After viewing the videos included in this week’s multimedia resources, reflect on the challenges facing the U.S. labor force due to outsourcing of jobs overseas. Discuss the effect of outsourcing of production on GDP.
The U.S. labor force faces following challenges due to outsourcing job overseas:
1. As jobs that do not require special skill are outsourced, the domestic labor force that do not have special skill face unemployment.
2. As a direct result of out sourcing, the U.S. labor force have to focus on production that requires highly skilled labor. This may require that U.S. labor force be retrained and learn higher skills.
3. The U.S. labor force have no choice but to accept lower wages for their survival.
The outsourcing of production results in lower production cost. This increases the sales and profit margin of companies raising the GDP. However, if the quality of production is low, the sales may drop considerably and reduce the GDP.