Social & Cultural Effects of Outsourcing

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Outsourcing has had a profound effect on Indian society.
Outsourcing has had a profound effect on Indian society. (Image: Thinkstock/Comstock/Getty Images)

Sending jobs overseas where employees work for a fraction of American wages has been financially rewarding for American companies. However, the effects of global outsourcing aren’t limited to economics. Outsourcing also affects the social and cultural framework of both the outsourcing countries and the supplier countries in positive and negative ways. Whether the net effect of outsourcing will be good or bad remains to be seen, but for now it appears international outsourcing will be an important part of global trade for the foreseeable future.

Empowerment

Outsourcing call center jobs has had a significant effect on the social, cultural and economic empowerment of Indian women. Thousands of young, urban women, who ordinarily would have been unemployed and married, are now making good money from call center employment and are considered to be assets by their families. Because they are financially self-sufficient, these women are often confident and assertive in their outlook and career choice and reject traditional familial control over them.

Cultural Bridge

Outsourcing also promotes international understanding. Because the majority of call center customers are from western countries, many Indian young people have gotten a firsthand look at the customs, culture and language of the West. With the approximately 20,000 to 30,000 non-Indians employed by Indian call centers, outsourcing also provides opportunities for cross-cultural interaction and understanding between Indian young people and people from many different countries. The call center industry’s growing demand for foreign professionals will only increase this opportunity.

Unemployment at Home

An obvious social and economic downside for outsourcing countries is loss of employment at home and the resultant political backlash. Calls for protectionism by politicians and stockholder unease have forced some corporations to rethink their outsourcing operations. Outsourcing by American companies is responsible for particularly high unemployment in engineering fields and a significant reduction in the number of students majoring in technical and scientific disciplines. Additionally, the outsourcing of high-paying, middle class jobs not only causes corporations to lose their best employees but also reduces the number of customers for their products and services. Sending good-paying jobs to foreign lands also reduces tax revenue for the outsourcing country, negatively impacting its infrastructure and social spending.

America as Superpower

According to “Outsourcing America,” a book by outsourcing experts, Ron and Anil Hira, outsourcing is rapidly eroding the United States’ position as a superpower. They point to statistics showing American trade deficits in advanced technology with Mexico, Ireland and Asian countries. Because these countries have never been leaders in advanced technology, the Hira brothers reason that outsourcing and the capture of U.S. technology can be the only explanation. United States companies, they claim, have been reduced to brand names with sales people.

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