While it is informative and beneficial to learn about the impact of offshore outsourcing on both companies and employees, it is equally beneficial to learn about what offshore outsourcing means for Americans as consumers.

The economy of the United States is driven by consumers, and American companies cater to a consumption-oriented lifestyle. Companies strive to provide quality products and services and to remain competitive in the world of consumerism. It has always been important to serve the customer. Now, companies are finding it increasingly necessary to cut their own costs in order to remain price competitive to consumers. It is estimated that companies that ship domestic jobs overseas save approximately 25 to 40 percent in labor costs compared to hiring domestic workers to complete the same tasks. This, in turn, results in the company’s ability to offer lower prices to consumers.

Thus, consumers may benefit from offshore outsourcing, because they can buy the same products or use the same services they normally would for less money. Because cost is the driving factor behind why many companies choose to offshore outsource in the first place, it is logical to determine that cost is the driving benefit of offshore outsourcing for consumers. If a company has to spend valuable resources to hire highly skilled employees in the United States, the price of the goods produced is naturally going to be higher. When a company offshore outsources, however, the money saved in the total production and distribution process can be transferred to the consumer. Companies hope that consumers will continue to buy their products and be loyal to their brands.

While the benefit to the consumer is obvious, another question must be raised. When the cut salaries and overall job losses of information technology (IT) industry workers are taken into consideration, are the cost savings as a result of offshore outsourcing really a benefit to consumers? The job losses, lower salaries, and underemployment caused by offshore outsourcing, as well as their concomitant effects on spending by these displaced workers, must be factored into any economic analysis of the benefits to consumers of offshore outsourcing. How do lower costs of goods stack up against the economic impact of the loss of hundreds of thousands of well-paying jobs?