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December 05, 2006

Pushing outsourcing

Outsourcing, which is the movement of jobs outside of the U.S. to a foreign country, is a big issue in today's economy today. Most people have assumed it occurs because companies can find cheaper labor overseas, but, as N.C. State University economist Mike Walden explains, a new study offers a different explanation.

"This study was done jointly by Duke University and the Booz Allen consulting firm, and what they found was very interesting, Dr. Walden says.

"They found that a significant number of companies said that they were not motivated to outsource jobs because they could find cheaper foreign labor. Instead, they were motivated simply because they couldn’t find the appropriate number of skilled workers here in the U.S.," he says.

"So it’s a push reason for outsourcing -- pushed outsourcing because they can't find the workers here rather than a pull -– rather than the attraction of cheaper labor," he adds. "This is a very significant finding. It flies in the face of all the assumptions that we’ve had about outsourcing.

"And if it’s accurate," he concludes, "it has a lot of implications for our educational system here in the U.S."

Posted by deeshore at December 5, 2006 08:00 AM

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