[downandout]

>From an ethical point of view, outsourcing is great. It provides jobs for people in poor countries.

I disagree. Even in today's global economy, the country in which a business is based seems to have a significant effect on its prospects. In 2014, 19% of US households with children were food insecure , and 46.8 million people were in poverty [1]. Given the widespread poverty right here in the US, is it ethical for US companies - that benefit to at least some degree from being based in the US - to export jobs to other countries?

[1] http://www.feedingamerica.org/hunger-in-america/impact-of-hu...

[aetherson]

Yes.

Your two arguments appear to be:

1. There is poverty in the US. Of course there is. But there is much worse and much more widespread poverty in nearly every other country in the world.

2. Companies "benefit to at least some degree from being based in the US." They also benefit to at least some degree from the economic participation of hundreds of other countries. Even if "that poor person in Asia hasn't done anything for me, so I'm gonna give my money to someone ten times richer" were moral (which it's not), it's not even true that that person has done nothing for you.

[sooheon]

To your point 1, some could argue:

Yes, outsourcing employs poor people elsewhere, but at 1/100th the cost. So the overall transfer of wealth is reduced, and global wealth gap increased. Also, given the intricacies of economic development, it is debatable whether an influx of outsourced jobs and factories (which may feed workers, but hinder formation of local industries) is better for the poor of that country. Just pointing out that it's not so easy to make a claim that outsourcing is categorically better for poor people anywhere, all things considered.

[eru]

Is there any evidence outsourcing hinders, rather than helps formation of local industries?

As far as I remember, foreign direct investment has a pretty good track record in terms of helping countries develop. (As opposed to eg loans to businesses or government. Loans can plausibly lead to financial instability, when the hot money comes in and again when it leaves.)

[sooheon]

I won't claim that it's empirically proven to be harmful, obviously there are so many intricacies in every case. However, I don't think it's clear that it's an obvious boon for the country either.

S. Korea's development, for example, has shown that export oriented growth, where the margins between international prices and local labor costs are enjoyed by the exporters, is one of the most powerful ways for an economy to grow. Outsourcing, OTOH, is guaranteed to funnel those margins back to the multinational, with little but the pittance wages and some nominal tariffs left behind for the people of the country.

[WWKong]

You could replace "US" in your argument with the county, state, region, continent or earth. Where do you draw the line? You want to see people of earth get jobs or people of americas or people of Nebraska? All man made lines on a map.

[sooheon]

But the people of the world do exist within man-drawn squares, with vastly diverse internal situations. I don't think that it's obviously more ethical to employ someone in China for 12c an hour, over someone in Nebraska for $12. It's debatable, sure, but hardly a foregone conclusion.

In my own country of S. Korea, the greatest economic boon of the 60s and 70s was mobilization of our cheap labor to create and export ourselves goods like wigs and textiles, plywood, etc. This allowed local corporations to reap the margins, and the profits stayed within the country (chaebol are another matter...). With outsourcing, the profits go the multinational corporation, and none of the increased margins made possible by the cheap labor ever gets distributed to the country of the laborers.

[bobosha]

Well companies like GE, Cisco, IBM earn >50% of their revenue ex-US, so you would expect a corresponding outsourcing - offshoring is the correct phrase here - of jobs to countries where they get revenue.

[eru]

Not all companies are based in the US in the first place. People worry about outsourcing in other countries, too.