College Essays-What effect may outsourcing have on domestic prices of these products?
There has been much talk in recent time about outsourcing and “sweatshops.” Outsourcing is usually defined as occurring when a company chooses to export some of its production to foreign countries. Jobs in which foreign workers work in “sub-standard” conditions and are paid lower wages (than their American counterparts) are typically referred to as “sweatshops.”
- What are some of the economic reasons why some firms choose to relocate some of their productive facilities to foreign countries?
- With regards to low- and high-skill laborers, which domestic (American) workers may gain from outsourcing, and which domestic workers might lose? Why is this the case?
- With respect to the types of products produced by companies that outsource, what effect may outsourcing have on domestic prices of these products?
- If the US government wanted to reduce outsourcing, what changes in policy could it make to do so?
