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1) It is very unlikely that they pay less than the "average wage in the area" in any meaningful sense. Why would skilled workers accept the jobs if they could do better otherwise? And it is hard for people here in the More Developed World to understand just how poor the opportunities for people in Less Developed Countries are. Outsourced jobs may be cheap from the hiring company perspective and still be much better than other opportunities from the point of view of those who are hired. Qualification: they would make more money still if they immigrated to North America and got similar jobs here. That puts upward pressure on the wages they are paid for the outsourced jobs, since immigration will be a relevant alternative for people with the skills outsourcers are looking for.
2) Unemployment rates are typically quite high in LDC's, and the outsourcing jobs probably reduce that unemployment somewhat, making a net contribution to the GDP of the country if they do. Qualification: the contribution to GDP would be much greater if the whole operation were moved to the lDC, rather than just selected outsourced jobs.
Two further thoughts. Goods imported from most LDC's are still subject to some tariffs. To the best of my knowledge there are no tariffs on imported labor. (I haven't checked, I should say -- I could be wrong. But if I am right ....) That would distort the market, making outsourcing look more "efficient" than it really is, because importing labor rather than products avoids the tariff -- a tax break. If so, that needs to be equalized. (As Kerry has been saying, no more tax breaks for companies that outsource jobs.)
Finally. In the long run (according to the free market theory) wages will rise so much in LDC's that they will no longer have the advantage of cheapness. In the research literature, that is called "equalizing up." But it could take a few generations, during which our children and their children will be poorer with each passing year, as, in fact, the working class in this country has been for a generation already.
But don't fret. It's "efficient," because "American" billionaires will be so much richer that it more than makes up the difference.
If you buy that, vote Republican. Better yet, get a brain.
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