Final answer:
Outsourcing is the practice where a company contracts an outside source, often in another country, to perform jobs that were previously done internally. This often leads to cost reductions for the company but can also result in job polarization and structural unemployment in the company's original country.
Step-by-step explanation:
The practice described in the question is outsourcing. Outsourcing involves a company contracting with an outside party to perform services or create goods that were traditionally performed in-house by the company's own employees. Often this is done to reduce costs, as companies may find cheaper labor markets in other countries.
For example, both manufacturing jobs and customer service positions have been affected by outsourcing. The shift has been toward increasing production of services faster than goods, leading to a change in the demand for different types of workers. This globalization trend has been facilitated by trade agreements like NAFTA that make it easier to move operations across borders.
Polarization in the job market can also be attributed to outsourcing, as it amplifies the disparity between high-end and low-end jobs while potentially decreasing the number of mid-level opportunities. Moreover, structural unemployment can arise when there is a mismatch between the skills workers have and the jobs available, often exacerbated by the outsourcing of positions.