Why are U.S. companies outsourcing jobs to foreign countries?

Answer by  Dean (4035)

It's all about the bottom line: it is cheaper to outsource to foreign countries where taxes are non-existent and unions aren't a problem. State and federal governments tax businesses to the extent they can no longer function profitably, so they outsource parts of the business in order to remain viable.

Answer by  LexiP (722)

Generally, outsourcing occurs because it's cheaper to do so. Not only is it supposed to make the item cheaper to produce, but the item can be sold at a lower price while still gaining a significant profit. In addition to products, services are also outsourced to various cities in places, most notably India, to help the companies save money.

Answer by  tamarawilhite (17883)

The daily labor rate in third world nations is lower than the hourly rate in the United States; it is then cheaper to make products there and import them.

Answer by  anon88 (166)

There are a number of factors to consider. One reason that many economists cite involves the minimal bargaining power of less unionized countries. As the bargaining power increases, do does the cost of employment, resulting in lower profit margins.