The Impact of Outsourcing of IT Jobs Concerning Technological Developments and Improvements in the United States

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Chapter 4: FindingsThe purpose of this quantitative research study was to investigate the impact of outsourcing of IT jobs concerning technological developments and improvements in the United States. Swar, Moon, Oh, and Rhee (2012) described the total quality management (TQM) theory and placed emphasis on the essential for constant corporate tactical progress on a 10-point practice. The independent variable was operational cost savings, and the dependent variable was total cost savings for the strategic outsourcing plan. The simple and randomly selected method was used for the participants in this study, using the most current and liable official data statistics from the Bureau of Labor Statistics. The research questions one and two was analyzed using the t-test to test operational cost savings, and the multiple regression analysis used to test the total cost savings. The study used the correlation analysis to test hypotheses H10 and H20. The correlation analysis decided whether job outsourcing measured in activities and operations within an unsteady and a steady information technology division was related to production measured by output hourly and per person quarterly. A descriptive statistical analysis was conducted using the SPSS software for the study data to determine means and frequencies. The following two research questions helped led this quantitative study:Research QuestionsThe following research questions and hypotheses recommended for this quantitative study involving a measurement in activities and operations in an unsteady and a steady global economic impact of information technology jobs outsourcing.Q1. What is the relationship between the activities and an unsteady global economic impact of information technology job outsourcing?Q2. What is the relationship between the activities and a steady global economic impact of information technology job outsourcing?Hypotheses (Quantitative/Mixed Studies Only)H10. A measurement of the activities will have no change of operations in an unsteady global economic impact of information technology job outsourcing.H1a. A measurement in activities will significantly decrease operations in an unsteady global economic impact of information technology job outsourcing.H20. A measurement of the activities will have no change of operations in a steady global economic impact of information technology job outsourcing.H2a. A measurement in activities will significantly decrease operations in a steady global economic impact of information technology job outsourcing.The results of the study provided businesses and the general public insight on how information technology job outsourcing would change the lives of all involved for the good or bad. The decision to outsource for some allowed those to cut operational savings and cost savings aboard. For others, their choice not to outsource provided those in the U.S. to stay employed and money was put back into the economy.FindingsWith the research, it is obvious that outsourcing jobs are not new to Americans. It has been used as a competitive advantage in the multinational market. Also, the outsourcing jobs have not only been used by the Americans but had become the trend in Japanese and European countries. Different countries used the outsourcing jobs to have the better expertise to perform specific tasks, but somehow it always left an impact on the productivity and the economy of the country. Same has been the case with America. Especially, in the 90s, when information technology outsourcing jobs were introduced, the economy of the countries was highly impacted either in a positive way or negative way.Outsourcing jobs are the better option for the countries that don’t have workers to work or do not have expertise but when the country is having skilled and educated people then outsourcing jobs leave a negative impact on the productivity and economy of the country. IT outsourcing jobs started when the communication became easier and faster with the use of internet and other communication devices. The Internet made the World a global village and people started to communicate with each other in easiest and fastest way. When the people were getting benefits of the information technology, then the industrialists and other professionals also thought to get benefits from IT by the outsourcing jobs.IT outsourcing job eliminated the geographical restrictions and distance became no issue. The professionals in any country could hire any employee from any other country, and thus the hiring for specific difficult tasks became easier. The trend of IT outsourcing became popular when the United States lacked in IT programmers, and they had to hire the expertise from other countries. The IT professionals and the industries begin to hire the expertise from other countries, such as India or China and got benefits of the outsourcing. In U.S. the IT outsourcing also became the trend because of the expertise and well-educated employees, from other developing countries, agreed to work with the U.S. companies at low wages and thus it was beneficial for the business sector of America.The workers or the expertise from other countries, such as India and China, also agreed for working with American companies because these countries had a lot of workers and due to surplus workers in these countries, the workers were ready to work with American companies at low wages. There is confusion; people think that outsourcing means, hiring people from other countries but this is not the case. When an American company makes a contract with any other non-American company, then it can also be referred as the outsourcing jobs because in this way the earner or the employee is not American. Or the contract may be done with the American company but in other countries.More Read: Animation institute in MumbaiWhen analyzing the Bauru Labor Statistics of America, then it is observed that since 2011, U.S. is losing so many jobs due to outsourcing jobs. According to the estimates, approx 2,273,392 jobs were lost due to outsourcing jobs in American. The details of the outsourcing ratio in different industries of American are shown in the figure below. The figure shows the complete statistical position of outsourcing in America. It is clear from the results that Administrative industry is the one which is least interested in the outsourcing jobs, whereas, information technology (IT) industry is using outsourcing jobs with the great ratio. According to the statistical results, the outsourcing jobs have been used by the Human Resource, IT, Sales and Marketing, Finance, Administrative, and other industries (Hemani, 2017). The percentage of the outsourcing jobs in the specified industries are shown in the figure below;Figure 1 Active Areas in Outsourcing.No doubt that results have shown that American is more inclined towards the outsourcing jobs because it is easier to get cheaper and skilled labor from other countries at low wages but then the question remains at its position that how is it affecting the economy of the United States? And to answer this question is the main motive of our research.Although it seems that the United States is getting so many benefits from the outsourcing jobs and enjoying the cheap labor which is skilled and experienced in their work, this is not the actual reality. Everything when provides benefits then there are some chances of loss as well, and the better thing is the one which provides more benefits and less loss. However, this is not the case in term of outsourcing jobs because it provides fewer benefits but more disadvantages to the country.According to the static results of 2013 of Bureau of Economic Analysis, US overseas affiliates employed 14 million workers in 2013 which seems great as it became easier for the IT industrialists to get better workforce at cheap rates without restriction of geographical position but let come to the losses to the America (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017). With the growth of IT outsourcing jobs, the competition is increasing in the global marketplace, and thus the industrialists can have workers at cheap wages which, as a result, is keeping labor costs low. When the country’s labor cost will be lower than there will be no standards of living and thus will affect the economy of the country (Meghan O’Neill, 2016).Also, with the increase in the outsourcing jobs, the U.S. unemployment is increasing. Now the companies can hire the IT workers from other countries at the very low wage, for which an American will never be ready. When the experts at cheap rates are available, then the companies does not give a chance to the skilled and experienced Americans, and thus it causes an increase in unemployment. According to the records of the Bureau of Economic Analysis, if 14 million workers have been hired from other countries in 2013 then it means that it doubled the 7.5 unemployed Americans (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017). Wouldn’t it be better to hire the Americans rather than the foreigner?The figure below shows that how the outsourcing jobs in 2013 have made a negative impact on the unemployment in the United States. The graph is clear indication that if the outsourcing jobs continue to increase, then it will result in higher unemployment in the United States which can be a great threat to the economy of the United States. No employment in the country means no value of experts and then no living standards which will raise so many issues within the country. However the present President, Donald Trump, has declared that he will bring all the American jobs back to the country so the decrease in unemployment can be expected (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017).Figure 2 Outsourcing Jobs and Unemployment in U.S.Outsourcing is not only in increasing unemployment in the United States, but also it is somewhere affecting the competition between the U.S. companies. As the outsourcing has made the companies able to hire the workers from other countries at a very cheap rate so they can manage the reasonable costs for consumers. However, if the laws to the artificially restrict job outsourcing will be implemented, then the U.S. companies will have to hire the U.S. workers at a very high rate which will in return affect the costs for consumers too, probably higher costs for consumers.In this way, most of the companies will not be able to manage their budget and to afford the high rate employments and the pressure might lead them to move their operations overseas, or the companies may be forced out of business due to expenses for the high rate employments. This will somewhere reduce the competition in the U.S. companies. But again when there are negative then there are positives too, and the major focus is always positive. When the companies start hiring the U.S. workers, then this will result in the reduction in unemployment yielding in better living standards and better economic condition of the United States of America.Now the question arises that why U.S. companies are for outsourcing jobs? In the U.S. business sector it is essential to compete at the global market level, and thus it is important to provide products at a reasonable rate so that the consumers will be able to buy the products and thus it will in return raise the U.S. companies’ market reputation in the global market. If the companies hire Americans, then they have to pay much to their employees, and thus they become unable to reduce the costs of the products. However, it is easier to hire the workers from other countries because the IT worker in China eras $7,000 per year and India earns $8,400. If the U.S. companies hire the same experts, the skilled workers from other countries such as India or China, then the companies will hire them at very cheap wages which will in return make the companies able to reduce their product costs for consumers.The workers from other developing countries become ready to work for low wages because the individual who earns $7,000 per year in China, can earn $22,600 when working with U.S company. Similarly, the person who is earning $8,400 per year in India, can earn $30,800 per year when working with U.S. companies. Thus the workers become ready to work with U.S. companies and both works by their benefits. But these benefits affect the U.S economy in the worst way because the Americans who were earning $30,000 per year while working with U.S. companies are now unemployed and have not enough money to have a better life. These statistical results are shown in the figure below;Figure 3 Impact of Outsourcing on the Earnings of EmployeesThe outsourcing was established in the Untied States for two purposes. Firstly outsourcing was established to reduce the prices of goods, and secondly to increase the demand for the goods from other countries. It was expected that with the progress of the business sector or the increase in demand of the goods from other countries will leave a positive impact on the economy. It was also considered that the Americans would be able to buy good quality products at lower prices. It was also considered that outsourcing would make companies able to hire the employees from other countries and to increase the demand for products from other countries which will make the American Companies prominent in the global market. Moreover, the target of the companies was to increase the competition between the American Companies because when they provide great quality products at low rates, then it will increase their sales and reputation in the global market.The results, finally, were opposite to the expectations. With the increase in the IT outsourcing, the economy of the U.S. was negatively affected due to losing skill level, dependency on the other countries, and charming innovations. No doubt with the increase in competition in the business sector U.S. lost competition in the skill levels which highly impacted the economy of the country. Similarly, with the decrease in the costs of the products U.S. faced the increase in dependency on other countries. With the increase in the outsourcing jobs, the companies were highly dependent on the workers of other countries, and thus indirectly were depending on other countries (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017).Also with the increase in the availability of the experts and skilled workers at low wages, U.S faced the great harm to the innovation and the talent of the United States was highly affected due to outsourcing jobs. Outsources also resulted in sending out the Research and Development abroad and thus it harms the innovation of the United States and makes the country dependent on the other country. With such outcomes, who can expect the good results at the economic level?When the outsourcing jobs affected the employment in the United States then. As a result, the income tax collection of the government was also affected which directly caused the reduction in funds. It is because when the American lost their jobs and unemployment was increased, then the government received less income tax. Due to this less income tax collection, the government was unable to provide funds for the governmental agencies, such as Social Security and Medicare.According to the BLS, results from 1980 to 2012 are shown for the ratio of Government employment in IT sector. One can see that the employment ratio in 1980 was approx 10% in the IT industry, but with the increase in the outsourcing jobs, the employment ratio for the Americans decreased and reached to the 9% (BLS, 2017). The results are shown in the figure below;Figure 4: Government Employment affected by IT Outsourcing Jobs.From the statistical results of the BLS, the employment in the IT sector from 1980 to 2014 is shown the figure below. In 1980, the employment in the IT industry was 19,000 jobs for Americans and gradually, with the increase in the outsourcing jobs in IT sector, the employment decreased by 12,000 jobs for the Americans (Statistics, Bureau Labor Statistics).Figure 5 Employment in IT IndustryFrom these results, it can be concluded the IT outsourcing jobs have left negative impacts on the U.S. economy and have reduced the productivity of the economy of the United States (Labor, 2017).Evaluation of the Chapter:The outsourcing was established in the Untied States for two purposes. Firstly outsourcing was established to reduce the prices of goods, and secondly to increase the demand for the goods from other countries. It was expected that with the progress of the business sector or the increase in demand of the goods from other countries will leave a positive impact on the economy. Moreover, the target of the companies was to increase the competition between the American Companies because when they provide great quality products at low rates, then it will increase their sales and reputation in the global market. But the results were opposite to the expectations. With the increase in the IT outsourcing, the economy of the U.S. was negatively affected due to losing skill level, dependency on the other countries, and charming innovations. No doubt with the increase in competition in the business sector U.S. lost competition in the skill levels which highly impacted the economy of the country. Similarly, with the decrease in the costs of the products U.S. faced the increase in dependency on other countries. With the increase in the outsourcing jobs, the companies were highly dependent on the workers of other countries, and thus indirectly were depending on other countriesAlso, from this chapter, it can be evaluated that with the increase in the outsourcing jobs, the U.S. economy is facing great challenges. Outsourcing is increasing the availability of the skilled workers who are ready to work at low wages, due to which U.S faced the great harm to the innovation. Also, the talent of the United States was highly affected due to outsourcing jobs. Outsources also resulted in sending out the Research and Development abroad and thus it harms the innovation of the United States and makes the country dependent on the other country.With the increase in outsourcing job in IT industry of U.S., the unemployment ratio is increasing, due to which the income tax receiving is decreasing to the Government. As a result, the Government is unable to fund the social programs. Moreover, outsourcing is harming the innovation, skill level, and the experts of the United States due to which the living standards have also been affected. In short, the outsourcing can no way be a better choice for the United States.Summary:In this chapter, I have analyzed that how the results from the BLS statistics reports and other secondary resources are useful to evaluate the impact of IT outsourcing on U.S. economy. The results show that with the increase in the IT outsourcing, the economy of the U.S. was negatively affected due to losing skill level, dependency on the other countries, and charming innovations. No doubt with the increase in competition in the business sector U.S. lost competition in the skill levels which highly impacted the economy of the country. Also with the increase in the availability of the experts and skilled workers at low wages, U.S faced the great harm to the innovation and the talent of the United States.The results also show that IT outsourcing is the main reason for an increase in unemployment in the United Stated due to which the income tax is reducing and also affecting the government funds for social programs. In short, from these results, it can be concluded the IT outsourcing jobs have left negative impacts on the U.S. economy and have reduced the productivity of the economy of the United States.Chapter 5Implications, Recommendations, and Conclusions The study gave a detailed discussion of the Research Proposal related to a five-year analysis of the global economic impact of information technology jobs outsourcing. The global economy and job outsourcing had huge impacts on the U.S. and other countries as well. Despite the attention that job outsourcing had received in the past few years, there had been a sufficient amount of empirical studies to provide individuals with an answer to whether job outsourcing was risky or beneficial to the national employment (Park, 2009). Job outsourcing, also recognized as offshoring, of information technology (IT), involved moving or relocating parts of computer-related functions of a firm such as help desk, network maintenance, research and development, and computer programming to a place outside the country. The research has shown that job outsourcing had a huge impact on the operational cost savings and total cost savings, quality of life, and household incomes, within the United States.The global economy and the outlook of job sourcing within the IT industry had become a phenomenon that had influenced the quality of a company’s relocation, and efficient management stated Ginovsky (2009). The research study took place in the United States, and the purpose of this study was to analyze the impact of outsourcing of IT jobs concerning technological developments and improvements in the United States. The independent variable was operational cost savings, and the dependent variable was total cost savings for the strategic outsourcing plan. The simple and randomly selected method was used for the participants in this study, using the most current and liable official data statistics from the Bureau of Labor Statistics.So many researchers have worked to analyze the impact of the outsourcing jobs on the employment of the United States and the economy of the United States. These ethical theories aided in structuring the environment, magnitude, percentage, and scheduling regarding job outsourcing. Ethical theories also supported administrative leaders to decide to outsource jobs made in unification along with organizational objectives. The management decision to drive jobs out of the country should take into the reason the organization’s responsibility to support its employees’ and other stakeholders’ civil liberties while applying its choice to search inexpensive experienced labor set up in countries in where U.S. jobs have outsourced. This research was conducted to study the differences between measurement in activities and operations in an unsteady and a steady global economic impact of information technology job outsourcing. To obtain a thorough understanding into whether there was a relationship between job outsourcing as measured in activities and separations, and production in the unsteady and steady information technology industry measured in output hourly per person measured four times a year, this study involved a quantitative correlation analysis method.The study population was drawn from 25 U. S. based information technology businesses such as AT&T, Apple Inc., and IBM that was, at current, comprised in job outsourcing (Bell et al., 2010). The study population was resulting from the data, which the researcher had collected from the BLS website. The gathering of statistical information interrelated to labor was sanctioned by the U.S. Congress. Also, these facts stream were part of a bigger collection work. This particular portion was kept by BLS, under its Mass Layoff Program, established in 2004 (BLS, 2010). The proposed research study employed a quantitative correlation method to recognize and differentiate the effects of outsourcing of IT positions on impending technological improvements, as well as on the quality of life in the United States. To obtain a thorough understanding into whether there was a relationship between job outsourcing as measured in activities and separations, and production in the non-steady and certain information technology industry measured in output hourly per person measured four times a year, this study involved a quantitative correlation analysis method. The study used to document historical data taken from the BLS. The study used this statistical data to look additionally at whether any dissimilarity exists in the information technology industry.The results of this study remained limited to the validity and reliability of the data that was gathered from BLS. Although conscious hard work was done by the researcher to ensure complete and proper collection and evaluation of the study data, the problem rests that organizations could not have reported to BLS all of its outsourcing data, and this could impact the study’s overview and replication. On the other hand, the researcher identifies the essential limitations of surveys in that they could not simply allow participants to look for an explanation or offer added material to give details to the replies. Therefore, it would be risky for the researcher to conclude or oversimplify the findings revealed in the study.Implications:The study was conducted to understand the impacts of the outsourcing on the productivity and the economy of the United States. This study answers all research questions. From this study, it can easily understand that there is a strong relationship between the activities and economic impact of the IT job sourcing. As the job sourcing is increasing, the availability of the workers from different geographical locations is also increasing due to which the competition and low wages workers availability are increasing, but as a result, the unemployment in the United States is also increasing which is affecting the economy of United States in the worst way.When comparing the relationship between the activities and a steady global economic impact of IT job sourcing and the relationship between the activities and unsteady global economic impact of IT job sourcing then we find IT job sourcing in two ways, a better approach, and a danger to the U.S. economy. Unsteady global economic impact or Steady global economic impact, both, of the IT job outsourcing, is contributing to the joblessness, less funds to the social programs, less receiving of income tax to the U.S. government, low living standard, low value to the skilled and IT experts, and less value to the educated people of United States.When analyzing the Bauru Labor Statistics of America, then it is observed that since 2011, U.S. is losing so many jobs due to outsourcing jobs. According to the estimates, approx 2,273,392 jobs were lost due to outsourcing jobs in American. Although it seems that the United States is getting so many benefits from the outsourcing jobs and enjoying the cheap labor which is skilled and experienced in their work, this is not the actual reality. According to the static results of 2013 of Bureau of Economic Analysis, US overseas affiliates employed 14 million workers in 2013 which seems great as it became easier for the IT industrialists to get better workforce at cheap rates without restriction of geographical position but let come to the losses to the America (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017). Also, with the increase in the outsourcing jobs, the U.S. unemployment is increasing. Now the companies can hire the IT workers from other countries at the very low wage, for which an American will never be ready.The outsourcing was established in the Untied States for two purposes. Firstly outsourcing was established to reduce the prices of goods, and secondly to increase the demand for the goods from other countries. The results, finally, were opposite to the expectations. With the increase in the IT outsourcing, the economy of the U.S. was negatively affected due to losing skill level, dependency on the other countries, and charming innovations. No doubt with the increase in competition in the business sector U.S. lost competition in the skill levels which highly impacted the economy of the country. Similarly, with the decrease in the costs of the products U.S. faced the increase in dependency on other countries. With the increase in the outsourcing jobs, the companies were highly dependent on the workers of other countries, and thus indirectly were depending on other countries (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017).Also with the increase in the availability of the experts and skilled workers at low wages, U.S faced the great harm to the innovation and the talent of the United States was highly affected due to outsourcing jobs. Outsources also resulted in sending out the Research and Development abroad and thus it harms the innovation of the United States and makes the country dependent on the other country. With such outcomes, who can expect the good results at the economic level?Recommendation:From this study, it is clear that IT outsourcing is no way a good option for the economy of the United States and thus the United States should either eliminate the IT outsourcing from their business system or must reduce it to regain the competitiveness amongst the skilled and experienced workers of United States. By reducing the IT outsourcing, U.S. will make sure that high paying jobs are going to citizens of the United States. This will also increase the innovation and the living standards in the United States.With the reduction of IT outsourcing in the business sector of the Unites States, the companies will begin to hire the skilled and experienced people from their country which will in return encourage people to get advanced education and to expose their innovative thinking. With the exposure to innovative thinking and advanced education, the people of U.S. will be encouraged to make strong decisions about their future and their country. No doubt with such actions the democracy will get stronger because in this way the government will get income tax and will be able to pay for different funds.The reduction of IT outsourcing will be beneficial in many ways. First, federal funds will be used to address the supply side of the problem. Second, it will reduce the number of H-1 visas, by which U.S. companies will be able to save as much as 10% by technology outsourcing. Third, foreign companies will have to hire U.S. workers before they sell their products to the U.S. market which will also increase the U.S. companies’ global market reputation and will leave a positive impact on the U.S. economy.Conclusion:From this study, it can be concluded that job outsourcing is leaving a negative impact on the economic condition of United States. The global economy and the outlook of job sourcing within the IT industry had become a phenomenon that had influenced the quality of a company’s relocation and efficient management. This research was conducted to study the differences between measurement in activities and operations in an unsteady and a steady global economic impact of information technology job outsourcing. The proposed research study employed a quantitative correlation method to recognize and differentiate the effects of outsourcing of IT positions on impending technological improvements, as well as on the quality of life in the United States.From this study, it can easily conclude that there is a strong relationship between the activities and economic impact of the IT job sourcing. As the job sourcing is increasing, the availability of the workers from different geographical locations is also increasing due to which the competition and low wages workers availability are increasing, but as a result, the unemployment in the United States is also increasing which is affecting the economy of United States in the worst way.When analyzing the Bauru Labor Statistics of America, then it is observed that since 2011, U.S. is losing so many jobs due to outsourcing jobs. According to the estimates, approx 2,273,392 jobs were lost due to outsourcing jobs in American. According to the static results of 2013 of Bureau of Economic Analysis, US overseas affiliates employed 14 million workers in 2013 which seems great as it became easier for the IT industrialists to get better workforce at cheap rates without restriction of geographical position but let come to the losses to the America (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017).The results show that with the increase in the IT outsourcing, the economy of the U.S. was negatively affected due to losing skill level, dependency on the other countries, and charming innovations. No doubt with the increase in competition in the business sector U.S. lost competition in the skill levels which highly impacted the economy of the country. Similarly, with the decrease in the costs of the products U.S. faced the increase in dependency on other countries. With the increase in the outsourcing jobs, the companies were highly dependent on the workers of other countries, and thus indirectly were depending on other countries (Amadeo, How Outsourcing Jobs Affects the U.S. Economy, 2017). Also with the increase in the availability of the experts and skilled workers at low wages, U.S faced the great harm to the innovation and the talent of the United States was highly affected due to outsourcing jobs.Now it is recommended that United States should either eliminate the IT outsourcing from their business system or must reduce it to regain the competitiveness amongst the skilled and experienced workers of United States. By reducing the IT outsourcing, U.S. will make sure that high paying jobs are going to citizens of the United States. This will also increase the innovation and the living standards in the United States. With the exposure to innovative thinking and advanced education, the people of U.S. will be encouraged to make strong decisions about their future and their country. No doubt with such actions the democracy will get stronger because in this way the government will get income tax and will be able to pay for different funds.Work CitedAmadeo, K. (2017). How Outsourcing Jobs Affects the U.S. Economy. The Balance.Amadeo, K. (2017). How Outsourcing Jobs Affects the U.S. Economy. The Balance.BLS. (2017). THE EMPLOYMENT SITUATION — APRIL 2017. Bureau Labor Statistics.Hemani, K. (2017). An Outsourcing Case Study. Customer Think.Labor, U. D. (2017). Bureau Labor Statistics. Retrieved May 27, 2017, from https://www.bls.gov/Meghan O’Neill, C. R. (2016). Outsourcing and its Effect on the US Economy. Retrieved May 27, 2017, from http://economics.uakron.edu/Portfolios/Fall2012/226/mwu3/Team7_Module4_Evidence.htmlStatistics, B. L. (Bureau Labor Statistics). Databases, Tables & Calculators by Subject. 2017.https://jooble.org/jobs-information-technology-specialist

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