Is Working Online Damaging Our Economy?
More and more people with the skills necessary to do so are turning to working from their PC or Mac at home and turning down jobs anywhere else. Working from home allows you to be your own boss, save on fuel, and (in some cases) spend a lot more time with friends and family, but could this new entrepreneurial movement contributing negatively to our economy?
Online Work is defined by most as individual contract work that can be done in front of your computer at home. This could be anything from writing short articles, to developing websites and programming, to online indirect marketing. Choosing this type of career path usually means Telecommuting (working from home almost exclusively) and allows for much more liberty in the lives of the people who pursue it. The harm comes in when individual contractors from abroad start taking jobs in droves and move money outside of a country’s borders.
Crowd Sourcing, or the act of contracting a group of people outside of an organization to take on recurring tasks (usually for cheaper than could be done by putting a permanent in-house team on the payroll). Task Sourcing is much like Crowd Sourcing, but instead of recurring tasks the outsource group is usually hired to do a single job like build a single program or help balance a checkbook one time. Obviously these strategies allow companies to save a lot of money, and in some cases, avoid a lot liability. Crowd Sourcing and Task Sourcing, much like individual online work, can also be severely detrimental to a nation’s economy if too much work is outsourced and too much money leaves a country’s circulation.
Online work for a wide variety of skills can typically be found by signing up on a website for an account at a place like textbroker.com, Dion Data Solutions, or AccuTranGlobal. Some online work can also be found for more specific skill sets at places like Career Builder or through company websites like SYKES.com, or even by taking the initiative and approaching a company with a new web design idea or a coding improvement. Most companies pay online workers via a direct deposit method or paypal transaction for a predetermined amount.
Crowd and Task sourcing companies usually find work through direct marketing to companies and placing bids on jobs and services. Company A might design a great new accounting software for $5,000 and support the program for 2 years, while the boogey woogey bugle boys from Company B might do it for $3,500 and provide support for it for 1 year. Some argue that the price and benefits are typically the only things companies looking for crowd/task source groups concern themselves with; neglecting the hit an economy can take from taking a lower bid on a foreign group for a job in lieu of a higher bid from a company within the same country.
Online work and outsourcing aren’t always bad, however, as they allow people to gain documented experience in a field they want to work in and make it easier for them to work for a company in the future that can provide them with a base salary (if they choose to do so). Though, there is the little matter of individual contractors also having to be their own accountants (which can obviously lead to some number fudging for personal gain for the embezzlers and secret agents out there). Of course, also, any entrepreneur has to figure out how to pay for their employees health benefits, which can be extremely scary to an individual contractor (especially smokers and people with pre-existing conditions).
While any kind of off-shore outsourcing or individual contracting might not seem like a huge economic problem, consider the following:
1. SYKES Enterprises (a crowd source group based in Tampa, FL that provides customer service and account handling and allows work-from-home) has a top salary for an entry level off-shore worker of about $10 US Dollars. SYKES has over 43,000 employees (all of which are NOT entry level or off-shore). For the sake of this problem, we will say that 75% (32,250) of these employees are off-shore and entry level.
This means that 32,250 employees are draining out $619,200,000 per year from the US’s circulation.
2. BMW employees about 91,000 people all over the world. A large number to be sure, but let’s say that only half of those employees are outsource. Of those 50,500 that are outsourced, only about 1,360 are American entry level employees making an average top pay (for shift incentive) of about $28.
BMW’s outsource manufacturing center in Spartanburg, SC brings in about $73,113,600 to the US every single year.
3. SYKES’ outsource agents drain out roughly $600,000,000 in comparison to the measly $74,000,000 brought in by BMW. Making for a a deficit of $526,000,000 that is going out of US circulation (and has small chance of never returning). On the bright side, this does get a lot of other countries invested in US Currency, which is currently the world reserve currency, which helps to solidify out position as the holder of the world reserve currency (which prevents us from having to pay exchange rates on foreign goods like oil and minerals).
I personally believe that online work when done by an individual can help strengthen our economy. It allows people to self-educate themselves about running a business and being self-sufficient. When this is applied to creating a new business, it creates job opportunities which are a good thing for any nation’s economy. Crowd and task sourcing also help, but not as much as they hurt. They help by allowing less skilled people to get into a field and gain experience, but also drastically lowers the amount of pay and benefits employees will receive while keeping the workload the same (and in some cases, raises the bar).
But you still have to add foreign workers to the equation, and that’s when things get hairy. Even if only half of SYKES’s workers are foreign (way more than half are) and only 1,360 of BMW’s production associates are on top pay (less than 25% are), the imbalance is staggering.
The bottom line is that outsourcing and individual online workers aren’t really hurting our economy as much as some people argue that they are, unless most of this work is outsourced, bid on, or taken up by workers outside the country of origin who are making and spending their salary in a foreign land.
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@JulianaPayson is an associate based in Los Angeles at web hosting company InMotion Hosting. InMotion is well known for their US based technical support assisting customers with their choice from shared busines hosting plans through to VPS virtual private servers and dedicated hosting.