1. Spencer Coan, Priyanka Jain, Olakunle Oyewo, Chris Swanson

2. OUTSOURCING Is it good or bad for the U.S. economy? China Mexico Ireland India

3. Our Contention Outsourcing is GOOD for the U.S. Economy.

4. The Rundown What is Outsourcing? Why Outsource? History and Trends Positive and Negative Effects Issues to Consider Conclusion

5. What is Outsourcing? Outsourcing is the act of moving domestic jobs (but not the people doing them) to foreign countries.

6. Why Outsource? Because of Comparative Advantage! “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy...If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” –Adam Smith, The Wealth of Nations (1776)

7. History of Outsourcing Outsourcing Has Existed For A Long Time –The British Empire and Textiles The Textile Industry in India and the U.S. More Recently...U.S. Outsourcing –Manufacturing Clothes Auto Parts Computers –Services IT Services and Y2K Customer Support

8. Outsourcing Trends

9. Positive Effects American Firms –Increased Profits through Reduced Operating Costs –More Competitive on a Global Level Americans –Cheaper Goods and Services The Nation –Better Overall Standard of Living –Peaceful Relationships with Other Countries through Aligned Economic Goals

11. Negative Effects American Firms –Customer Backlash (Poor Service) –Employee Relations (Job Insecurity, Unions) Americans –Job Loss –Wage Reductions The Nation –Industry Standards of Foreign Countries –Human Rights Violations (i.e. child labor) –Security Concerns (Russia vs. Georgia?) “ President Bush is on an eight-day tour of Asia. He’s visiting American jobs.” –David Letterman

12. Issues to Consider Reality vs. Perception –Outsourcing Vilified? Short-Term vs. Long-Term –Net Effect on Jobs –How We Educate Our Workforce Free Trade vs. Protectionism –Politics of Outsourcing American Workers = American Voters –Diplomatic/International Conflicts

13. Conclusion Outsourcing is inevitable. –How Americans Respond to Outsourcing will Determine Whether the Overall Effect is Good or Bad for the U.S. America can and will capitalize on the effects of outsourcing if it: –Maintains an Economic System that Supports Innovation –Renews its Focus on Education –Commits to Retraining the Workforce Question (make it a good one)?