Slashdot Mirror
Labor Department Downplays Offshoring
twitter writes "The New York Times is reporting the US Labor Department's first assessment of International Offshoring. The report claims that less than 3% of Q1 2004 jobs were lost to offshoring. Companies were asked if workers had been replaced and taken at their word. A Federal Reserve governor is also quoted as dissmissive. Estimates by Goldman Sachs are 20 times higher. Despite Washington's IP fetish, no one quoted is worried about the export of US research and knowhow. Your job and 830,000 others are gone."
Kerry will stop this offshoring nonsense!
oh wait, his wife's companies are offshoring as much as anyone else.
ummm...
NADER '04 !!!1!
Dey took arr jabs!
Here is some advice that I took after I graduated college. During my last few years of college there was a lot of talk that companies may start outsourcing their work to places such as India. Living in an area where there is a large air force base I was given the advice to get a job there working with either with a contractiong company or the civil service (government). They are so strung for computer-minded people that they can offer up to a $60,000 hiring bonus on top of about $60-70,000 per year just to get you to work for them. And the best part? The US government isn't going to outsource your job anywhere. The only thing to worry about, however, is that your job can be eliminated. But the benefit of working for the civil service? They also have to find you a new job of similar pay.
Hmmm.
The report claims that less than 3% of Q1 2004 jobs were lost to offshoring.... Estimates by Goldman Sachs are 20 times higher.
So 60%? I don't think so...
I feel for people who've lost jobs -- my wife lost hers, twice, and several of my friends did as well. But you know what? It keeps the labor market dynamic. "Well, if this is dynamic, I want none of it!" Sorry, but that's a kneejerk reaction: if people overseas can do it cheaper, and maybe even better, WE HAVE TO LET THEM. If we don't, then some day they'll come along and simply overpower us, because they -aren't- stagnant. Look at what happened (say) to American automakers when they were dismissive of Japan! How about textile workers? It's part of being in a global economy. Unless we wish to become entirely self-sufficient and isolationist, we HAVE to learn to do well what we do well: innovate, create jobs, create wealth and opportunity. But don't try to bail out a tepid economy with finger pointing and a leaky pot.
was answered by Sanjay Patel, who couldnt comment as his superiour had popped down the shops in Delhi for a curry
Yes, when you take a survey, you expect people to be honest, the very few that aren't honest won't make much of a dent in distorting the picture.
Anyway, I don't know why slahsdot is playing protectionist when it comes to tech jobs in the US. You people enjoy the fruits of offshoring in cheap computers, gadgets, and other electronics. Tech jobs aren't any more sacred than manufacturing jobs. Adapt or die.
Slashdot Moderation: From positive to terrible in 2 "insightful" posts.
I have to reply as an Anonymous Coward b/c my indian replacement took my slashdot account!
It is not downplayed in India. BPO jobs: Devil in sheep's clothing? Call centres put Indian mores on the hook
There is a big attitude that ofshoring is taking away people's jobs.
What bull! Of course, These jobs don't belong to you in the first place, but that's missing an important point. There are always more jobs. Many of them will NOT be offshored. People need employees. People will create jobs when there are some free workers. If you can't get a job writing tedious code that a trained monkey can do, learn to do something that requires real skill and talent.
But you also need to take into account that these foreign workers :
So how can you compete when they can feed a family of 10 on 10K a year and have housing while you would be in poverty here if you made that much ?
UPS Sucks
Yes! Let's do exactly that!
While we're at it, let's ensure that no policy that would cost American jobs is ever passed. We should tax the hell out of any company that attempts to hurt American workers by doing things that increase efficiency, automate labor, or make products and services cheaper. Sure, we'll all have to pay $50000 for a computer assembled by hand, but at least we'll have all those good-paying jobs right here in America.
All this regressive protectionism is a throwback to the nativist movement and the failed policies of the Smoot-Hawley Tariff. You can't take the benefits of global trade and then complain about how terrible it is that people are getting their jobs replaced by cheaper workers. We all benefit from products and services that would be prohibitively expensive if it weren't made in a distributed fashion.
The best way of saving American jobs isn't by shutting our borders and going back to the 1920's, it's by reducing the cost of health care and enacting tort reform to prevent frivolous lawsuits, both of which would decrease the regulator burdens that make it very hard to add new employees and be able to pay them well.
Of course, why bother with a nuanced solution when we can react in a kneejerk fashion and makde a cheap ad hominem against the President?
..within my department at work. The company recently exported some data entry positions to India. Our IT manager claims this is just a natural progression to the "next thing", just as we made the move to a service-based economy. But what is the next thing? A progression to service seems natural in hindsight; can anyone point to what is after that? Of course, I hear people say that wages overseas will eventually climb, making companies here rethink this outsourcing strategy. But when? 50 years from now? I am no alarmist, but this is beginning to really, really worry me.
Don't be a looter...and yes, I know that it's spelled with an "A" instead of an "E".
You know why? Because companies that do this should be taxed to hell and back for doing it.
Fine, but be prepared to pay at least twice what you now pay for a lot of your consumer goods, including your PC, TV, clothes and most of what you can buy so cheaply at the mall or Wallmart. Why is it OK to outsource the manufacturing jobs so you can have cheap electronics, but when the job being outsourced is something you're trained / interested in, it's wrong?
... is to be the best ! No matter the cost, if no one is able to do your job, you are safe. With the development of automatic code generation, middleware and so on, the number of coder will fall in a near future. Trying to reduce offshoring is just a way to gain time. Remember the beginning of the modern era, when labor worker where replaced by machines... but there are still manual worker, they are doing "haute couture" and earn a lot of money. Now, it is the same thing with software. But, maybe we are all wrong, maybe there ain't enough job for us all, not enough place, not enough ressources... Want to drive a SUV ? Eat super maxi menu ? We can't go on like this, it is time to slow down, relax and live a better life. The more is not always the best.
No. That's not how it works. It -is- a level playing field, almost by default: their cost of living is lower than ours, regardless of the reason. That means that there are certain things that they can do cheaper. WE HAVE TO LET THEM. Eventually, their economy will get better, raising their cost of living... or it won't, and they'll no longer be a concern. But if you try to "level" the playing field, you're just kidding yourself. If someone else can do it cheaper, and you don't let them, YOU WILL LOSE: that's the only sure bet. Check history if you don't believe me; gov't instituted remedies in situations like this just don't work, as most socialist countries were fine examples of. Free market may not be fun, but it's the only game that consistently wins, because there's nothing artificial, and greed -- the great human motivator -- is allowed to run rampant.
My job has not been shipped offshore. There is no risk of my job being shipped offshore.
Of course, I've escaped the rut of the corporate/educational/medical IT structure and gone into business for myself. There's no more worries about losing my job because some corporate bigwig doesn't know how to use a computer correctly. I don't worry about the High Point Furniture Market doing badly, causing a warehouse glut and staff cutback. I can no longer use victim-mentality to explain what goes wrong with my career.
These days, if I don't make much money, it's because of the ups and downs of the retail cycle. It's because I need to get off my butt a bit more and do some work. It's because of a lot of things, but it isn't because of offshoring of my job.
Want to be insulated against offshoring of jobs? Learn carpentry, or HVAC maintenance, or any number of trades. Then, buy yourself a van, hit the road and work for yourself. The rewards are greater, the hassles are more easily managed, and you get paid extra for working with bigger problems or worse customers.
Oh yeah, and you'll get a thank you occasionally, from those you do the jobs for.
Visit Lockjaw's Lair. He won't bite.
Excuse me but zero jobs should be lost to overseas workers.
Ah yes, the boundless economic ignorance that leads to +5 insightful on Slashdot.
An economy where no jobs are going overseas or coming back is a lifeless, growthless economy. Acting as if even one job moved overseas is somehow a problem does nothing but illustrate your own particular ideological blinkers, which prevent from thinking in any halfway rational way about complex topics like economics and globalization.
If it ain't broke, you need more software.
"Comapnies that do this should be taxed to hell and back for doing it?"
This post betrays an utter lack of economic sense, and a complete disregard for individual rights. So you think companies should be taxed to hell for hiring employees outside of the U.S., and then Slashdotters think this idea is insightfull? What the hell happened to keeping the federal government out of private buisness? I see now that most of you slashdotters are all about personal rights, so long as those rights are yours and rights aren't given to other people who might use them in ways that you don't like
Your idea that "zero jobs" should be lost to workers overseas is completely, utterly, assinine. Anyone who thinks this sort of thinking is "insightful" needs to learn some basic economics. Everyone benefits when companies become more productive because their products are made cheaper. We have seen a net increase in the number of americans employed as a result of international trade, because those people in foreign countries who get jobs will now be able to purchase more expensive American jobs.
You really piss me off. Saying that we should tax the hell out of companies so that they keep all their workers here is mindlessly stupid from an economic viewpoint, and utterly unamerican. Is there any consitutional basis for controlling whom private companies wish to have for employees? No! Mind your own god-damned buisness. If you think too many companies are outsourcing, then start your own company with only american workers and american inputs, and see how long you last in a free market. The truth of the matter is that it's the American People who are pushing for outsourcing becuase they demand cheaper products. And why shouldn't they?My blog
As a U.S. IT worker, I helped do my part for GE outsourcing. I traveled to New Delhi and GE's new facility in Haryana State where I helped to set up the infrastructure for helping to offload work from the GE financial units.
I can tell you that I did not feel the least bit sorry for the American call center employees whose jobs were sent to India. The Americans in the call center were men and women right out of high school and college with crappy attitudes and a streak of laziness a mile wide.
The Indian workers had master's degrees and had drive and ambition. The Americans did not even care about the job competition and thought they were owed work. Sorry, I cannot agree with protecting an entitlement!
That being said, there is still a barrier. Despite English being the common language between India and the U.S., Most Americans cannot understand the Indian accent and get rather frustrated. (I am sure it works both ways. ) Also, some of the Indians take a "Brahman" or intellectualy superior view and treat their American customers like crap, especially women.
The offshoring will level off in my opinion. Some companies will still try to gain competetive service level where empathy and understanding are part of the customer experience.
You're idea of taxing companies for shipping jobs overseas has merit. Despite this, however, I am reluctant to go along with it. My concern is that the current state of the IT industry depends to a certain degree on the cheaper labor of programmers, etc. in countries that do not have the labor laws we enjoy here in the US. If the government begins taxing this practice will the impact force companies to hire American workers? Or, perhaps companies will fire more American workers to make up for the taxes. Or the company might just fold and leave all their employees without jobs.
I don't know enough about economics and business to make a conjecture about which of the above would happen, but they all seem like reasonable possibilities. Is there anyone with a MBA out there who can elaborate :D
As a side note I am an EE and, while I'm not one of the jobs most likely to be affected by the shift, it still makes me quite uncomfortable.
100% Crunchier
Hear, Hear! I'm sick of hearing protectionist garbage, particularly on slashdot. I like to think of this as a place where intelligent people can debate ideas. It discourages me enough when some guy says that we should tax the hell out of companies who think about outsourcing, but then when people go and say this sort of thinking is Insightful? Give me a break! It makes me think of a bunch of Neanderthals with clubs sitting around in a cave. One of them stands up and says "GROG SMASH," and the others point and grunt approvingly - "Grog Insightfull!" they chant, and Mod him a notch.
My blog
Has no-one thought of the possibility that Goldman Sachs might be wrong ? I don't know how trusted they are (I'd assume at least a bit, as they're used as a reference,) but even the most trusted firms/whatever can be wrong.
/prefers to be an optimistic pessimist: Plan for the worst, try/hope for the best.
I'm not saying the Labor Department is right, but there's a chance that Goldman Sachs is wrong. I mean, they are estimates. I could do some quick researching, round to the nearest hundereds places, and report that as an estimate.
You're all pessimists.
Not only do they incorrectly calculate the numbers, but they also don't use the correct numbers in the rest of the article.
It says we lost 3 million jobs since 2001.
But then it says we've gained back 1.4 million of those jobs recently.
But our population has been growing since 2001. What about the jobs that are needed to employ the new workers entering the workforce in 2001, 2002, 2003 and early 2004?
And what is the total pay for those segments of the population?
If I get outsourced as a sysadmin, and I take a job flipping burgers, then that's still ONE job. But the pay rate is very different.
It isn't just a matter of adding X jobs. They have to be in similar or better fields at similar or better pay.
Ship 100,000 jobs overseas - It's a free market and a free country
Drive to Canada to buy medicine for your grandma - you're un-patriotic
*DrugCheese rants*
The report claims that less than 3% of Q1 2004 jobs were lost to offshoring.
/.ers - If you really believe in personal freedoms - you gotta side with Bush on this one. Companies ought to be able to do what they please within the law. All the local (MN, but it's everywhere) no smoking legislation lately is driving me nuts. Lets get the government out of business - yes that means that some companies will outsource some of their labor. Nothing new here!
It's not 3% of all jobs - it's 3% of the jobs that have been lost. Quit with the mindless troll attitude. Don't blow the outsourcing thing out of proportion.
Oh, and by the way - all you ACLU loving
If an overseas worker is considerably cheaper than an American one, if we eliminate the savings through taxation, overseas companies will simply form that capture the difference. Then the US company will evenutally go bankrupt (and wipe out even more jobs). Imagine how expensive a cheap Ford would be if all car parts were required to be made in America.
Realize that many technology jobs have been replaced by automation that lets a few people do work that many would have been required to do years ago. That's a much bigger factor than offshoring. If you want to protect yourself learn as much as you can about what others use your products to accomplish, even if you are no more efficent than an indian programmer in lines per hour, you have a tremendous advantage over him in making software that will do more for your company (because you can see how it is used).
A fable that I am stealing from an Econ prof goes as follows. Imagine a bright engineer announces a development that allows him to covert grain into cars. He buys tons and tons of grain, which goes into one end of his factory, and out the other end roll cars (at considerably less cost than Detroit can produce them). The machine is rather automatic, so while he doesn't hire too many people, there are a few jobs created in his machine. Everyone is amazed at his prowess, even Detroit who has to adjust to compete with this new competitor, they vow to become more efficent producers.
A few years after he begins operation a bright, hungry investigative reporter gets the scoop of his (or her) lifetime, the factory does not convert grain into cars, it's a cover on a large boat dock (grain is exported and cars are imported). After he blows the lid of the story his cars are taxed, protested, and disliked. Why would it be alright to convert grain into cars through an industrial process, but not alright to trade for it? That's why I'm a free trader.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
"And we'd like to welcome the technology workers of America to the global economy. Please, have a seat and make yourself comfortable. If you fight it you'll only waste time you should be spending upgrading your skills."
There are two scenarios here, let's play with them a little bit:
1:
We tax local companies who offshore to make offshoring less palatable. We tariff products coming into the US from companies who are offshoring but use certian tax shelters and place their corporation offices outside the US so the taxes don't affect them.
Outcome:
Other countries raise tariffs in response. Companies here in America lose customers because their products are so expensive compared to solutions and products purchased elsewhere by independant companies outside the US. American companies close shop unless they are 'saved' by tax breaks/loans/subsidies - the same companies that were taxed into not outsourcing.
2
We recognize the fallacy of America as an independant microeconomy. We allow companies to outsource labor which can be performed more cheaply elswhere. Displaced workers are forced to upgrade skills or accept a lower sallary.
Outcome:
Those who upgrade their skills earn more money, increasing the economic power of the US Labor force. National GDP increases, companies become more profitable, etc.
There is no realistic way to stop outsourcing the tech worker. All one can do is try to stay ahead of the curve. Get your MBA and manage outsourced projects. Move to a smaller company where outsourcing IT doesn't make sense. Start your own company.
Eventually the global economy will level out, and half of the tech work done here will be done there. This will happen regardless of the measures we are taking to slow it down. In the end our products are still competitive on the global market, and we still carry 1/3 of the international GDP. Fighting it is only going to slow down our economy and speed up the rest of the world's economy.
If you really want to keep your current life style, you'll learn to roll with the punches, pick yourself up and get back in the game.
-Adam
It also turns out that offshoring is a complicated business. I have participated as tech lead in three offshored projects. Only one of these ended up "profitable", costing us less than domestic talent would. Even though offshore workers earn a much lower salary than their US counterparts, the markup on their services is not small. We were paying $35/hour for talent that we could get for about $55/hour domestically. I think a lot of companies will experiment with offshoring and quickly discover that there are many sharp rocks under those inviting waters. The companies that are seeing biggest gains are those that set up offices in the offshore countries and hire the locals as employees, rather than consultants.
From a larger view, the baby boomers are starting to retire. If you check your census statistics, that is a huge skill deficit that we just don't have the population to replace in a growing ecomony. Therefore, if we wish to continue similar growth rates to what has happened over the past 50 years, we will need to:
- Immigrate
- Automate
- Offshore
Remember 1999? Companies were recruiting waiters and putting them through IT training, just to make up the shortfall. If you knew where the power switch on your computer was, you could get an IT job. Well, back then, we had a shortfall of 4.7 million skilled workers. If similar growth is projected forward and the baby boomers are subtracted from the labor pool, we're looking at a shortage of over 20 million skilled workers by 2010. This will make the shortage of 1999 look like a picnic. Some predictions even show us using up all the available offshore talent by 2012 or so.So whine all you like about offshoring. Soon, it'll be the only thing that keeps our economy growing.
The problem is that there is no way to make sure that companies that oursource actually pass those savings on to customers in the form of cheaper goods, or instead just give their ceos larger bonuses.
There must be something done to level the playing field, otherwise American labor will never be able to compete with countries that have much lower standards of living and little or no workers rights.
It -is- a level playing field
Not quite. Because of market collusion its possible to lower the quality of goods across the board and pay no price for it in the marketplace. THAT's why outsourcing to India works. If you are one of five widget makers, and you all subtly agree not to compete on quality, then it's easy to fire 90% of your customer service center, hire shoddy brute-force armies of programmers and end up paying far less than you would need to if your customers actually got a real choice of widget to buy. If one of your competitors hired real programmers who were worth thier salt (and paid them for it) they would eat you alive as droves of customers left you for them. But as long as you all agree to keep the status quo or less, then caring about your customers doesn't really matter.
Don't believe me, go do some comparison shopping on cell phone in the US and Japan. When the market colludes, and competition is scarce, the playing field is not level.
A family member is currently a project manager for a new software product being created in India. As such, I have some insights into the situation -- and I don't think the current offshoring craze will last too long.
The basic problem is because there is approximately a 12 hour time difference between the US and India. This makes business communications quite slow. For example, at 6 AM in the US, it's 6 PM in India.
What happens is that the normal project related problems pop up during the day -- and if you need input from "the other side" then you have to wait up to 8 hours. Or make your best guess and verify it with "the other side" at a later time.
As developers, we all know this happens a lot during product development. What used to take a few minutes with a call or a quick meeting can take a day or more. This dramatically slows down the development cycle.
Of course, management is excited about the fact that the labor cost is about a third as expensive. They are now starting to realize that this benefit is offset by the cost of lost revenue (products that are late can't be sold!)
So long term, I don't see offshore development being used for new product development. It's likely that it will continue to be useful for product maintenance and support since they have a lesser need for constant communication.
-ch
I agree with what you are saying (especially the bit about a knee-jerk reaction). We cannot isolate ourselves and create an environment that stifles competition. And certainly attacking the high health costs and the sue-happy will help.
However, the problem I have with outsourcing and international competition is that it is not a level playing field. We have many requirements on companies that run in the US -- environmental standards, insurance requirements, minimum wage, etc. (I am sure that others can come up with even better examples) -- that many of the countries we are dealing with do not have. I agree with the parent poster in that I think there should be a tax to compensate for the differences in requirements for employees. How can we expect an American firm who has to spend millions to be environmentally friendly to be able to compete with an Indonesian firm with absolutely no attempts to be good stewards with the land?
This is not an easy problem, but I think attention needs to be given to the requirements on our companies. I do not propose that we lower our standards. Rather, perhaps we should require companies working in foreign countries to either meet our standards or apply a financial penalty for failing to do so.
Our countries companies cannot hope to compete with other countries given the current environment in America. Maybe this means that America itself needs to change to keep up.
I believe in de-evolution. God made the world perfect, man fell, and its been going downhill ever since!
"Companies were asked if workers had been replaced and taken at their word."
Because a statistically significant number of companies are scared to reveal the truth they will lie to the gov't about how many people they are offshoring?
The bureau has always taken companies at their word. Are you going to pay for them to audit american companies for labor statistics? It's stupid to assume that you'll get better numbers by holding a gun to someone's head. They'll lie if they want to lie just to see what you'll do. You'll be forced to implement laws and consequences for lies, and if you discover a company was lying then you get to prove it in court.
It isn't worth it.
The BLS has always surveyed a number of companies and a number of households for their information. These surveys produce unemployment numbers and a ton of other interesting statistics about the job economy.
If this bothers you then you'll really go wild when you learn that they only survey a small number of companies instead of all the companies in the US.
I love a good cynic in the morning. No wonder some people are so unhappy about outsourcing - they're never happy about anything.
-Adam
Free Markets are like black holes, no one has ever seen one, but theoretical academics will argue to the death about what they are like. Economics is a soft science based on assumptions about human behavior.
If US companies want to ousource, fine, just quit giving them taxpayer dollars (corporate welfare) and access to government R&D.
The problem is that there is no way to make sure that companies that oursource actually pass those savings on to customers in the form of cheaper goods, or instead just give their ceos larger bonuses.
Sure there is. Its called competition. When a company finds a way to reduce costs, their first urge probably isn't to lower prices. But when a competitor who wants some of their market share sees that they can make money while selling the same thing cheaper, that's what they will do. The first company will then lower prices or watch the new competitor eat their lunch. That's the beauty of capitalism.
Assuming of course we actually have a free market. We don't. A free market assumes many buyers and sellers of the same product and perfect information; when you have just a few sellers of a product and disinformation in the form of advertising, you have something that does not at all resemble a free market.
The first company will then lower prices or watch the new competitor eat their lunch. That's the beauty of capitalism.
Your argument is nice in theory, but with all the outsourcing that has happened lately, shouldn't we be seeing a lot of decreases in prices? I haven't.
Offshoring creates a much larger problem that none of these articles have touched on. I call it the "Bob Factor." Here's how it works-
Bob worked for CitiGroup in Chicago. Bob was earning $80,000/yr for his database programming position in a light supervisory position with a few other coders under him. Bob had fifteen years experience and has worked on numerous mission-critical multimillion dollar projects.
Bob lost his job a year ago to offshoring.
Bob is now in his late 30's or 40's. Bob has a mortgage, car payment, spouse and kids to support. Bob cannot afford to quickly change careers. Starting over gets a lot harder with age for financial reasons.
Bob is now willing to relocate to smaller midwestern markets like.. South Bend, Akron, Indianapolis, etc. etc. Bob will now be competing with you for the $48,000/yr job that you had your eye on.
These displaced IT workers with gobs of experience and resumes 3x thicker than yours are out there competing for the same jobs that new graduates and guys with a few years and a couple certifications were hoping to get. They are the ones making new positions in IT harder and harder to find.
Ph33r the Bobs, people. They are making it harder to GET jobs or CHANGE jobs. And worse yet, they are destroying the IT salary horizon by bringing superior job skills to the table for entry and mid-level positions out of need, creating an environment where the average REAL-LIFE starting salary for IT is DECLINING.
In the area I live in, people with Masters' degrees and a handful of certifications are showing up for entry-level programming positions advertised at ~ $25,000/yr in the paper.
Offshoring is doing precisely the same thing to the IT market that the Japanese did to big steel in the U.S. in the 70's and 80's. The U.S. government did absolutely nothing to level the playing field then - What makes you think they will now? Who has more lobbyists buttonholing congressmen in the hallway on their into work? You, Joe Schmoe Slashdot reader, or Tata?
Signed,
Frustrated former IT shmuck changing careers
THIS SPACE INTENTIONALLY LEFT BLANK.
I live in Brazil, where workers have many more "rights", or rather, entitlements, than in the USA. For instance, women have four months childbirth leave with full pay. Every worker has 30 days vacations each year, with full pay. Depending on the activity, some can retire with full pay after working for 20 years, it was only recently that a minimum age for retirement has been legislated. I know several engineers who retired in their early 40's. This list could go on and on, there are thousands of laws regulating labor in Brazil, starting from the Federal Constitution downward.
But this does not translate into a high standard of living. For one thing, it encourages illegality, if the alternatives are working outside the law or being unemployed, what would you do? Also, so many benefits do have a high cost. Taxes are sky-high in Brazil, and still rising. The minimum wage is equivalent to about US$80 / month, raising it would cost too much for the government to pay all the benefits to retired workers.
OTOH, even if there was a way to legislate against importing from countries with low standards of living, it wouldn't resolve the problem of outsourcing. Exchange rates still make a difference. If countries like China, India, or Brazil seem to have such low wages, part of it comes from depressed exchange rates. In Brazil a typical restaurant meal, for instance, will cost about US$4. You can buy a new car for less than US$5000, or a man's shirt for US$5.
At least at the state level. Wasn't it Indiana that had offshored a computer system/call center associated with the unemployed?
Also, state governments often LIKE to outsource stuff to the private sector. The bureaucracy associated with a state run project is huge -- everything from labor rules to material acquisition, and with more states needing to do more work with less tax revenue, these projects often get pushed into the private sector.
Once in the hands of the private sector, there's often multiple layers of subcontracting that can involve offshoring. Somtimes it just seems like a giant shell game -- local business (with figurehead female minority ownership for easy contract grabs), pitches for state contract and then just subcontracts all the work out, skimming profits off the top and not really doing any work.
In fact, it wouldn't surprise me if some consultancies have won business by equating offshoring with minority hiring, which should REALLY piss off the people the minority hiring laws were supposed to help.
What are you talking about? American companies are around for one reason, and one reason only: to make money. They hire GOOD programmers in India CHEAPLY. They save money. Simple as that. There is no 'conspiracy' for a group of companies to not compete over quality: as soon as this happens, a new player will come in not following these rules and take over the market. It's how free trade works.
You got it nearly right, only the conspiracy theory is a little off. Why invent a conspiracy, when a few simple observations explain it also:
If the customers don't care about quality, saving there is a sensible measure. The goal isn't to produce the best, it's to produce just good enough. Anything above that is wasted. If customers wan't better quality, there's a business oppurtunity by making them pay for it.
The other assumption was, that the service from american is better than what poor starved indians provide. More often than not, the so called better service from americans was limited to read the brain-dead script with an american dialect instead of an indian one.
Well, duh! If you ask the company, nobody is "replaced"-- departments just get downsized, and new divisions open up overseas doing the exact same job, but there is absolutely no corelation between the two... no sir!
About a year ago I was working as a contractor for a certain very large hardware/chip company. My immediate manager (an engineer) and über good guy wasn't "replaced" -- he was just sent to India to train somebody how to do his job, and then was send to the "redeployment pool" (laid off) a few weeks later as part of a massive downsizing of the department... nope, no replacement going on here!
As anyone who has looked into this issue can tell you, there is not in most cases a one-to-one correlation between an American losing their job, and the job going offshore.
For instance, Microsoft is shutting down a major facility in the US. They are also hiring in India. Will the Microsoft jobs lost in the US be counted as jobs lost to outsourcing? Probably not. That is why the new buzz words are "global sourcing" and "insourcing".
Also, how many jobs are being lost to "American" companys like Cognizant, who do not hire permanant US residents or citizens to work for them, only people on H-1B visas? 30% of Cognizant's 9K headcount work in the US (per the June 7th issue of Newsweek), and according to the Dept of Labor's LCA database the company has 2719 immigrants here on H1-B visas (you do the math).
This issue is not simply them bad us good. American IT workers are getting shut out of the IT labor market, even in our own country. This is not good for anyone. We are wasting our own intellectual capital, which we should be sharing with other countries so IT can be used to bridge cultural and economic divides. People should not have to pretend to be from another country as part of their job requirement. People should not be brought here on temporary visas and be paid less and worked harder than the Americans that work in the next cubicle.
This black and white thinking about this issue is pitting the workers on both sides against each other. The only people who win in that situation are the big guys making millions and millions of dollars to come up with these schemes. We (all IT workers worldwide) created these technologies, and historically we have openly shared and taught everyone so that the technology would thrive. That cooperative spirit needs to come through when thinking about this issue.
www.displacedtechies.com
I am a recent graduate who found himself in a toilet when it came to getting a job. I have been working in the industry since my freshman year in college. By the time I graduated I had experiences with almost everything: from kernel development, to Java to PHP and system administration. Yet it took me forever to find a job. Now that I am gainfully employed I constantly wach out and see how I remain employed in the coastal United States. Here are my survival tips.
Look for a job where you can get into business-to-business relationships. When you deal with large companies, your job has a higher chance of staying in the States because companies like quality service. Dell was forced to bring its business customer support because managers did not enjoy talking to people who could not assit them in a reasonable manner. Moreover, once you get into B2B, you get to meet a lot of people; if you leave a good impression, some of them could help you out in the future.
If you are stuck with a job that involves receiving specifications over e-mail and then sending the code somewhere else, RUN. Unless you code something that is used for military of the government (meaning you have at least one level of clearance), you job is done. You must get out and do more things. I do not know what things you should do, but you must do something besides being a code monkey.
Learn how to do business; learn how to benefit your current employer or start your own shop. People do not create companies in order to employ more people. Businesses are here to make money. If you show your employers that you can benefit the company, they are likely to keep you closer.
Learn languages, cultures, and traditions. Improve your communication skills and presentability. Being flexible in the global economy is very important. I got my first job only becuase I was the only applicant who spoke fluent foreign language. I could talk and relate to our development team, something that other candidates could not offer. Based on my previous experience, I am going for one more foreign language, my fourth. Staying neatly groomed and socializing with your co-workers helps as well. I would not want to employ a person who is not welcome by the rest of my crew.
I followed these rules and, fortunately, I was able to find different jobs even during the recession. Also, remember whatever does not kill you, makes you stronger. Learn from other peoples' mistakes and do not forget to do so from yours.
You can buy and sell IT JOB futures here:
http://www.ideosphere.com/fx-bin/Claim?claim=IT
Includes a lot of links to BLS statistics and gives you some idea of whether you will have a job in a few years. If this claim trades above $0.50 then market participants expect the job market to expand; below $0.50 and it is expected to shrink.
Put your (play) money where your mouth is: You can get a high score in this game by predicting the future. If you really think all the jobs are going overseas sell sell sell.
It's kind of an experiment, and a non-profit/academicy/free thing so give it a whirl.
Companies lobby the government for favorable treatment. Hell, Microsoft pays no federal taxes and it's the most profitable company and yet your mom and pop don't get tax breaks or incentives or abatements. Our conservatives believe in taxing workers, not businesses. In fact, handing them money through sweetheart deals. You're kidding yourself if you don't think businesses don't create "protectionist" policies to help themselves (but not workers, oh, no...)
If corporations have lobbyists, why shouldn't the average joe?
People that believe that protectionist is garbage should revoke all local tax abatements and government research money to corporations. It's a hypocrite that believes in "helping corporations" is okay, but helping people is "protectionist."
If I buy components from China or India instead of your company, and your company loses business and you get layed off, I have outsourced your job as part of the global economy. However since I am getting lower cost components and become more profitable, I can hire more people to assemble my product. Then as I realize that other local companies are eating into my business by selling at a very slightly lower price, I now start looking for offshore manufacturing and shift my workers to other jobs required by the additional volume. I become more competitive and profitable, but my local competition loses business and has a layoff. So far I have outsourced your job and the jobs of another local company. Both of these companies had layoffs that were not due to outsourcing.
So far I have outsourced your job and the your company's manufacturing by putting you out of business.
When the Bureau of Labor Statistics asks mine and the two other companies about outsourcing, two of them have lost jobs but not due to outsourcing. I have done outsourcing but have hired some people to help with the additional volume.
Net result of the survey? Few or no jobs have been outsourced, and the jobs that were outsourced did not result in a layoff. So much for government statistics!