4. U.S. productivity has improved noticeably in recent years, averaging 4%–5% pe

Question

4. U.S. productivity has improved noticeably in recent years, averaging 4%–5% per
year, while the U.S. economy grew by only 3.5%. The gain in productivity was due,
in large part, to the use of technology, in addition to longer working hours by those
who are lucky enough to have jobs. According to the Economic Policy Institute, the
average U.S. worker has added 199 hours to a year since 1973. The United States
achieved per hour productivity of $32, compared with $38 for Norway, and $34 for
Belgium. In other words, U.S. workers are simply working longer, not necessarily
better or smarter. They take less annual vacation time (only 10.2 days, on average),
compared with 30 days in France and in Germany.
At the same time, a large number of U.S. companies are aggressively outsourcing
work to low-wage countries, such as China, India, the Philippines, and Mexico.
A 2003 study released by the University of California at Berkeley indicates that as
many as 14 million U.S. service jobs are in danger of being shipped overseas.
Who is responsible for this peculiar position that U.S. workers are being forced
into? How can U.S. companies meet the new challenge of improving the quality of
life for their workers, without sacrificing the companies’ relative competitiveness
in the marketplace?

Chapter 14: Engineering Management in the New Millennium

Book: Engineering Management / Meeting the globa challenges 2nd ED C.M.Chang

Explanation / Answer

The outsourcing process can be explained in a very easy way, for example the pay of a company in the U.S is 20$/hour, where as if the same company is giving projects through outsourcing process the pay given may be around 500 rupees (in India) which comes out to be only around 8$/hour, so in this way the company is going to save a lot of money without investing in man power and it satisfies the minimum earning of the low wage income countries like India, mexico and other countries, according to a recent survey from PayPal India is the largest market for freelancer communities, most of the companies are based in the U.S.A, so in this way a lot of jobs are being outsourced to the other countries. The major responsibility for this reason is the people working in the U.S.A and not willing to work for the low wages like the low income countries.The governement should restrict the jobs for overseas employment and it should encourage the local communities for job, the people in U.S.A instead of working for longer hours and taking less days for vacation they should work how to work smartly and productively, for example let us consider a software company working on a project and it is given to a team of ten persons, five are based in India and five are based in U.S.A, in India the persons are working on outsourcing basis and try to finish the work within the given deadline, if the five members in U.S.A instead of working for longer hours if the team members try to work in a smarter way by improving the quality of project this will lead to better quality of project and greater creativity in the people who work in the U.S.A.

The U.S companies can meet the new challenge mostly by giving preference to locals, in case they are eligible, the citizens from other countries should not be stopped into stepping in, if the citizens from abroad are stopped from stepping into the U.S, the economy can be hit and may have a shortfall of manpower, so any company in the U.S should follow certain recommendations like giving most preference to talented and productive local citizens, and giving jobs to less abroad citizens, the companies should take care of their employees and also pay the minimum wages, in this way they can improve the quality of life of their workers without sacrificing the companies relative competetiveness

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