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The Unstoppable Shift of IT Jobs Overseas
514x0r writes "The spectre in the back of many of our minds is that in a few years we may be replaced by an underpaid programmer in India. Newsforge.com is currently running an article about why this is unstoppable, that actually ends on a positive note...sort of." Newsforge and Slashdot are both part of OSDN.
If, instead, you see this as an opportunity to start your own company, become proactive, and actively be more creative, then this isn't a bad thing. It provides labor for small businesses that they could otherwise not afford. (We were able to hire excellent programmers for half the cost) Further, if you are an excellent programmer in a specialized field, then you aren't going to have much trouble anyway. People will seek you out. We do.
So contribute to Opensource software. Get your name out there.
But if you think that you can just "punch the card" then in my opinion you deserve what you get. And if you think you can stay in California, well, good luck unless you figure a way to build the better mousetrap that everyone wants.
And you're a bloody hypocrite if you do.
All you accomplish through getting the government involved to prevent outsourcing is hurting a hundred people through higher prices for the sake of one person.
You don't have a right to an IT job. If you have one, great. Make sure you have skills that are so valuable that you won't be outsourced. If you can't do that, then find another line of work, you lazy bastard. Should the government have done something to protect operators of horse drawn buggies that were put out of business when cars came to the market?
I was thinking about going into IT. The recent fad of outsourcing makes me rethink my priorities. I don't want to benefit by causing prices to rise beyond free market levels and screwing my fellow citizens who have little to do with this.
When Microsoft pleaded that the GPL would destroy their ability to make money, someone responded, "Tough. Adapt or die."
So, to those IT workers who feel they're being cheated by having something taken from them, when in fact they did not have an inherent right to what they have:
Tough. Adapt or die. Offer something in America in IT that foreigners cannot offer or find some other line of business. I refuse to support people who want to screw me.
Economic illiteracy like this is the reason why we get screwed by the Republicans and the Democrats so often. Quoting John "Candy" Keynes. Sheesh.
Bush is on fire and its not good for my lungs.
Comment removed based on user account deletion
Seems to me that the title of the post contradicts the end of the article itself!
Your next "IT job" may be in an industry you didn't even think about a few years ago. It may be in a place you never thought of as an "IT mecca." But if you have solid skills, whether as an entry level programmer or sysadmin or as a top-level IT manager or CIO, some company out there almost certainly needs someone just like you. The trick is finding that company -- but that's another article for another day.
Although in the end, I hate to say it, but this looks like its still based on speculation and hope rather than any empirical evidence.
Ever noticed /. NEVER has a positive article about the IT industry?
I guess bad news always sells more copies.
But most buisnesses and certainly no government would outsource penitration testing and other security jobs. I bet there is tech job security in well...the field of security.
------ Take away the right to say fuck and you take away the right to say fuck the government.
So the American corporations (of doom) are sending jobs to foreign companies to save some cash. Considering Indian IT workers have a wage of $10,000 compared to the $60,000 of fresh out of college Americans, that adds up. The pay raises usually end up in the pockets of the business owners.
But weren't the same American business owners, albeit in other industries, complaining about other countries making money by importing goods to the US and competing with the traditional businesses? Isn't that what the entire anti-dumping, WTO policies are about?
There was a mainstream article on Time magazine entitled Where the Good Jobs Are Going. (Premium, pay article) which you might want to take a look at if you have access to it.
Yeah well they are gonna pay once they realize that nobody in the USA has any jobs because they've all been moved overseas. Once nobody has any jobs, they won't be able to afford to buy anybodys products. Then when nobody buys the products, the companies begin to fold. Don't they see how this works. Its simple logic that says when jobs go away, people can't afford stuff, when they can't afford stuff, they don't buy stuff, then the companies fold. SIMPLE ECONOMICS. All of these companies need to start to realize that they are only hurting themselves in the long run.
I think they meant the math/ee people that would become the CS lords....
>:-)
Tom
Someday, I'll have a real sig.
From the article: :-)
In the end, like it or not, we here in the U.S. are going to have to learn how to deal with a truly worldwide IT economy.
The only way to deal with any kind of worldwide economy, not only IT, is international unions and solidarity. This is big corporations using one country's workforce again the other. As pointed out near the beginning of the article, this is a lot similar to German workers losing jobs to Americans who lost jobs to Mexicans. This would be prevented if there was an international labor standard. Well, there is, but it is not enforcable unfortunately.
Until international unions can be formed, we need to work to pass laws to prevent this abuse of workers, IT or any other field. However in US it is a far dream since there is no labor party. I believe US is the only industrialized society without a labor party.
Happy Labor Day!
ato
I'm not sure why anyone would want to hire Americans, since our cost of living has shot way beyond anything like a reasonable level. You give someone a $100k salary, and in California he can pretty much just make ends meet and maybe buy a few gadgets.
I'm actually thinking it might be a good idea to move offshore myself. I'd earn less, but I might earn more when adjusted to the cost of living in, say, the Philippines or Brazil.
I'd still earn a lot more than the typical offshore worker due to excellent English skills. All I would need to do is learn how to communicate with them and I'd be in demand in the same way the Los Angeles auto mechanic head is. He typically gives instructions to the hispanics who do the real work. No different from my scenerio.
True, the infrastructure isn't there, but if enough of us go, it's going to improve over time. The first mover keeps the low cost of living, and in fact benefits from inevitable increases in costs. For instance, if I buy a house today, it will go up in value if more come.
SF guru Robert Heinlein always said that we have a choice of staying fat and happy in our own spaces, or going to explore the unknown. He said the fat and happy places would decline, and eventually get swallowed up by more competitive ones. I think we're seeing that happen right now, in our own lifetimes. There's no space travel, true, but international travel is every bit as mysterious to the average guy.
Maybe it's about time to realize that unfortunately, America isn't what it's cracked up to be anymore. We've gotten too flabby and expensive for our own good. That spells problems, yes, but it also spells opportunity for those who dare to take it.
D
There were IT people then. For example, in the early 60's we had an IBM 360 at the University of Waterloo and even had our own Fortran interpreter (WatFor which was soon replaced by the improved version, WatFive). Who do you think was running it?
In the long run, it was good for our society that the factory workers' jobs went overseas, and it will be good for us if tech jobs do as well. We end up getting more produced for less labor. It just sucks in the short term for the people who watch their jobs go away. But in the end, we'll have to find other jobs, so the country benefits from our old job being done and us working at a new job. Why should we expect people who are not affected to be sympathetic?
I have some experience with this. My last company laid most of their programmers off and outsourced the work overseas. In their case it worked since they were essentially an ad agency and all of the websites we did were pretty much "done" by time it came to code them (graphics and manuscripts just handed over).
Now I'm doing j2ee programming (I wasn't always a web monkey) for a different company, mostly financial applications. There is a lot of interaction with the business people, and requirements are quite often fluid. I doubt the business and sales people are going to want to come into work at 1am to conference call over to India to hash out the latest requirements.
Point is, some jobs are more likely to be shipped overseas than others. The pay scales of these jobs are going to fall in line with other white collar jobs (except the criminally underpaid teachers). It's just something we need to accept and move on with.
Once again, I think at that "30 or 40 years ago" there was no IT INDUSTRY !!!
It was not until much later, when IT Industry appeared. At that time, it was just a beginning, very rare instance of this type of business, that by no means could be called INDUSTRY !!!
...we may be replaced by an underpaid programmer in India
Are programmers in India truly underpaid? Or are they simply paid less than programmers in North America and Europe?
What would you have the programmers in India do? Raise their rates? Unless someone over there is twisting their arm into underselling themselves, I'm just going to label this as fair competition by a less expensive supplier. This concept made America great. So swallow your lesson. No wait. That will make you fatter.
I have nothing to fear from overseas labor. Why? Someone in India can't fix the printer. They can't install antivirus software on someone's system. They can't set up the phone+new PC for a new employee. They can't head over to the hosting center and install that new rackmount server. They don't form a working relationship with their coworkers that makes assisting them and understanding their problems easier.
Further, they're not going to speak English very well(or they'll have such a thick accent, they might as well be speaking Martian), and it's going to be very expensive to communicate with them(and most upper management people don't consider "only via email" to be an acceptable communications medium, rightly so- it's damn tedious sometimes). Not to mention the time difference is a royal PITA. Companies are drastically slashing policies on telecommuting employees- remote just doesn't work. You've gotta be there for the over-the-cube-wall conversations, the overheard tidbits of information that contribute to overall 'corporate knowledge', the meetings...
You know what? While developers were making 2x, 3x my salary during the internet boom(and didn't have to deal with emergencies, late night pages, etc), I didn't hear any complaints from 'em. Now, they'll all finding they're replaceable and their salaries are dropping- while sysadmins, network engineers and internal support staff are doing a far better job of holding onto employment because their jobs require physical presence. I have zero sympathy for the programmers- maybe those engineers should have actually saved their money instead of spending it on Porsche Boxsters, the latest PDAs/phones, and expensive clothes. In my experience, the only people who were worse about spending habits were the execs, but the difference is, the execs are still getting paid insane salaries.
Hey, maybe we should outsource executives :-)
Please help metamoderate.
It's good see that there is a better future for the young people in India. There are a lot of really bright young people there. They are paid well in terms of their own economy.
It somebody else's turn to have an economic growth period. An american is no more important than an Indian.
Once more, I find myself educating those who should not need it... IT is more than just programming, people! Yes, programming jobs are going overseas. Phone support is going overseas. But in-your-office-today support? That's not going anywhere.
You introduced the "industry" word.
Do you often pretend people said something they didn't so that you can disagree with them? You must be great to be around.
Are they really underpaid? By whose standards? By Indian standards they may be paid quite well. I do software development here in New Zealand, and think I'm probably underpaid compared to my American counterparts, but by New Zealand standards I'm paid well.
You don't have to move outside the US to vastly improve your cost of living.
Try getting out of Cali for starters. There are many states with thriving IT markets that are below the average cost of living for the US.
Using California as an example is really a mistake. Cali is not the norm.
.sigs are for post^Hers.
Be an entrepreneur. Take some risks, try to fill that niche market, etc.
Working for big companies usually sucks anyway, since big companies are full of useless middle and upper management who thwart your every attempt to do something useful.
I have a friend who works for a large US software company. He spends perhaps 10% of his time working. The rest of his time is spent asking for work or trying to communicate with his manager or anyone upward who might be able to give him something to do.
Most management is poor. So heck, they might as well outsource all the worker jobs, since that's just going to be wasted money anyway. Those who are bright will just go on and do something useful again.
.sigs are for post^Hers.
People in North America are really losing jobs to the same people to whom they sold all those products from the 60s onwards. All the computers that students in India and China own have Intel chips, are mostly made in western countries by western-owned companies and designed by insanely paid fat and happy engineers. Natural law dictates that you cannot expect them all to send you a steady stream of income buying American copies of Windows(r), processors, washing machines, cars, airplanes, routers and telecommunication equipment, Levi Jeans and a connection to the Internet Backbone (and IP address space). After a while of selling North Americans raw products in exchange of these goods, they will start manufacturing and designing it themselves.
During the tech boom and export years, noone complained. Funny how everyone refers to 2000-2003 as the 'economic downturn' years while the 1990-1999 years were 'normal'. How about 1998 being a 'boom' year while 2001 is 'normal'? Add the IT market of Asian, Europe, Africa etc to average it out and you'll see 1998 was no normal year for the industry at all. Just as water tends to flow to the lowest potential level, so will the economy of the well-to-do countries.
IT is far from over in North America and not every position can be outsourced. Can an average-sized manufacturing company have its Network Admin located in Indonesia? Software development will be hit hard, but newer markets and applications of software will also open up all over the globe, and specialized software developers here will get the boost.
To be an optimist about the issue, just imagine the number of Linux and BSD developers multiplied by 20.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
That said, I still support free trade, I don't think it's right to make society as a whole suffer to enrich a few IT professionals with outdated skills.
"The question of whether a computer can think is no more interesting than that of whether a submarine can swim" -EWD
It is called Free Trade . Your government and mine signe the NAFTA agreement because they felt more loyalty to big corporations than they did to their own citizens.
Around 1960, just after the slide in industrial employment began (industrial employment as a percentage of labor force dropped below 50% for the first time in 1956), the consensus was that the future was a service economy where only low-paying foodservice jobs and the like would be available.
Funny how things didn't quite turn out that way.
Nope, what is hillarious is that all that is required to prevent this is legislation requiring any american company to pay any employee US equivalent wages for the job they do, regardless of the work they are doing. This simple legislation would have sorted out the sweat shops long ago, and is not expensive to enforce. You dont tax Nikes at a higher rate because they are cheap to produce, you should just make sure the company pays all its employees a fair salary. Of course this outsourcing will fuck up the US economy, because every billion paid oversees workers is 3 billion less paid to american workers. That is hauling money straight out of the primary consumers pockets. That has to mess up something. Nevermind that the offshoot of outsourcing manual labour was cheaper cars, cheaper TVs, cheaper microwaves etc. Does anyone see us getting cheaper software out of this?
Slashdot: Proof that a million monkeys at a million typewriters can create a masterpiece
Well...tell us, then. Did you sympathize with the laid-off factory workers?
To an extent, but factory workers could retrain for other equivalent jobs, often on the job, in a relatively short amount of time. (We had record low unemployment after NAFTA, so clearly this happened.) In contrast, I have tens of thousands of dollars, and many years, invested in my computer education. I would be extremely hard-pressed to find an equally well-paying job if no computer jobs were available.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Bullcrap. The shift of jobs overseas is hardly a good thing, whether you call it "free trade" or some pseudo-Darwinistic economic evolution. You want good examples of what these corps do overseas?
Look at Nike. Indonesian factory workers - mostly girls - work under conditions and hours typical of late 19th century American garment factories. Environmental destruction runs rampant.
Take a look at Coca Cola's operations in South America - their hiring of death squads for "security" and assassination of labor organizers.
Remember Union Carbide?
This "free trade" business has led to US corporations moving offshore to the Caymans and elsewhere so they can avoid paying corporate income taxes. Taxes that you, me, and Joe Sixpack get burdened with - even as we move down the economic ladder.
Fortunately I still have my job - and yes, for a while it looked like my work was going to be outsourced to India. But the folks working in New Delhi don't understand the ins and outs of our operations or the systems we integrate with: I do. As a "knowledge transfer" - forget it, won't happen.
Folks seem to have this silly notion that what's good for the corporate economy is good for the citizens. That ain't necessarily so, nor do I think that "cheaper is better" is necessarily good for the corporations either, not in the long run. If the middle class continues to shrink who the crap is going to buy the stuff produced by cheap labor?
You know, I didn't waste much of my time reading your inane ramble but I read the first line and that was enough to know you had no idea what you're talking about. For reference, I'm a leftist libertarian and complaining about exploitative labor in other countries is very well within my political philosophy.
The rest of your post contains various inacurate accounts and inane comments. If you're going to attempt an argument, try and put together something coherent.
My view on this matter is far simpler and doesn't require references to the dark ages. The market of programers was flooded following the dot.com bubble and there is no way to sustain that market while there is cheap labor else where. Why is this a shock to everyone? I knew this going into college over 3 years ago(which, incidently, is why I'm not a Computer Science Major). Everyone, even this poster can claim ignorance but that won't help them today. They need to find another way to live - either overseas as a post suggested or go back to graduate school and diversify.
There seems to be a knee-jerk reaction that exporting jobs will somehow hurt US productivity in the long run, while in fact it's a reflection of our high productivity. When I'm not a codec nerd, I'm an economics nerd, so let me spread the Ricardian gospel a bit.
Our GDP is hugely higher per capita than India. This is because we are hugely more productive per capita than India overall. Because we are so productive we have a much higher standard of living, and much higher wages. As our economy grows, and our GDP per capita goes up, so do our wages.
Eventually, wages get so high, that it doesn't pay to hire folks in the US to do them. So they get exported. This won't cause a lack of productivity - the only reason we can afford the outsourcing is because of our aggregate productivity in the first place.
Let's imagine the long-term scenario folks here are implying. First, all the high-paying jobs get sent to India, since Indians will work for less. Second, US workers will go broke. Why would it work that way? Obviously, as jobs go to India, wages will go up in the sectors we're looking at. And there is a limited population in India who has the secondary education good enough to go to any kind of engineering school - clearly it's a much smaller pool to draw on than the US has, even though our population is much less. This is because we're very productive, and can afford lots of really school schools, especially at the college level. Over time Indian wages will rise and US wages for those who do thing that could be outsourced to India will fall so that the total cost of each will be roughly equal. The US wages will likely be quite a bit higher still in that case, since having someone local has definite advantages, plus the reduced cultural barrier, etcetera. And the US economy is doing great, since we're able to get our software cheaper, and we've freed up a lot of smart people from having to do something that we can outsource. It's not like all those replaced IT folks go straight into retirement or anything. Lots of them will start new business, get new jobs, and so on. And the folks who keep their jobs are going to be trying like crazy to stay productive in order to justify why they're worth as much as six guys in India. That's great - their productivity is going up, and everyone is happy. These transitions can be painful, but it's not like the US has huge sustained underemployment (although we're in a cyclical slump right now, largely due to an economically incompetent administration).
Now, let's say that India makes so much money on outsourcing (which they won't) that they can really upgrade their schools, and approach the US in productivity. If so, great! We've got a big, rich, friendly democracy in a part of the world where we can use all the help we can get. And as Indian productivity rises, so will their wages, so that's less downward pressure on US wages.
Anyway, the thing to remember is that we're rich because we're productive, which means that those parts of the economy with lower relative productivity compared to the rest of the world are going to get outsourced. This won't make us poor, since the outsourcing is only a reflection of our wealth and productivity in the first place. It's a self-balancing system. So, if the problem in the long term is places like China and India grow productivity faster than we do (which is likely for the next few decades), than the relative gap between their our our wealth will decrease. No problem - I just want to be rich, I don't want India to be poor!
Also, if you look at the history of South Korea, Japan, and other nations that industrialized rapidly on US lines, we're still more productive per capital than they are. They get close, but the US always seems to pull ahead in the end, for a variety of reasons (lots of bright, motivated immigrants, low barriers to start new companies are big ones).
So, folks, don't define what you do so narrowly that the only career you can imagine is something that's outsourced. Programming to a spec? Not a good long term move. Being able to right good, business-driven specs? Good move.
My video compression blog
Globalization is going to be painful occasionally because of the disparate incomes in various parts of the world. It isn't just IT and manufacturing, it's all jobs - Intel has a marketing division in India, Boeing has a design center in Japan, and so on. If you aren't delivering some value that can't be offshored, you are vulnerable.
In the IT industry that means you need to learn to be close to your customer - so they can't replace you with a coder in China.
What is happening is simple - we used to talk about automation replacing manufacturing workers, and code writers being replaced by RAD tools. Maybe someday. But first we have to elevate the worth of human being worldwide so that their pay makes the cost of this automation economically valuable.
Some people question the wisdom of globalization because of the painful changes it forces in an economy. That is not tenable long-term. The planet is shrinking and if we are going to avoid devastating wars and dislocations we must make the nations of the world so interdependent that there is no potential for gain in anything but full participation on a global society.
Ok lets take it from the top.
1. There are people with functional brains and mathematical skills all over this planet. The US has no lock on either commodity.
2. The educational system here has been garbage for years. We have emphasized collage preparatory skills over vocational skills and managerial and business skills over technical and engineering skills. Other places haven't had this luxury or stupidity.
3. Capitol ALWAYS seeks the lowest cost solution. As soon as the ability to move material goods became cheap enough to negate a localized location requirement for manufacturing items, then the next highest cost became the labor expense and companies sought the lowest labor cost market they could find. To not have done so would have been a breach of their obligation and duty to maximize the profits of their corporation. As soon as the transfer of information became inexpensive, knowledge based companies did the same. And investment companies have done the same. What do you think the currency trading and international banking markets are all about anyway?
4. Don't know about you friend, but when I was born I didn't come with any guaranties or warranties. Competition is the natural state of life and you can no more be shielded from it in employment then you can in any other factor of your existence.
In short, you are all whining. Some have said that people of this opinion must not have ever lost a job to such outsourcing. Good guess, but wrong. I myself have been fired, quit, and been downsized out of positions. No one has yet assured me that I'll have this job forever, nor even this line of work. I've been through four different career fields so far and if I have to do a fifth then I do. If the only other job you can get is "do you want fries with that", then neither your initiative nor your imagination impress me. Try becoming a plumber, I can never find a good one when I want one, and it's bloody hard to downsize that position to India. Or start your own business, or go work for the government, go into sales or... But stop wasting the world's time complaining about how the gravy train has stopped flowing for you. You were put on this world to suffer and work, only slaves get things handed to them, free men have to earn all they get, so get moving or be a slave. And since it's corporate profits that are increased then don't fight the tide, roll WITH it. The rule is INVEST, INVEST, and INVEST. Not in stupid, flash in the pan ventures either, but for the long term and steady returns. My father in law is eighty, he's been a farmer all his life, when he was twenty he was smart enough to figure out that farming would never pay worth a damn, so he invested every extra dime he could. He still goes out there and farms, because hard work has never scared him and at heart he's still a farmer. But he's put three daughters through collage and helped them all get started in life with the money from his investments. Stop whining about the moneyed class and figure out how to get into it.
Firstly this is just yet another doom-and-gloom BS article of the sort that appears during every single downturn: Each time it's pronouncement of prophecies, and then a few years later when we have a market where web slugs are making $150K/annum these people are silently biding their time waiting for the next downturn to spout their negativity.
Having said that, firstly Indian workers aren't working for "less" : Many of them have large homes, servents, etc. The issue is one of currency conversion: The US dollar is grossly overvalued, and while it allows US companies to buy foreign firms cheap, it also makes the same US operations uncompetitive on the global market (which is why the US has had a trade deficit for many years). Already as the US $ has declined the hypothetical cost competitiveness of Indian firms has greatly diminished.
In the end, though, India isn't the "problem" with the IT market: The problem is that IT hasn't delivered on its promise. In many organizations the redundant and overlapping IT processes take a large share of the budget, earning a lot of attention for cost savings. The software development process is an absolute FARCE, with the majority of software projects being absolute failures, often coupled with extremely heavyweight processes that ensure that the actual developer is a tiny portion of the process (with a massive business paper trail). Tell me that you can get a 30% savings by outsourcing to India, and I'd say that you could probably yield a 80%+ savings by culling the deadweight and switching to an Agile process: Something that actually yields results.
Nope, what is hillarious is that all that is required to prevent this is legislation requiring any american company to pay any employee US equivalent wages for the job they do, regardless of the work they are doing.
Nope! Bzzzzzzzztt! I call Bullshit!
You think that if this kind of law was passed, that it would make *any* difference at all?
All that would happen is that the Nikes of the world would re-incorporate oversees as "Nike-Asia" or something, becoming two separate companies with a complex arrangement of contracts, and the work would be done by a "foreign" company (Nike-Asia) by contract, and the products (software) "imported" into the US by a "local" company. (Nike)
In fact, I'd be pretty certain this has already done in order to prevent passage of liability.
In short, it's called "out-sourcing" and it's done legally any time any company provides a service to another.
There are no easy ways to stop this.
It's just market economics doing what they do best - balancing out supply and demand. So, do as the article says, wise up, and be very aware of the many opportunities as they arise.
There will most certainly be plenty!
I have no problem with your religion until you decide it's reason to deprive others of the truth.
"This could be because most American programmers are lazy and somewhat stupid. Most of them think they are 'l33t because they know how to use ASP and Access. So few people know anything about Computer Science, it really is a waste what we are paying them. They are terribly slow, have almost no initiative, and have trouble communicating with customers." http://newsforge.com/newsforge/03/08/27/132243.sht ml?tid=3
I've been saying this for a while and people look at me like I have a green mustache.
..... etc will take us there. They can never pay little guys to little and they can never pay the CEO's to much.
The jobs get outsourced to Indian Consulants, but the end result in products or whatever is still sold here for the same amount, only with a much higher profit. BUT, here's the rub, we have Americans making less so they can't afford to buy a bunch of overpriced american goods any more. A bunch of Indian programers and accountants making $6000 a year aren't going to be lining up to $1500 Amana Fridges, $30000+ ford SUVs or $20 brittany spears cds. Except the CEO's still want to make thier 20 million a year salaries. There will be massive defaltion, something has to give. The CEO's want to make all the money, only problem if they have all the money and they aren't paying US and they aren't paying the Indians a whole lot, no one has the money to buy thier stuff.
If things get bad enough Congress WILL enact those tarrifs, they will do all the things the author said they should'nt, because thats thier job. Eventually we will have socailst style gov't where everything is regulated ( all those regs require gov't employees to do the watching).
I don't like it but the every greedy CEOs, CFOs, CIOs
So Long and Thanks for all the Fish.
Presently, the outsourcing rush is correcting an obvious market inefficiency; namely that for whatever reason, highly educated Indian labor is cheaper. A properly functioning economy redresses such imbalances rapidly: India's skilled workforce is finite and its value will increase with average quality of life, reaching parity with ours.
Parity, however, is grossly distorted in this situation. Indian employees and firms do not pay the ~45% tax (spread over income, miscellaneous regulation, property, ad naseum) that their counterparts here and in Europe must. In effect, this aggregate taxation is an enormous tariff sponsoring foreign labor, and the otherwise natural equilibrium in compensation found at parity ought to rest in the vicinity of... 20% ->below- foreign levels.
I do not mean to imply first world taxes are wasted by govt, but some combination of reducing the largely unconstitutional federal bloat and introducing tariff on outsourced production (correcting for minuscule Indian cost of living) raises job market parity to a bearable level.
However, overriding protectionism (such as that Japan *still* favors) will certainly ruin this nation. After all, how will all our exported capital ever return as investment if the US and Europe appear content to maintain the status quo (0% GDP growth, in more obvious terms)? Long decades of trade deficit and wholesale hollowing out of domestic industry afford developed countries little flexibility defending what little real productivity they retain. Socialist policy and GDP shrinkage or free market and some painful hard work are the plausible remaining options.
Suggestions that companies outsourcing their labor are self-interested offer no insight. Individual and corporate motivation to profit are the only reliable constants in a democratic, capitalist society.
My thoughts seem grossly out of place as I read recent comments, but what the hey.
If the current market for labor doesn't demonstrate how capitalists reap huge benefits by exploiting a reserve army of the unemployed, now worldwide, I don't know what it would take to convince anyone that Marx got a few things correct (a little too soon). He also predicted that economic fluctuations would become increasingly severe. It behooves us to do something to make sure that doesn't happen.
The theory of free market economists relies on investment to prevent depressions when labor is cheap and interest rates are low, like now. (Like in 1931, too). Where's the investment? Looks like we have way too much capital with nothing to do. Some of our highest-value companies (MS, etc) are just sitting on cash and investing overseas. Capital is competing to make residential mortgage loans around 5% instead of investing in any businesses.
Look what happens whenever a company announces crappy earnings now (or any time over the past decade or so): The market expects them to fire people. They fire people and their stock goes up. Does it occur to investors that the way to make money is to hire people and use them productively? Not anymore. Everyone knows that investments go down the toilet as often as not, but a paycheck cut is a paycheck earned.
At this rate, during the next cycle, Asia will get the "creative" and we'll get the "destruction."
Don't drop the soap, Tommy!
Indian programmers are not underpaid. If anything, they are overpaid compared to their peers in their country. If you can get 3 Indian programmers for the price of one American one, then each Indian programmer will make 20,000 which 900,000 rupees a year.
However, the cost of living comparision is more like 1/10 and not 1/50. But that still means that the "underpaid" Indian, is making $90,000 in "real" wages, which is 50% higher than his "spoiled" american counterpart. Even a 1 American, to 5 Indians isn't so bad for the Indian.
And remember, that in India, that kind of money buys you live in maids, drivers, and very posh surroundings. It's practically impossible for American workers to compete.
"To save the planet, I had to go to the worst spot on Earth, and that was Philadelphia." -- Sun Ra
All right, reality check time - let's go back to macro economics.
I'm in technology, and it's been quite a while since I really studied macro/micro (no, economics, you dolt!!! NOT design!!! :-))) Anyone
who can put a fine point on this perspective -- please do.
Like John Houseman (to misquote), "I seek clarity."
Having read much in the genre of political treatise (I admire Machiavelli, he was right so damn often!), some philosophy, and "modern day polemic" [everything is polemic, today :-/ ] I understand the argument as far as I have taken it, and I can understand how big business can manipulate events to cause this to happen - but I wonder about:
I say significant events, as the baby boomer generation (I missed it by about 8 years :-) retiring is going to put such a load on us as a
society that I don't think there will be that much benefit in the
(believed/perceived) sudden influx of available positions - if
anything, I worry that this will be the springboard needed by those
who'd ship our entire economy to someplace where more money could be
made.
So, yes, I'm a bit worried. I'm preparing, and you're here reading this, so you're far ahead of the rest of the U.S. population, but that should be small comfort to you (and to the rest of us...).
Live long and prosper.
Redundancy is good; triple redundancy is twice as good! - Me.
I believe a huge chunk of the baby boom will simply work until 75.
First NAFTA moved the jobs from the US to Mexico. Now the jobs are moving from Mexico to China. The Mexicans were "overpaid" at $4,000 a year while the Chinese make $1,000 a year. CEO pay is, of course, higher than ever.
Including me, and I like it.
When I buy stuff, I buy the cheapest stuff. I don't care where it's made, it's all the same planet to me. And you know what? 99% of IT workers are the same way.
It doesn't freaking matter. As long as we keep outsourcing jobs to foreign countries, we can keep making less money and maintain the same standard of living, because things keep getting cheaper.
I know its comforting and easy to blame "greedy corporate executives", but if you think the money that's saved from hiring foreign workers goes into executive pockets, you're an idiot. It goes to lowering prices so that that company doesn't get put out of business by their competition who DOES outsource their labor to India and gives the American people what they *REALLY* want...
Cheaper shit.
paintball
The problem with eliminating the minimum wage is the assumption that wages are a simple supply and demand curve. In reality, parts of the employee supply is rather inelastic.
In non-economic speak:
People have short term and long term expenses. Short term expenses are things like food, clothing, housing, etc. Long term expenses are things like health care, retirement, education, etc. For immediate survival, people only need to meet the short term expenses. Without a minimum wage, when there is a surplus of workers, wages are pushed down to the bare minimum of short term expenses, and below. People end up living in sub-par conditions, borrowing for unexpected expenses, and have nothing for health care, retirement, etc.
An example:
Bob needs $1500 for housing, food, clothing, a decent vehicle, health care, retirement, and a rainy day fund. However, Bob only needs $500 for food, clothing, and a rat infested apartment split between 2 other roommates. Now assume that there are a surplus of workers out there just like Bob - are wages going to stabilize at $1500 or $500?Now I don't support such restrictions to ensure 'we keep our jobs', I don't think 'we' have any more right to these jobs than 'they' overseas. However I do think laws of this kind should exist which limit the offshore operation to give equivalent fundamental rights to workers overseas as workers have here (Australia for me).
So this to me means - right to collective bargaining, no unfair or arbitary dismissal, no discrimination etc. And the biggie, enforcement of a minimum wage calculated by the standards of living of the country in which the operation exists. So no I don't think the operations in China should be forced to pay their workers AU$12/hr - but at least enough to suppport an average standard of living in China. Then let the Chinese workers collectively bargain their way up over time...
As was pointed out in the article, such restrictions on imports are fairly impossible to enforce with digital information, so this doesn't really apply to things like Software etc. But at least the exploitation practiced against workers in clothes/shoes/other semi-skilled factory sweatshops would cease.
I think this is fairly ethically consistant too. After all, how can we say that we guarantee such rights to our workers simply because they are born in Australia, but we don't have to worry about those born overseas - we'll just import the products and reap the benefits of their exploitation. If countries started doing this then effectively it wouldn't matter if China and other countries enacted their own worker protection legislation or not, because companies operating within their borders wouldn't have anyone to sell to if they didn't comply.
// It had been Fat's delusion for years that he could help people. --Philip K. Dick, Valis
Unfortunately, I've fallen so far that yes I know how hard it is.. and yes I've done it. Housing assistance is even harder. I've yet to manage to get that even when unemployed and homeless. Somehow I didn't qualify. I'm really not sure why.
Being evicted is probably one of the worse things I've been through. Having to move when you are unemployed and really have no other place to go. That and having the utiltiies shut off constantly as I strugled to stay above water. Every time they'd shut off the utilities my food would spoil.. so I'd have to buy more food.. which made it harder to pay the bills to begin with. It was these two bills (rent and utils) that totally trashed my credit while unemployed. I'd never used credit cards and the only loan I ever had was for school. Nobody really cared that a 20-something might be starving or homeless. Call various places for assistance and 'Do you have kids?' was the first and last thing they'd ask. No kids.. then well fuck off. I can see why a lot of people in this situation might choose to have a baby.
Almost as bad is when you're looking for work. The only way to get a job is to lie. You wrote software? Sorry, Taco Bell (Walmart, QuikTrip, etc) isn't interested in hiring you.. never mind that you could do the work as well or better than the teenagers working there. Or for a good job you have to lie and suddenly claim that you have a PhD in astrophysics from Big Ralph's University so that you can get a job doing the same thing you've done for years.. despite it having nothing whatsoever to do with astrophysics.
Why anybody would want to live in welfare I don't know. It's a hellish life. I'd much rather work a decent job even at less than great wages. $10/hr * 40 hours a week would be a start.. if I could get such a job that lasted longer than 6 months. I hate finishing projects and being thrown back out into this job market.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
Now I understand what all this union shit is about. It's really fucking sad that we have to make a gang to keep our jobs.
Of course, most developers would never agree to such a thing. They'd rather die first. Fucking irony.
"A mind is a terrible thing to taste."
The US population goes up while the number of jobs go down, does it matter if toys are cheaper when I cant pay my expensive rent or buy food due to no job?
That only benefits rich people.
"so the country benefits from our old job being done and us working at a new job. Why should we expect people who are not affected to be sympathetic?"
What new jobs have been created?
If you use Linux, please help development of Autopac
IT workers just get paid too much. We have become fat and lazy and awfully impressed with ourselves. I personally know people in other professions that have what I consider to be much more skill than I, yet command a fraction of what I was making. I have a friend that graduated with a 4.0 GPA in some sort of art degree, went on to get a masters and makes next to nothing. I did not graduate from college 10 years ago, but was making almost 6 figures. Was I smarter? No, I was just positioned better at the right time.
Add in the great
I did get laid off from a U.S. company, but not due to Outsourcing - the company was just falling apart from poor management and was selling itself off piecemeal. It was not due to Outsourcing overseas, but I can see the concern with that.
Since then I have done a few things. One, I drastically reduced my standard of living. I got rid of the $2k / mo mortgage and got it down to $800 in rent. I did not get a new car, but kept my old 96. I stopped buying every new toy and tried to get back in touch with life.
In the past year, my life has gotten so much better with so much less. I do freelance consulting for anyone who needs it, I take a college course every semester so I can get cheap insurance through the school, not to mention have use of the gym, pool, library, etc. Now I work between 15-20 hours a week. The rest of the time is spent with my daughter, reading, excersizing, etc.
We need to accept that the days of high paying IT jobs are gone. Programming has become so easy that most anyone can be trained to do it. Granted really good programming is still a skill, but how many companies really want a well designed program? Not at the technical level, but at the management level. 9 out of 10 will take the fast, cheap way and forgo quality. Since programs are useful for less and less time now is it really important.
I think as the jobs go overseas, then eventually it will level out. It may take a long time, but it is already happening. I have heard that the better programmers in india are making up to $65k a year. For where I live, and what I require to live that would be fine for here. As the people over there make more, the cost of living will rise as other people realize that they can charge these people more. Eventually it will even all over.
Quality? I have heard both good and bad about overseas. It seems like the executives are under the belief that the quality is better, but the technical people think it is worse. This could be the technical people protecting thier jobs and executives just buying the latest Gartner hype. I do not know first hand - I do directly know people who have been tasked with running people overseas that have complaints.
Remember that all things are transient. What is now will be gone tomorrow. Our happiness and our suffering is all temporary. In a universe level view of everything, I am not even a dust mote. If I have a roof over my head, and enough food to not be hungry then life is good, even great. In this country we have been trained by the media and our peers that if we are not happy all the time, then we are lacking. If we are not death-camp-thin then we are not attractive. If we do not have a giant house then we are substandard.
Did you ever notice that when your income changes your expenses do also? In two years I went from making $30k to $60k with only one job change. You know what? After a year I had exactly the same amount of extra money left over each month. Why is that? Because all the sudden I could acquire more and more. When I look around at my posessions, I find that sometimes it was the smallest things that give me the most joy.
Hah, I think I will post this into an essay somewhere.
This is all my opinion, and subject to change as events develop. Be well.
The key to being successful is networking. Quick tip for those with a bit of free time. Pick up a networking book such as Masters of Networking. Figure out who you know and who you can sell to. Put yourself in situations where you are forced to meet new people - preferably 10 a day. This is not selling in the pure sense. It's not cold calling. Just go and get involved in activities that involve other business people.
The problem with this approach is, quite frankly, that it's a lot of work. A couple of years ago, I was working 8 or 9 hours a day and the rest of my time was free. I didn't have to go to any boring social events or pretend to be interested in some guy's life story. Now you're telling me that I should be spending most of my free time digging up leads just so that I can spend the rest of it working? No thanks. I'd rather be unemployed.
Not that networking doesn't work. (I found my current job through a friend of a friend.) But I didn't have to go around selling myself to do it. Basically: do a good job, earn the respect of your peers, be friendly towards your co-workers, don't get involved in office politics. When an opportunity comes along, your friends will recommend you.
-a
Market economics ultimately makes a few people very wealthy and most people extremely poor.
I am not an American, but I have been to New York, and I can tell you, in the heart of capitalism, I have never seen such poverty living alongside such obscene wealth.
The law of nature is that of "survival of the fittest". It's very brutal. It's not at all fair. It's not democratic, it's not just.
But, it's very effective. Those that can gather the werewithal to make money, and to study ways to make more money, and will become wealthy.
Those that don't, won't. I'm not arguing that it's optimum or that it's right or even that I like it.
But to pretend that some stupid, ineffective law would solve everything is just stupid and ineffective. The utopian future they all thought 50 years ago would happen someday didn't happen - and it seems to be part of human nature to make sure it never does.
Sad, but so far, true.
Have you ever bothered to take the time to find out *why* those people on the street in NYC are on the street? If you haven't, you're part of the problem. If you have, you're still part of the problem because I can be pretty sure you aren't working feverishly to help them.
When you're poor (and I have been) utopia is when you have the resources to buy a car with cash, you have food in the fridge, and no worries about buying more tomorrow.
Well, I buy (used) cars with a few thou in cash, plenty of healthy food for me and my five children, and I'm not worried about buying more tomorrow.
How come I don't feel like I'm in utopia? Now, utopia means providing tuition for my 14 Y.O. boys who aspire to Harvard and MIT. Utopia means buying a *new* car instead of a "last decade" model. Utopia means I hire somebody else to mow the lawn, instead of either yelling at said 14 Y.O. boys or doing it myself.
It's just human nature to strive for more.
At the end of the day, this is another market correction. In 100 years, our economic woes will be as dim a memory as the severe market slump of the late 1890s. (What, were you sleeping in history class?)
In 100 years, people will fall in love, go to work, eat, argue, and reproduce, just like they do today, and have for millenia.
What's so horrible about that?
I have no problem with your religion until you decide it's reason to deprive others of the truth.
That's pretty much on the money. Networking is key. The only point I think you're missing is that businesses don't buy or commission due to high quality. What you've got to convince the company of is not the fact that the work you're going to do is higher quality than anyone else, but that their spending 30K rather than 1K will save them more than 30K - you've got to make the business case. Saying what you're going to do is high quality makes little difference if high quality isn't what's required or - more importantly - if the person comissioning the work doesn't understand why it might be. Simple point but easy to miss.
It's been my experience that the only people who would suggest not having a minimum wage are people who have never lived at the bottom. You can't support yourself today making minimum wage, let alone a family. If you eliminated the minimum wage and allowed wages to get lower, yes it would reduce the cost of certain things. But they would lose more by making less money than they would save by having reduced costs. Cost of living would not go down proportionately. You argue that the flood of low paying jobs would cause companies to raise wages to compete for workers. Do you honestly think that it would even approach the minimum? They would do the same thing they do now - ship jobs overseas where people will work for even less. I will give you the fact that there would be more jobs - at the bottom. I don't think theres a problem finding jobs at the bottom right now, McDonalds seems to be perpetually hiring. There is a lack of jobs that pay a living wage. All this would do is increase the gap between rich and poor.
It is the same effect as those overseas factory jobs, but it isn't the same thing. Factory workers were not college-educated.
A friend of mine has left engineering for embedded systems because he can't find work. He is getting his nursing credentials now. This guy used to write code embedded into networking equipment, and now, because of the labor market, he's taking people's temperature, doing throat swabs, and doing eye chart tests. Is this what those in IT are supposed to do? Leave the industry?
Saying that lower paid foreign workers are putting US jobs at risk is a bit like arguing that visual GUI/IDEs have put assembly code workers out of a job.
If I could get 5 times as much LOC for my dollar in Thailand (I wouldn't using India as much as its more expensive !) then this means I could provide 5 times as much functionality or features.
But think about it - who the hell would be doing the requirements management, installation, acceptance testing, implementation, user training and manuals ???? Not some Foreign worker but a US local.
Think of programmers who create lines of code as just one small part in the whole food chain of software developement. With MODERN software development creating lines of code is actually one of the smallest parts in the whole business.
A programmer is simply a factory worker who turns requirements into intermediate goods. It doesn't even figure in the GNP figures of a country !