What challenge does job outsourcing create for domestic economies?

Job outsourcing, which involves hiring external organizations or overseas labor to perform certain jobs or services, can lead to job loss in the local workforce. This occurs because companies may choose to outsource tasks to take advantage of lower labor costs in other countries, reducing the demand for local employees. As a result, domestic workers may find themselves facing layoffs or diminished job security as their roles are transferred to outsourced operations.

While outsourcing may bring some benefits, such as cost savings for companies, the direct impact on the local economy often includes reduced employment opportunities for residents. This phenomenon can also result in a shift in the job market as certain skills become less in demand, further contributing to challenges local economies face, such as increased unemployment rates and economic instability for affected workers.