History of Offshore Outsourcing

The loss of American jobs to foreign markets is nothing new. For decades, Americans have been losing jobs in manufacturing, textiles, and almost any field that involves factory work. Offshore outsourcing is just recently becoming prevalent in the news because white-collar jobs that used to be considered secure are being lost to overseas contractors. Two explanations for the sudden outburst of outsourcing in the IT industry are the Y2K bug and the dot com boom. Both events created a great need for developers that could perform mundane repeated tasks at a low cost. Since America couldn't provide enough workers at the time, companies looked elsewhere, namely India.

Is Offshore Outsourcing Ethical?

Many people consider offshore outsourcing to be immoral and unethical on the part of the company. However, morality and ethics are difficult to judge when it comes to market outcomes. Offshore outsourcing has numerous consequences that can be considered both ethical and unethical, depending on the interpretation of the individual or company. While many unemployed IT professionals may be dismayed, studies show that outsourcing is improving the American economy. A major conflict for outsourcing comes not only from the replaced employees, but customers as well. As the amount of data that American companies trust to foreign countries continues to grow, more risks and conflicting interests come in to question.

What Actions are Being Taken?

On the consumer side, many activist groups are forming to speak out against offshore outsourcing with the goal of preventing laws from forming that would encourage outsourcing, and enacting new laws to limit it. The number of outsourcing companies continues to grow, but the amount of functions that they outsource rises as well. We can assume that this trend will continue indefinitely, as long as companies can continue to save money with offshore outsourcing.