Campus Only Senior Thesis
Bachelor of Arts
Politics and International Relations
© 2014 Ambika Bist
United States legislations have allowed U.S. companies to integrate with the economies of other countries allowing U.S. companies to outsource manufacturing and services abroad and take advantage of lower input cost because of cheap and skilled labor - an opportunity cost choice. In the global economy employment in the United States seems to be influenced simultaneously by variables such as outsourcing, international trade, foreign direct investment (FDI) and immigration. The shift in our economic and labor structure due to outsourcing will impact many different groups of people, mainly the next generation entering the labor market. The goal of this thesis is to examine the effects of outsourcing, Foreign Direct Investment, and International Trade on the U.S. labor market. It reveals that as an effect of outsourcing jobs have shifted to the emerging markets for cost and capability sourcing, but in response to the uproar on U.S. jobs being lost as businesses move abroad there seems more of job complementarily than substitution between parent and foreign affiliates. Also, companies are integrating vertically and that outsourcing is integral to a company’s success in the global economy. Furthermore FDI in the U.S. is not growing as rapidly as it is in Asia and many other parts of the world, when FDI is shown to positively affect a country’s economy. The U.S. because of the imbalance in international trade runs a huge trade deficit, which again takes a toll on the U.S. economy and employment. As the U.S. parent companies account for large shares of the overall U.S. economy, and foreign affiliates are also significant contributors to the U.S. economy there should be legislations that support multinationals to remain competitive in the global market as they contribute to strengthen the U.S. economy.
Bist, Ambika, "The Politics and Economics of Outsourcing: Where did all the jobs go?" (2015). Scripps Senior Theses. 530.
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