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Effects of international trade on American Labor

What are the effects on American wages and purchasing power of the continued outsourcing of labor overseas. What are some of the reasons for these trends. What effect has this trend had on the American workforce; especially the working class?

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Krajewski and Ritzman (2002) define outsourcing as "allotting work to suppliers and distributors to provide needed services and materials and to perform those processes that the organization does not perform itself." Outsourced capacity includes increasing the production by giving or shifting the production to another country. Outsourcing is becoming more popular among U.S.-based companies expanding internationally and among countless others participating in the globalization trend ("Analyst Voice," 1998).

Effect on American wages and Purchasing power
Export of jobs is becoming a threat to the workers of the developed countries as this has led to the shift of the jobs from developed countries to developing countries. For example shifting manufacturing from USA to China as Chinese labour are cheap. Already a significant share of manufactured goods is sourced in China; and similarly, there is a significant market for Outsourced software and other services from India. Major automation ...

Solution Summary

Outsourcing is examined thoroughly using research.

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