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Donald J. Trump was promising to make America great again, including enhancing manufacturing. America is a large economy but has outsourced many jobs to India. At the campaign period, the number of jobs that US companies had outsourced was around 3.3 million. Those are many job opportunities for the 5.9 unemployed Americans and 4.3 million part-time workers who are searching for full-time employment; the numbers are an indicator that outsourcing to India costs American’s employment opportunities.
The operating costs and lower wages in India make it cheaper for American manufacturers who outsource to produce products. It is a trendy thing for companies. It will take longer for developing countries to reach a saturation point. The jobs moving offshore often will take a long time to return.
There is even no guarantee that companies will manufacture some products in America again. Unemployment will keep rising if America is not creating new jobs and outsourcing the available. The high base unemployment rate will become the norm. Outsourcing also causes a loss of manufacturing capacity that will hurt America in the coming years. When an industry moves offshore, the number of people who know how to manufacture products reduces and they will not need to train others. It will take Indian engineers to run industries if the US repatriates the industries after outsourcing to India. Re-developing manufacturing equipment and training engineers for Americans to regain the manufacturing capacity will take many years.
Outsourcing is not always a bad thing. It saves the cost of production, labor and overall overhead costs. American manufacturers can develop products and sell at a cheaper cost. Outsourcing to India also helps to sell products in its local markets and neighboring countries. Buyers who would have found out is expensive to buy goods from the USA due to shipping cost can afford them due to the proximity of manufacturing plans, the American owners get more profit and can ship back ready for the market product at a lower price. Distributing them will create jobs in America.
Outsourcing to India has some benefits, but they are short term gains. Manufacturers must consider that outsourcing is costing employment opportunities and also phasing out those with skills in outsourced jobs. It will kill innovation in America and make it reliant on India.
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