There has been much talk in recent time about outsourcing and “sweatshops.” Outsourcing is usually defined as occurring when a company chooses to export some of its production to foreign countries. Jobs in which foreign workers work in “sub-standard” conditions and are paid lower wages (than their American counterparts) are typically referred to as “sweatshops.”
1) What are some of the economic reasons why some firms choose to relocate some of their productive facilities to foreign countries?
2) With regards to low- and high-skill laborers, which domestic (American) workers may gain from outsourcing, and which domestic workers might lose? Why is this the case?
3) With respect to the types of products produced by companies that outsource, what effect may outsourcing have on domestic prices of these products?
4) If the US government wanted to reduce outsourcing, what changes in policy could it make to do so?
5) Please watch the following 2 videos regarding “sweatshops.”
Inside Look at Apple’s Chinese Sweatshops!
John Stossel – Sweatshops
Describe the main points of EACH video. What evidence do they present to reach their overall conclusions?
6) After watching the videos, please tell me if “sweatshops” are a good or bad thing for foreign workers? WHY? You need to thoroughly explain your answer.
