outsourcing and offshoring

The CareGroup case brought up the issues of outsourcing and offshoring. Outsourcing is when a company has another company perform a job function instead of doing it in-house. The other company can be either inside or outside of the U.S. (assuming it is a U.S. company). Offshoring is when a company has workers outside the country do the work, either as employees of the parent company or not.

It used to be the case that manufacturing workers such as auto workers were the only ones in danger of losing their jobs due to outsourcing or offshoring. One popular film criticism of offshoring was the Michael Moore movie, "Roger & Me" in which (Moore argues) GM devastated the town of Flint, Michigan, by closing the Flint plant and exporting the jobs to Mexico in order to maximize shareholder profits with reckless abandon of the interests of the other stakeholders (employees and the local community). Moore is obviously a controversial figure and one may argue the recent status of GM filing bankruptcy hurts his argument.

In any case, outsourcing and offshoring is not just for blue collar workers any more, but white collar office workers. Dell has outsourcing most of its customer service/ IT call center workers to India and they are certainly not alone. A call center can be set up in India, or Ireland or Bangladesh and the cost savings, especially in this economy, must be tempting. Thomas Friedman argues convincingly that the world is getting flatter. The speaker in "People in a Technology Driven Future" argues that new technologies can be destructive. Certainly, being an office worker in the U.S. is a lot less secure than it was in the pre-Internet age.