Globalization, comparative advantage and outsourcing are closely associated with each other. Famous companies like Nike, Adidas or Apple demonstrate great example of the connection among globalization, comparative advantage and outsourcing. In order to benefit its own comparative advantage, big company is globally looking for cheap labors, who can provide good service while receiving minimum wage. By having outsourcing, big company provoked a tendency of losing jobs in its own country. More and more people's jobs were replaced by those cheap labors, who lived in China or India. Those outsourcing requires physical strength, which means labors do not have to possess any skill. Of course, due to the huge populations, famous companies started moving their factors to China or India in order to hire cheap labors. The more labors a company has the more product the company will produce. Once the quantity of supply increases, the price of supply will gradually decrease. Outsourcing has to do with opportunity cost, as I mentioned earlier, because the companies can maximizing their benefit while minimizing their cost. Statistically, even though people seem to lose their jobs in their country, outsourcing literally created more job opportunities in other countries. By looking at the data provided in video, we can see Job Lost goes up to 391 million; however, Created job goes up to 411 million, which is higher than Job Lost. Therefore, people seem to fight against the outsourcing in their countries; conversely, outsourcing allowed 20 million people to have jobs within 4 years. According to the video, outsourcing shouldn't be a problem until people start thinking to stop it.
No comments:
Post a Comment