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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.
I know I am going to get flamed by the "Keep jobs in America" folks, but the argument shown is very one sided.
There is the outcry about the Indian programmers being underpaid. What is left out of the equation is how the pay fits in with the standard of living where the employee lives.
Isn't it only good business and responsible to shareholders that companies look for the best return on the dollar spent?
The company that I work for has employees all over the world. I work in Australia. I know that I am paid less than my counterparts in the US. However, I also know that my cost of living is an awful lot lower than, say, California.
That said, going to cheaper countries must be balanced with getting the appropriate skill sets. There is nothing worse than dealing with someone who does not have the skill sets that you require them to have as a basic part of their job.
Tp.
The software industry we know in this country will soon go the way of the dodo bird. Just like Textile, Steel, any sort of plastic manufacturing.... As more companies move their development offshore, there will be less jobs for entry level developers. Well, no entry level jobs means that in about 5 years, there will be no senior level developers in this country. Heck, all the main players thinks 5 years experiences makes a senior engineer, right? Since there aren't sufficient senior engineers here, it's time to rely on all foreign talent for the devleopment. Besides, the architect really needs to communicate with his team anyway, and in the same timezone. Soon, all development jobs are offshore. There will still be IT or admin jobs here, as those requires some warm bodies in the building. But true development will be all gone. Oh, the small consulting companies, the few experts with highly technical domain knowledges, they will have a paycheck. But the developer that can jump in anywhere and help out would not have a place. There will be no big software companies that has a big building with whiteboard walls. This is already becoming true, as more and more jobs openings expect exact fit in terms of domain knowledge. It's a matter of time before a big chunk of development for CA, Oracle, and Microsoft and others like them will be off shore. I suspect Microsoft won't shrink much, but the growth wouldn't be here anymore. I have a 40 year old, very senior engineering fried working on his Law degree. Most of us will need to think like him soon. If you read this Mike T., keep going!
This is why the callcentre staff all have pretend European names, and are given classes in the vernacular of whichever locale they deal with (at least in the best call centres).
So long as Joe six-pack gets a fix, is he really going to give a monkeys?
I can't see a technically well educated Indian being any worse than your average first line support guy anyway, and from my experience of Indian colleagues, they tend to be more tolerant of user-obnoxiousness, and better able to handle dickheads.
Personally, I think it's a positive move - rather than shaving costs to the bone trying to supply minimum-wage phone support locally (which is difficult foir the company and unrewarding for the employee), it's better to pay a good market wage in a low wage, English-literate economy, and add value with operator training.
Just my two pennworth.
oh brave new world, that has such people in it!
The corporations want to make more profit, and the way to do it is to get rid of expensive American workers and get cheap over-sea's labor.
By coincidence, I live a block from the Thai-Mandarin Garment Factory, where former US textile jobs have been for about twenty years. If you want a job, they're always hiring.
The starting salary is US$3.50 a day.
Wake the fuck up and start doing something about it before we're all working at Wal-Mart or McDonald's.
Welcome to globalization. Hope you're ready to change professions like my American friends in the clothing industry did twenty years ago. The jobs don't move back to America. Trust me.
Put identity in the browser.
[This is primarily directed at those who claim to be libertarians and then bitch about H1B's or offshore IT work.]
Quit your whining. This is a good thing people and it's an example of what makes capitalism great.
Read up on Joseph Schumpeter, arguably the most brilliant economist to come out of Austria. One's inability to see that the move of IT labor offshore is a good thing is largely due to a failure of most people to understand Schumpeter.
Schumpeter's primary focus was on capitalism as a dynamic system. It continually evolves through creative destruction. There are countless examples of this phenomenon.
A 120 years ago, most Americans were living on farms. With little mechanization, hard manual labor was the order of the day. As mechanization began to become more prevalent, thousands upon thousands of farm workers were surplus to requirements. Doom and gloom predictions that the move from an agricultural economy to a non-agricultural economy would lead to the collapse of America were common. Politicians ran on platforms aiming to keep the family farms solvent and prevent greater mechanization (for instance by taxing production of goods that could be used for farm mechanization).
However, mechanization and consolidation took place in the agricultural business. Today, less than 3% of Americans are farmers, and there are far fewer farmers today than there were then. If static economic analysis, from the perspective of the past, was used to look at the economy today (or during the boom years of the late 1990's), the only conclusion would be that the US was in a total depression, because the vast majority of the old farm jobs were gone.
So why wasn't it the case that the US went on to enjoy even better economic times than in the late-19th century? Why isn't there 90% unemployment (since from the 19th century perspective, 90% of the jobs that existed then are gone today)?
What no one saw was that freeing up the most important capital, human labor, from inefficient application to the task of growing food for other purposes. What those who looked at the farms failing and saw disaster were missing was that now the farmer was able to go to the city and be basically as well off working in a factory, and that the farmer's children would go on to become doctors or lawyers or engineers or skilled laborers. Indeed, the industrialization could not have happened without the farm failures.
For a more recent example, look at the state of heavy industry over the last 30 years. In the 1950's, 50% of Americans worked in industrial occupations, creating physical products. Nowadays, it's less than 20% (IIRC). You would expect there to be massive (>30%) unemployment, wouldn't you?
But there's not 30% unemployment. The children of factory workers went to college and became clerks or salesmen or scientists. Think about what your grandparents did for a living. With few exceptions (I'm one of them; my grandmother was one of the early programmers of ENIAC-type machines), they weren't computer scientists, sysadmins, or electrical engineers. They were probably factory workers, or day laborers, or housewives, or maybe a clerk at some large industrial concern.
By freeing up human capital from making cars and clothing and other labor intensive tasks, financial services, creative services, IT itself could be spawned.
IT arose out of the collapse of an old economic model; it will collapse as a major player. It is inevitable. In 20 years, the jobs held by the readers of this site will have demand levels at a fraction of what they were before. In a century, we'll be looked at as the farmers; while there will still be demand for the tasks we perform, it will be nowhere near what it is today (and nowhere near what it was a few years ago).
The core of what I'm saying is that we don't know what will come next (though it is most likely happening below our noses). T
Business 2.0 magazine is running an interesting article called The Coming Job Boom. Basically, because the baby boomers are getting ready to start retiring, and there just aren't enough workers to replace them, there is impending skills shortage similar that what occured in 1999/2000 just around the corner. According to the article, the article states that this will occur even if the US GDP growth rate is only 3% annually. (Latest reading is 3.1% BTW). Overseas outsourcing, importing workers, and people delaying retirement will not be enough to prevent this crunch. It claims the biggest shortages will be in tech, and has all kinds of data to back up these claims. We should start seeing this around 2005.
This is not the first article I've seen that makes this claim. Its just that this kind of article is not in vogue in the current environment. You have to dig through all kinds of doom and gloom about jobs lost overseas to find them.
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Hi!
Want to scare a lot of people? Or want to get a zillion page views to boost your website advertising sales? Post a red-meat story on SlashDot about IT jobs getting outsourced to India, and watch the fur fly. Toss in a statistic or two (in this article there were no statistics at all) about how EDS has thousands of jobs in India, and let's not forget about that tape recording of IBM's HR guy saying that they should be moving jobs offshore, too. By golly, we'll all be sitting on the curb selling pencils by Christmas!
Or maybe not...
Believe it or not, those offshore code factories aren't much of a job threat to American programmers. Companies have been trying to move programming work offshore for a good ten years--and yes, some programming work has moved offshore. But most of the offshore outsourcing that's been done is either code maintenance (hiring the cheapest person possible to maintain legacy COBOL applications that refuse to die) or help desk support jobs. Neither of those categories poses a big threat to an experienced C++ programmer with good communication skills and a good resume.
What is a threat to American programmers' jobs is a simple economic reality: a lot of us had high-paying jobs in the 1990s because of two different bubbles. The dot-com bubble and the Year 2000 "crisis" had the delightful effect of creating an unbelievable demand for programmers--with or without experience. When Congress passed "emergency" legislation to permit corporations to expense Y2K related expenditures (instead of depreciating them as usual) I joked to a friend that the bill should be called the "Full Employment for Programmers Act."
Those were terrific times. But they're gone.
The hard and simple reality:
The bubbles have burst. All of the Y2K coding has been done. Every Fortune 500 corporation that simply HAD TO HAVE A WEB PRESENCE BY THE NEXT STOCKHOLDERS MEETING is now hoping that the auditors won't compare the money spent on that Enterprise Web Portal with the amount of business generated by it. The insane levels of demand for programmers--and the insane pay rates that went with it--are gone.
That doesn't mean we're all going to lose our jobs to people in the Indian subcontinent. But it does mean that we have to adjust our expectations of the labor market to something a bit closer to reality. If we were newspaper reporters or insurance claims analysts or high school teachers or mechanical engineers we'd face certain realities: you have to look for a job; employers want experience before they'll hire you; sometimes you can't find a job in your area--so you may have to consider moving; and sometimes, well--sometimes you have to consider the possibility that you should look for another career. As information technology becomes a more mature business, a lot of those realities apply to us as well.
Programming doesn't move offshore well
It doesn't. Sure--if you're a SlashDot regular or devoted to a particular Open Source project, you can name talented programmers who live and work outside of the United States. Miguel de Icaza of Ximian, for instance, is an extremely capable programmer who lives in Mexico. Do I consider him a job threat? Not in the least--because programming is not as portable (at least not to India) as you might think.
It's about communication
Simply put, the essence of programming is communication. The vast bulk of programming jobs involve translating user requirements into functional computer code. And if you've been in the business more than, say, three weeks, you've no doubt learned that the customer's written requirements generally have little relationship to what the customer actually needs. Central to what we do is figuring out those little nuances of a customer's business that let us write an effective application--which inevitably involves asking questions the customer never even considered we'd ask.
For example: I'm presently wor
Is that the best you can do? It's like me asking you why Chevy's are the best and you directing me to a Chevy website. The websites you've listed are left wing political websites. Where as the information I cited is a financial statement filed with SEC. Maybe you should have IRS audit MS since their financial statement shows that they owe over 2 BILLION in taxes (and this is from a public record) and you stated MS pays ZERO in taxes. And if IRS asks if you have proof, just point them to the websites that you've listed. I'm pretty sure that IRS will take your word for it as it's not like those web sites are biased. Maybe people like Michael Dell are rich because he founded his company with $1000 instead of spending that money on a gamining system/car/weed/beer. And that's why there's a wealth gap in America.
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> don't expect a great deal of
> political support for laws to help keep
> programming jobs in the U.S.
I should damn well hope not. That is the solution of the coward and a thug -- "thug" because it involves using the threat of violence (all laws are ultimately enforced by men with guns) to take out the competition, and "coward" because those proposing such thuggish methods hide behind their proxies in the legislature and law enforcement.
I have a wife and four kids and have been out of work for 2-1/2 months, but I'll clean toilets for a living before I'll stoop to threatening someone with violence to get a job.
I don't doubt the ability of the Indian programmers, and nothing in what I wrote was meant to question that.
However, I happened to have a problem with a Netgear router, and I was transferred to a bunch of thick-accented tech support people who were fairly obviously in India. What was clear after talking to them is that it was very hard to be understood, and I think it would be even worse if I had to communicate to them about a difficult software project.
So a firm of Indians with expat Americans capable of bridging the gap between the two cultures seems like a pretty good idea.
You would pay me - or someone like me - in India (or whatever other country this was done in) for doing the communication, which is much easier face to face.
It's not the Indian programmers who would need me (although they'd welcome getting the business). It would be the American side of things that would find my services useful.
D
Someone in India can live off of $5000 a year, but an American can't even pay rent and utilities with that in a year.
If no one can their rent in America, the rent will go down.
Oddly, out here in San Francisco, the rents DIDN'T go down signifigantly once the dotcomer's left. They stayed nearly as high as they were for YEARS, the apartments completely empty, becuase real estate holders were hoping against hope that the rich people would return. They started laying off people instead of lowering thier rent prices. Even today there are daily layoffs at local title offices and rela estate agents. Sure, if you are willing to wait another 5-7 years, maybe the prices will become livable again, but 5-7 years is a loooong fucking time to out of a house.
For starters, what's with this statement they inserted in the middle of the whole thing:
"Libertarian IT workers who watch their jobs go overseas should derive joy from geographic shifts in employment. Their "dog eat dog" creed requires them to be happy whenever the marketplace finds a way to pay workers less and increase business owners' profits."
Did the author of the story suddenly feel a need to attack Libertarians or what?? That's, at best, a very inaccurate statement.
Libertarians have no "dog eat dog" creed! If anything, it's more of a "live and let live" creed. Do whatever you wish, as long as you don't infringe on other's rights to do the same.
As a self-proclaimed "Libertarian I.T. worker" myself, I can assure you, I'm not taking great joy in the marketplace constantly finding ways to pay workers less for their work. On the contrary, I'd simply like to see workers able to keep more of the money they're entitled to for their labor, rather than be forced to turn about 1/3rd. of it over in taxes.
But I digress....
On this I.T. outsourcing issue, I'm not sure if any of us really know yet how it will all pan out. I have a strong suspicion it will be a short-term "bad thing" that turns out to be a "good thing" in the long run. Why? Well, many 3rd. world countries are far behind the technology curve right now, but are trying hard to catch up. When enough of them earn some money doing I.T. (even if it is for the U.S. companies), it will help spur interest and growth of I.T. in their own countries. Eventually, that means they'll be needed locally, instead of only when they take U.S. jobs. (That also means new jobs might become available for U.S. workers willing to accept work overseas.)
Part of the problem with this whole "global economy" thing is that U.S. citizens are still going into it with "tunnel vision". We're all about the "What's in it for me, today?" -- and tend to forget it may take some pain and suffering now, to "jump start" the economies of other countries, so we'll all be operating on a larger, more level playing field down the road.
In the short term though, yeah - I don't think you can avoid some of the I.T. outsourcing. Much depends on how much human interaction is required from your job. Programmers generally don't need high levels of interaction. They're paid to bang out a product (code), and if foreigners code cheaper - that's the new "going rate" for the work.
I've seen several articles in various places on the woes of the current job market and ways to deal with them, and I noticed that they are primarily written with a "hearing" audience in mind (a reasonable target audience, after all). Their advice on coping in today's job market often does not address the unique difficulties of being a Deaf IT professional who has been laid off.
For several years, even as a Deaf person, I rarely had to look very hard to find a job, simply because my skills were in demand. Now that the tables have been turned around on all of us, an already bad job market is worse for me because I am Deaf. Many job postings state that excellent communication skills are required--which is fine and reasonable, except I feel that I am at a disadvantage and won't be considered a good prospect once they know that they can't just talk to me as easily as they can talk to most people.
I do communicate quite well in one-on-one settings with minimal background noise. However, even if I get the interview and land the job, there is another concern: fast-paced, cutting-edge job environments do not encourage ideal communication settings. The norm is to get together in group meetings, which I find very difficult. Yes, I could get an interpreter, but these meetings are often called at the last minute (fast-paced environment, remember) and many interpreting agencies want a week's notice. Also, the lag time in the interpreting process prevents me from smoothly contributing to the discussion. In a previous job, I tried setting up an IRC server to allow people to talk online, but the other workers just didn't want to have online meetings. The isolation had very deep, harmful effects on me. This was a corporate setting, and I don't see how a Deaf person could survive there.
I seem to remember that employers were more willing to work around these issues when the economy was better. When that changed, there was less and less tolerance for my needs (however substantial they were) as time went on. Now that I have been laid off, this is on my mind as I search for job opportunities. If I'm not someone who can communicate in a "typical" way, there are hundreds of other candidates with no communication issues who will appear more attractive for that reason. Furthermore, for the sake of my sanity, I do not want to get into another impossible corporate situation like my previous job.
So, I am faced with couple of possibilities. One is to seek out a work environment where we can work out ways to communicate effectively and get fairly settled for pretty much the long term. I do feel that I would do well in a small-company environment, where I could easily get to know everyone. In the past, I have worked in such settings and they indeed proved to be better experiences. That kind of environment is hard to find nowadays, and the ones that I have come across don't seem to be hiring. Even so, this would be my preference, because my experience is that corporate settings just do not work for me. The same goes for consulting firms such as RHI (just to pick one example out of many) which would entail working out communication at the start of every new contract.
The other possibility is to change my career. I'm not sure what kind to consider yet. Once upon a time, Computer Science (my degree major) and IT were considered very promising fields. Now, it is all a completely different ball game.
Actually, my career is not completely uncertain. I became a Deaf preacher in the last few years, and this is becoming my primary focus. However, Deaf churches are usually not able to support a full-time pastor, so I expect to be bivocational when the Lord calls me to pastor a church. Thus, I still need to think and pray about what kind of work to pursue on the side.
I also have a few Deaf friends in the IT field who are either laid off or see the ax falling anytime soon. I wonder what advice I could give them and other Deaf IT professionals (and myself, for that matter) on how to cope in today's job market?
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Happy Fun Ball got first post...because I taunted it.