Ask The Readers: Is Outsourcing Irresponsible?
On the Internet Business Mastery Podcast Blog, there’s an interesting debate going on, and it involves a little bit of what I do online. There are tons of very interesting comments and a lot of rage about the subject of outsourcing.
On one hand, online businesses outsource many tasks overseas because you really can’t beat the price. As I mentioned in a previous post, I had hired someone from the Philippines for $2.22/hour to do some web research for me. Hiring someone in the U.S. would cost me a lot more, and a lot of businesses rely on these low wages in order to succeed. In other words, many online businesses would not survive if it wasn’t for outsourcing.
On the other hand, outsourcing takes business and money away from within the U.S. Many people are losing jobs to people overseas who can do the same work for far less. Also, people are saying that paying someone $2/hour is just wrong and immoral.
As a response to that, the “pro-outsourcers” say that although they are hiring people overseas, they have U.S. based businesses that get taxed by the U.S. and contribute to the economy and are allowed to conduct business as they wish. As far as the low wages, $2/hour seems very low for the U.S. but when converted to pesos, $2/hour is a normal wage for workers in the Philippines.
Then, there’s some people’s feelings about our responsibility to America. It’s all really interesting stuff! I encourage you to have a look at Jay’s post and the comments over at the Internet Business Mastery Podcast Blog. I think I’ve read through them 3 times already.
I’m not sure exactly where I stand on the issue, and I usually try to stay out of these kinds of things – but I really do feel for the people who are losing their jobs to people overseas (since I know what it feels like to lose a job). On the other hand, as a business owner, it’s nice to be able to get work done at a cheaper rate and have more capital for other things. Also, it’ nice to be able to provide an income for some individual in another country who may be struggling and needs a job too.
What are your thoughts on outsourcing? Where do you stand on this issue?
Posted on : July 11th, 2009
Related posts:
- Ask the Readers: How to Motivate the Unmotivated
- The Power of Social Proof and Putting Your Readers First
- Here’s Why I Don’t Have a Full-Time Virtual Assistant
- What’s Stopping You From Using a Virtual Assistant?
- How to Utilize Virtual Staff to Create Multiple Streams of Passive Income
Digg it
Delicious it
Stumble it
Sphinn itEnter Your name and email to get Free Instant Access to my complete guide to Publishing, Marketing, and Automating a Killer eBook. You will also get my weekly newsletter with tips that you can't find here on the blog. Learn more...
No, I'm not a millionaire, but I am living off of passive income made online. I'm here to show 
Enter your name and email below to get Free Instant Access to the most comprehensive guide available on how to Publish, Market, and automate a killer eBook. 
Digg
Facebook
StumbleUpon
Technorati
Twitter
YouTube
19 Comments (Click Here to Leave a Comment Below)
I don’t criticize people who outsource some tasks overseas. First and foremost, you aid the world economy somewhere.
However, I live in a depressed state, one that’s been down for a very long time. I think this is a great place to outsource TO. Perhaps not as great as the Philippines, but it’s still a place where labor and cost of living is a little cheaper, and those dollars go farther for the employee than in, say, Silicon Valley.
Me, I won’t outsource until I make enough to make it worth hiring someone I know.
A large percentage of people in the world live on USD $2 per day. USD $2/hour is a very nice wage, providing for a family without being so extravagant as to alienate the family from the community. It’s a complicated issue and debate, but I’m okay with it.
That said, whenever it’s possible to support the local economy it’s a positive thing to do on many levels.
“Irresponsible” is really a subjective term. Are you being irresponsible as a business owner? No, you’re taking care of your business. Are you being irresponsible to other people in the U.S.? No, you aren’t really responsible for anyone outside your family.
The term that I would better place on it is “immoral.” Since we are in a horrific recession and most of our jobs are being sent elsewhere, I don’t personally feel that it’s moral to prevent yet more people from working by sending the work elsewhere just because it’s cheap. Other people’s opinions will vary, but that’s mine.
I’ve heard many, many people say that their business couldn’t exist if they couldn’t outsource their work elsewhere for peanuts. But then my question is, then should it exist? Should your business exist if you can’t do the work yourself and you can’t afford to pay someone a decent wage to do it? In my opinion, no.
Pat,
You say you’re not really sure where you stand on the issue, yet having already contracted work overseas means you’ve made your position pretty clear.
Having said that, anyone who criticizes a business for outsourcing work overseas is full of baloney. It is these same people who consider it “un-American” to short-sell a stock. Nothing could be further from the truth. A short sale is simply a vote of “no confidence” in a company’s management. The “dissenters” who short stocks are simply the system of checks and balances that encourage companies to operate efficiently.
I believe outsourcing can be looked at as the same sort of system of checks and balances for American business at large. The days of companies that operate like General Motors are over.
@LS: “Immoral”? It’s immoral to outsource at a rate that may enable someone in the world to afford food and medical care for his or her family when one might not even be able to pay a starvation wage at home? Bollocks! As the economies in these other countries improve, the consumers and businesses there are also able to afford more imports, and in many cases workers in the US, Germany, Britain, etc. will benefit. Narrow nationalism will only tighten the economic choke chain further around everyone’s neck. Here in Germany where I live it’s a favorite theme of the neo-Nazis to insist that foreigners (like me) be kicked out and only domestic products and services be purchased.
The current economic troubles in the US were not brought on by moonlighting librarians in the Philippines nor even by cheap Chinese factory labor. Greed in the financial markets coupled with a lack of regulatory backbone, predatory lending practices (brought on by lax regulation), household overspending and other factors are in fact to blame. If the economy is to stabilize at some point and the job situation in the US and elsewhere to improve, solid ties to other countries at all levels – including minor outsourcing like Pat does – will be an important part of that recovery!
This isn’t Germany. Most of our troubles come from nothing being made here and far to many jobs being outsourced. Our money goes to support dozens of foreign governments, even foreign armies, and now our unemployment rate is estimated by some to be as high as 20 percent. There is no nationalism, much less narrow nationalism. So yes, I find it far more moral to outsource jobs domestically.
LOL I am currently outsourcing writing at 1c/word to US based writers – I actually felt bad about it but its a legit writing site and the topics I had were US based and so far I have had no problem getting people to write for crap money!
I live in Australia. I won’t hire anyone local because of the added level of paper work that would involve my business in.
I am in fact a New Zealander – a country of 4 million people at the end of the world who totally opened up their economy in the 1980′s We don’t have heavy industry or a car manufacturing because we can’t compete. NZ is doing a lot better with the current financial crises than it did after the 87 crash (the NZ stockmarket took the longest of all country’s to recover ) – because we do have an open economy.
To be honest I don’t consider US a high wage economy when it comes to writing and similar – purely because of your lack of social safety network and low wages (compared to Australia) – but the debate is laughable – the sooner US opens up its economy the sooner you will get thru the pain – proping up Detroit car makers is just throwing good money after bad.
Australia is just as bad – Australia grows rice in the drought stricken murray river! I make sure I buy Indonesian and Pakistan rice – which is generally cheaper than the local stuff anyways.
Go where you can get the best quality and value– if that is overseas, so be it. I would hope it is in the US, but I would go with the pure economics.
I have recently outsourced my blog redesign overseas and I have no problem with it. I can’t afford to pay prices for a domestic designer and the quality of the work is excellent for less money. I would do it again and in other areas as well.
I think if you can do everything yourself, and you don’t mind it, then do that, and if you have huge profits, and you want people near you, then hire local. For growing online businesses, I think outsourcing is a real fantastic breakthrough…it lets you get things done, while still being affordable.
And quite honestly, helping developing nations is one of the best things you can do in this world.
The way I look at if you can hire someone local then great but if you can’t afford local wages then it is fine to outsource. It is better that the job gets done by someone than not get done at all.
I totally agree with Christina helping people in developing countries with actual jobs is great. Far better than just throwing aid money at them.
People need to stop thinking of it as “Outsourcing” and thinking about their own country. We are all human. We need to think about the world as whole. Running my online business, I have made friends all over the world. I much rather pay a friend to do work for me than look for a person in the USA just to pay a higher price for the same work. Don’t get me wrong, I do hire people within the USA though. (Only friends though) Both of my web designers are good friends and stay in the USA.
It really is tough, jobs are jobs, do you take care of your own or try and help out other countries. I would go with “whoever is best at the job” at the price your willing to pay
Whichever is within your budget
I think it would be crazy not to outsource, if the alternative is to take on locals for a month or so before going bankrupt due to unsustainable salary bills.
Far better to stay in business with cheaper outsourced labour, and keep on paying taxes to the government to help the domestic recession situation – you can’t really help anyone if you’re squeezed out of business yourself.
I agree with Camille, who said “First and foremost, you aid the world economy somewhere.”
Besides, we’re supporting our own economy when we spend the money we make (because of our outsourcing methods).
Theresa
if you can get away it it, then you should
if you can get away with it then you should
[...] There is only so much a person can outsource for a project of this caliber. As you know, I’ve already redesigned intheleed, which I talked about in my June monthly income report – which was definitely outsourced. There is no way I could design something that looks so beautiful myself. In addition to the website redesign, I did hire a voice talent to read scripts that will be used as the audio portion in the class, which also syncs with the video slideshow presentations. And in case you’re wondering – the designers and the voice talent are both from the U.S. [...]