From an economic perspective, does the outsourcing of jobs lead to a net increase or decrease in total wealth? In domestic wealth?
In general the outsourcing of jobs is referred to contracting out business process to a third party. The main reason for outsourcing is of course for cost minimization. It is cheaper for certain processes in certain businesses to be done by some other parties. This is the "extended" concept of division of labor. This is particularly true for certain peripheral activities. This will give more room for the firms to focus on their main activities. Outsourcing can be done locally or internationally. However, international outsourcing is becoming more popular in this globalization era to take advantage of cheap labor and other resources abroad. Outsourcing can lead to a substantial cost saving due to, ...
Outsourcing of jobs internationally can lead to the increment in total wealth as well as in domestic wealth if the whole economy running efficiently. Otherwise there will be a subject of a cost-benefit analysis. The solution discusses from an economic perspective, if the outsourcing of jobs can lead to a net increase or decrease in total wealth.