What are the costs and benefits of "outsourcing"?  Consider these in regard to both the "home country" and the country in which the products are made.

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pholland14 eNotes educator| Certified Educator

When an American company outsources some services to a foreign country, it can receive the benefits of a large, relatively inexpensive workforce; the company can pay lower wages.  The United States has a minimum wage, but many of the nations that are the beneficiaries of outsourcing do not.  The dollar travels further there and one can find employees who will work for lower rates, though it is less than what an American worker would require to survive.  Also, outsourcing allows a company to expand faster, since the money not used to employ Americans can be used to hire more foreign laborers quickly.  

There are also numerous costs to outsourcing.  In today's business climate, Americans want to keep as many jobs at home as possible.  Outsourcing and laying off domestic workers can cost a company in terms of public relations.  Also, the company must go through intermediaries overseas in order to deal with the workers, whereas by keeping the jobs in the US, the process is more streamlined--if corporate has a problem with a mid-level manager, someone from the office can go see him/her for a face-to-face meeting.  Also, foreign countries do not have the business regulations of the US.  While this can be good in keeping prices down, it is another public relations nightmare if a report leaks that the company is using child labor or that workers are being treated inhumanely by American standards.