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Tech Firms Defend Moving Jobs Overseas
bobcows writes "Yahoo is reporting about leading technology companies urging Congress and the Bush administration Wednesday not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower. 'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday. 'The problem is not a lack of highly educated workers,' said Scott Kirwin, founder of the Information Technology Professionals Association of America. 'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"
As a stock holder in several tech companies, I appreciate them saving money and maximizing my return on the funds I saw fit to invest in them.
"We've found a way to line our pockets with more money, so why shouldn't we use cheap, hard to understand overseas techs? We're greedy, plain and simple."
I'm not american, so I can't comment on what the loss of jobs in my field their is going to do to me, but I think this kind of thing should be expected if anybody wants the global economy thing to really happen.
This could still be beneficial to the american economy, it just means that many of these out of work programmers should look into some of their own ideas and start companies around them, hiring out to the cheap labour overseas. That would probably benefit more people anyways.
So it is now, "It's not that you are stupid, it's just that you asked for the right to have some bread and water for your family."
Sucks to be a working (wo)man, I guess.
Lets face it. If you're a multi-billion dollar corporation and you can get labor dirt cheap in another country wouldn't you do it? Yes there are plenty of qualified, educated American workers. So what? They work for $3/hour in India instead of $20/hour in America.
We need some kind of regulation to discourage these practices or our entire economy will go to shit. George Bush wants to help ILLEGAL immigrants out by letting them work? Because he is so compassionate?? Give me a fucking break. It is about exploiting people and getting cheap labor so the rich get richer.
Easy for her to say in ivory office while she's pulling in a million dollars a year in salary, not including bonuses. She's complaining that people are willing to accept minimum wages?
Why does an education entitle you to anything?, let alone a good paying job. Wake up, once education became accesable to all, a degree isn't a golden ticket to success anymore. Now you need a degree to compete for the opportunity.
This is exactly what I was thinking.
If I go to school for 4-6 years, and come out with a very nice degree, why should I have to work for $5 an hour, while management is making 10 or 20 times that?
If I went to school and got a degree, why should I, a person who has spent time and (very much) money to better my education, work for the same amount as the person who has not gone to school, has not tried, and now mops the floors?
Some may call that elitism, but I wouldn't. I would say it's more just a basic understanding of the American dream that if I try to better myself at something I enjoy, I will receive more in the end.
This just seems to kind of trample all over that idea. I would support a trade restriction.
If you reduce her salary to $500,000 (ten times what a sacrificing $50K engineer might make), you can save 2290 well paying (50K) jobs.
For the life of me, can you imagine any CEO contributing as much to a company as 2290 rank and file workers? Unless they can literally print money, I have trouble imaging how an executive can make that kind of contribution compared to the employees they lead.
"Prepare for the worst - hope for the best."
The quote about what workers in the US cost reminds me of this article from Fast Company:
...
:)
http://fastcompany.com/magazine/77/walmart.html
The article makes a believable case that WalMart is singlehandedly, drastically, speeding up the move of manufacturing jobs overseas. Towards the end, they have this quote:
'Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."'
That's exactly what's going on here. 'Middle class' in the US costs a hell of a lot more than 'middle class' elsewhere, and if consumers here have a choice, they will buy the things that were not made under those expensive conditions. Of course, by making that choice, we push our own jobs overseas
I can't predict how this will end up, but it's going to be a trip finding out. What do you all think? I want to see I Am An Economist in the replies.
She's got to be kidding:
"Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday. 'The problem is not a lack of highly educated workers,' said Scott Kirwin, founder of the Information Technology Professionals Association of America. 'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"
We (the highly educated unwilling to work for minimum wage) all got high education because a high school education would not get you a job that you can actually live on. Maybe even 20 years ago a high school education was enough for some jobs, but even trades require additional education - and then you can command a good living wage. Even in China - their wage may be our minimum wage, but with their lower cost of living it comes out to about equal to what we make most of the time. So what Ms. Fiorina the Oligarch should be preaching is lowering the cost of living in the US and then you won't need protectionism...but then she'd lose millions in assets so we know that won't happen.
-When going for broke, go for Ithaca!
I,
Love this one:
-----
Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.
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I suppose Mr. Barrett would have us eating all those food surpluses that India and China are producing now-a-days.
He might get a rude awakening though if the US were suddenly dependent on India, etc. for food and they said, we're not shipping you any more food because we don't like your stand on XYZ issue.
If there is one thing that I'll certainly support is help for farmers. Hey, they put food on my table.
The last thing I'll be supporting in the future is govt. investment in high tech. Why should the US support high-tech when high-tech eggheads like Craig Barrett will just take those advances and give them to the Chinese.
I can do without a computer for a long time. I'd probably starve to death in about a month.
Talking about losing points with me, it's not even close....
Caution: Contents under pressure
Not the only place where India is not playing by the same rules we are. See my sig.
It's no damn wonder India can pay minimum wage for tech jobs, half the freakin' country is slaves and most of the other half is 'untouchables' forced to work for next to nothing.
Carly really needs to explain how she personally and HP feel about supporting slavery.
I'm not sure what the secret to success is, but the secret to failure lies in trying to please everyone -Bill Cosby
I've found that the pay for the jobs out there hasn't decreased it's simply the number of jobs available has gone down the toilet.
This is interesting, because it seems to be in stark contrast to the comments in the story about U.S. workers being unwilling to work for less money. That suggests to me that there are still the same number of jobs in this country, only now they pay smaller salaries, and after some period of time the executives decided that U.S. workers were unwilling to accept those smaller salaries.
The thing is, as you pointed out, this is not what's happening. There are in fact fewer jobs available, and the salaries are the same (ie, not lower).
Perhaps a good summary of the article might be: "Well, we're doing the usual blind executive thing, making lots of decisions that we can't really justify to the public because our reasoning is shaky and unfounded. So please just leave us alone and give us the freedom to wreck the U.S. high-tech job market as we see fit. Thank you."
What I love about this sort of 'unenlightened self-interest' from corporate types like this is that they don't appreciate the irony that if everyone starts outsourcing jobs, no one in the US will be able to afford the goods they produce!
Think about it. If no one in the US can afford their products, then they'll have to either drastically reduce prices, or they'll have to sell many more of them to people in countries like India, who they are paying many times less than they are paying US workers. Can they afford to keep 'US' prices in those countries? Not if they want to sell a lot of machines they can't. They totally miss the fact that well-paid American workers are their best customers and 'profit generators'!
That's what happens when you don't think about the economy as an ecosystem (which it is). And when you lack fundamental ethical thinking skills (i.e. what if everyone did what we did, and what responsibilities do we have to society). Being a responsible corporate citizen pays off, but it simply can't be seen in some corporate 'bottom line' spreadsheet, so most companies sadly ignore it. Make no mistake though, if most things in the US become automated and/or outsourced (which is the current trend), there will be a major crisis in this country.
1) If jobs are done by people for less money, thep products will become cheaper for us, lowering our cost of living. This is pretty evident in most consumer electronics and clothing today.
2) If jobs are done by foreign workers and it makes them richer, they will buy more products, including from the US. For example, US exports to China are way up, including server sales.
Hundreds of millions of people in India and China have been lifted out of absolute poverty over the last 20 years due to freer markets, and developing countries around the world are raising their minimum wage as their economies grow (Beijing and Mexico just have, for instance).
3) There are particular industries that are tough for developing countries to get into without higher education systems, including research and development of technology and bioscience. This is definately being done in India and China, but not to the extent of lower skill manufacturing, call centers, and "simple coding".
4) The US GDP has been moving primarilly to services over the last 50 years. A lot of these are difficult to offshore growth markets, such as health care, business management, and MarCom.
If they raise prices, you can freely compete with them again. Look, I'm not saying that China is right in the ways it conducts its business, but their not playing by the rules does not justify us not playing by the rules, neither ethically, nor economically. If you believe that China is better off because of their unreasonable trade policy, then why not compare quality of life over there and here in the U.S.?
but what about requiring them to have minimum wages equivalent to the same standard of living for minimum wages here? as well as enforcing our same workplace safety and overtime regulations?
it's not just cheap to move stuff overseas because the cost of living is cheaper over there- it's because it's practically slave labor. if people in the western world had to work under the conditions these people work in, they'd riot.
in addition to equal workplace and minimum wages of equivalent standards of living, free trade is only fair with free movement of labor. people worldwide should be free to live wherever they want and be guaranteed a minimum standard of living. businesses would then set up shop in the optimal location, and the workers whose skills fit the job would migrate there...
The investors choose a management team to take care of their capital and run the company with a profit. If the management team is payed a flat salary, they have no incentive to make, say, 15% instead of 8% profit. Their incentive is to keep their jobs, theoretically by doing the minimum necessary. If, however, their compensation is tied to the performance of the company (through growth targets, stock options, etc), the executives have a personal financial interest in maximizing the value of the company, and thus (in theory) the share price.
I guess the big flaw in this is that no other member of the company is compensated the same way, while arguably an engineer has the same influence over the success or failure of the company, at least on a small scale. If it works for the executive, why not the front-line worker? The only answer I can think of is that there is no "procedure" for being a CEO. Everything that the company does is a calculated risk, and management requires a high degree of customization. Maybe without this compensation there'd be less incentive to take risks, while the last thing you want to tell your front-liners is to take risks. I'm not saying it's a good answer, but it is all I can think of. I'm open to other ideas. Thoughts?
Wake up, dude. Not only can you not live on minimum wage (even with two jobs), there is the added concern for college costs. Education cost money. It isn't like a blue collar job where you can get along on a high school diploma that's free to get. In order to get those white collar jobs, you need a diploma that will cost you on average some $80,000 from a decent school to get. That isn't free, you have to pay back loans. You can't do that on minimum wage. Now, I'm not saying it entitles you to a good paying job, but you shoudl get payed what your worth - and having a college education (notice I didn't say diploma - just because you have a diploma doesn't mean your educated) and working a job that requires such an eduication entitles you to a higher wage then someone just out of high school (which is probably the minimum wage standard). How many good doctors work for minimum wage?
You can't get by on minimum wage (that's single - forget having a family), you certianly can't pay school loans back on minimum wage, and you definitely can't send your kids to college on minimum wage. Someone with a college education that works for minimum wage insures that their children probably won't even make it to college. As it stands the system cannot support itself. The avergae us worker cannot compete against a guy who only makes $10,000 a year. And foregt this baloney about balancing out lifestyles and setting us eqaul to the rest of the world. You want to know how the rest of the world lives? Read "Nectar in a Sieve". That's where life styles are going to balance out. The way things are going, BladeRunner would end up looking like paradise. The reality would be more like the slums of south america or africa.
There's a growing sense that even if The Future comes,
most of us won't be able to afford it.
-- Lemmy
Yup, I am a little biased here, and I am a little pissed off as well.
I went to school, and Got a degree in applied Science majoring in computer and telecommunications. Not because people were saying "IT is HOT" or anything like that, but computers are the things I love, so I just followed what I was good at doing.
I finished top of my class, fought a bitter 4 month battle to get into an IT dept of a big company, and studied my but off every night to get my Certifications.
It took me a little over a year to get my Windows 2000 MCSE. Yeah, I know there are places churning paper MCSE's out by the 100's but I worked my ass off and did it without anyone's help, so I am going to be proud of it. I used to work from 7am-6:30pm come home and study till 2am and get to bed at 2:30 and sleep till 5:30 and repeat.
(and not to mention being on call 24/7 while trying to study).
So now, I am two years out of school, Married, providing for my family and my new puppy with hopes to have a kid soon and get my family and life started.
My company lays me off because I cant work for as cheap as their tech support. I was laid off and three Germans actually came here. The company could pay for the housing and their wages and still hire three of them for one of me.
I only Made 22,000 a YEAR!!!!!!!!
So now what the hell am I going to do? I been unemployed for the last 6 months and there are no IT jobs within 70 miles of where I live. How many IT people along with me are probably going to be putting a Wal-Mart vest on!?
But as a morale matter, I have to say I don't see anything wrong with what these execs are doing. They are paying as little as possible for what they want to buy, just as I do when I buy stuff and services. I don't see how it is morally better to hire an American for 80k rather than and Indian for 8K. Does the American deserve a job more than the Indian?
I lose if my job goes overseas, but the programmers who get my job win. Should my employeer care more about me than those programmers. It doesn't care about either of us, of course, only money. But assuming it SHOULD care, why should workers in the same country be first in line?
These same companies crying "FREE MARKET" are the same companies being subsidized by the US government. And where does this government money come from? the taxpayers of course. And who are these people screwing over? the taxpayers of course.
Winfried Ruigrock and Rob Van Tulder, The Logic of International Restructuring, New York: Routledge, 1995. An excerpt (pp. 220-221): [O]ver the 1950s and 1960s, the Pentagon paid more than one-third of I.B.M.'s R&D budget. The Pentagon moreover acted as a "lead user" to I.B.M., providing the company with scale economies and vital feedback on how to improve its computers. In the 1950s, the Pentagon took care of half of I.B.M.'s revenues, enabling it to move abroad and flood foreign markets with competitively priced mainframe computers. Thus, I.B.M.'s defense contracts cross-subsidised its civilian activities at home and abroad, and helped it to establish a near monopoly position throughout most of the 1950s, 1960s and 1970s. Along similar lines, all formerly and/or currently leading U.S. computers, semiconductors and electronics makers in the 1993 Fortune 100 have benefited tremendously from preferential defense contracts. . . . In this manner, Pentagon cost-plus contracts functioned as a de facto industrial policy.
David F. Noble, Forces of Production: A Social History of Industrial Automation, New York: Knopf, 1984. An excerpt (pp. 5, 7-8): [B]etween 1945 and 1968, the Department of Defense industrial system had supplied $44 billion of goods and services, exceeding the combined net sales of General Motors, General Electric, Du Pont, and U.S. Steel. . . . By 1964, 90 percent of the research and development for the aircraft industry was being underwritten by the government, particularly the Air Force. . . . In 1964, two-thirds of the research and development costs in the electrical equipment industry (e.g., those of G.E., Westinghouse, R.C.A., Raytheon, A.T.&T., Philco, I.B.M., Sperry Rand) were still paid for by the government.
While I would agree with most of your post regarding overpayment, execs on each other's boards taking care of each other, etc., there is a big difference between CxO's and IT personnel.
There are very, very few people qualified to run major corporations, compared to the positions available. That's just an unpleasant fact. In IT, particularly after the job losses of recent years, the situation is more a buyer's market.
Oh, and given the fact that business is a highly competitive endeavor, it isn't possible for all execs to do a "good job". There will always be companies running into the ground as their competitors move forward. The trick, however, is to ensure that the chief doesn't earn $zillions unjustly along the way (see Gary Welch of Conseco, for example).
Stop by my site where I write about ERP systems & more
Someone should remind Carly that American corporations don't have a God-given right to tax incentives (aka corporate welfare). The tech lobby should also stop demanding government protection for its "intellectual property" overseas.
Let's get drunk and delete production data!
Since I haven't seen this written elsewhere, I'm sure that it's probably impossible - but here's my idea:
A US corporation can only remain a US country if a majority of its employees are US citizens. So if HP, etc. start employing Indians or Chinese, they should be forced to become either an Indian or Chinese company (and listed on their stock exchanges as well...)
I just think that if HP is using mostly non-US labor, then they shouldn't be listed as an American company.
/Me safely goes back to sleep, knowing that no "leader" will ever agree to the above clause for themselves.
Software is not supposed to be about how to work around a useability issue. - Ken Barber
well you have the IWW which was born in the USA and has always been internationalist.
This is the other end of the stick that America used to beat the (third) world with.
In order to create the market for Boeing, McDonalds, etc. America pushed global economy down the world's throat.
Little she realized that it's coming back to bite her in the rear.
I agree with both parents (me too!)
How about instead of passing a law that says no exporting jobs overseas, we pass a law that says executive compensation cannot exceed X times the lowest paid employee's salary.
Then when a CEO wants a raise s/he will have to give his peons a raise also. Likewise board members,senior management all forms of compensation so the weasels don't find a way around it.
Now, admittedly, in US currency that's ca. $6500-$7500. But consider: Rent around Bangalore is 6,000 Rupees per month. That's $131 dollars a month. A good computer in India costs 30,000 Rupees or $656.31.
These are not people at the poverty level. They are self-respecting middle-class IT workers. America's cost of living (which drives the computation of minimum wage) doesn't apply.
Sigmentation fault - core dumped
if every company was run by people like Aaron Feuerstein, the CEO of malden mills, the maker of polartec fleece, the world would be a much better place. talk about putting your employees, the real people that make the company, first. his factories burned to the ground in lawrence, mass, a small not so well-off city. instead of taking the money and shutting down the company, he continued to pay all the employees their normal salaries and rebuilt in the same city. he not only gave the employees their fair wages, he also kept the economy of that city going. i don't think there are any others like him. the company went into bankrupcy and is now back out.
the problem with most companies is they see their employees as expendable. he didn't. he saw each person as someone that brought something positive to the company that was irreplacable. he lost a ton of money because of it, but he didn't care what happened to him, his company and employees were more important. that's a guy taht knows what he's doing. most will continue to raise their salaries. i would also like to compare the government to this as well. the senate recently voted a salary increase for themselves, something that is far greater than the cost of living for them (including all their travel to and from DC). they voted it in during the economic downfall, how convenient, people lose jobs, but they get higher pay. same goes for the governor of CT, my home state, john rowland. he gave himself a raise while the state's economy is in shambles. it's really greedy and stupid and really pisses me off. i don't see it changing anytime soon, hopefully the government won't listen to the schmucks that run the big tech corporations and put restrictions on their doings, or at least raise taxes on the companies that outsource to other countries.
please me, have no regrets.
The purpose of a company is to make money for it's OWNERS, ie. stockholders, not it's execs.
The real injustice in the whole scenario is that I, as a part owner in IBM, have no voice compared to the institutional investors. Corporations are NOT the representative democracy that the U.S. is. There is no corporate Senate to protect the interests of the minority.
But the U.S. shouldn't favor foreign workers if those foreign countries penalize U.S. workers. Fair is fair, after all. That is why I am against the steel tariffs - if American steel is that good, prove it!
Oh well.
How about instead of passing a law that says no exporting jobs overseas, we pass a law that says executive compensation cannot exceed X times the lowest paid employee's salary.
:-b
I could be off my nut, but I think I recall hearing once that Japan had something to this effect where X=10. Think about that one. If the janitor is making $5/hour (or about $10,000 per year), the CEO can't make more than $50/hour (about $100,000 per year). It makes for a great incentive for the greedy CEO to "take care" of his troops - because in doing so he enables himself to take care of himself. You want to make $1,000,000 per annum as a CEO? Great! It means your janitor has to make $100,000... how do you intend to justify THAT to your board of directors? It won't bring other folks' salaries up, but it WILL bring executive salaries WAY down. And believe me, if executive salaries drop from $10,000,000 to $1,000,000... well... $9,000,000 can pay for a LOT of jobs at $50,000 a pop (in fact, it can pay for 180 of them).
And FWIW, include "temps'" hourly salaries in the calculation as well. No company of a CEO and a million temps.
--AC
In my view this is the critical issue. Wages are only a certain percentage of the cost of a company. When Oracle has to compete against an Indian company which has its equal in intellectual capital, but half of its labor costs, then its dead. But then, isn't that like all American companies - improve the books in the short term without considering the long term?
I was consulting for a GE product factory in 1999 while working for one of the now mutated interactice consulting companies. The engagement lasted three months on site, and while there I PERSONALLY watched this process take place.
The first step was to bring in H1-B mainframe workers from India, estensibly for training purposes. These people were flown in from overseas, lodged by the product factory in question, and shuttled back and forth from their hotel.
Shortly after they had been "trained" enough to suit managements needs the existing American mainframe workers were laid off in progressive batches. I sat next to one of them who told me personally what was happening and how he didn't know how he was going pay the bills after his job was terminated later that week.
In the end I left with the Indian mainframe team in full control. They had been there longer than me (3+ months) and were slated to stay the full period of the visas before taking the work they had back overseas with them. I later learned that many of these companies actually shuffle foreign workers who are ALREADY TRAINED in and out of country to get skilled labor cheap locally.
And your telling me that foreign nationals with training and ZERO overhead or living expenses aren't stealing US jobs?!? I mean really, you ARE saying that in the face of OVERWHELMING DIRECT EVIDENCE to the contrary?
Dude you need to wake up and smell the home brewed coffee you'll be drinking after your job goes bye bye. But of course all the management types say "that'll never happen to me," right? Sadly none of them stop to think what will happen when these subcontractors and contractors in poor nations decide to forego the US middle-man and take their products and companies direct to the first world market (read a recent story in the times about the company that makes Ryobi's tools in China buying the name and business rights everywhere outside of Japan).
I am constantly amazed at both the naivete and idiocy of my fellow men. You cannot have fully open markets in a world with disparate income levels, costs, and social development. Even Keynes would have recognized this if he could see the world we live in now.
-rt
I've nothing constructive to add, but I had to say "Amen brother". The whining here reminds me of growing up in the rust belt seeing "Hungry? Eat your import" bumper stickers holding together rotted old ford trucks.
At the bottom of the endless pile of paper work which characterizes all regulation lies a gun.
Alan Greenspan
I am curious what one does when one retires to one's home country after being paid local wages? This clearly does not pose a problem if you stay in the same relative band of purchasing power parity. Or should one plan on retiring to Bangalore?
I wish I could find it, but sometime recently one of the business rags had an article in it where it was found that you could replace the CEO with anyone off the street at random. The stock price would briefly dip, but would quickly rebound as though nothing had happened.
As for making sure the chief executive doesn't get (Nobody EVER earns $5 million a year and a $40 million golden parachute) an excessive amount, there are options: 1. Pass a law saying the federal and state governments cannot do business with any corporation where the CEO recieves more than Xtimes what the average or median employee earns in a year, whichever is lower. 2. Graduate the tax system more--make it less worthwhile for the company to give out huge paychecks as the CEO will recieve less and less of each dollar spent on their salary package as the amount gets higher and higher. 3. We have minimum wage laws, we can impose a maximum wage law. I like the idea of 1 and 2, but 3 I don't care for. While it is bad for our republic to have such wealth and power in the hands of so few and the concomitantly huge gap between the rich and the poor, it just seems wrong to say nobody can get paid $x million a year. But until we have campaign finance reform it's a moot point since no laws will be passed seeking to limit excessive executive pay, since they donate money to election campaigns and money plays a critical role in politics.
Sure companies can move offshore, but the goods they import could be required to be manufactured via workers at minimum US wages, or some fraction thereof.
My theory is just print the wages on the box, too. That way, consumers will make informed choices, and informed choices are a staple of capitalism.
a war on terrorism? How can we end a war on a method?
The basic problem is programmers refuse to organize themselves. Programming simply is not a profession.
There are over 2,000,000 programmers in the U.S. However, in spite of record unemployment (surpassing not only the rate for professional workers but for all workers as well) and legislation (e.g. H-1B) designed move jobs overseas, programmers refuse to organize.
There are a few groups out there fighting for a programmer-friendly legislative agenda.
www.aea.org
www.programmersguildusa.com
Yet these groups (I belong to both) are tiny.
Worse yet, I see people say "Oh, they have a bad website" and all that nonsense. You have to run before you can walk. How come programmers don't say "Oh, I don't like your website but I'll join and help you make it better".
If you aren't a member of a group fighting for programmers, then your complaining is having no effect.
However,
'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday.
It's true, there isn't, and that includes Carly's job. I guess she'll have made enough money to retire once HP looses enough grounds to foreign competition to cause HP to drastically cut back or go out of business. Reality is it is. When enough R&D, management and manufacturing are sitting overseas, there'll be no need for the US company. Bye bye, HP.
This is an election year. Organize and threaten to vote Bush out unless he does something real to improve the situation here at home. For example, the US allows Indians to come into the US and work with H1B and L1 visas, but a US citizen can't go to India to get a job. Here's an idea, don't give visas to countries that do not reciprocate. Part of what we're seeing is a natural globalization that will continue throughout the 21st century, but let's make sure that US labor is competing on equal grounds. I'm not looking for a free meal, just an equal opportunity.
By the way, eventually, prices will rise overseas and labor will get expensive there as well. Human nature is what it is, and people will charge more for goods and housing, workers will want more amenities and conveniences, etc. Labor costs will go up overseas as well. This is a temporary situation, although I'm sure that the used car salesman who used to be a senior analyst doesn't find this comforting.
In terms of cost My Roommate's Brother(tm) who does a lot of obscure and classified work for, well, I don't think I can even say that, has done some interesting research.
According to the latest numbers *he* has access too, last year 4 out of 6 Offshored IT projects which reached maturity (were supposed to be "done") failed to produce a usable product despite being "finished" (and paid for) by the parties involved. Why he phrased it as 4 out of 6 instead of 2 out of 3 is a statistical mistery... 8-)
The one thing that offshoring *does* do is get the horse so far away from the driver that the necessary whiping cannot take place.
And so it was a "very expensive cost saving measure".
I could not, howerver, get him to give me a good X out of Y for unusable but finished domestically produced IT projects, so...
In short, nobody knows what *any* of these numbers mean nor what the costs or benefits really are in absolute numbers or dollar values.
So all things being equal, further away is worse. Sending money into another country is bad for the local economy. (Hence all of the rest of the world not wanting to send money to Redmond WA.)
The particularly vile intangables are, well, particularly vile. The cultural differences and their effects on the results can be legion. For instance the very-smart chineese woman who is writing our app in-house used this sickly and nausiating yellow-on-yellow color scheme "nobody likes." I know, however, that these are "prosperity colors" in her socalization.
A lot of making people happy is making a product that meets the local sensibilities.
You can't Offshore "local sensibilities" in any useful manner.
Costs will be paid, people will mess up. "Enron Happens" largely because it must. And the U.S. of A. is positioning itself to be The Premere Third World Country of the Next Millennium, Sic Transit Gloria Mundi, Amen...
Innocent people shouldn't be forced to pay for inferior software development.
--"Code Complete" Microsoft Press
Well, here in Bangalore, you get a nice single bed room apartment for about $40, a good lunch costs you 50 cents and a bus ride across the city costs you ONE cent. For $5, you can travel almost 400 miles in train...what if you get paid $1200 per month. Remember, that country side all the figures above are atleast half the price.