Should the U.S. Government Levy Additional Fines or Taxes on Companies Essay

Should the U.S. Government Levy Additional Fines or Taxes on Companies That Ship Jobs Overseas - Essay Example The paper tells that according to the McKinsey Global Institute the threat posed by shipping jobs abroad has been grossly exaggerated. To start with, they argue that the number of jobs lost per year to offshoring is far fewer than the normal rate of job turnover in the economy. Secondly, savings from offshoring enables companies to invest in future technologies that create more jobs at home and abroad. Thirdly, global competition improves the skills of American companies making them more competitive. Companies that offshore have the opportunity to take advantage of distinctive skills that are available overseas. Fourthly, the U.S. runs a trade surplus in services. This means that America needs other countries to buy its surplus services. If America refuses to similarly offer overseas countries a platform for trade – by refusing to procure their services – these countries may opt to retaliate and thus leave the U.S. with no one to trade in its excess capacity. On the con trary, in â€Å"It's a Flat World After All† argues that the convergence of information and communication technologies (ICTs) have leveled the playing field and if not addressed as a critical issue by the U.S. policies, it could signal the end of American wealth and global dominance. He further argues that whereas in the past American companies offshored primarily to minimize production costs, nowadays they do so because they are unable to find the talent they need locally. Nobel Laureate Paul Samuelson agrees with Friedman when he states that free trade could leave rich countries worse off by eroding them off their comparative advantages. Moreover, who says that China, India, Russia and the other emerging economies are content with providing low-end, low-wage jobs for eternity.