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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
Ever noticed /. NEVER has a positive article about the IT industry?
I guess bad news always sells more copies.
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.
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.
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.
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.
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
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.
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
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.
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.
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 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