JOVERO, Mia Nikka S.

July 30, 2014

BBM0101 Seat No. 21
A Case Study Analysis: Moving U.S. White-Collar Jobs Offshore
The terms "blue collar" and "white collar" are occupational classifications that
distinguish workers who perform manual labor from workers who perform professional jobs.
Historically, blue-collar workers wore uniforms, usually blue, and worked in trade occupations;
they perform labor jobs and typically work with their hands. White-collar workers typically
wore white, button down shirts, and worked in office settings; are highly skilled and formally
trained professionals. Other aspects that distinguish blue-collar and white-collar workers
include earnings and education level. (S. Scott, 2014)
Economists stated that high-skilled and high-wage white-collar jobs associated with the
knowledge-based economy would stay in the United States, but gone are the days when only
blue-collar jobs are offshored. Because of globalization and economic boom, white-collar jobs
are also outsourced. U.S. workers have reportedly become more concerned about the security
of their jobs due to increased global economic integration. The recession prompted employers
to seek further efficiencies by tapping into the global supply of labor. The United States
businesses were able to outsource abroad the jobs of white-collar workers in some service-
providing industries as a result of widely disseminated technological advancements that permit
low cost, good quality, and high speed transmission of data communication. Many American
companies have been moving knowledge-based jobs to developing nations where they could be
performed for a fraction of cost. The work that is used to be done in the United States is now
done in countries like India, China, Philippines and other countries, that have lower salary rate
than that of the United States; that results in reduced prices of project, salaries, that also gives
the company a cost-based competitive advantage in the global market. The short and long run
labor market implications of offshore outsourcing are also unclear. It can be claimed that from
the recent recession, it explained much of the jobless recovery; it also asserted that the link
between economic growth and job reaction remained intact and that the labor market would
eventually would recover from the short-run downturn in the business cycle.
So who actually wins in offshoring and who loses? Within nations, the trade tends to
redistribute a lot of income. The cost efficient strategies tend to get concentrated in the
pockets of the companies in a form of profits. If I am an investor, it enables me to consume
more and therefore contribute to job recreation. If I am a company, it enables me to re-invest
and create jobs. People who lose out are the blue-collar workers and are the older workers.
Also, the worker that is directly displaced from a sector is not the only one hurt by the
international trade, every worker who has similar skill profile is affected. But in the end, some
people who happens to be displaced, for example, who has manufacturing jobs, eventually, find
a new jobs.