Outsourcing Jobs and The American Dream


Outsourcing offshore and unemployment go hand in hand, and together, they are bringing the US economy to its knees. The issue of how outsourcing affects the economy has been a matter of monumental debate for the last decade with growing importance as American jobs continue to disappear. Those populating the political right (aka as millionaires, billionaires, CEO's, COO's, Board of Directors, and big business) claim the practice will have a positive effect on the US economy. Why? Because it saves money for companies and avails Americans, with an eye toward entrepreneurial activities, more opportunities. The most notable reason given for outsourcing is that it leads to more Americans holding higher level positions.

The opposition, those who want the US to retain its jobs, say hiring foreign workers strikes a blow against the US economy for every instance. Outsourcing strips Americans of the jobs they would have performed, especially those requiring skilled and semi-skilled workers. They also maintain that taxation methods based on outsourcing only serves to decrease a corporation's tax liability, and thus, decreases federal spending.

Back in 2004, the Bush Administration, despite evidence that demonstrated otherwise, insisted that the movement of American factory jobs and white-collar work to other countries was a positive program. They had also claimed that 1.7 million jobs would be created in 2003. Instead, our country lost 53,000. In fact, 2.2 million jobs were lost during Bush's first three years in office.

By 2006, the Bush Administration was having a difficult time of keeping Americans convinced that outsourcing was beneficial to the US economy. Recognizing that Americans were becoming increasingly doubtful and doubly resentful, a new approach was taken. Acknowledging the loss of a job as being painful to those who suffer the loss, he advocated making sure people are educated in order to “fill the jobs of the 21st century.”

And to just what jobs might he have been referring? In 2007, Goldman Sachs estimated a whopping 400,000 to 600,000 professional services jobs as being moved overseas in the previous few years. 104,000 IT jobs were outsourced between 2000 and 2003. From 2000 to 2004, another 128,000 jobs were slashed from software-producing industries. During this same time frame, 100,000 new jobs for producing software for export to the US, were created in India.

An estimated 75% of all major financial institutions are sending work offshore. One research company found the world's 100 largest financial services firms expect to have shifted $356 billion worth of operations and about 2 million jobs to low-wage countries by 2012. To date, there are at least 40 states contracting out public sector work to off shore locations. The outsourcing of state and local government technology contracts is in excess of $20 billion. The state of Washington discovered that 36 out of 41 governmental agencies were contracting work overseas. Not so surprisingly, most states don't even know how many of their agencies are also outsourcing to foreign markets.

With the level of off shore outsourcing taking place in sectors besides manufacturing, it's hard to understand just what jobs of the 21st century Bush was talking about. He also said we should be making sure to align education with these illusive jobs. How do we educate ourselves to work such jobs when we don't know what they may be?

The Bureau of Labor Statistics shows an alarming picture of the ordeal college graduates are facing in today's job market. Just ten years ago, a little over 81% of college graduates under the age of 25 were working. 59.7% of them were working in positions requiring a college degree. Those students who went on to Masters programs or other forms of continuing education are lumped into the 19% not employed. Ten years later, Oct. 2010 to Mar. 2011, there are less than 75% of college graduates working any job at all. Of those who are working, only 45% are working in jobs requiring a college degree. To make matters worse, the cost of an education at a four year college has risen an average of 30% since 2000, but there are currently 15% less graduates able to find employment for degree required positions. And the stated 15% doesn't include those who are unable to find any job at all. Where are all those 21st century jobs needing educated employees?

In April, the Wall Street Journal reported that some of the country's largest corporations (Wal-Mart, Microsoft, Caterpillar, General Electric, United Technologies, Oracle, Cisco, Intel, Chevron, Merck, and Stanley Works) have cut their workforces by 2.9 million people over the last decade, while hiring 2.4 million people overseas. Since 2001, these corporations have been adding more foreign jobs overseas than jobs created in the US. In the last year alone, they have increased the use of outsourcing by 57%.

Want another slap in the face? Some of these same companies, Cisco Systems for one, want to bring the profits made through outsourcing, back into the US with as little tax liability as possible. Cisco Systems is currently involved with a lobbying campaign called “Win America.” It calls for a tax repatriation holiday that would let big corporations off the corporate tax hook, by allowing them to bring in money they've hoarded overseas at a drastically lower tax rate.


Itching for yet another love tap? Cisco Systems had 26% of its workforce ensconced overseas at the beginning of the decade. They now have 46% of the workforce abroad. It's increasingly clear that the people who run such corporations, have no loyalty, no sense of patriotism. While it's perfectly understandable that a corporation's function is to make money, there is still a responsibility toward those who have made them great. And when actions taken, serve to bring great harm to an entire populace, a line must be drawn.

While those for and against the practice of outsourcing are battling it out, the facts remain. Income inequality is increasing. The relatively recent 20% increase in the gap has been blamed on increased trade by economists left to theorize that it translates into a decrease in real wages for the majority of American workers. Recent wage trends seem to confirm the theories.

The Economic Policy Institute reported that wages in the industries still creating jobs, are 21% lower than the wages paid in those industries losing jobs. Besides the lower wages, jobs being created do not carry the benefit packages of those outsourced jobs. A dangerous effect of the mobility of employers is that they have taken to using threats of moving overseas in order to effectively hogtie would be bargainers coming to the table to discuss working conditions. Full time positions being cut to part-time hours and reductions in pay rates have become the norm in an environment designed to squeeze the American worker into more narrow confines.

Losing trade related jobs doesn't just hurt those who are now unemployed. Entire communities are affected by the falling tax revenues normally gained through earned income tax. The continued off shoring is rapidly spreading to other sectors, especially those with higher technology and skills. The practices are putting the long-term competitiveness of the American economy at risk.

So how do we make our voices heard? The first logical thing to do is to find out where your politicians stand on the subject. Apply pressure through telephone calls and letter writing campaigns. I learned years ago, during a stint as a lobbyist, just how effective letter campaigns can be. In addition, it doesn't hurt to organize a rally outside your governor's doorstep to protest the continued allowance of American jobs being outsourced while American corporations doing so reap the benefits of keeping income earned abroad free from American taxation.

If this information is upsetting and worrisome to you, please pass it on by clicking on the Tweet, Like, or +1 button provided at the top of the page. Then contact your government officials and let them know how you feel!

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Comments 33 comments

Robwrite profile image

Robwrite 5 years ago from Bay Ridge Brooklyn NY

Excellent hub. A lot of good points. Voted up.

profile image

PWalker281 5 years ago

Having read several of your hubs now, I am very impressed by your ability to present your arguments clearly and with copious facts to back them up. Well done. Rated up and useful.

Terri Meredith profile image

Terri Meredith 5 years ago from Pennsylvania Author

@Robwrite: Glad you like it. thanks for the vote up

@PWalker281: As always, thanks. Sometimes I have a tendency to research a thing to death so I always come up with lots of numbers and studies. I guess it's all just part of the process of how I learn in depth about topics that interest me. Then I just pass it on to whomever is also interested...except it's all in one place. Thanks again!

JON EWALL profile image

JON EWALL 5 years ago from usa

Terri Meredith

Take note of how many dollars are being spent in the government. Since Obama became president the government has added 759 new agencies in the Healthcare Bill and 447 new agencies because of the Dodd Franks Banking bill. The private sector has been bombarded with new government regulations . The Student Loan program was taken over by the government at a loss of 32,000 private sector jobs in the banking industry.

Why would anyone blame the business industry when no one knows what the playing field looks like down the road.

As usual, GOVERNMENT is the reason for businesses not hiring.. Since 2009 the OBAMA ADMINISTRATION HAS ADDED 200,000 GOVERNMENT JOBS increasing the size of government.

Marlon 5 years ago

Great article, and very thorough and well thought out, if i could offer my experience on this matter.

The challenge we Americans face in the coming future is globalization and technology catching up in "under privileged"countries. When i worked in silicon valley after hours we would connect the IT department to the department in multiple countries in India...

Over there a well trained, good English speaking computer science PhD will work for $10,000 salary per year HAPPILY because there are sopi many of them competition is fierce.... How in the world does an American PhD who ASKING PRICE starts at $100,000? The world is moving faster then the fastest right now.... For better or worse... And i really don't know what politicians can do about it cause they don't even understand it :(

Marlon 5 years ago

Bah, typos... Countries should be cities andi don't even know what a solo is Lol also: then - than & who - whose ;/

Marlon 5 years ago

solo.... How come autocorrect KICKED IN THEN? But still incorrect: sopi supposed to be so ;P

Marlon 5 years ago

solo.... How come autocorrect KICKED IN THEN? But still incorrect: sopi supposed to be so ;P

Terri Meredith profile image

Terri Meredith 5 years ago from Pennsylvania Author

@John: I am certainly not a proponent of big government. I absolutely detest having my hard earned money taken to waste on useless projects and personal agendas. There is a huge danger with our government becoming such a large political machine. I'm sure you don't need me to reiterate them to you. I do question whether he's simply not being wise (a polite term). Unions have been in decline since the late 60's, with the exception of those in the public sector. And unions have proven to be an equalizer of income distribution among the middle classes and the lower end of the wealthy. We have lost many jobs..millions, in fact. Making up positions in government agencies may be his way of attempting to come through on some of the job creation he has promised so often. If that is his game, it's very poor strategy. If it's for the sake of building a monstrous government...we're all in trouble. Big governments feed on the people and beat them down into submission.

kittythedreamer profile image

kittythedreamer 5 years ago from the Ether

It saddens me to learn that more and more companies are throwing their American employees to the wolves while hiring on foreigners. As much as I love the idea of giving third world countries jobs, I disagree with taking it away from our people. We need to look out for own backs as a whole country, not just worry about if our company is making enough money or not. Ridiculous. Voted up and useful.

poetvix profile image

poetvix 5 years ago from Gone from Texas but still in the south. Surrounded by God's country.

I think this was presented really well. I really appreciate how specific you were and the company names was icing on the cake. I think this situation is compounded by the hurdles placed in front of smaller business, mom and pop, local type things. These companies have become way too big and powerful and many keep buying their products and services because of dwindling competition and products from other sources being readily available. Wally Mart alone has run out vast numbers of smaller businesses all over America.

JON EWall 5 years ago

kittythedreamer '

‘' the jobs will go offshore only because of government taxes and regulations in addition to higher labor cost here in the US. THAT TOO IS AN OLD STORY.”

Check out this Series of articles tracking the stimulus money. By Russ Choma

Blown Away: Tracking stimulus grants for renewable energy


Have a good day, enjoyed the discussion.

Ps Check the TV schedule for Sept. 7, 2011 and Sept. 8, 2011

Terri Meredith profile image

Terri Meredith 5 years ago from Pennsylvania Author


Corporations need to look out for profit margins, but the question is really about how big profits have to be in order to satisfy the shareholders and at what cost to the American people. When people for whom the products are being manufactured can no long afford to buy them, they'll feel the bite. I suppose by then, they will have a new "middle class" in countries like India and China, to whom they can sell their wares. Wages will rise in those countries, because that's the nature of the beast. Then they will move on to other slave wage countries. Just an endless cycle of greed and corruption, while laying waste to entire populations.

JON EWALL 5 years ago

Terri Meredith

''Corporations need to look out for profit margins''.

‘’we need to use the government to make it fair... take money or resources from the rich and give them to the poor‘’.Are small business owners considered the RICH?

The Obama led government has placed 340 NEW regulations costing the private sector $65 billion to operate their businesses . The continuing threat to add more is the major reason why business is holding back on hiring more people . Result of which is 14 million out of work and a 9.1%unemployment crisis.

On Obama’s recent bus tour, the audience told the president that NEW government regulations are hurting the business industry. President Obama said that he will look into the matter, just another joke.

A recent IRS audit revealed that illegal immigrants received $4.2 billion from Uncle Sam under the earned income TAX credits. Wow, fraud and/or waste?

WORTH WATCHING for an eye opener about the government.

Sept 8, 2011 8:00 pm Presidential debate

Sept 9, 2011 President Obama speech to a joint session of Congress

buyamerican profile image

buyamerican 5 years ago from United States

When the companies outsource, it means only short term profit for them.

It is the exact opposite of what Henry Ford meant when he decided to pay his employees more so that they would buy his products.

JON EWALL profile image

JON EWALL 5 years ago from usa



Solar Power, The Future Is Here

a showcase for the Obama administration’s effort to create jobs


Terri Meredith profile image

Terri Meredith 5 years ago from Pennsylvania Author

To all: First let me apologize for the length of time it's taken for me to respond to your wonderful comments. As there's been some severe flooding around my home, I've been staying at my daughter's but the internet seems to be going out quite a bit.

@John Ewall: As always, thanks for your wonderful comments. Appreciate that you can be counted on for the most up to date info to be found on specific topics!

@buyamerican: Outsourcing is a no win action against the American people. And while our gov't has certainly become a force that seems determined to crush us, we still are able to make our voices heard through letter campaigns, personal visits to our officials and even protesting in front of their offices and homes. With so many people out of work, they can't use the excuse that they don't have enough time to be involved. NOW is the time!

Alison 4 years ago

Outsourcing is crushing the middle class in America. Check this perspective out!


Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

Hi Alison. Thank you for leaving the link. I appreciate the nature of the message. However, I have to say, it was a bit difficult to get through the spelling errors, the redundancy of repeatedly used words, and the run-on sentences. The information is solid, but the writing is tedious and may cause other readers to quit before they finish the article. I DO appreciate you taking the time to point us toward more information on the subject.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

Check these links.

Firms Pass Up Tax Breaks, Citing Hassles, Complexity

tax deductions too cumbersome, confusing, can cost more to obtain than they save


Ernst and Young: Obama’s Tax Increase Would Kill 710,000 Jobs

allowing the Bush-era tax policies to expire


Obamacare, Taxing jobs out of existence

WHY are companies not hiring?


Money from the 2009 stimulus bill to help support the renewable energy industry

Renewable energy money still going abroad, despite criticism from Congress


IRS to play major role in Health-care system

CBO estimates that 4 million people will pay the penalty


The government has not helped the problem.

Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

Hi Jon, as always you've posted a few links that will give food for thought. However, there are any number of people who will present their own arguments regarding the bad habit major corporations have of keeping their earnings outside of the company where it's benefiting non-Americans. I don't think anyone really has a problem with FAIR taxation, but fairness has not been what it's about. Many of us could be helping to create jobs too, if our disposable income wasn't cut to the bones by paying out 15 to 20% more than the richest among us. Sorry, but when I'm being taxed at a rate which costs me 29% of my income, and a super wealthy person is only paying a small 13%, I get more than a bit peeved.

Here's what I propose. Let's not raise the income tax rate for the wealthy. Let's just close all the loopholes that only the very wealthy are in a position to take advantage of. How about the incentives and write-offs being reduced as the adjusted gross income increases? That way, the little guy doesn't lose everything. I don't think Capital Gains tax should be paid by someone whose entire taxable income is under 50,000. I think those same types of gains should be taxed at a lesser rate for someone with a 100,000 income as the person with a 200,000 income. I could go on and on, but you get the point. Right now the tax structure is designed to slap the dwindling middle class with the burden of supporting the entire country. What do you think will happen when we're all gone? If you don't want to pay taxes because you "create jobs" and the poor who have to accept the slave wages I see being paid during this horrible economy, there will not be enough tax money to pay for half the salaries of government workers...never mind the actual projects they're supposed to be overseeing.

There are 14 million people out of work. The jobs being found are paying far less than those same jobs would have paid two years ago. It's obvious the job "creators" are taking advantage of the desperation of the unemployed. We don't need more jobs paying less money. We need our jobs brought back from overseas. The tax derived from millions of minimum wage earners is NOT going to pay for this country. Nope, sorry. The wealthy who are fighting to keep every penny of their million dollar bank accounts need to be subjected to the same treatment as the rest of us.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

Sounds like the Ryan budget proposal. the House has passed a budget ( Ryan's budget ) the last 2 years. the Senate ( Harry Reid ) is not allowing a vote on the legislation, wonder why?

June 3.2011 Ryan and Van Hollen Debate Medicare Proposals 6/3/11 '' THE TRUTH ''


Rep. Paul Ryan defends GOP budget plan


The President's Speech Distorts the Truth


The choice in who will be in charge in Jjan.2013 is in the hands of the people.

Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

Thanks Jon. I'll take a look, but I've got to tell you, I tend to take a middle of the road approach to both parties. Too much of what's being put out there is slanted in directions depending on party affiliation. I take most of what's written as biased and not a true presentation in its entirety.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

That's a good way to go but getting past the propaganda in the media is difficult. That's why the news is spread so far apart. Check this link and then check the 2nd. you be the judge


President Barack Obama – [ F ] Address to Joint Session of Congress


Barak Obama Campaign Promises


Jobs jobs would solve many of the nations problems. '' the Man '' is a failed socialist leader!

Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

Thanks Jon. Your first link gave me a 404 error message. I read your article and it certainly does outline the facts easily enough that anyone, including those who haven't paid attention to details, can understand. I have to admit, though, Romney scares the bejesus out of me. I don't trust him or his running mate. I'm not affiliated with any party and intend to remain so. I find the two party system doesn't allow enough room for taking different approaches than what is prescribed by the endorsing party. Thank you as always for putting so much information out there.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

That link goes on and off. THANKS FOR THE READ.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

''gave me a 404 error message'' THE LINK IS A WHITEHOUSE LINK . It's back on and guess what. it appears to be altered from the original, open a transparent administration. I should have copied it.



Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

thanks, Jon

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

Check this link out, live and uncut or doctored.

Exclusive: Paul Ryan VP nominee previews first presidential debate 10/3/12

recent poll numbers and talks foreign policy and the economy


Where Did All The Money Go? STIMULUS


Voted on and passed by a super majority controlled Democrat Congress

Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania Author

John, as always, I welcome your comments. I want people to see both sides of the coin and make their own decisions regarding what is taking place in our country. However, you and I will continue to both agree and disagree on various issues. I am not happy with the mountain of debt added to the burden already resting on the shoulders of American taxpayers, but I'm also none too happy that the GOP continues to try to cram the idea of lower taxes for the rich and obscenely rich. The "trickle down" effect has never taken place. It simply hasn't happened because greedy people do not spend their money in the interest of making others wealthy or even financially stable. As long as off shoring is not only permitted but encouraged, corporations will continue to take American jobs to countries where slave labor can be had for pennies.

JON EWALL profile image

JON EWALL 4 years ago from usa

Terri Meredith

''Here's what I propose. Let's not raise the income tax rate for the wealthy. Let's just close all the loopholes that only the very wealthy are in a position to take advantage of. '' Sounds like the Ryan/Romney plan

Paul Ryan on Fox News Sunday Chris Wallace

June3.2011 no changes for 55 over

Ryan and Van Hollen Debate Medicare Proposals 6/3/11 '' THE TRUTH ''



Romney plans is to cut TAX RATES 20% for everyone.

Anonymous 2 years ago

Washington for the past 20 years have sold the American public out for donations from large corporations. Obama, who campaigned on hope and change has employed folks from companies like GE, who refuse to pay taxes and others who move their corporation for tax purposes only to Ireland, UK and other countries.

We the people must stand up and stop this. Large consulting companies like IBM, Accenture, Deloitte , etc are using back door temporary agencies to hire H1b holders for projects and many of the projects are tax payer projects. State agencies, great example is the state of NY, Albany campus is filled with people from foreign countries, while educated New Yorkers are unemployed or under employed.

Washington seems to think our young folks are only good for fighting their wars to protect corporate interest around the globe.

Places like India and China still today do not have electric power or utility infrastructure, so how can their be millions who know more about computers than Americans. Corporate America has spent billions to build infrastructure to train their young folks with dollars taken from America, to train people to come here and take jobs.

Last but most important is the Guest Worker Programs. Today H1B holders are working on Corp to Corp basis. Temporary Agencies are bold enough to advertise temporary jobs to H1B visa holders.

The visa program was created for American companies not offshore companies, who pretend to have American Business Units, that do not employ any Americans. Instead they ship in the workers.

Obama's Hope and Change is just a load of crap! The GOP has spent the last 6 years doing everything to undermine the Obama administration. It is all just a big stage play to confuse everyday Americans, while lining their pockets with millions of dollars.

We the people have to stand up and united. This means managers, directors and other Main Street citizens. At this rate in 10 years America will be like India, the very rich and the extremely poor and the rich will be imported citizens ..as a result of birth tourism and importing people.

JON EWALL profile image

JON EWALL 2 years ago from usa


'' GOP has spent the last 6 years doing everything to undermine the Obama administration''

Take note Dems have had 2/3s control of our govt( President Senate House ) 2007 2008 2011 2012 2013 2014 Obama Dems had 100% super majority control 2009 2010, meaning R's could not stop any legislation. R's 1/3 control cannot make any law!

9/8/14 Our Economic Recovery Is Stuck in the Senate http://www.speaker.gov/op-ed/boehner-timecom-our-e...

5/13/14 The American people are tired of waiting for this body to act on the jobs bills Senate Democrats continue to blockade http://www.mcconnell.senate.gov/public/index.cfm?p...

4/21/14 Carney rejects trade offs for unemployment insurance http://thehill.com/blogs/blog-briefing-room/news/2... Pay Go law http://www.whitehouse.gov/omb/paygo_description

12/17/13 A Plan For Jobs & Economic Growth http://www.speaker.gov/jobs

2011 President Barak Obama where are the jobs? http://hubpages.com/politics/PresidentBarakObamawh...

Some people have a distorted view of what President Obama is feeding the American public .There is a difference between true and truth!

for example Obama will say '' the Republican Congress is holding up his legislation'' note Congress ( D Senate R House )1/2 of Congress is working

7/16/14 House has passed 7 appropiation bills Senate passed 0 http://www.speaker.gov/press-release/house-7-senat... top priorities Jobs & Economy fiscal year 2015 starts Oct 1, 2014

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