In the aftermath of 9/11, the trend in companies in the US has beento outsource
ID: 1235993 • Letter: I
Question
In the aftermath of 9/11, the trend in companies in the US has beento outsource jobs outside the US. There have been claims andcounterclaims that this has led to a substantial increase inunemployment. What are your thoughts on how to "decrease the priceof production"? Do you think that by decreasing the price ofproduction, companies can thus increase quality? Wouldn't it standto reason that cheaper production = cheaper quality?When factoring labor costs into the costs of production, is itpossible to increase jobs available while decreasing productionexpenses? Wouldn't decreasing production expenses also eliminatejobs availability?
Explanation / Answer
You can decrease the price of product by using Research andDevelopment to develop cheaper ways to producing the goods. Also, if these cheaper ways, happen to involve heartier materials,then it could stand to reason that cheaper production = higherquality... However, in most cases cheaper production does equalcheaper quality. You can increase the # of jobs available by reducing the salary ofeach position. Minimum Wage laws are VERY VERY VERY bad foran ideal economic labor market, because companies will not hire asmany people as they are forced to pay a certain price. Unionsare bad for the same general reasoning. In most cases, decreasing production expenses refers to materialcosts vs human costs. However, continued decreasing willalways eventually eliminate human jobs.
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