Journal of Labor Research

, Volume 18, Issue 4, pp 503–519 | Cite as

Outsourcing: A corporate competitiveness strategy, not a search for low wages

  • Kenneth L. Deavers
Symposium Outsourcing, Union Survival, and Management Rights

Abstract

Popular use of outsourcing as a description of corporations’ search for cheap labor reflects a belief about the motives and consequences of economic restructuring, not careful analysis. As I show, several factors are at work simultaneously that are likely to increase outsourcing: rapid technological change, increased risk and the search for flexibility, greater emphasis on core corporate competencies, and globalization. In this broader context, outsourcing is the result of a complex change in the cost boundaries facing firms as they choose between inside and outside production. The question of what happens to wages is one to which there is not a simple a priori answer.

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Copyright information

© Springer 1997

Authors and Affiliations

  • Kenneth L. Deavers
    • 1
  1. 1.Employment Policy FoundationWashington, D.C.

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