Question

What benefits result from the outsourcing of skilled white collar jobs to developing nations? o Who are the losers? o Will developed nations like the US suffer from the loss of skilled and high paying jobs to developing nations? Is there a difference between the transference of high-paying white collar jobs, such as computer programming and accounting to developing nations and low-paying bluecollar jobs? o If so, what is the difference, and should government do anything to stop the flow of white-collar jobs out of the country?

Answer 1

Please note questions are given in bold.

What benefits result from the outsourcing of skilled white collar jobs to developing nations? Who are the losers?

The benefit from outsourcing will be for the developing nations which the skilled white collar jobs that will be outsource from, as it generates employment in the developing country. Also,  the company which outsourced the jobs will enojoy lower cost in terms of cheaper labor, and hence give the company a competitive edge in the global scenario.

Countries like US will however face an employment loss as it transfers  white collar jobs to developing nations.The white collar workers will lose their jobs due to outsourcing white collar jobs from developing countries .

Will developed nations like the United States suffer from the loss of high skilled and high paying jobs to developing nations?

Initially developed nations like the United States will suffer due to this unemployment generated from thransfer of labour. But over time the cost benefit form outsouri=cing will ensure that they can make much higher profits. Higher revenue will mean more expansion and so more jobs will be created which can cater the labour market of the developed countries. Hence developed nations can ultimately benefit from it if they take the right steps towards employment generation.

Is there a difference between the transference of high-paying white collar jobs, such as computer programming and accounting to developing nations and low-paying bluecollar jobs? o If so, what is the difference, and should government do anything to stop the flow of white-collar jobs out of the country?

There is definitely a difference between transfer of white collar jobs and blue collar jobs because white collar jobs demand much higher wages compared to blue collar jobs. Since there is abundant labour in developing countries the demand for blue collar jobs is much lower and so it is not a viable decision for blue collar workers in developed countries to move to developing countries. This is because they will be offered much lower wages due to abundant labour supply. Meanwhile white collar jobs in certain field sof expertise are highly demanded in developing nations as they strive to improve their technological prowess. So attractive offers for white collar jobs is provided by developing countries which may cause outflow of white collar jobs from developed countries. The governmenet can ensure this dos not happen by providing adequate employment opportunites in the white collar market. This can be achieved by promoting growth in skilled sectors and creating new employment channels by development of R&D.

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