Slashdot Mirror
The IT Market: Cyclical Downturn or New World Order?
An anonymous reader wrote: "CNN.com is running an interesting story on the heels of a Forrester
Research report concerning the
shift of high tech jobs from the U.S. to places like China, India, and Russia for cheaper labor and got me thinking about the nature
of the current downtrend in programmer demand in the U.S (as opposed to the "morality" of such a shift). While I'm sure the causes for this downtrend are variable, the more important
question in my mind is this -- Is software guru Bruce Eckel correct in
saying that the current downturn represents a temporary blip in the business cycle as jobs are shifted from large and medium companies to smaller companies,
or are Andy Hunt and Dave Thomas correct in recognizing this as
a new reality. Personally I tend to agree with Hunt and Thomas's view (which is not completely opposed to Bruce's opinion, btw) and
I also agree with their viewpoint that protectionist policies like H1B quotas and tariffs won't work to change anything for the better. So what do you think? Is this
just another business cycle or is this a New World Order in IT?"
The cold, unpleasant truth here, is that 90% of IT isn't worth its salary.
Globalization is the great leveler (assuming free markets). It takes time, but eventually, everyone gets paid what they're actually worth as opposed to what they think they're worth.
The secret is to make yourself worth more. Probably a meaningless admonition to most slashdotters who think that the world owes them a living so they can spend all their time downloading files from Kazaa.
You can tell a great deal about the character of a man by observing those who hate him.
And it's not just level 1 support, either.
The sad truth is that the H1B Visa is no longer an issue. It is easier and cheaper to outsource your entire support staff to a foreign country. With the maturing of high speed communications the ability to work with staff across the world is forcing labor costs down. Any law passed is easily circumvented as the support center ( consulting shop outside the US) is not part of the business entity. The only way that this behavior could be deterred is by putting a tarriff on foreign services which would too broadly impact other industries that arn't "abusing" (relative term here) this business option. P.S> Thank Clinton for raising the H1B visa cap his last day of executive power. 3 days later 2000 IT staff nation wide (US) were given notice. 700 here in Minnesota. Where I was at the time EVERY person that was laid off was replaced by H1B staff the following month (That totalled 22 people). One of my co-worker at $33/hr was replaced by a H1B @ $9.50/hr. NY Times was applauding Bill for helping create a 5 BILLION dollar IT industry in India. That's 5 billion that American Workers lost. That's 5 billion directly gone from the US economy.
-=[ Who Is John Galt? ]=-
> they are only outsourcing the call centers and
> other jobs for which no skill is required.
That is just completely misinformed and inaccurate.
Much software development work has already gone overseas to India and Russia. They work at about 50% of the rate you have to pay a programmer in the US.
That work is never coming back to the US economy. New software development and QA jobs are going overseas faster than they are being developed here. The skills you learned in college don't help with this.
It is not unusual to see ads in the Silicon Valley paper (Mercury News) for software management jobs in Bangalore. They are trying to lure home Indian expats.
Things are ugly in the world right now.
Many development jobs may be leaving the US, but there are many other tech related jobs that will exist (and don't currently).
From my consulting experience (large and small companies), I've seen two areas that need major improvement: workflow and training.
They're actually strongly related. Many companies are just now basing a significant part of their business processes on technology. They've been gradually moving this way for some time, but it's at the point now where a tech catastrophy would seriously hurt them. However, they're still only taking advantage of perhaps 10 to 40% of what's technically feasible and also practical. There's still quite a lot of double entry of data and shuffling of papers.
So the workflow side should see a continued increase in technical development for years to come, and this will require services of "experts" of both the problem domain and technology solutions.
Training is the other area that should see continued and hopefully increased rate focus from businesses. Most users (and their bosses) approach computers and software as they approach a rental vehicle. They don't typically get much or any formal training, and they don't spend much time with books or manuals.
They're just scratching the surface of what much of their tools could do for them. Many people need broad and specific training to really make their technology work. An example of this is MS Exchange and Outlook. (I'm no fan of these, but I use them as example since they're ubiquitous.) Most business users can send and receive email, possibly with attachments. But most never touch their calendars, public folders, etc.
So maybe development is moving away, but there exists a big vacuum for other tech-related services, and those are going to stay right here in the US, if only because they often require personal contact.
.sigs are for post^Hers.
The parent post was copied directly from this link (originally linked in the article summary as Bruce Eckel's viewpoint.) Please do not mod the parent post up, as it is not an original post and does not identify the original source.
Simpli - Your source for San Jose dedicated servers and colocation!
Wired just ran an interesting article last week about Indian IT workers falling apart after long hours. IT Sweatshops Breaking Indians
Everyone has thier breaking point I guess.
The EU is a good example - they simply don't allow guest workers in anywhere near the scale that H1B allowed. And just try to immigrate to Germany and see how far you get.
My wife who is a QA tester, had to work for a company that moved all there QA to India and it became increasingly more and more difficult for the developers who were Indian to work with the developers who were American. Aside from that, they didn't understand goals and expectations for the product and ended up giving them something much different that what was asked for.
I think tech support, customer support and other low-tech things like that can be moved but in the long run, if you are willing to commit to a presence in a foreign country, you are better off sticking stateside... or trying Canada. :)
This is my sig. There are many like it but this one is mine.
I currently work for $7.25 / hour doing small time web development for a department while I'm in school. It's not that much, but I don't do much either. A friend visiting from India says that a middle class person makes about 1,000-1,500 rupies a month (and that's full time out of college) You get about 46 rupees per dollar now. So, if I work 4 hours I've already made enough to live decently for a month in India. If I worked fulltime (8 hrs / day) I'd be filthy rich for 1 days work. They work long hours all month long and make what I (a cheap college web developer) make in 2 days. How can we compete with this?
Below is a link to the article referenced in the parent post.
The Economics of Empire
Michael.
Linux : Mac
Solution? Use an Indian company to do the job! C++ IS C++, after all. Within a year, they were back at square one. I have another friend that is interviewing and testing Indian developers for a proposed India-based development lab. Result? Very few were able to answer half the questions correctly (mid-level Java developer-type questions).
So, quality does kick in at some point. India is NOT the IT panacea some have hoped for. I still think we'll see some more outsourcing, but it isn't the end of IT as we know it. Not every company can do this kind of thing.
On the executive point, yes and no. There are a LOT of execs who are part of the good-ol-boy system. Those who are good, do a great deal more. But the squids...
Anywho, my opinion...
Computer Science is Applied Philosophy
IMHO, it's a national security issue. We don't need to be exporting our expertise, we need home grown expertise that will stay in America.
Big buisness uses H1-B and L-1 visas to hire employees that they can pay well under the going rate for U.S. citizens. Small buisness doesn't have the overseas connections to hire folks with this so it only serves to give big buisness even more power over the start-ups.
Additional information on H1-B and L-1 visas:
Washtech.org
L1s Slip Past H-1B Curbs
Re: H1B and L1 visa influence US unemployment
After H1-B visa, L1 now bytes IT
The reason not everybody uses it is that you have to have a fairly large HR department in order to handle the paperwork; or outsource to somebody who does.
wrong. The point is the is the tech jobs ARE being significantly outsourced. Look at the developer jobs AOL is moving to India. Look at i2. Look at dozens and dozens of other companies.
Yes, you can outsource integration and consultation and they are doing just that. i2 has all its internal and external tech support in India. The call centers are there. The sysadmins are there. The programmers are there. Soon all the servers will be moved there. The local tech people were laid-off and more in Bangalore were hired. Companies are offering relocation packages at 1/4 the pay to move to Bangalore. Some Indians who have immigrated to the US are taking them and moving back gome.
Its exactly what you are saying WON'T happen that IS happening and that is why many are upset and think it is a bad idea. Read the articles and look at the data out there.
You'll note that globalism only seems to work one way. Why can't I buy shoes directly from Indonesia for $5? Why can't I get a PC from China for $100? If American companies really want to compete globally then let's open the door both ways and see how they fare when I can buy a DVD player online for a fiver + shipping.
actually, why cant you? not a flame, I just don't see why you cant. Are there any regulations that prevent you? If it's not that way, then it's not free trade.