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A Thoughtful Look at Indian Outsourcing
thefinite writes "This article needs to be read by anyone interested in the outsourcing of IT jobs to India, no matter your opinion of it. It dispels some rumors (for example, if Indian IT companies do such bad work, why are over half of Carnegie Mellon's highest-rated programming companies Indian?). It addresses all of the arguments. Perhaps most importantly, it adds faces to the problem. It not only tells us about the American programmers who are out of jobs, but also about the Indians who are getting them. In the end of it, this is what Free Trade is about: people. This article makes that clear."
This article is simply a sensational piece. It's intent is to say, "See? Look at all the smart programmers we found in India! Don't you feel ashamed of yourselves now?" At which point both sides of the argument will start shouting.
Do yourself a favor. Realize that there are smart people in India, and there are smart people in the US. Realize that the amount of outsourcing done is ineffective and will change, but some outsourcing works and will work.
Javascript + Nintendo DSi = DSiCade
Irregardless of the angle placed upon the situation or the people involved, the "outsource-to-India" thing is affecting more than a few American jobs. This is a global problem.
Realistically, IT workers (non-management) need to consider their jobs redundant and over in five years. Make sure you've got skills that require onsite presence, like cabling.
The industry is just about finished, people, and it's getting worse. Give it a little longer and we'll see the likes of Sun vanish, HP is exiting the Unix market and the Linux bubble will eventually burst.
Can *you* make coffee?
I find it rather ironic that so many people in America, the land of capitalism, hate outsourcing so much. This is simple economics right out of Adam Smith. People in India can do the same things as people here in the States, and at a significantly lower price. Therefore, they get the jobs, and rightfully so. One good benefit for Americans is that this allows their employers to use that money elsewhere. And yeah, IT job salaries might fall, and some people might have find jobs outside the IT field. But for the most part Indians need these jobs much worse than we do. I'm willing to bet that as far as possessions go, the average unemployed computer geek is significanlty better off than the Indian worker who "stole" his job.
That's one thing this is NOT about: free trade. Free trade is when an unemployed American computer scientist can go to India to get a job. Guess what? It's impossible for Americans to get work visas in India. Why? Because they are protectionist.
People need to realize that the exodus of jobs is a one-way ticket. Indians can come over here and work as programmers, but Americans can't go to India. This is really a story of the American worker getting shafted by the illusion of "free trade." So let's stop the propaganda and say what it really is.
... it's the white collar execs (and wannabe execs) here in Corporate America that we're mad at!
They get the nice fat promotions and bonuses, while our jobs go elsewhere. And we are the same people they praised just last year as invaluable assets to the company.
So what happened? They can't get rich pulling fancy accounting tricks, so this is what they've resorted to.
I seriously hope that I'm wrong when I predict that this whole thing will fail miserably (taking the off-shore jobs with it).
I have nothing again'st people making a living, but lets see how your tune changes when they start outsourcing journalist jobs...
My days of not taking you seriously are certainly coming to a middle...
This leaves the americans with the opportunities to open liquor stores!
As I was told by an Indian man at a liquor store once as I was reading a magazine... "this is not a library, you either buy or get out".
In the end, I do think it'll be a while before the "highest level" of IT (such as research labs) find comparable counterparts at that deep a discount. People who are worried about their job moving offshore should think about how they can do things that can't move as easily, perhaps by increasing their education (MS/PhD)...
Mencken had it right. So glad that's old news.
Funny, it also looks like it's in part about the poor getting richer.
Anything worth doing is worth doing badly -- G.K. Chesterton
Could it just be that because of America's prosperity has created a "bubble" in the american labor market over the past decades?
Maybe all americans are simply overpaid and we're in for a BIG correction in the coming years?
Kinda scary.
The key word is not "better" but "cheaper", it happened with manufacturing jobs in the past 2 decades... it started happening with other jobs now. As long as executive positions are not being outsourced Corporate America could care less about who is doing the job, and the quality of it.
In some sense it is economic suicide, sure you produce cheaper goods, but those who are in this country to buy them are out of jobs. I.e. they have no money to buy those cheap goods, and the people who produced the goods are too underpayed to afford those goods. This is why MBA schools should be shut down once and for all, they have been produced miserable failures for the past 2 decades, a ton of greedy idiot savants who are unable to see the whole picture.
I could care less if Indian companies can do the same job better, or cheaper. If that was the case Indian corporations would rule the market, if there was indeed a perfect free economic system as the article sort of tried to hint.
Outsourcing isn't the magic arrow CEOs want it to be. This article doesn't really address anything important at all. Ratings are pretty meaningless. I know parts of companies that are rated at SEI Level 5, but produce some of the worst crap I've seen. They're rated well though, so they much be good.
Why doesn't someone write an article about all the times outsourcing has been tried before? How about what happened with Malaysia? How about the fact that the overhead involved in trying to manage people half-way around the world is higher than the amount they save by outsourcing? This isn't a new fad people. Sure, the people and the places change but the problems don't.
Things are different now than they were in the 80's I'll grant you, but no one seems to be drawing the comparisons. Health Care costs are rising in the US, thus possibly providing better savings when outsourcing now. However, it's not like this is a new concept and that the problems aren't well known. Let's see some hard questions asked and analysis done based on past experience!
KhyronThis article makes interesting advertising for outsourcing firms and raises some very valid points but hardly can be considered either objective or entirely factual. The article talks about the quality of Indian IT firms (and they do have some high quality professional firms). However, they fail to mention the many negative experiences U.S. firms have had with botched projects, poor service and support compounded by language issues despite claims that Indian English skills are adequate (albeit this is not true in every instance). One of the main issues offsetting these facts is that they work for a tenth of what their US counterparts do. Companies find it cost effective to allow them to make these mistakes and learn from them (which they seem to be doing). Outsourcing is a minefield that can lead to extraordinary success or disastrous failure. From an economic perspective the cost savings you reap from outsourcing you pay for in the long term (as a nation) by the erosion of your markets buying power. 3 Million consumers in your home market (making $70,000 dollars a year) are replaced by consumers in a market hostile to foreign competition making $8000 dollars a year (for the top tier anyway). Sooner or later America will realize this and legislation will be put into place to stop it. But in the meantime hang onto your seats
I guess things have quieted down now or perhaps we in the US have just lost interest. But there was a time where I am sure a few CEO's and CIO's had to be worried how long it would be before their big software project went up in a giant Pakistani mushroom cloud.
Do political situations, like the border skirmishes near Kashmir, ever get discussed when it comes to making these outsourcing decisions? If India was thrown into a state of turmoil due to an attack from Pakistan what would happen to outsourced projects? Or if India attacked Pakistan in a way that the US felt was too severe and sanctions were put into place against India, what would happen to these contracts?
'Same speed C but faster'
That's all this Indian Outsourcing thing is.
Are there really really good, really smart Indian programmers? Of course there are! But overall, on the average, outsourcing will end up biting most companies in the ass, in the long run. There are hidden costs to it, like the 11 hour time difference, language barriers, cultural differences (anecdotally, from many accounts, Indians tend not to raise questions, or think independently when a design sucks, etc.)
Worse yet, this will bite the US Software industry in the ass when we suffer from brain drain - when software engineering is no longer a sought after degree. Then the Indians will start their own companies, and eat our lunches.
Worse still - with the decimation of these high-paying jobs, comes an overall lowering of the standard of living here in the US. These companies got rich by selling to the richest market in the world - American consumers. By gutting their own customers, these companies are shooting themselves in the foot.
- - -
That said - the writing, in big letters, in crayon, is:
Investors should believe that a wise company outsources, because it's a move towards efficiency. It will eliminate those overpaid "web designers" that are sapping corporate profits. Companies are "cutting fat". It's perceived as a gutsy move.
Actually, it's the herd mentality. "Oh my god! IBM's outsourcing, they're going to KILL us unless we outsource too."
But mainly - it's a movement designed to lure investment dollars back to the Tech Industry. It's basically hype. Companies who outsource are selling stock. Not products and services. This is their motivation, their drive. And it's very much a herd mentality. Among investors, AND corporations. They may be heading off a cliff. They may be heading to the slaughterhouse. Or perhaps greener pastures. But make no mistake. The Outsourcing Movement is NOT a drive to offer better service, or find better talent, or even save real money. It's a drive to LOOK like they are.
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
I've been out of work and interviewing. Every company I interviewed with has opening because they're bringing their outsorced projects back.
Granted, it's not 6 figures like 5 years ago, but it's still nice.
The Kruger Dunning explains most post on
How must I compete, Mensa? Lower my standard of living to $11,000 per year? Move to India? Become a nuclear physicist or nanotechnologist overnight (until that job gets outsourced)? This "do a better job, loser" garbage gets old. This has nothing to do with "better". It has to do with the fact that there are 5-some billion people on this planet so they can keep moving from country to country paying the lowest possible wages to get what they want. They being the rich. It has nothing to do with our effort or skill level.
The reason that India has a disproportionate number of SEI CMM level 5 companies is that with ridiculously cheap labor you can afford to create a Potempkin process on top of the rampant hacking.
Having worked with two Level 5 organizations, one level 4, and several level 3, I can assure you it's just expensive window dressing. Motorola foisted this fraud on the world in order to keep their Malcolm Baldridge award (they were told they had find something similiar to their six sigma program, but for software). The way you get to levels 2 through 5 is to fire the internal assessors (yes, they self assess folks), until their replacements tell you what you want to hear (Ye Gads, you're a level 3 organization!).
Unfortunately, the cost of generating the useless paper for the audit trail costs as much as generating the actual software, so they farmed out the work to their internal offshore software factories (at first in India, but now, wherever hords of programmers are cheap).
The vast majority of Indian job shops are also self assessed, and comically so (I've been told by some directors of SE that they are SEI CMM 3.5). The real problem is that the CMM has never been objectively validated. You hear wonderful claims by the SEPGs, and CMM - but their jobs depend on it, so fudging is expected. The proof is in the pudding, and when times got tough at Motorola, the CMM and Six Sigma specialists were the first to go. There's now grumbling about what to do with Global Software Group (their internal offshore outsourceing groups). Cheap is still no deal if it don't work.
Two wrongs do not make a right, but the USA, along with most Western nations have been taking advantage of other nations through trade with developing nations for years (sweatshops anyone?), unfortunately it is just the way the world works.
See,
most of the jobs that are moving out of the country are the type of jobs that are high profile. And therefor we hear a lot about it.
Typically, it is programming projects that require teams of 20 or 30 people (maybe) and that lasts for a year or longer.
But many programmers are employed where proximity is important and where the primary product isn't the software itself. Maybe it is a small financial institution or maybe a factory which needs a few programmers to build in house systems.
Sure, it sucks when HP, Sun and others move their big and fun projects to India, but many jobs will remain here, because it isn't cost effective to move them to India.
The Internet is full. Go Away!!!
But, really, there is a much more important issue that doesn't seem to be getting airtime. As a software developer, I have no problem with India or any other country doing my job. However, claiming that this is all just "capitalism at work" and developers should just "suck it up" is a specious argument, at best. I pay taxes to support the government, which in turn supports the citizens and corporations here in the US (I'm not interested in addressing whether this is the proper function of govt., that's just how it is right now). These corporations are taking those government granted favors (in the form of subsidies, tax breaks, trade favors, patent and copyright protections, use of infrasturcture resources such as highways, etc etc etc ) and hiring people overseas. Now, if MS or IBM wants to move their headquarters over to India, fine, so be it. But I truly believe it's a crock to take advantage of the pro-business US laws, excellent infrastructure, a competent policing force, and all the other services that developed under our system of capitalism, and then not supporting the community that supports you. I'm not talking handouts or redistribution of wealth, I'm talking about the long-term consequences of this sort of policy. Yes, US software developers cost more, but the cost of that worker is factoring in a lot of "unseen" advantages that are granted to companies founded here.
The environment that allowed MS and IBM and all the rest to grow and prosper is unique to the United States. These companies would have never happened if they had started in India.
The Flight to India
The jobs Britain stole from the Asian subcontinent 300 years ago are now returning. Is this a good thing or a bad one?
If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don't expect to have a job in five years' time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem.
Britain's industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India.1 Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the 18th and 19th centuries, India was forced to supply raw materials to Britain's manufacturers, but forbidden to produce competing finished products.2 We are rich because the Indians are poor.
Now the jobs we stole 300 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south-west India. Two days later, the HSBC bank announced that it is cutting 4000 customer service jobs in Britain, and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, BUPA, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line.
There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India's own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages.
The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper.
It is not hard to see why almost all of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call centre jobs only when they have no choice, Indian workers see them as glamorous.3 One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications.4 British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer.
There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each o
I'd say you were talking through your racist hat on this one.
I wouldn't have an outsourced Indian firm do the human interface design on a project either, and it has nothing to do with racism.
India has a different culture than the United States, so interface design assumptions that seem perfectly obvious to someone in India might be completely incomprehensible to someone from the US, and vice versa.
For example, consider that a user interface designed by programmers for programmers will have as many options as the programmers could shoehorn in. That UI will seem too complicated to use for the typical J. Random User, while a UI for J. Random will seem too constrained for the liking of a programmer. Now, multiply that sort of thing tenfold, and factor in things like the meanings of colors (red for danger/stop, etc.). That's what can happen if the human interface is designed in one culture, but used by another.
"They redundantly repeated themselves over and over again incessantly without end ad infinitum" -- ibid.
How many loggers while you're at it? Face it--the fantasy world of overpaid IT jobs is gone forever. You have a skill that is basically fungible in today's world, and can be purchased at a lower price than would sustain or satisfy you. What IT people have been failing to understand for years now is that technology expertise is not as valuable a skill as it was once perceived. In fact, a lot of technology work is drudgery on the order of rivetting and lever-pulling. Too bad for those who were counting on making $300,000 a year. Time to reinvent yourself. The steelworkers did it. The loggers did it. Now it's your turn.
I wouldn't rely on ANY outsourced firm for that kind of work, much less one half way around the world that doesn't speak my language. It's not a matter of them being Indian, Jewish, Chinese, French, or Dutch, it's a matter of them not being able to communicate with me on the same level as someone in my own company, or at least someone I can meet with in person and have a easy conversation with. It's hard enough to explain ideas about design to someone you know in person who speaks your language. Trying to communicate that to someone far away who doesn't is harder. And that hardship is rarely worth the savings I might see in what I pay them.
That's the kind of thing that shows itself in the end. Outsourced software is of lesser quality because of the communication gaps, not because of the quality of the code that the people in other countries write. There are ways around it, but they are expensive, which is exactly what the outsourcing tried to avoid in the first place.
My sig is blank, I typed this by hand.
I work for an Indian call center which does all sorts of processing and telemarketing for clients like Chase,Citi..ec.
I work as a systems admin at night(USA time), studying for my GMAT in the day along with catching a little sleep.The job gets me about $7000 annually.Yes I am going to study in the USA probably steal another job there, temp or not if I can get it.Does that make me bad?Does that make the whole outsourcing industry bad?Its not the minimum wage factor that I'd like to argue.
Everyday we get about 5 tasks that were done wrong by some desk jockey in the USA and have to be streamlined and corrected here.(not talking about the actually processing, just simple reports n stuff)
Ok maybe not everything is that bad but what is a guy like me supposed to do? I earn more than most of my friends..live an ok lifestyle and struggle to save up for future education.This is the typical scenario you find in a IT outsourcing company in India.
Should I just quit and work as something else? Why would Citi stop Outsourcing when they earn more by outsourcing and get better value for money? Isnt it right that we lobby for Outsourcing in USA?
Lord of the Binges.
Indian law is no different from American law in this matter. You're welcome to visit India, but if you want to work in India, you need a work permit. These are granted as a matter of course when the sponsoring company files the paperwork.
One major difference is that while in America, the LCA (Labor Condition Application) states that the H1-B applicant will receive a salary *equal to or in excess* of the prevailing wage for that job category in that region, in India, there is a reverse certification that the wages paid will be *less than or equal to* a certain constitutional ceiling, traditionally the same as the wage paid to the President of India, which is about $1100 per month. It's an archaic law that dates back to British times and when foreign exchange was a scarce commodity, and exceptions can be made, but that's how it is.
Americans (or any other alien) *can* work in India, if they're willing to work for about $12k/year. Above that, it requires more paperwork and approvals, but no reason that it can't be done.
Free trade has three requirements:
Outsourcing of jobs to India does not satisfy the third criterion. Technically, it is incorrect to call it "free trade".
The only true free trade system I am aware of is the European Union.
Reading Slashdot is ruining my spelling and grammar.
You have a point, but what's next? There is nothing big next! Every article and story keeps talking about jobs shifting to the next big thing, but there is a problem--the is no next big thing. As one person said in the article, "where do you go after knowledge". The last shift was towards knowledge based industries, and now there isn't anything to shift too.
At the next eco-hypocrisy-meeting, count the private jets used to get to the meeting. Should be interesting to see that
First of there's not just one IIT; they are a system of seven institutions of higher education (Kharagpur, Mumbai (Bombay), Chennai (Madras), Kanpur, Delhi, Guwahati and the newest Roorkee).
Second, it's important to realize that many of the students from India who do the best in their undergraduate class become graduate students at those American institutions you listed as well as other institutions (some not very impressive at all) in North America and Europe. It is still a big deal in India to go a major American university. I have a few friends who did their undergad at an IIT campus. All of them left India for graduate study, because the research opportunities there are just not as good as in the West (although the situation has been improving steadily over the years). I will grant that the undergraduate education there seems to be particularly strong though.
Furthermore, it's important to realize that just because IIT admits such a small fraction of its applicants does not necessarily make the educational opportunities there better. Selectivity does not always equal quality. If anything, it calls into question India's ability to offer access to quality higher education for its population.
Learning is a cultural thing. While many american kids are focused on TV, Britney Spears, video games, etc, these kids start training hard for school at a young age, in the hope of their families to be able to enter IIT years later.
I do have to agree with this in general. In America, there is a very anti-academic tone culturally (even in schools). However, you have to question the quality of a life where from the womb all you do is study in order to get into a good university where all you do is work in order to get a code-monkey job which is your life.
Even when I went to highschool, there were probably a couple kids in a graduating class of ~400 I'd consider truly gifted students. Often I'm seeing the gifted students were foreign born, because their parents don't indulge their children with crap culture, but expect them to start preparing themselves to be citizens at a young age. It's usually the second and third generation parents who fall into the typical american lack of concern and discipline.
For this, I think you have to look at what kind of people are first-generation Americans. It doesn't just take a lot of work and/or a lot of money to immigrate to a foreign country. It takes ambition as well. Immigrants are therefore more likely to be ambitious about themselves and their kids.
I know of many US companies who make a living teaching companies in other countries like India about quality control and the way that US Businesses do business. If Indian companies had good quality, these companies would be out of business and not have business booming. I shall cite some examples of the quality of offshoring below.
Thing is, most IT workers, such as me, do not blame the people taking our jobs, but the companies making the move to other countries and cutting us loose. This is a global trend that is not going to stop unless there is some law passed against it, which I doubt will happen.
First it was a Labor Shortage which was a big lie by the Corporations to get rid of US workers and replace them with H1B Visa workers or outsource to India. Now that there is a surplus of IT Workers, they still claim there is an IT shortage and need to move more jobs overseas.
Where is the beef? Where is the quality that Indian companies are supposed to have? Apparently they did not have Quality at Dell when they moved a Help Desk over to India. Where is the quality in programs written? Security issues are a big risk and we are supposed to trust someone we cannot even watch from half a world away that they will not harm source code or be a risk to security?
Of course there is always hidden Malware to consider. Really nice of them to put in a back door or virus or trojan to access the corp system after the Indian programmers are let go when the project is over.
Oh yeah, the myth that it is cheaper. Consider the Hidden costs of Ofshoring nothing like a project going over budget and full of bugs and needing US developers to fit it. Once again, where is the beef? That quality is just not there once again.
It seems that India is America's silent partner. We may not even hear about it during the election year. When a government is more interested in rewriting copyright laws so that the RIAA can sue 13 year-old girls and fair use is out of the picture, I wonder who our politicians really work for? Certainly not the US Citizens, only Corporations. So of course they support the wholesale slaughter of US IT Workers and the export of IT jobs overseas.
Ah but there is a big risk involved in Offshoring. Sort of like taking all the company stock to Las Vegas and betting it all on number 35 on the Roulette Wheel. :) Just ask those who craft the contracts about the risks involved.
Nice to meet the people that are taking the jobs moved to India. Also nice to know they are not concerned that US Workers are losing their jobs to keep the Indian workers employed. I'd think if I was given a job at someone else's expense that I would quote my religious or culutral references instead as well when asked to respond to that. :)
Maybe we should personalize the US IT Workers too. Here is Bob, he worked for a Fortune 500 company for the past 15 years developing award winning programs and his work gained the company many patents. Bob holds a Masters in Information Systems. Management decided that he earns too much, so he was terminated and his job was sent with many others over to an IT sweatshop i
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
While I take offense and you trying to rank IIT above Caltech (as I'm sure the many Nobel prize winners from Caltech would as well,) I think you hit on an important aspect of American culture. We have a culture that does not promote education. We ridicule our smartest people (look at how many words we have in our vernacular for making fun of smart people.) We praise athletes or singers or pleasant looking people, but not scientists or mathematicians...
Large corporations (HP and Intel immediately come to mind) are fond of saying that they 1.) have to offshore to stay compettitive but 2.) America needs better education system because they can't find quality engineers here. These two thing seemingly contradictory at first, but they're not once you realize that maybe Intel would outsource to Arkansas if it was possible. Don't you think that if Corporation XYZ could open a new office in Arkansas, or South Carolina, or Wyoming, i.e. a place with lower cost of living and lower pay scales, then they would've done that before they "sent" their jobs to India? For that matter, even here in California you'd have a hard time hiring 100 programmers in Fresno, which is only a few hours from Silicon Valley and has 500,000 people living there. Of course there's no shortage of programmers in Silicon Valley, all needing $70K just to pay rent, but you cannot go to less expensive parts of the country and find skilled labor.
I'll shed a tear for the American Programmer the day the American consumer sheds a tear for the sweat shop laborer that made the overprices POS shoes you can afford to pay gross markups for from the likes of Nike.
Your country profits from the exploitation of child labor and people caught in poverty traps... You there, unemployed developer, reading this... reap what you sow.
"no amount of wishing, screaming, arguing, protesting, legislating, hoping, lobbying, letter-writing, bribing, petitioning, imagining, discussing, complaining, worrying, fretting, bothering, sign-writing, stalking, or planning will bring it back"
You are quite wrong. Much of the debate of the next Presidential election will focus on the "free trade" policies that are gutting the middle class in the U.S. to the benefit of U.S. Big Business. Many many middle class people who used to have decent jobs who now are out of work, or working at WalMart, are mad as hell. American workers are coming to realize that they cannot compete with overseas workers who earn a pittance. In the end, no amount of money from Big Business will keep the electorate from kicking the guilty parties out of office. Thankfully Indian programmers cannot vote for American congressmen and Presidents.
--Slashdot: News for Turds. Stuff that Splatters.
Just a quick comment here...
The Carnegie Mellon CMM Level 5 rating that a lot of these firms receive is not always related to overall quality. Like the ISO 9000 standard, you can have a poor product come out of a CMM Level 5 shop.
The CMM is supposed to improve overall software development process but, for example, there is nothing in the CMM that says "Don't use unprotected globals" or "Avoid goto's and labels".
Code written in CMM Level 5 shops can be good or it can be utter crap. The CMM states that you have a process which meets all of these different criteria.
That's not to say it's bad to pursue a CMM rating. In some cases it helps. A lot of it can be common sense. Though what is one person's common sense is another's undiscovered fronteer.
Do not let a CMM rating wow you just as an ISO rating should wow you. It can be a factor in deciding a contract but there should _never_ be a single factor to decided a contract!
It's the companies that should pay. Find out who is outsourcing and tax the hell out of them. They're making quick bucks off of the American government and domestic/foreign workers.
and on top of all that I was forced to give myself the pink slip and outsource my personal website becuase free was too damn spendy!
The problem with The Wealth of Nations is that it boils everything down to arbitrage. Unfortunately, the technology that really only came into being over the last decade have made nearly everything a potential for international arbitrage. This is not just a problem for the United States, although the United States seems to be the last to blush at it from a governmental point of view. This is something that every single one of the so-called "global North" are worried about because if everything is distilled to "capital" and "labor," well, labor is cheaper almost anywhere else. Labor is cheaper in Canada and Mexico. You don't even need to go to India. You think we've got problems with that? Go to Germany or Scandanavia where labor is even more expensive.
OF COURSE it is a "good thing" to the recipients of the work in underdeveloped countries. However, CEO salaries are on average thirty times what even the President of the United States makes. The CEO of Abercrombie & Fitch makes about half of the compensation for the entire House of Representatives and Senate combined. The AVERAGE CEO compensation is $11,000,000 per year--thats 39,285% more than the average American. A Dilbert cartoon recently opined on this where Alice is speaking to the CEO and asks, "I work 70 hour weeks and I don't make $40 million per year. Do you work twenty-eight thousand hours per week?" Note, this is a characterization of someone making $100,000 per year -- in the top eight percent in the United States.
This "they need the jobs more than we do" is ridiculous. That's a race to the bottom. Almost EVERYONE needs the jobs more than we do. By comparison, the unemployed computer programmer needs the $60k that used to be his salary about two hundred times more than the CEO who outsourced his job. Put your scorn for the overpaid where it belongs.
$60k in 2004 is $27k in 1980 dollars. Anyone who remembers 1980 remembers that was a painfully modest salary then. We're getting lost in a collective memory lapse where the numbers we see today are impressive compared to what we experienced a decade or two ago. In 1980, the pay gap between worker and CEO was only about 42:1. In 1990, it was 84:1. In 2000, it was 531:1. That's a jump of 44,700% in ten years. That's a compounded 192% raise every year. If a $60k computer programmer performed that well, they'd be making $40 million per year after ten years. In the meantime, we can all sit back and party like it's 1981. YAY.
As for this argument from possessions, the cost of possessions is relative to the location. Anyone who has travelled abroad at all realizes that the standard of living that $50k affords in the United States costs $100k in Sweden, costs $25k in Poland and about $15k in India. A $7.50/hour engineer in India is SIGNIFICANTLY better off than an unemployed computer programmer in the United States by virtue of the fact that it costs many times as much just to stay alive in the United States as it does to live in luxury in India.
That is the nature of arbitrage. You'd think by blathering Adam Smith you'd realize that.
From the third page in the article: "Turner's bill passed the state senate by a 40-to-0 vote. But it got bottled up in the assembly, thanks to the efforts of Indian IT firms and their powerhouse Washington, DC, lobbying firm, Hill & Knowlton."
Why the hell do we allow Hill & Knowlton to greatly influcence our governmental decisions regarding outsourcing U.S. jobs? They have offices in 37 countries around the globe and firmly believe in outsourcing jobs outside the U.S. Our government really needs to stand up to companies like Hill & Knowlton and fight for U.S. jobs.
http://tomgould.com/
What? The people living there have little education? They don't even know how to use a computer? Well, I'd be glad to live in the sticks and telecommute - just like those Indian workers. While some may prefer the city, I'm sure that quite a few geeks would prefer the sticks, like I do.
The problem is, the corporation won't let you live in the sticks. They insist that you relocate to the most expensive regions. Then they complain that you are too expensive - because the cost of living in NYC, NoVa, SFO, LAX, etc is so high - and outsource your job to India.
My distaste for the city prevented my from taking a number of high salary offers. Also partly because the salary wasn't really all that high after talking to people who lived where I would have to move to. My friends were in incredulous that I wouild turn down $90K. But $90K is peanuts in SFO (even 10 years ago when I had the offer). Now I am glad that I stayed away.
There is really only one fundamental problem preventing cheaper Tech labor in America. Lack of infrastructure. Lack of education can be worked around by moving people like me to low cost areas. This creates more demand for technical education, and more qualified native workers will turn up as local kids get turned on to tech. However, telecommuting requires a decent broadband internet connection. In the sticks, you can't get DSL or Cable, so you have to get T1. That runs $600/mo, which adds $7500 to your salary right off the bat.
Uhm, you're oversimplifying. A lot Here's a more complicated, but still oversimplified, version.
Japanese growth in the 1980's was fueled not just by internal capital but also by foreign capital. When 1 USD was 200-300 JPY, it was extremely inexpensive to invest in Japan, coupled with the fairly high standard of technology in Japan, financial institutions both domestic and foreign poured capital into the country.
Then, a few things happened. First, because of the huge export-based economy, the value of US Dollar against the Japanese Yen dropped precipitously. From 360 JPY for every dollar in the 1980s, it dropped to below where it is now: about 90 JPY for every dollar. This makes an export-based economy much less profitable, even though the raw materials (paid for in US Dollars) is much less expensive, due to inefficiencies in the Japanese manufacturing economies, these savings were not passed down to the exporting manufacturers.
Second, the Japanese government, for various reasons, dropped or relaxed much of the foreign investment laws. Do you remember the Japanese buyout of various real estate pieces (and the Japanese love investing in real estate more than any other investment vehicles) and nonmanufacturing companies (especially entertainment, like film and music) during the late 1980's? This was the direct result of their relaxation of laws. Unfortunately, it was also a PR disaster.
Finally, America went into a bit of protectionist mode. Do you know why Camrys and Accords are now assembled in USA? The American import/export automobile export laws have changed, and now they have quotas on various vehicle classes. This made investments into Japanese manufacturing less attractive to foreign investors.
Because of these issues, foreign investments in Japan dried up considerably, and Japanese domestic financial institutions were overextended and became unable to fund the necessary amount of investments to maintain the status quo, let alone fund the huge amounts of growth. The direct result of both foreign and domestic captial loss was the real estate bubble bursting, in the very first years of the 1990's. This led to the further weakening of banks, which Japan is finally starting to crawl out of.
Japan was never an outsourcing target. They were, however, the world's Taiwan and China before those countries were ready to start exporting cheap manufactured goods.
There are a lot of fallacies with this article presented here.
In almost every major pro-outsourcing argument, history is mentioned that back in the turn of the century farmers moved to the factories. And in mid 30's and 40's, migration from the factories to the cities started. So essentially a lot of the workers were trained in newer "better" jobs.
True...
Except everyone fails to mention this important fact: it all happened internally within one economy so overall affect was positive for the U.S. worker/economy/country. Workers moved from farms to factories then offices (spanning generations), to higher salaries, better standard of life and etc.
So what is just the U.S. IT worker will do? Train for a better a job? Such as law, or medicine? If one wanted to become a lawyer, s/he would have never majored in computer science. And worse, loss of IT job in the U.S. means lost income and tax revenue.
Ultimately, the Indian IT worker's salary will also go high, but then there will be Malaysia, Indonesia, and etc. Don't forget China.
Just what are Americans are supposed to do?
Here's a question: with the low-end (farm and service industry) jobs to be filled by Mexican workers, mid-level (such as customer service - AOL anyone?) jobs to be outsourced to India and others, manufacturing jobs gone forever (challenging to find any product made in U.S.A anymore), high-tech jobs and products outsourced to India and made in Taiwan, steel industry succumbs to cheaper import, I ask again just what are Americans are supposed to do? How many lawyers, dentists, and doctors do we need? Or are we supposed to become car salesmen at local dealerships?
You may implement fair trade policies. You may implement trade restrictions. You can declare war on India. You can vote Democrat. You can vote Green. You can vote Libertarian. You can enact a law that forces all US companies to use only US Citizens for all software engineering labor, to force them to use only foreign labor, or anything in-between. You can make it all free, or all restricted.
The reason businesses choose to hire cheap programmers is because that is how much they are willing to pay. If you artificially try to raise that price, they will not hire programmers at the higher price; the projects will simply go away.
You will not make your job come back. It is gone FOREVER. It is a dead issue. Politics and greed are simply irrelevant; this is the reality you must face and deal with constructively, by looking for ways to adapt your skills.
A brief aside:
I have little sympathy for the millions of my fellow Americans who charged into the gold rush of computers in the 90's who now have no jobs. I did not choose this lifestyle because I had dollar signs in my eyes. I chose it because it is who I am and have always been.
I am fortunate that people are willing to continue to pay me to do something which I enjoy and do well. But I am not so naive to think that this will always be the case; I am mostly concerned with whether or not I am providing more value to my employer than I cost. If I fail to do so, then it is up to me to find new ways to be productive.
And I'm lucky in that my employer actually asked me to provide weekly status reports. Imagine that -- he actually ASKED me to do something which I really wanted to do anyway: Once a week, I remind my bosses how I am contributing more value to him than he is having to pay me. And by doing so, he is happy because he feels he is getting a bargain, and I am happy because I am well-paid, enjoying my job, and likely to keep it.
But there's more than that. I'm also keeping up on the industries we're in, and the trends in those industries. And I am using that to get advance warning of what skills I will need to brush up on, and the likelihood of my company succeeding in certain areas, and most importantly, when the project I am is in danger of becoming cancelled by the company.
My resume' is a marvel of marketing: It tells an employer not just that I have skills, but that I do this because I enjoy it, have always enjoyed it, and have a history of seeking to make value for my employers.
I don't have to like doing this. I just have to do it. That is part of being a professional. That is part of adapting to reality.
This is how you deal with a down job market constructively! You can go ahead and do your superstitious lobbying and your arcane petitions to the witch doctors in Congress to somehow magically summon your long-dead, buried, and decomposed job from the grave. There is no evidence that such mythical sorcery has ever managed to successfully resurrect a job, and it's not for a lack of trying!
Fuck politics. Instead, market yourself well. Learn about the industry you work in. Make your goal to produce more value than you cost. Do these things, and you never need worry about having a job, regardless of what you do or where you do it.
scripsit rmassa:
That's a somewhat misleading statistic. I assume you're basing that on median income or something similar rather than cost of living data (I didn't find where you got your figures on the site you cited). As someone who has lived and worked both in the States and in a developing country, I fully appreciate how much farther a dollar goes in a poor country. It is quite nice, for example, to be able to afford to eat out all the time, have a maid, etc., while making less than U.S. minimum wage. However, once you move beyond food, domestic servants, and (to a lesser extent) housing, you realize just how poor you are. Want a car? Those are quite a bit more expensive than in the States. Ditto for any kind of electronics (computers, stereos, TVs). Travel abroad? That costs you just as much as it costs an American.
Bottom line: That $11,000 may make you as rich, compared to other Indians, as making $700,000 does in the States, but it still makes you poor on a global scale. For a geek, that's significant: imagine how rich $700,000 would make you feel if the shiny new laptop you wanted cost $200,000, and if a compact car cost about $2,000,000!
In principio creauit Linus Linucem.
However, you have to question the quality of a life where from the womb all you do is study in order to get into a good university where all you do is work in order to get a code-monkey job which is your life.
This is true, but from the American perspective, it's not very encouraging to see that you can work hard, study, blow some serious cash on school, and then have your job sold out from under you, leaving you with $7/hour flipping burgers and trying to pay off those student loans. That's one aspect of the Wired article that was almost completely ignored - with all of the people saying, "just move laterally into another field", no one seems to have a good idea just how to afford that lateral move and the training it entails, especially for the poor schmucks that are just now graduating.
There are lots of comparisons made with the steel and textile industries, but those didn't require an expensive specialized education that suddenly became worthless. Also, there is *such* a gap between the COL between here and India - the Wired article mentions that the project manager they interviewed makes $11,000 per year and lives quite comfortably - that's practically at U.S. minimum wage and not really a sum you could live on here.
I guess that this whole thing is an object lesson in going into business for oneself - when it comes down to it, you're the only person that can really be trusted to look out for you, because you can't trust an employer to give a damn.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
no one seems to have a good idea just how to afford that lateral move and the training it entails, especially for the poor schmucks that are just now graduating
Well, actually, the idea is pretty obvious, and has been used repeatedly for the previous wave of outsourcing in manufacturing jobs.
The basic notion of free trade is it that it makes people richer. (If not, the parties involved wouldn't trade.) We all buy electronics made in Asia because they're cheap; that's a great deal for us as consumers (because we get to have more stuff for the same money) and it's a great deal for Asian manufacturers and their employees (because they get a slice of our wealth). In the long run, everybody is better off.
But as you point out, in the short run people whose jobs go overseas are in a pickle; they have trained for a job that's no longer available. The solution is to tax consumers a bit (so their cheap imports aren't quite as cheap) and pay for job retraining and income support.
There are some programs like this for lost manufaturing jobs, and there should be more. And their needs to be support for those harmed by the new wave of white-collar jobs. Write your congressman!
But the solution isn't to block trade. Trade makes us all richer, and blocking it makes us all poorer.
I'm a relatively old fart in this forum; I'm 33 years old, and I've been programming in one language or another since '95. I've been around; I did the comp sci degree, the Y2K effort, the Manhattan, NY, dot-com/dot-bomb experience, some corporate IT, and civil service in a few different organizations. I've been around to watch our field go down the tubes, I have a pretty good understanding of the whys and whens, and I've got some advice for you, so please listen. I might be able to save you some grief.
First, look at the problem at hand: corporate jobs are going away because of corporate greed and disloyalty. First it'll be IT jobs, then virtually everyone as corporations move everything overseas that CAN be moved. This is nothing new, they did it to the manufacturing sector decades ago. But it IS unique in that once it's gone, that's it. There's nothing left for an ex-corporate type to retrain to except dead-end retail jobs at six bucks an hour.
So, this is pretty scary. But you CAN keep yourself out of harm's way. You don't have to just let yourself get sidelined.
First of all, ask yourself: do you really want to work for a corporation? You'll have to sign an IP agreement, a nondisclosure, and a noncompete, so you won't be able to work for anyone else for several years even if you're fired -- this is sort of like indentured servitude. And you'll have to work 60+ hours a week with no overtime pay because they'll write you up as an "exempt" worker. And you'll have some idiot suit breathing down your neck all day, reminding you on a constant basis that "you're lucky to have a job in this economy" (believe it or not, I've heard of this kind of thing from a lot of different people). You'll have to physically restrain yourself from dropping him out the nearest window, which will cause you stress. And you'll have to eventually watch your job go away, maybe even training your replacements.
So all those corporate jobs sucked anyway. Fuck 'em. Don't even consider them. The only reason corporations are still hiring is that they haven't fully ramped up their outsourcing yet. Why help them while they're still in the process of screwing you and all your friends over? Blow 'em off and get a non-corporate job. Stay in school. Get that Master's degree. Go on to the Ph.D and become a professor. If that's too annoying and your suck-up skills aren't strong enough, get into the IT department of a university near you -- you get all the benefits and none of the headaches of a professor's post. Get into civil service if you can. DISDAIN the corporations. They've earned it.
If you can't score one of those jobs, try and find something with a small business. Parlay your knowledge of computer science into a position where you'll learn some other trade at the same time. Wear a lot of hats. Be the indispensible local geek who keeps everything running. Small businesses are better than you might think; if nothing else, they would NEVER have the resources to outsource your job. Think about it.
So, ok, now you have a job. You're eating, you're making your car payments, you're not rich but you're not dead meat either. So, now what, you ask?
REVENGE.
Say it with me. "Revenge". Feel how it rolls off your tongue. "Revenge". It's such a happy word, such a WARM word. It LIKES YOU. It's your FRIEND.
REVENGE.
Here's how to get one for the little guy, without breaking the law or doing anything that'll get you into trouble.
1. Don't buy anything from a major corporate outsourcer unless you absolutely have no choice. Or, be obnoxious: buy a Hewlett Packard printer (usually sold at a loss) and buy NON-HP INK. If you need a new laptop, buy it on Ebay, where the money goes into the wallet of one of your neighbors instead of a corporate bank account. Buying music? Buy it used in your local CD shop. Buying a car? Get a used one. BE CHEAP, and be proud of it. Convince everyone you can to be cheap as well. Think grassroots.
If you're buying an item like a TV, and you don't w
Farewell! It's been a fine buncha years!
A lot of the comments about being "unable to compete" with regard to outsourcing can also be made by commercial software companies trying to compete with Open/Free source software. The answer typically given is that Open/Free software raises the entry level and provides a better starting point for commercial companies to build upon.
Similarly, Western IT professionals (it is not just the US having to deal with this issue by the way) concerned at this trend should try to acquire a broader-based skillset which includes business and creative as well as "pure" technical skills - and local knowledge that cannot be easily duplicated by an overseas company (in most organisations, it still is a case of not what you know but who you know).
Also the companies outsourcing are mostly major corporations - which by their nature tend to stifle innovation with bureaucracy. Freeing up their workforce will make it easier for smaller companies to start, recruit, expand and innovate (provided the DOJ manages to rein in Microsoft). And it is only a matter of time before senior management and CEOs find themselves being outsourced (who needs a US-based board of directors when all the real decisions are being taken overseas?).
Finally, this also provides the English language with a massive boost - India is gaining a real advantage due to their widespread use of English and other nations like China and Vietnam will have to do the same in order to grab a significant slice of the outsourcing pie (French/German/Spanish supremacists beware!).
Bear with me a moment.
o urce merry-go-round. Every once in a while, some manager hoping to score brownie points would suggest outsourcing as a means for the company to improve their bottom line. And it would be done.
I am currently looking for a job and have noticed that many companies ask that I send my CV as well as my preferred salary. Okay, I can do that. Of course if I state my preferred salary is R10 000 and someone with similar skills and experience says she wants R5000, who are they more likely to hire?
A few years ago I worked for a company that seemed to be permanently in the outsource-then-bring-it-back-in-house-then-
outs
Then not too long in the distant future, the outsoursed jobs would be brought back home because some other manager suggested that doing it ourselves would be cheaper. And it would be done.
Face it, Joe Soap might have started his lemonade stand as a means of feeding his kids but when he started making more money then he needed for groceries what did he do? He grew his company, branched out into orageade, limeade and coolade and employed his brother-in-law to do deliveries.
That is until Joe realised that he can pay the Indian kid down the street a fraction of what he pays his brother-in-law for the same job and in the end Joe makes more money.
Does he stop selling lemonade when the kids are all grown up and can provide for themselves (assuming they're not American programmers)?
Of course not, because it stopped being about feeding the kids a long, long time ago. Now it's all about the money.
Is it not better for a company of 150 people to outsource 100 jobs and stay in business or not outsource at all and so all 150 jobs are lost?
It's still about the money because if you don't have money, you certainly can't afford to pay a programmer.
"I'm going to worry like hell and that's not an easy job, believe me" - Lu-Tze "Thief of Time"
Bullshit.
"[Americans] are regularly told by politicians and the media, that America is the world's most generous nation. This is one of the most conventional pieces of 'knowledgable ignorance'. According to the OECD, the Organisation for Economic Cooperation and Development, the US gave between $6 and $15 billion in foreign aid in the period between 1995 and 1999. In absolute terms, Japan gives more than the US, between $9 and $15 billion in the same period. But the absolute figures are less significant than the proportion of gross domestic product (GDP, or national wealth) that a country devotes to foreign aid. On that league table, the US ranks twenty-second of the 22 most developed nations. As former President Jimmy Carter commented: 'We are the stingiest nation of all'. Denmark is top of the table, giving 1.01% of GDP, while the US manages just 0.1%. The United Nations has long established the target of 0.7% GDP for development assistance, although only four countries actually achieve this: Denmark, 1.01%; Norway, 0.91%; the Netherlands, 0.79%; Sweden, 0.7%. Apart from being the least generous nation, the US is highly selective in who receives its aid. Over 50% of its aid budget is spent on middle-income countries in the Middle East, with Israel being the recipient of the largest single share"
"Why do people hate America?" by Ziauddin Sardar and Merryl Wyn Davies, 2002. p79
______________
OTTERS RULE.
The entire CMM argument is just a marketing tool for these firms. CMM describes process not result or whether people actually found the software produced useful and usable. And the real issue is often not IT and its process, but that the line of business people and politics do not let internal IT shops practice the process.
A lot of the problems of US IT groups and projects is that with programmers down the hall and senior level line of business (LOB) guys able to threaten and yell at and IT execs and get them fired for being honest, a US based IT shop often has to do a lot of changes on the fly, delvier before something is ready, etc. With a remote operation, a specification gets written and a contract gets attached to the spec. The senior business execs sign off but now THEY CAN NOT CHANGE things without renegotiating and visibly accepting responsibility for the schedule and quality impact of the changes.
They can not pressure the Indian firm to make a change and still hiold the schedule. When you are in IT and work for a company, you are always powerless and the senior management listens to the line of business folks and gets angy at or ignores the process or schedule or deailed explanations about why a change will cost 5x as much, slip 1 year, etc.
The distance and the contractual relationship put the discipline where it is needed - on the line of business folks. That isn't to say that there aren't bad I folks, bad plans, silly promises and the like. But a lot of the problem is line of business people who buy a pitch from some software comapny whose product can't deliver the benefit promised, that will take 2x and cost 10x to implement ans the like. It comes from them refusing to understand why the stuff they legitimately need can't be delivered when they want it.
So, the discipline of the Indian companies isn't in the CMM stuff, it comes from the arms length contractual relationship protecting them from the stuff that screws up projects. It comes from the distance keeping the line of business execs from demanding constant change. Most IT shops know about process, and reviews and the discipline. The problem is that the CEO's and line of business people will not let their in house teams practive these techniques.