The Implications of American Outsourcing Essay Example | Topics and Well Written Essays - 1000 words

The Implications of American Outsourcing - Essay Example Over the years the American economy has taken a drastic turn for the worse, especially in the realm of job sustainability. In a study conducted by the University of California, "14 million white-collar jobs are vulnerable to being outsourced offshore" (Roberts, 2005). These include jobs requiring a high-level of skill including "information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services" (Roberts, 2005). According to another study done by EconEdlink, America's unemployment rate has increased alarmingly since 2001, after having experienced a period of substantial lows throughout the mid-90s. After that the unemployment rate remained somewhat steady, with a spiked increase between 2003 and 2004 followed by occasional yet not extremely noteworthy decreases. (See Figure 1 & 2 for a visual depiction of this phenomenon). How can outsourcing be justified in the face of such figures To make matters worse, many of the persons displaced by outsourcing are those who have spent a great deal of time, money and energy at colleges or other academic institutions trying to acquire specialized skills. When education can no longer offer assurance for an individual's financial future, "the value of the investment in training, and in the individual, to promote growth in America's society, and economy, is diminished" (Torrance, 2006). In fact, it is not too uncommon to hear IT graduates mumble about how there are so few jobs available because the jobs they were trained to do are now being exported (Torrance, 2006). Consequently, professional workers affected by outsourcing must consider either negotiating lower wages or changing their vocation completely. The former option seems unrealistic especially considering "businesses who are outsourcing can set a minimum wage in developing countries that would never be accep ted as a minimum wage in America" (Torrance, 2006). The latter option only exists as long as there are industries that are willing to do business primarily in the United States. If other companies also believe outsourcing will improve their profitability, then where can the American worker turn Outsourcing proponents argue that even though outsourcing may take a few jobs away initially, in the long run it will put more money in America's pocket by lowering the cost of consumer goods and services. It will help create a sector of jobs more reliant on management and creativity than a fulfillment of 'worker-ant' responsibilities. All of this could be true as long as some form of employment remains available for Americans to earn money for spending. However, if everyone outsources it will get to the point that reduced costs won't matter because Americans simply won't have the money to

Management accounting Essay Example | Topics and Well Written Essays - 1250 words - 3

Management accounting - Essay Example A higher actual purchase cost is depicted by the adverse material price variance. The prices of raw materials may have increased in the overall market. Moreover, this may be due to inefficient buying by the company. The procurement staff may have ordered the materials in small quantities that did not attract any discount. The material usage variance also is unfavorable. The materials purchased may have been of a lower quality than the standard. In addition, the company may have employed unskilled labor. The favorable labor rate variance affirms that the company may have employed un-skilled labor. In addition, the overall wage rates in the industry could have increased. Ultimately, it may have resulted due to poor planning by the management of Geeta. In contrast, the labor efficiency variance is unfavorable. It may be because of the company hiring un-skilled labor than the standard. Increased cost of services used may have made the variable overhead expenditure variance unfavorable. A rise in the statutory minimum wage rate may be a possible cause of the adverse variance. The adverse variable overhead variance is a result of more time used in the manufacturing process than the standard time. In addition, it could have resulted due to use of cheaper materials, use of unskilled labor and decline in the efficiency of machines used. Variances are interrelated when one is unfavorable while the other is favorable. This is demonstrated in the labor variances. The favorable labor rate variance indicates that the company may have employed unskilled labor, which resulted in unfavorable labor efficiency variance. Costing systems help a company to determine the relevant cost of a product. The traditional costing and activity based costing are the two common costing systems used. Activity based costing is a replacement to the traditional costing method. It divides production into major activities and then assigns costs to the activities based on the