Offshore outsourcing reduces living standards and limits social mobility.

Side opposition have created an argument for increasing the quality and affordability of education within developing states. Thanks to Trade Union’s intensive involvement in the decisions taken by large western businesses, companies that engage in offshoring are often compelled to invest a portion of the savings that they make from offshoring their operations into retraining schemes for staff at risk of redundancy. In 2005, the large IT services company CSC reached an agreement with the Union Amicus that required it to share a portion of the savings that it made through expanding its use of outsourcing with its staff[i]. Rather than declaring any redundancies, CSC gave its staff the opportunity to retrain by devoting almost £5000 for each of its English employees to education and development schemes. It is conceded that the offshoring relationships formed between America and India and China during the nineteen nineties formed the basis of the industrial booms that both of those states are currently experiencing. An influx of expertise and increases in education and living standards funded by companies specialising in offshore have enabled both Indian and China to reduce their dependence on US manufacturers in many areas of their economy. However, the transition of manufacturing-led industries into developing economies is only one aspect of the offshoring narrative. Increases in living standards within the developed nations of Europe and north America will only be sustainable if the individuals benefitting from higher wages and access to global markets for goods and services are able to maintain access to these advantages independently of the state’s intervention and changes in industrial practices. This goal is only possible if levels of education within a state are increased. Although side proposition believe that the increased burden on state support services that offshoring may cause is intractable, investment in education can limit the impact of such negative trends to only a single generation. The affluence of many developed states is also reflected in intense entrepreneurial activity within their economies. In states such as Germany the proliferation in highly specialised small and medium sized businesses- that are unable to afford the services of offshoring businesses- has sustained demand for skilled and semi-skilled jobs. Many of these firms are sustained by larger businesses seeking outsourcing opportunities that are unwilling to engage in offshore outsourcing. The size and relatively low individual incomes of German-style mittelstand enterprises prevents them from taking advantage of offshore outsourcing, often seen as (proportionately) too expensive and too risky[ii] by mittelstand executives. Such companies also help to sustain employment within economies that place a high premium on specialised technical and professional knowledge, but neglect equally complex and specialised vocational and craft skills. [i] “CSC to retain staff with offshoring cash.” 09 August 2005. http://www.guardian.co.uk/business/2005/aug/09/7?INTCMP=SRCH [ii] “Big is back.” The Economist, 27 August 2009. http://www.economist.com/node/14303582