Outsourcing essentially redefines economic boundaries - meaning that someone from an area with a low cost of living (such as India) can directly compete for a job originating in an area with a higher cost of living (such as the US). Outsourced wages are decreased, of course, but they are still drastically higher than wages from comparable Indian jobs (by Indian companies). It is problematic since it shifts economic productivity to other parts of the world - productivity that we, as Americans, created. An outsourced job will yield a paycheck to a foreigner, who will spend that money in his home country, while a job remaining here in the US will yield a paycheck to an American who will spend that money in the US economy. It essentially siphons capital away from the US, and creates prosperity in other countries to our detriment.
I don't know... I get that from one perspective, if a company is going to have a given number of jobs and they go somewhere else, that affects the previous location's community and it makes certain waves in other markets that may lift up the relative security or buying power of people in another place. That's just how companies work, if you let them operate in a more laissez-faire vacuum around the world. The other choice is perhaps to give regional or national priorities more clout somehow, and risk retaliation from foreign alliances or blocs...
Though companies (at least big
ones) may also say, well "someone is going to do it and sooner or later they are competing with us
." So if we are not allowed to move and compete, well you will have to subsidize us or give us some other incentives to stick around. Or at least, you might need to protect your smaller companies some other way from other, more globally mobile and cash fluid companies that can go wherever labor is cheap and regulations are less cautious.
But from another angle, I also don't think "productivity" exists in a vacuum where employers can easily decide what region 'should' benefit without a whole string of global consequences. Actually making anything beyond the basic idea requires enough people (and talent, awareness, contacts, even languages?) to get all the creation and support and distribution and marketing done
in a material sense. Actually gaining and maintaining -- or moreover as larger companies generally say they seek, especially expanding
-- market share requires new populations with some level of increasing income to at least become potentially interested in some of those products (or even for starters, cheaper versions of somehow complementary or similar products).
While an Indian worker may well spend some
income on necessities and fashions that are often cheaply available from local, more "native" if you will sources, that worker could also sooner or later buy some things from foreign companies in certain areas. And at some point, a larger internationally marketing company takes an interest in having a certain reputation in having name familiarity and a pool of workers with increasing incomes in various countries, so that it might think of selling to a market where it is producing as well as in those higher income populations it has been exporting stuff (or, also sending stuff "back"?) to.
So to some degree it depends what your model is for economic growth or stability. Workers are getting burned pretty well in many places in all but the "highest value" industries. That's not just in the U.S. -- You can look at things like the living and working conditions that clothing or even, some computer chip workers face in some parts of either China, Southeast Asia, or even Mexico and find that regardless of marginal wage gains, probably many are not having an 'easy' time of it.
While Americans - men in particular - have had some complaints of a drain on industrial jobs since at least the 70's-80's, many Asia-Pacific countries speak of a situation with "rich country, poor people" as much of the corporate money coming in goes to bureaucracy, outright bidding fees and kickbacks or informal "greasing the wheels," and finally into facilities that may only last as long as the company hangs around before moving on to the next cheaper labor force. There is surely a bit of worker versus worker competition that appears more toward the month to month survival level when whole operations move about, but I think more of the "big" game of wealth collection and market fixing is still being played between a small number of government elites and top company board types.