A major criticism of offshoring is that it __.
A. increases production costs
B. allows companies to avoid payment of any taxes
C. exchanges good jobs for bad jobs
D. threatens the sovereignty of larger countries
The correct answer and explanation is:
The correct answer is C. exchanges good jobs for bad jobs.
Explanation:
Offshoring refers to the practice of moving business operations, such as manufacturing or service work, to foreign countries where labor costs are typically lower. While this practice can be economically beneficial for companies in terms of reducing production costs, it has faced significant criticism, particularly concerning the impact on jobs in the home country.
One of the major criticisms of offshoring is that it often leads to the replacement of well-paying, stable jobs in higher-income countries with lower-paying, less stable jobs in lower-income countries. This is why option C, “exchanges good jobs for bad jobs,” is considered the correct answer. In many cases, companies offshore jobs that were once well-compensated and provided good benefits, especially in manufacturing sectors, to countries where workers are paid far less, have fewer labor rights, and face poorer working conditions.
The shift often results in job losses for skilled workers in developed countries, contributing to unemployment and income inequality. Although some jobs may still exist in the home country, they are often in service sectors or temporary positions, which typically offer lower wages and fewer benefits than the jobs that were offshored.
Offshoring can also have negative social and economic consequences. Communities that once relied on manufacturing plants or other industries may experience economic decline and a reduction in quality of life. In some cases, these workers may struggle to find equivalent employment in the same region, leading to a phenomenon known as “deindustrialization.”
While offshoring can provide benefits such as cost savings and access to new markets, the criticism centers on the human cost, particularly in terms of job quality and economic stability in the affected regions.