Offshore outsourcing is consistent with existing labour distribution patterns.

Offshore outsourcing lowers the cost of goods and services. There is no real need for all of the goods and services that are consumed within a highly developed economy to be produced in that economy. The sale price of a particular form of good or service is determined by a wide range of factors, including the pay demands made by the workers assembling the good or providing the service. Seeking out a labour force willing to accept lower wages and work longer hours enables a business to reduce the price and increase the overall supply of the products it offers[i]. As more expensive and elaborate goods become available to more people- due to reductions in price- living standards throughout an economy will rise. Concurrently, increased demand for goods produced abroad will lead to increased business for offshore firms that take on outsourced work, leading to more money flowing into developing economies. Standards of living will also increases in these economies – albeit at a lower rate than in the import economy. Offshore outsourcing does nothing more than reflect labour distribution patterns that already exist in domestic economies[ii]. Different types of activity will be carried out in centralised urban areas- where land and operating costs may be higher- than in the countryside or peripheral, industrialised districts. Certain regions of a state, by dint of geography or earlier investment decisions, may produce a concentration of certain type of worker, service or skillset. Competition within these areas will drive labour costs down – but a downward trend in service and production costs will usually lead to an upward trend in demand. This interrelationship has successfully fostered developed within all of the worlds’ largest economies, without creating unmanageable regional inequalities and without undermining workers’ rights. Greater social mobility and education attainment within developed economies reduces the availability of the types of skilled and semi-skilled manufacturing-oriented labour that drove first-world economies during the twentieth century. First world nations now compete in knowledge-led economies, seeking to provide research new technologies and provide novel services to consumers in other highly developed nations. The residual power of collective bargaining mechanisms such as unions, coupled with expectations of high pay and highly refined working conditions mean the relative competitiveness of first-world manufacturing industries has dropped. Even if a state were to give preferential treatment to domestic manufacturers and low-level service providers, it would still run the risk of being out-competed by its counterparts in the developing world. Better standards of education, growing personal wealth and the frequent use of credit to purchase assets have created a collective action problem in first world states that practice off shoring. While, in the long-term, the number of highly skilled workers within domestic economies will grow, in the short term, a significant number of older manual and clerical workers may become unemployable as a result of more intense overseas competition. However, side proposition argues that this constitutes a marginal and bearable cost in term of the wider benefits to quality of life that outsourcing achieves. Further, the potential costs of assisting excluded domestic workers to re-enter the job market will be covered by increased taxation and excise revenues resulting from more frequent trade with offshore outsourcing firms. [i] “Idea. Offshoring.” The Economist, 28 October 2009. http://www.economist.com/node/14301171 [ii] “The once great offshoring debate.” Real Clear Politics, 16 May 2007. http://www.realclearpolitics.com/articles/2007/05/the_once_great_offshoring_deba.html