore outsourcing is a major budget-balancing act and agencies should consider offshoring most of their common tasks wherever possible. This does not call for job losses, but efficiency, which in turn lowers the burden on the taxpayer and that in itself, proves that private firms can provide services at lower costs with higher quality than the government. Outsourcing from a business perspective, simply means having a component or a process outsourced from the firm that sells the final product. This enables the firm to focus its resources on their highest and best aspects which are, producing and selling its products and services. The result of this drive toward efficiency is visible to all Americans in the form of lower prices and higher standards of living. For example, computers and televisions today cost a fraction of their cost during the 80s; this is due to the relentless process of efficiency-driven change in the form of offshore outsourcing. Foreign outsourcing is undoubtedly taking place and may increase, but it goes hand in hand with higher wages, lower prices, higher profits, and enhanced competitiveness. Doing away with offshore outsourcing would only erode standards of living by raising the prices Americans have to pay.

Myth: Outsourcing is a one-way street.

Reality: Outsourcing is a two-way street. There are over 6.4 million jobs in the U.S. in which the employer is a foreign company. The rate at which these jobs are growing is faster than the rate at which jobs in general are being outsourced. According to the Organization for International Investment, manufacturing jobs grew by 82%—at an annual rate of 5.5%; and manufacturing ‘outsourced’ jobs grew by 23 percent—at an annual rate of 1.5% in the last 15 years. As a matter of fact these foreign companies often pay higher than those that are outsourced—e.g., the 4,300 workers at the BMW factory in South Carolina and the more than 14,000 employed at Honda plants in Ohio. The nature of economic development means that while some lower-paying jobs may move overseas, higher-paying jobs move in. The majority of US jobs, threatened by offshore outsourcing pays less than the US average wage, suggesting that many of these jobs may face medium-term elimination through technological change, regardless of whether they are outsourced to offshore locations or not.

Myth: Only greedy corporations benefit from outsourcing.

Reality: Everyone benefits from outsourcing because outsourcing is about lowering costs in response to competition. That’s why as costs decline, every consumer benefits. The vast benefits from lower costs are usually overlooked because the benefits are evenly distributed throughout the economy. The few who lose their jobs to outsourcing are the most vocal compared to the millions of consumers who save several hundred dollars each year due to lower prices for such products like computers, cell phones, or even coffee. The benefits of offshore outsourcing outweigh its cost by 100 percent, which saves American consumers billions of dollars.

In conclusion, offshore outsourcing is not and will never be a serious threat to the U.S. economy, and should the state governments begin to bar contracts with firms that outsource any work overseas, they will jeopardize the competitiveness of U.S. firms on a global level. The process of outsourcing is more or less like gravity which can not be stopped. Most businesses survive on slim profit margins, and should they loose that competitiveness they possess by doing away with outsourcing, the devastating impact will be felt immediately in U.S. American companies are renowned the world over for developing sophisticated global supply chains in close coordination with worldwide trading partners. Any sort of disruption to the efficiency of the supply-chain network will have a negative impact. To criticize and regulate multinational companies that trade, invest, and outsource, is to pave way for major disruptions in efficiency that will lead simultaneously to both inflation and recession pressures. In a global economy with global competition a necessity, the cost of taxes and regulation looms large. As much as America has the world’s most productive and skilled workforce, its high tax rates, tax complexity, burdensome regulations, and the never ending lawsuits discourage job creation. Therefore it’s not a question of offshore outsourcing of jobs, but rather to continue America’s tradition of free and open markets.