Outsourcing of Jobs

Check out this parody of Walmart!



Okay, this is not really related to what we are currently doing for econs now. It's more of macroeconomics and about outsourcing of jobs.

Basically, due to the 'everyday low prices' policy at Walmart, or in fact many other supermarkets in America, pressure is exerted on American manufactueres to lower their prices. To cut costs, many American factories have moved their factories to places like China due to cheaper labour.

The end result is unemployment as factory workers lose their job. Not to mention as well the 'poor quality' of Chinese goods which many Americans complain about, as well as the recent scares of toxic traces detected in imported Chinese goods.

Just to highlight the amount of Chinese goods that Walmart is importing, statistics have also shown that if Walmart is a country, it would be China's 8th biggest trading partner (ahead of even Australia and Russia.

Finally, if these American manufactueres were to shift their factories back to America, it would create millions of jobs. However, would Americans really want to work as factory workers, given the low wages? Some analysts say some Americans will, as the jobs they are holding on to now (mostly as janitors or other low-paying jobs) offer even lower wages.

Also, if factories were to shift back, labour costs will rise, making goods more expensive. Would Americans complain about the high prices then? This is a question that has no definite answer.

-jensen