Outsourcing is the contracting out of an internal business process to a 3rd party. In short, it often manifests itself in a company hiring cheap overseas labor which replaces domestic jobs. On the surface, this seems disturbing. But there is more than initially meets the eye. First, we are talking about a global economy, and if a domestic company is producing a labor-intensive product, they had best produce that product in a low cost labor market, or they could be out of business. Their international competition most certainly will have low unit labor costs, and their final prices will reflect that. A politician may wring his/her hands about it, but short of throwing up tariffs, there is nothing that can be done. And you won't find a legit economist on the planet that would agree to the old days of high tariffs.
By the same token, those that complain the loudest about outsourcing never even mention "insourcing". That is, international companies like BMW and Michelin locating plants in South Carolina, and Honda, Nissan, Mercedes, and Hyundai having manufacturing in Alabama. It is Europe, with its liberal labor practices, high tax rates, and restrictive tariffs that has been outsourcing millions of jobs.
The upshot is that globalization has resulted in a loss of some jobs.....unionized factory jobs in autos, steel, and textiles. But manufacturing insourcing has more than offset this in right-to-work states. By the same token, there have been significant increases in the services industries, technology, and knowledge based industries. Nonetheless, some would balk at the service industry...they would argue that it doesn't pay well. But many service based jobs (trade, finance, insurance, banking, retail, travel, delivery, education, healthcare, entertainment, government, etc) have very competitive wages. And here is the salient point: A booming service economy is a symptom of economic sophistication.
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