Question

Is there a difference between the transference of high-paying white-collar jobs, such as computer programming and accounting, to developing nations, and low-paying blue-collar jobs?

If so, what is the difference and should government do anything to stop the flow of white-collar jobs out of the country to countries such as India?

Answer 1

The major difference between the transference of high paying white collar jobs and low paying blue collar jobs between developing and developed nation are :-

1) The white-collar collar jobs are mostly outsourced to developing Nation in order to reduce the overall production cost by cutting labour cost expenses as hiring professionals in in developing country is much cheaper when hiring professionals in a developed country. On the other hand the blue collar jobs are outsourced two developing countries not because of their high wages rate but instead of the large amount of workers involved that automatically increases the production cost at a high level.

2) The transference of White collar jobs decreases the economic growth of the Outsourcing country as the the internal professionals of the country do not get correct employment opportunities which leads to less consumer spending thereby decreasing the aggregate demand as well as lowering the the government tax revenues. On the other hand transference of blue collar jobs leads to suppression of the economic weaker class of the the society further increasing the the economic gap between the marginally richer class and the marginally poor class.

The government should make effective provisions such as :-

1) creating better employment opportunities to make sure show that the professionals do not face unemployment due to outsourcing.

2) the government can take steps to fix a certain salary and wages reservation system that determine what are the certain wages or salaries for different professions in order to create an effective system so that the internal professionals do not suffer.

3) The government can take steps for fixing a quota of outsourcing jobs to developing Nations .

4) Putting effective taxation system that taxes profit of such companies at a higher percentage to set of the revenue loss of taxes from the professionals who have lost their employment opportunities due to Outsourcing of jobs to another country.