Slashdot Mirror
Outsourcing is Good for You
gManZboy writes "Catherine Mann, from the Institute for International Economics, has a look at What Global Outsourcing Means for U.S. IT Workers up over at Queue. She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US. Ummm, did you follow that?"
On top of that, you can outsource your own job, take up another one, and outsource it too. Basically you can be making way more than you currently are. I think there was a /. story on this a while back.
Ummm, did you follow that?
heh...nope.
Should have read:
a net gain of _outsourced_ jobs in the US
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
An economist. Lovely. International economist, actually. Have those people *ever* been right about anything?
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
No I think it means more outsourced. IT jobs in Asia and India. And larger bonuses for american executives.
Outsourcing also raises the amount of money third world countries have. As they get richer, they start buying more expensive luxuries made in the industrialized nations. In the end, it will help our economy. Also, it is true that we do lose jobs to outsourcing. Like the article mentioned, however, we gain new skilled labor positions that are better paying than the manual labor positions that were eliminated.
I've been hearing more and more often about something similar. While not the same idea, it's the idea that America "recycles" (to be put in an Economists terms) jobs every year, something in the order of 50 million or so if I'm not mistaken, and that outsourcing somehow is just a natural process of this recycling...
:-P
If you ask me, I think Economists have it tougher than Computer Scientists, but that's just my opinion.
-Devin Torres
Real programmers can write assembly code in any language. -- Larry Wall
Since not all jobs can be efficiently outsourced, a company that raises their productivity by outsourcing the jobs that can be will have more resources to devote to those that can't be
How does the Slashdot Effect happen given that no slashdotters ever RTFA?
Oh, the United States of India...
--
"we live in a post-ideological world..." - Billy Bragg.
...and it appears valid at first bite. Ultimately the corporate motive is to make more profit however, so money saved by outsourcing probably wouldn't drain into more programmers (or whatever position abroad) more likely into the bottom line for the shareholders...not an entirely bad thing if you're a shareholder but if you're an employee...
...in bed
For adminstrative jobs that require physical presence and attention, outsourcing might be good.
However for jobs that can be done remotely (like programming, call centre etc), it's still a bad sign.
So those who can identify this change of job demand and acquire a different trade quickly, they may still survive in this outsourcing trend.
Uselessful technology (Air-Charged
Last time I checked the market set the price (with obvious unnamed monopoly exceptions *coughMicrosoftcough*). The price the company pays for the production of the item has negligable impact on price--and that's fine. The price people are willing to pay for something has a much bigger impact on the price. All outsourcing overseas does is fatten the profit margin for the sales of these IT projects. So right there, her basic premise is crap.
I mean, is she REALLY saying that companies will have more money to pay you with, because they don't have to pay you? WTF.
-- "A chicken is an egg's way of making another egg."
Thanks to outsourcing, everything I buy at WalMart with my unemployment check is cheaper!
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Well, nice arguments and all. But fuck that. They can say all they want but before we stop paying multi-multi-millions to these greedy ass CEOs/CTOs and such, I don't want to listen to nothing. Do they have any answer to "If the CEO took a 50% pay cut, we could add another 2000 jobs in my company right now. So, why doesn't he?"
I guess I am just a little bitter but since they have announced 'massive' layoffs mid-sept, I can't do nothing but rant...
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It's for real. I normally don't go for these things but...Free ipods (click here to get yours) .
I don't think that less cost necessarily leads to purchasing more products. If anything it means companies will spend LESS overall on software and shift the money they were going to spend into other areas...
Not so good for those of us who have skills other than sitting behind the biggest desk in the department.
- The
.com bubble bursts, causing employees working for firms whose primary business is selling IT products to lose their jobs.
- Bigger IT companies that didn't actually fold outsource some work to reduce expenses.
- Due to public demand and reduced expenses, non-IT companies buy more computer crap.
- Non-IT companies have to hire the old IT employees to run the new computers.
Net result: Those employees eventually have jobs in computers, just not with computer companies.This actually makes sense, and I've seen it here locally. A lot of people I know who were laid off from startups are now working for their old customers. The problem is, this trend can take years. The number of businesses that totally went under put a ton of IT talent out of work. Compensating for that will take some time. That's not good news for the employees who haven't landed a job yet.
Yes, because trickle-down has worked so damn well, both times (Regan, now Bush) it's been tried.
What REALLY happens is that the owners/higher ups just get bigger bonus's and the rest of us are screwed.
Excuse me while I go get ready for my job at Burger King. You want fries with that?
I outsouced my /. reading to India, i pay 4 dollars a day. They even make quality posts about random topics on it.
If anything, the jobs that might be created is Help Desk Support for all the products that were outsourced and made/bought so cheaply. The support would more likely be done here, because of american intolerance/lack of understanding for foreign accents, so to speak.
So this begs the question, are those really the jobs you want?
But as the economist John Maynard Keynes said, "In the long run, we will all be dead."
"dope will get you through times of no money better than money will get you through times of no dope"
But what is the realistic time frame for the world to become rich enough to afford all this wonderful crap we first worlders take for granted? 20, 50, 100 years? This isn't an instantaneous merry-go-round of wealth.
I tried to think of a good sig, and this wasn't it.
If "eating Cheetos and drinking Mountain Dew Code Red while complaining on a message board about how Lucas ruined the Star Wars movies while arguing about whether Padme or Leia is hotter" all day instead of working is better for you, then yes.
Yes it is.
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I keep hearing this argument made in favor of outsourcing jobs, but what I never hear is a realistic estimate of the amount of time that has to pass before the good stuff comes back our way. If there's a fairly quick turnaround on work returning to the country of origin then it's a good argument, but I suspect that the amount of time that has to elapse in order for the jobs to start coming back is more likely to be measured in decades than years.
-- Gargonia
Never play leapfrog with a unicorn.
Meet my good friend, reality.
Hate me!
The difference is that there will be 1) jobs which are more productive / efficient for the world and 2) a more equitable distribution of wealth in the world. 1 - Technology made automated manufacturing lines possible, reduced the number of manual manufacturing jobs initially. This freed up people to do other types of work. If a machine / program can do a good job in a certain area, why tie a human to that work? It makes sense to free up people as much as possible, to do things machines can't, utilizing more creativity and ability that machines do not have. Technology will help that. 2 - pausing on the debate of how outsourcing can actually bring jobs back to the US, many people who complain about outsourcing just don't care about people outside the US. Outsourcing means better pay for people in countries not as rich as the US. Its fair for people in other countries to be paid well for similar work we do in the US. If you have any moral sense, you would care also about the wages of people overseas. -Edward
Sounds like you discovered the secret of multi-level marketing. Sssh.. before someone patents your idea.
"dope will get you through times of no money better than money will get you through times of no dope"
How many "IT products" can a business use? If they've got 1500 employees then they need, say, 1500 computers. They aren't going to buy 2000 computers because they are 2% cheaper - businesses are just going to chalk the 2% savings up to extra profit. Extra profits are invested somewhere else or returned to shareholders. The shareholders are the executives, investment firms, and a bit of it is owned by employees. If the "IT products" are routers, networking cable, PBXes, servers, etc the argument is the same. Are you going to buy an extra PBX because they are cheaper? Ridiculous!
Stop the Slashdot Effect! Don't read the articles!
...One bird in hand is worth two in bush.
All I can think about is the scene in Monty Python and the Holy Grail where they are using 'logic' to prove that a witch weighs the same as a duck...
XML Database
First, basing conclusions on an incomplete dataset is foolhardy. The quoted numbers do not capture the complete status of affairs. Much work in IT is done via contract/consultancy and those job losses arn't reflected in the numbers listed. If Fortune 500 companies replace domestic consultants with those working for offshore vendors, it really won't register in those quoted statistics. But it's been happening on a grand scale - as I type this, I am surrounded by ~500 offshore visa workers.
Numbers aside, there is a larger theme that Ms. Mann and others of her ilk neglect - if lower end "grunt" positions are being snuffed out in lieu of higher, "up the skills ladder" posts, then shortly, in a few years, both ends will inevitably be filled in such capacity. Where, pray tell, do qualified IT "engineers" earn the experience and prove their mettle? By toiling on systems bottom-up and then gaining an appreciation and understanding of complex system underpinnings. Or am I to understand that these ranks are now to be filled entirely by MBAs and sociology majors? Young folks are choosing alternate career paths, heeding the alarms that the parents and older friends send their way.
AZspot
unless you are the one being outsourced.
I am a programmer, I make my money from making programs. I expect to get paid very well for what I do. I have spent thousands of dollars in not only college expenses, but also other training and materials. If x number of programming jobs are exported to another country because U.S. coorporations don't want to pay what I expect how does that benifit me the programmer? The economy as a whole 'may' not be hurt, but actually helped, but in the end there are less programming jobs out there than if there weren't outsourcing programming jobs. The big picture doesn't make me feel better.
Nuttles
Saved By Grace
Wow! Sounds like a good plan. When do we start seeing these promised results?
Oh, and did anyone read that USA Today article where people would rather pay $400 for local tech support than pay $20 for an offshore call?
Become a security guard for rich people.
Build trust over a decade or so.
When the upcoming collapse is in full swing, abuse that trust by handing the boss over to the tar-n-feathers brigade.
Ya gotta think long term.
Writers imply. Readers infer.
"meaning more products to make & manage = net gain of IT jobs in the US"
Do these jobs pay above minimum wage?
--The Dude
I won't pretend to know all the issues involved in outsourcing as it is currently used. I am curious though as to what people think.
Is outsourcing good/bad in the U.S. because the U.S. loses jobs?
Is it good/bad that a developing country (say India) receives jobs?
Is the economy of the U.S. (a world power) more important than the economy of a developing country?
Linux Resources
It's basic economics. What is described is how it works in theory. However, the theory requires perfect knowledge for all parties involved, zero costs for movement of capital (human and otherwise). I'm also unsure how comparative advantage (Google and David Ricardo are your friends) works in a market that is essentially saturated.
Perhaps the thing that really needs to be looked at is that IT support is viewed as a commodity. Support offered in India or Russia is viewed as the same quality product as that offered in the US. If this is the case, quitcherbitchin. I doubt you are buy American in other walks of life. If there is a difference in quality, it's time to express that. Was it Dell who found that their business customers wanted US tech support instead of Indian tech support? (or HP?) The product wasn't a commodity, so it couldn't be switched.
Rather than gripe about losing your job, explain why it's better that you have it than someone in another hemisphere.
And if you made it this far, here's a link to a non unreadable article. Will Taco et al. ever admit they are wrong with this color choice?
Jesus was all right but his disciples were thick and ordinary. -John Lennon
And don't know a damn thing about what they claim to be experts in. Anybody who hires an economist might as well be hiring a crystal ball worshiper for all the good the information will do you.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Me agrees! Greets from Abû
Hivemind harvest in progress..
sounds about as likely as trickle down economics.
ya, know, not at all.
--Nuintari
slashdot : where an opinion can be wrong.
Catherine Mann has little understanding of technology (another pseudo-savant for US). Reality is that technology at a time-rate of about twice Moore's Law will have significant human factor improvements. The more and cheaper products will be made overseas where it is cheaper to manufacture as stated. The human-factors improvements (that track with Moore's Law) will mean less requirements for highly qualified systems/IT/network administrators/managers. IOWs, Device quantities increase, features and functions improve and human-factors are part of the improvements. IT will be easier to install, initialize, configure, maintain, upgrade, ... less requirements for IT jobs in the USA for US.
Catherine Mann is a plutocrats dogma monger telling US all will be okay. Next week the Republicans, just as the Democrats did recently. Don't worry be happy, you fools, all is okay in time you will be dead and not ever need to be bothered again.
Unaccountable leaders are masters, and unrepresented people are slaves. How do US and EU fare?
...we're all dead. But it's nice if, until then, we can work at jobs that utilize our skills and have a chance to earn a decent living.
I don't believe it reduces prices but it does delay some price increases. The market is pretty competitive across the board and pressures on this market prevent any real changes in the costs of most goods. So what is a company to do? Try to do the same for less. This allows some, not all, companies to be able to forgo raising their prices.
Of course its all a vicous circle. Eventually one of the companies succumbs to the fact it will have to raise prices... and they lose a little marketshare but it evens out usually as others end up with the same issue.
However it is just as outrageous to not believe that using cheaper resources doesn't result in lower costs.
Seems to me that too many people can justify the milkman losing his job to technology, the seamstress to technology, and even the gas attendants to technolongy. Yet threaten the geeks and they act as if its the coming of the end.
Face. The economy churns through jobs all the time. Some of these go overseas which does result in lower costs for people here. Just as the cost of clothing is less when it comes from China so can the cost of tech.
Like that nice PC you got there? Cheap memory eh? Where is the crying over the person whose job was lost to a PC?
Sorry but the world maturing does suck at times for those caught up on the wrong side of it. Getting emotional and claiming its all a lie won't make it stop.
Remember 138 million jobs exist in this country and compare that to the number outsourced. Also remember that the number of people who are employable will decrease over the next 10 to 15 years... so...
* Winners compare their achievements to their goals, losers compare theirs to that of others.
She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US. Ummm, did you follow that?"
Yes, and those additional products will be made and managed overseas. Anyone want to explain why cheaper products == hiring back US workers? As long as there are large cost savings of going overseas, there's no reason for US companies to come back here...
is that economics is a zero-sum game. Lower costs supposedly means more profit to executives, but no increase in jobs. Higher overall demand supposedly means higher demand for outsourced workers.
... or you'll be paid to integrate that piece with other pieces that can be picked up cheap as open source software or as cheaply developed components.
What the author is trying to point out is that whole new markets of opportunity will open once the cost of basic programming activities is low enough. One of the benefits of open source software is that poorer countries can now obtain technology that before was out of their reach (or they can at least extract higher discounts from proprietary vendors).
I have a friend who works as a software consultant customizing proprietary accounting software for small/medium enterprises like those described by the author. That's the basic outline of the future -- smaller companies could benefit from technology that goes beyond office applications, but to more backroom ops, or e-commerce opportunities, or whatever. You won't get paid based on your ability to write something that can be written cheaply overseas to target a generic problem -- you'll be paid to tweak that piece into something that gives a competitive advantage to your customer
Many industries assemble cheaper components into an overall design that delivers a value greater than the cost of the parts. Software, as an intangible good, provides some interesting (perhaps worrying?) differences that make economic analogies a little tricker to apply.
But I think while some components are open to a research/science approach (algorithms, maybe frameworks) I think the majority of software is close to manufactured goods in that customer requirements drive a solution that isn't generically applicable or saleable (a problem for Microsoft-ish companies that try to sell the same thing to everybody). The world of de facto standard products gets a lot of press because it's typically winner-take-all (google, MS Office, MS IE), but the growth in demand and in jobs will be in the world of tweaked software.
I just recently came across this site.
Some of these guys are charging $0.16/minute for programming help ( $9.60/hour). Hell, the 976-HOTT girls make much more than that.
I should have gone into the sex-talk business instead of programming.
Not only do I get it, but I think similar things apply to the software market when it comes to free/libre software.
High volume shrinkwrap software is likely to take a hit. So is infrastructure software. That'll free up cash - home and office users who aren't buying expensive OS, AV, and office software. That cash goes back into the economy. Some of it will go to higher-level software, some to cusomisation and services. It'll all still be taxed.
Good for you? Not if you sell shrinkwrap software, but probably yes if you're a custom software house or "value added" provider. Good for the industry? Hard to tell.
The end of the world that'll cause governments to collapse and countries to fall into anarchy? Hardly.
Wages in IT have remained flat in the US/gone down whereas for execs it has gained at least 20% just in the last year and that is average for the last few years.
That is what outsourcing gives us. So get to the top while you still can, you're either at the top outsourcing or you are outsourced.
2 years and no mod points. Join reddit. Because openness is good.
Maybe we can start outsourcing economists, too.
-- I Am Not A Terrorist.
As in
Isn't this just 'trickle down economics' all over again. Which BTW doesn't work!
Bitter and proud of it.
yeah because when evil corporations get rich they just hide the money under their big corporate mattress and never buy anything.
dude! someone is going to end up with that money and they are going to put it somewhere. they might hire people or they might buy a car or a jet or invest it in other companies. anyway you slice it that money gets put back into the economy and ends up creating more jobs.
but hey go on and believe whatever you like. just try not to choke on your drool while you're learning to tye those shoe laces. WTF.
I believe alot of good programing could be equated to the work of a craftsman or artist. I can see codemonkey products using this argument, but not for the highly crafted products. If DOOM3 was outsourced, it probably would have sucked and we would not gotten that program, no one would have made any money off it, AND there are no new jobs for anyone for the next project...
for bend over and grab your ankles again little worker bees.
I kinda have to disagree with all of that. Current trends is not that business uses the money it saves to buy new stuff, it's that the money they save, they tend to apply to top executive bonuses and salaries. The trickle stops at the top, generally speaking.
I guess there's none of them pesky thermodynamics laws in the world of economics huh?
Starsucks
Sponsored by Microsoft.
fuck 'em.
This has to be the first ever economic theory equivalent of the Chewbacca Defense.
I just love it when you IT people get all pompous about economists. Of course you're all the smartest people on the face of the earth, so people who've actually STUDIED economics can't possibly be right about anything, especially when you disagree with it on a visceral level.
You guys sound as pathetic as the steel workers and miners where I grew up, compaining about how the corporate "man" keeps you down. Get with the times: many IT people were the first to say that to the "old economy" manufacturing employees back when getting an IT degree meant a paycheck that was completely outsized compared to your actual skills.
Now that you're not making mad money right out of college, you're all more than willing to join up with the Union and be protectionists.
It's a known economic fact that lower labor costs translate to lower finished goods costs. You think you'd be able to afford the latest graphics hardware and a new box everytime the next killer FPS came out if they weren't being manufactured overseas for way less than they could be made in the U.S.? You all benefit from outsourcing and globalization, but you're too fixated on your own careers to see the benefits.
See:
u ll.html
...
...
"Exporting America : Why Corporate Greed Is Shipping American Jobs Overseas"
by Lou Dobbs
"The power of big business over our national life has never been greater. Never have there been fewer business leaders willing to commit to the national interest over the selfish interest, to the good of the company over that of the company's they head."
See also:
http://www.pbs.org/now/transcript/transcript334_f
DOBBS: I want to hear one of these candidates sharply and clearly say this country is about the people who live in it.
DOBBS: You have a responsibility not only to your investors, you have a responsibility to the marketplace, you have a responsibility to your customers, to the community in which you work. You have a responsibility to the country that makes your business possible in the first place.
MOYERS: Heresy. Are you a traitor to your class? The investor class.
DOBBS: Well, I'm, you know, I think most of us are investors. And I hardly think I'm a traitor. I think it's traitorous and treasonous and absolutely ignorant for these people to be out ballyhooing double-digit returns on equities when first we have to get our house in order in this country. And bring back integrity, principle, leadership to our business enterprises, to our markets. And try to do a lot better for the people who count. That is the middle class.
MOYERS: You begin with a stunning quote. I'll read it. Quote, "The 20th century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda as a means of protecting corporate power against democracy."
DOBBS: Absolutely. Corporate America has at this time controls the national media. It controls nearly every avenue of an American citizen's access to information about the way he or she lives, about those forces that are influencing our lives.
And corporate America is protected in Washington by the dollars it spends. It is protected in the media by some virtue of ownership.
Outsourcing is bad for the person whose job goes elsewhere.
But the job goes elsewhere because someone else can do it cheaper.
It happens all the time. Sooner or later, all those guys in India will price themselves out of the market and lose their jobs to people in China or Africa.
I have sympathy for people who lose their jobs. I have no sympathy for people who want government to distort economics.
-- Slashdot: When Public Access TV Says "No"
Outsourcing's results: the U.S is out of IT jobs and India, China and Eastern Europe are hiring.
Bitch and moan as we may, this ridiculous imbalance in world wealth doesn't look very stable to me. Outsourcing this kind of stuff had to happen.
There are masses of very poor people out there now able to afford a computer and internet access. Their disadvantages are many, their only advantage is that they're poor. So of course they will work for less. Suck-it-up dept is right.
I don't support the exploitation of workers in poor countries, but it's hardly exploitation if these people are making a living doing what they do.
If other reasons we do lack, we swear no one will die when we attack
Ms Mann appears to have a severe case of rectal cranial inversion.
First they sold all our good paying blue collar manufaturing jobs down the road.
But promised a new prosperious age of IT.
That didn't last 15 years.
I'm a programmer who can't find a job and am now working at a sewage treatment plant and still paying student loans.
What's next, will you need a PHD to work at McDonalds?
Only the few rich at the top get richer.
So the seeds of revolution are sewn.
Remember the following 5 slashdot offshoring axioms:
Mathematics is made of 50 percent formulas, 50 percent proofs, and 50 percent imagination.
Microsoft is a monopoly, this means they control pricing of that product. This is why the price is where it is.
In a competative market the prices should end up closer. Look at oranges in your local grocery store, here (Canada) I pay about $1/lb for South African oranges, which is around the same price Florida oranges were a few weeks ago.
This is a market price.
____ Gay relation-ship supporter and embarrassing "Vice" President Dick (Haliburton) Chaney will not be selected to run, due to R-platform differences (coincidently recently restated again, for US UN EU, in the setup news story/conference).
____ Recently PR-Bush (USANG Draft Dodger George) asked Senator John McCain to get to the bottom of the 527-campaign ads and sue for liable if possible (NOT!).____ Gosh; John McCain, would make a real good VP candidate for the R-party, and cure a few election potential problems, because we all know "John McCain" is more electable then either DemRep President options.
To dang bad we can't bet on USA President stuff, maybe VP stuff is okay what's the legal (I wonder)?
Unaccountable leaders are masters, and unrepresented people are slaves. How do US and EU fare?
wtf?
The author shows how IT oursourcing might be good for the U.S. economy as a whole, but I fail to see how that is going to help the average IT worker.
The author's main point is that by saving money, supposedly it will free up money in sectors such as education, health care, and construction. What the author fails to realize is tha most of the outsourcing WAS in customized applications. It wasn't the big boys like Microsoft, IBM, etc. doing most of the layoffs, it was the smaller shops. In addition, I would call in to question the value of IT spending in each of these industries.
1) Education - need better teachers, not better software. I've taught before and that is the main problems. Computers won't keep Johnny from . Secondary schools are mainly just babysitting
2) Construction - ?? you hire a bunch of drunks to pound some nails in, what do you need computers for. This industry loves cheap labor, I don't see much opportunity here
3) Health services - IT could really shine in this area, but it is such a huge mess that it won't be fixed without government regulation, which means that few will profit from it. I remember this was what MicroStrategy tried to concentrate on back in the mid-late 90s, I suppose they just dropped it after they realized what a colossal mess it was. A bigger problem with health care is the cost of health insurance and the fact that people are living longer and needing more care, long after their productive years are over. Malpractice is another issue effecting this industry.
Really they only way you can make money in the IT sector anymore is you can show businesses that it will save them money. IT is mainly just a cost center nowadays. I don't see this happening for any of those industries.
Also, consider this: Are Windows/Office any cheaper now than it was 10 years ago, adjusted for inflation? I don't have the statistics on hand, but I'd be suprised if it were true. Though I suppose hardware is a bit cheaper.
Consider what happened during the 1980s - 1990s . I suppose you could say it was good for the U.S. "economy*" that all the decent wage manufacturing jobs left the U.S. Consumers got cheaper cars, but workers lost their jobs, and they NEVER came back. If you use the author's analagy and applied it to the manufacturiung sector, then as prices fell on consumer goods, demand should have increased since consumers now had more money which to purpose. Well I suppose that did happen, but the sector never responded, and things only got worse.
Some of them were able to retrain to IT jobs, quite a few were relegated to WalMart. A few years later they also lost their IT jobs. Its just not possible for a 45 year old with three kids and a mortgage to be constantly retraining like this. Quite a few familes have never recovered.
The author suggests that by outsourcing programmers you create more positions in design/interface, interacting with customers and management. But how is someone who has never programmed Only a few with can be a manager/CEO straight out of college. You need some time in the trenches. And if they layoff all these junior positions where are our next batch of managers going to come from? I suppose from whatever country you are outsourcing to.
In short, I don't see no light at the end of the tunnel for those in IT/Programming, which is part of the reason I'm getting out. Luckily I'm still young and have no family, I suppose with the way the U.S. works, from a purely economic standpoint it is uneconomical to have one.
* Interesting how these lassez-faire types hate collectivism yet often resort to a purely aggregate word such as economy, GNP, GDP, etc.
I think we have to put limits on the domain of the word YOU.
for instance...
YOU = persons who live in india
In the NY Times a while back, in a Virginia Postrel column about outsourcing, Mann suggested that (paraphrasing) "perhaps technology would allow IT workers to find IT jobs".
Clearly, the woman was unfamiliar with Monster.com, Dice.com, or the realities of the IT job search.
I think this was earlier this year, so clearly, she's had her head up her ass for the better part of a decade.
Her idea was that there might be "hidden" IT jobs in hospitals, and other places where an IT worker might not be smart enough to look.
If she knew what she was talking about, she'd know that you don't just look for jobs at IT companies, you look for jobs that require the skills you have. (Because there's not much point applying at a VB shop if what you know is Java.)
In IT job ads, you're likely to find ads from hospitals, insurance companies, banks, and local government, as well as "IT" companies. Slashdot readers know this.
Mann seems to have no concept of what an IT job search is like, yet she doesn't hesitate to consider herself an expert.
"...there will be...a more equitable distribution of wealth in the world"
"If you have any moral sense, you would care also about the wages of people overseas."
Wow, that's great stuff. But here's an idea: Americans eventually succeed in sending a sizeable chunk of their middle class tax base overseas. Americans can no longer afford their military superiority (and everything that goes with it), and their influence in the world diminishes. The world becomes much more unfair for Americans.
I used to know a guy who could lead you through a string of "if this then that" statements, each of which you could easily agree with, arriving at the end with "...then everything in the universe is a dairy product." It was unnerving. Karl's dead now, or I'd think he had taken up a job as an international economist.
The Spoon
Updated 6/28/2011
Better times for techies? and the an article it references Study supports controversial offshore numbers. This is just voodoo economics revived.
An economist. Lovely. International economist, actually. Have those people *ever* been right about anything?
Election Year.
Another take on this, though, was some fantasy which was handed to me at some point. I think there was a chill down my spine when I heard it and knew it was evil wrapped in a sheepskin:
How it actually played out was:
Menial tasks were actually a good chunk of our work.
Less work and no increase in critical tasks means headcount minus half.
The damndest thing is, even what is called 'menial' isn't, it's all critical, and that came out clearly a number of times as soon as some doofus with limited background knowledge screwed up.
Not my problem anymore. I left.
A feeling of having made the same mistake before: Deja Foobar
Example #1:
Design and interface must be done together with the customer, but coding and maintenance do not require close proximity with customers and can be done by less costly programmers abroad. The higher-wage jobs, involving design and interface, must still be performed in the U.S.
Good try, but wrong. There are times when the designer and the coding monkey can be safely separated, but in general you're asking for trouble. Prepare to be IMing a lot. The offshore outfits are becoming better designers in any case, and soon the US designer's employer is going to be shipping his/her job out to be where the code is written.
Example #2:
The value to the U.S. economy of cheaper outsourced software and IT services is that it reduces the price of customized software. Econometric estimates are that, to an even greater degree than IT hardware, demand for software and services increases more than one-for-one with reductions in price. Therefore, as prices fall, demand for services and software rises more than one-for-one, diffusing IT into the lagging sectors and deepening the use of IT in the leading sectors, thus increasing demand for workers with IT skills in all sectors.
So with cheap custom software, more businesses will use it and the user employees become computer skilled. The first assumption I'll buy into, assuming that an easy and cheap local consultant is available at the start of the coding chain. If this plays out to the scale she thinks, therein lies the benefit to US IT workers. The second assumption is complete crap. Someone using a customized Access database front end is no more "computer literate" than someone using Word, all else being equal.
Example #3:
Meanwhile, U.S. IT jobs continue to move up the IT skills ladder. Demand increases for workers with the skills needed to design, customize, and utilize IT applications...
Nope. This assumes the US always holds the high ground. However, as more development and design occurs overseas, and the host countries become ever more developed and self-sufficient, this falls apart. They sell to us, and by and large don't need anything back... except our increasingly worthless dollars.
Luke, help me take this mask off
If you don't have money to buy products would you buy products just because they are cheaper.
Go and walmart that.
Germany will be better with no Jews in it, ship the Jews off to labor/death camps which fuel bigger industry and make more German jobs.
B U L L S H I T!
Costs will drop and everybody will be happy with that.
Wrong.
Your salary will drop too.
This isn't that complicated.
I am a custom programmer, I bill $50/hr.
I get lots of work, I hire someone to help me.
I pay them less then I charge, I make money on their work as well as mine.
I provide the work to them, and supervise, this is how I justify my cut.
This is how many small business grow, it is called organic growth, and is very common.
Since programmers don't need to be physically close, why not hire the cheapest capable person? If you only pay $10/hr, you make $40/their hour, of course minus your management work.
What about this doesn't make sense, when I was 14, I worked for a guy cutting lawns doing almost exactly this.
People will get fed up with working for private industry and they'll stick to local jobs, skilled trades, government jobs (like contracting, or doing IT for their county, etc), academia...
People that can't find the kinds of careers they want here will get out of the country, just like people did in Europe after each world war. Lack of opportunity has always driven immigration. It will be the same in the future. People who CAN leave, WILL.
Brain drain; it's a classic.
Farewell! It's been a fine buncha years!
outsourcing WAS good for you, until you got arrested by your own govt as a "terrorist" for crossing the street.
Nobody ever complains about marketing our products overseas. I guess we just don't want the competition that comes with it. Maybe we really are as stuck up as others around the world say we are.
Scientists have found that swallowing large amounts of bleach is good for you too.
This sig contains repetition and redundancy.
Color harmony
"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone? ...the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered? ...raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics."
Bush Lies On the Record.
Check this link: PDVSA'S Cero Outsourcing
Use your favorite translator, is in spanish, the article explains how PDVSA (6Th Oil Company in the world give or take) happened to save a lot of money and recovered control of things once they got rid of Outsourcing.
I promoted this history to ./ but their biased crew rejected it. Does ./ want you out of your job in IT?, who knows.
Yeah, I follow that arguement...all the way to the unemployment line.
First, all tech is crap. Let me repeat that. Our careers are based on crap. First, for any non-tech company, computers are a support accounting item. This means that computers are not in the business of making money for the company, they are an expense. (Get over it, I'm not done yet, so hold the flames til you see where I'm going.)
Let's look at the grocery store. It's full of tech in my area. PCs on the check out lines. PCs to weigh and print tickets for fruit and veggies, computers to check the temps in the coolers, computers to do the accounting, timeclocks that are really T104 form factor motherboards with full computers, hell, almost every isle has a computer. (I understand that some stores are replacing the security camera VCRs with computers now.)
Second, when these devices are first installed, there is some sort of cost/benifit study, both before and after they buy it. (If they are a cluefull company. Uncluefull don't do them, simi-clued do one before. Only fully clued do both.)
Third, after a few years, these productivity gaining devices stop being seen as something that saved them money, but just another expense. They forget they replaced things that cost even more, or the savings they got from installing them.
Now comes the down cycle (remember when all the wall street anaylists said we beat the down cycle markets? Cheap talk, and while I never believed it, many did.) and busineses have to cut expenses.
Gee, where do we cut? Almost always the answer is IT, because IT is seen as an expense. They almost always forget the productivity gains they get from the use of technology, they only see that line item cost IT people are on the balance sheet.
As for tech companies, very clued know that IT keeps the plates spinning and productivity high. They may cut a few in IT, but mostly by quietly asking "who are the bottom 10% we can do without best?" and those hit the bricks.
Simiclued tech companies just cut the last hired.
Unclued cut a lot of IT, regardless of why.
Likewise, consertives say "outsourcing is GOOD for jobs!". Look at thier reasoning, folks. If you believe it, then outsourcing is good all the way up the chain of command, yet you don't see CFOs and CEOs being outsourced. Oh, no! What you do see is that they get multi-million dollar bonuses and raises for cutting 2,000 jobs here, 5,000 there.
This is why I say IT workers are the modern black gang of the world. We stoke the boilers, fire the engines, make the computers run. But are we asked our opinions on all the jimcrack geegaws PHBs demand? Hell no! Most of the time we are accused of "slacking off", "being uncooperative", "geeks" with a roll of the eyes and shake of the head, and the only respect we get is when we save their ass and the empty mouthings of praise during those "all hands" meetings where the bosses give each other awards.
(OK, so I'm bitter right now. I'm miffed because I just came from one of those all hands meetings, and it was a complete waste of THREE FREAKIN' HOURS.)
But let the pager go off at two in the morning, and we are there. Someone has spyware on their system? We are there. Virus? Ditto, gritting our teeth all the while they regale us with how smart they are about technology or how absolutely they can't do a thing with a computer. Thinking how this person makes twice what I do, with an IQ measured in irrational numbers....
But what really gets me is the number of times when the very people that depend on IT to get their computers working bypass IT, and go spec out and order servers and software and then expect us to keep it running, or second guess us the rare times we are asked our opinion.
You know, I'd never dream of tryi
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
The problem with outsourcing is that it isn't a buisness move that creates growth. You remove a job here and create it over there. Profit is generated but no real change has happened so there is little modivation to create new jobs.
Yes its true the new job over there creates higher standard of living and wealth over there but at the cost of the standard of living and wealth over here you really haven't gained anything but CEOs with larger wallets.
Let's take a step back here before we all start grabbing our pitchforks and torches, folks! I feel like I'm stating the excruciatingly obvious here, but don't we sound a wee bit Luddite? Somehow I expected the Slashdotters to be a bit more aware that change is a part of business, and it's our own responsibility to stay ahead of the curve. Not only that, but the socialist bitching about "profit is evil blah blah fight the Man" is really something we as reasonable geeks should be a few levels above. Hopefully this crap is just emotional venting and not anyone's real mindset.
Just because we're not exchanging physical "goods" with them doesn't mean that free trade isn't working to our benefit. The law of comparative advantage applies for services too. In fact, it works even better, since the cost of transportation is so much less. Politicians will lie to you and tell you that out-sourcing is bad for America. This is because the average American finds this intuitively appealing in the same way that people found the sun goes around the earth intuitively appealing.
1984: War is Peace
2004: Outsourcing is good for the domestic IT industry.
Um, that could use some editing.
"You might as well get your son a ticket to hell as give him a five string banjo." -unknown minister
I'm surprised they can get away with such a fallacy.
Let's carry the fallacy to it's natural conclusion.
Suppose you outsource all jobs, including the CEO.
Now there are no jobs in this country, but the (outsourced) company is able to produce goods cheaper so that all those with jobs (i.e. no-one in this country) are able to buy cheaper goods.
In this situation, how can outsourcing be good for you?
Once again, Econ 101: Supply of IT workers increases, wages drop. Product per dollar for IT workers increases since their wages drop, so companies hire more wokers at the lower wage. Since you're competing with countries where a standard salary for tech workers is around ~$20,000, this is not a good thing.
you can come up with anything. For instance:
outsourcing means cheaper labor, higher profits to high-level executives.
So they have more money to burn. Thus increased activities in service/entertainment industry.
Conclusion: Unemployed programmer? Become a waiter or learn how to give BJ.
I rest my case.
I've recently been to two hardware companies, one a small business doing about $10 million in annual sales, another with $2.7 billion in annual sales. Both of them have attempted to outsource their hardware manufacturing to taiwan. Both of them ended up deciding they could do it cheaper and with better quality by keeping it in house.
For the small shop, the problem wasn't the cost, it was cheaper per-board to have it outsourced. Their biggest problem was that it took a month or more for turnaround. The next biggest problem was that they had to ship out the specified BOM to taiwan, since there were few manufacturers for some of the components.
For the big shop, the problem wasn't cost. It was the dynamic nature of the work. Every day, they fill and empty a warehouse of a different product. The complaints that the manager mentioned were that the products were more likely to break, were more often defective, and were often made with cheaper or inferior parts than the specification, sometimes causing the product to fail FCC standards. This was an intermittent problem, so they found that to preserve brand recognition for quality, they needed to keep it in house.
I don't believe that cost alone is the overriding factor. If a company decides based on that alone, the company will have shoddy products, choosing cost over quality.
Of course, I'm not saying that outsourced stuff is necessarily bad, only that the experineces of the companies I've worked with have found it to be the case.
frob
//TODO: Think of witty sig statement
Call me a troll, fine... but it seems to me that most of the responses of negativity towards the article is with the reasoning, "I'm not employed, so therefore IT jobs arent being created."
However, I must say, as I am currently looking for alternate employment, I have had several opprotunities for job interviews (about 10). And these jobs range from technical support at 30k/yr through Sr Network Engineer and Security Analysts at 100k/yr and more.
The jobs are out there, people... however (here's the troll) whether you're qualified for them is another thing altogether. Whether you want to be a tech support guy is yet another... It also depends on where you live (I happen to live in the NYC area and there are plenty of IT jobs around). Yes, my current company is outsourcing to India, but we're still hiring IT people... just not the same group of IT people.
Oh and one other thing... most of the people that were laid off here in the US due to my company's outsourcing have been Indians who are here on work visas.... so if you're going to get the same people at 1/2 the price because they are 6000 miles away, then why wouldn't a company do that?
So, essentially what she's saying is that we lose jobs on every transaction, but we'll make it up in volume?
Here's what economics students in three countries are doing to put their professors on the defensive.
PAE
you wrote:
" No, her basic premise is sound economics.
Economics is nothing more than a science of how to fuck over the working citizen and benefit the investor. Anytime I hear someone talk about "economics", I know they are either callow and ignorant or an evil greedhead. Guess which one I think you are....
you also wrote:
What outsourcing really does is grow the economies of those other countries.
WHo cares? America is my business. I own it jointly with all my fellow citizens. They are my partners. I aint looking to fuck them over so I can unduly benefit myself and some foreigners. I call that treason....
The money going into those economies results in higher economic spending power among the outsourcees. They in turn buy more goods, which employs more people in their local economy. This causes economic growth... at the same time it provides the ability for people in these countries to start their own business, utilizing cheaper local professionals, to produce products and outcompete the American companies. That sounds scary... but the net gain is cheaper goods and services for US as well.
OK...that scenario MIGHT come true, at some point in the future, maybe 50 years or 100 years. But I and my fellow citizen-partners are gonna get mighty skinny waiting for your free-trade, lasseiz faire, cornucopia-religion, rapture-prophesy crap to come to fruition. I say fuck that, and put up steep trade barriers. You know, things CHANGE from time to time in this ol' world. What works OK at some time N, does necessarily work well at some time N+K. Reality is like that.
You wrote:
It's the concept of competitive advantage. The workers in India have a competitive advantage as they can do the IT jobs cheaper, and ostensibly at or near the same quality level. By allowing them to take that advantage they win (their economy grows), but they also begin producing products that out-compete the more expensive American products. This is the exact same cycle we saw with Japanese cars (which has come full circle with those companies opening up manufacturing plants in the United States).
Here is an analogy for you: I and a bunch of people own an office building together. Each of us owners uses one of the offices to ply our trade. I am a lawyer; Joe down the hall is a dentist, Mike is an accountant, etc.
Then we hire an office manager. This office manager finds out that the office building on the down the street is not doing so well. The lawyers, accountants, dentists working there do not have much business. They charge much less than we owners in our office building do, but the problem is that their location is not as "prime"as ours. So that office manager conspires with the owners of the other building: whenever someone comes in looking to hire a lawyer, get dental or accounting work, etc., he just sends them down the street. He gets a kickback.
When we catch onto what he is doing he just says basically what you have just said: "it will grow their economy, it will keep prices down, yadda yadda yadda...."
Now, what do you think of that office manager?
With regard to manufacturing and japan and the USA, you might wanna read this....
eat shiat and bark at the moon
I'm amazed at the number of posters that somehow-in-their-own-mind make this out to be a Microsoft issue. Talk about stretching.
I've heard that giving away all your money will make you rich, too. If you give it all away, that leaves a "cash deficit" which will create an "opportunity" for you to generate more money to replace it. As you gain more and more of these opportunities, eventually you will have so many ways of generating money that your income is basically unlimited. It's brilliant, it really is.
If you laid all the economists end to end, they'd point in all directions.
Faith: n. -- That human impulse that drives them to steal appliances when the power goes out
So is a colonoscopy. That doesn't mean I want to work in a colonoscopy economy.
M
You can't.
I can't outsource many of the services we rely on.
Conveniently we are also moving to a service economy. If the bulk manufacturing or work is done offshore that's fine, it's the end stages that require the most skill are the most profitable, and least likley to move.
Stay at the top of this curve and you're in the best position. If you make a commodity, you will have zero profit (basic economics here)
Outsourcing and offshoring are just putting a different name to being uncompetative.
When presented in it's simplest form, the argument skips over one teensy little detail: "outsourcing means cheaper IT products" is based on the delusion that lower overhead translates into lower prices. If you know of a capitalist system that has not succumbed to profiteering, and thus might actually work this way, please let me know. I got my bags all packed.
You are right - I don't care about people outside the US. Quite frankly, its not my problem. My father's job (as a programmer) was outsourced and he in turn was let go. My father was 61 when that happened as was forced to retire early. My mother, now 63, still works 60+ hours a week to be able to keep the house that my father's retirement benefits do not quite cover. If that had happened a few years earlier when he was not eligible for retirement, my parents would have lost the house and been displaced.
I'm working (perhaps mistakingly following in my fathers footsteps) as a software engineer now. I get to struggle to keep my job each day - I'll probably get to meet the fate I described above (although I am trying to take measures to mitigate it).
So - if you are asking me if I got a warm-fuzzy about the guy in India that got my fathers job - the answer is NO! I'm worried about people in THIS country. Let the governments and people of other countries worry about their on people.
Outsourcing also raises the amount of money third world countries have. As they get richer, they start buying more expensive luxuries made in the industrialized nations. In the end, it will help our economy.
They will not buy goods from industrialized nations, they will buy counterfeits made in the third world. Check your TV listings for the rerun of a recent 60 minutes episode. Everything you can possibly imagine is couterfeited, even cars. Enforcement is a token effort, the couterfeiting shops provide too many jobs.
As the joke goes...
If you lined up the world's economists in a line, they wouldn't reach a conslusion.
Well if you want to skim off money you have to add value somehow.
Supervision, hiring good people, project management, ensure quality, provide customer support, all those things customers want.
You know all that stuff Redhat is doing with Linux.
Bear in mind, foreign countries, particularly China, tend to do economic espionage. I wouldn't reccomend moving your R&D lab there.
... I suppose we could just our crops from south of the border, though. Right?
Also, I knew a lot of Chinese folks who wanted to get their educations overseas.
For the moment, at least, the west has a good lead in terms of R&D and education.
Of course, we'd be more competitive if we copied China's lead and forced some farmers to produce food for our country for near-slave wages.
___
It's the end of my comment as I know it and I feel fine.
"It's win-win if you have the key to the big boys' bathroom."
I have the key to the big-boys bathroom.
.
.
.
I'm the janitor.
For people like me that can speak fluent technical English, know their way around Windows, can get by in unix/linux and MacOS, have a good work ethic and take pride in doing a job RIGHT instead of at the "absolute lowest cost," outsourcing is AWESOME. The lowbie jobs get outsourced, leading to general customer dissatisfaction with overseas support personnel (who are probably not computer-inclined to begin with), leading to a plethora of support work for independent/hired tech guys like me, and at better pay to boot.
To rehash in short version, outsourcing means:
--> Better pay for me for doing the same job
--> More work for me doing the same job
--> Better average customer satisfaction for me for doing the same job
WIN-WIN!
The vast majority of people, who hold jobs that are purely local in nature (thus cannot be outsourced) won't notice anything at all. Plumbers, mechanics, construction, retail, and so forth won't be affected one iota.
People whose jobs are able to be done via a network connection are pretty much screwed. That's a big category, with a whole lot of middle-class jobs in it, not all of which are IT oriented. So, people being smarter than companies are willing to admit, people will lean away from jobs that don't contain a large, non-outsourcable component. With any luck, this'll bite the pro-outsourcing companies in the ass because they'll find it impossible to recruit for jobs they haven't outsourced yet.
Comp Sci types like me will stick to the following types of jobs (which can't be outsourced):
* Positions in academia, especially college IT support
* Positions in government (state, local, federal)
* Positions with government contractors (bonus points for security clearance)
* Positions in local organizations that need IT staff, like hospitals, police departments, libraries, etc. And small contracting companies that serve them.
* (last but not least) Positions with companies doing types of IT work that can't be outsourced, like on-site system administration and such. But these jobs are far less trustworthy than the others.
Overall, outsourcing is a nasty, brutish trend demonstrating the complete lack of loyalty or trustworthiness of Corporate America. But it isn't the end of the world. The trick is to get away from sectors that are affected, and carve yourself a place within a more local, trustworthy sector.
Just my two cents...
Farewell! It's been a fine buncha years!
Sure. Linux is cheap. Linux is free. Does one thus conclude my consumption of linux increases?
Even if you made food free I wouldn't eat any more than I currently do. Well - I suppose SOME people might try to consume more - but then they will just get fat.
What she misses is that at ANY price there is a maximum amount people will consume and once the price drops low enough then further price declines have no meaning.
Bertrand Russell pointed this out in an essay in 1932: In Praise of Idleness
Funny that over 70 years later we still have not caught on that Russell is correct.
In fact, what people need to start realizing is that in an economy one person's expense is another person's income. When we eliminate people from the workforce we do not benefit from the "savings" because there may well be none. By leaving a segment of our work force idle all we accomplish is that we lose what they can contribute.
This is one reason that NASA really does not cost what anti-space antagonists suggest it costs. If we eliminate NASA then somewhere else a would be engineer gets pushed out of a job and can't contribute his talents to the economy. Ditto with programmers.
People can't easily switch careers. I have a family
to feed, so I can't just go back to school. I made
my investment in education. Somebody going into IT
today would be stupid of course, but some of us
started long ago. We're stuck. I need to keep this
career until I die.
The feds muck with interest rates all the time.
Sometimes they break up monopolies. They dish out
artificial monopolies to your local phone company,
patent holders, copyright holders, TV stations,
and so on. Market distortion is the norm.
In industry X, base production is moved offshore, while higher-level refinement/assembly/r&d/management remains stateside. Moving production offshore promotes efficiencies blah blah blah.
The problem is that this is mostly an illusion. Production is hard and requires skills and capital. Refinement, management, and assembly can be done anywhere. They're moved to the US more for tax purposes and for "Made in the USA" stickers than for any concrete advantage. The only thing that's tough to move offshore is R&D, and the software side of the tech industry doesn't even have that going for it.
In short, this is what's really happening: The third world is becoming the producers (food, industrial, whatever). The first world is becoming consumers. The only thing that keeps the third world from becoming self-sufficient and raising prices on the first world is crippling debt and indemic corruption.
Yes I know the terms "first" and "third" worlds are passe. "Developed" and "developing" countries is worse, because it creates the impression that all countries can become all super-developed like the US (and if that's the case, who grows our food again?)
This all seems to be pretty simple to me, and fits into "the big picture" quite firmly.
/. about how overseas programmers are less "in tune" with the business problems that the software is to provide the solution for, and how in some cases the programmers are not as well-trained.
From 1999 to 2002 (last available data), the number of "programming" jobs in the U.S. earning on average $64,000 fell by some 71,000. But jobs held by application and system software engineers earning on average $74,000 increased by 115,000.
So, programmers overseas are now writing the programs that businesses depend on, and we're hiring more people (44,000 more people in 3 years) to try to implement / support that software. Makes sense to me.
There's been lots of discussion on
Therefore, it should be no suprise that it takes that much more work(ers) to crowbar this software into place & pound it into submission so that it does the job, and to keep it doing so every day. Additionally, when you consider that the personnel doing the implementation/support are that much further disconnected (language barriers & such) from those who actually built it, this becomes a no-brainer.
The real question is, is the trend of software requiring more and more maintenance & support year after year for myriad reasons a good thing? This article claims that it is in the short-term (more jobs), but what about when the whole card house tumbles?
Once all the IT jobs are outsourced, it will only be a matter of time before the Indians decide they don't need the American companies to tell them what to do, and can just send over some Indians on L-1 visas to interface with *their* customers.
Title sez it all
Fair enough. The same thing happened to my father, except he was able to get back in the work force. It is difficult here, especially when there is silent age discrimination. I've moved away from software engineering for the time being to avoid the crunch.
Of course, this breaks down once you can't get any better (hence the "if salt were free" is a somewhat better argument, though I bet I could come up with some creative uses for free salt).
Long term though, lets say competitor software companies in other countries (SAP is a german firm) do outsource and make good products at a cheaper price. If US companies don't outsource, they will lose to companies like SAP and Wipro. Eventually, US jobs will still disappear for the time being, because foreign firms can make better software products for cheaper. If the US wants to build walls of tariffs for outside products, then it will cost more for other US industries to produce goods (as their material, infrastructure, software all cost more now because of tariffs). The same fate will await them as foreign firms whose base cost is cheaper can make better products for the world. The world will stop buying from the US and then even more people's jobs will be lost.
I don't think outsourcing is bad. However, what about thinking this way:
If you don't outsource, you create another job in your country.
You employ another unemployed person.
You create another tax payer.
You collect income taxes from this person.
You make it possible for this person to earn money and become a consumer.
And so on...
Not a bad way to think, IMHO.
Simpy
"Or am I to understand that these ranks are now to be filled entirely by MBAs and sociology majors? "
They're counting on two things. One all the "doing it for the money" have left, easing the pressure. And the other is with the groundswell of "doing it for the love" in appreciation of getting rid of the aformentioned "money grubbers". That'll carry IT through these "rought spots". Besides we all know all those IT "John Henry's" born with a slide rule in hand. Don't need those "make work" jobs in order to be good.
I'd rather try to outsource the polititians. You'd see some real effort to protect the labor force then.
Any sufficiently advanced influence is indistinguishable from control.
article in the Inquirer?
The veracity of the article aisde, the semantics themselves make sense. That is to say that 5% of 100 is more than 10% of 10.
If you lose 50% of your existing IT jobs and that loss (somehow) causes a 400% increase of business that need that aforementioned 50% of IT workers, you still have a net 200% increase in jobs.
Again, for the linguistics-impaired, I am not agreeing with the author as to whether or not this is, in fact, happening. Only that it is possible to lose something which ultimately causes a gain.
Then again, if you happen to think that the concept of trickle-down economics is bullshit...
My
Limekiller
but I dont think I've ever seen anything more insightful in my 3+ years here...
Because without welfare, your out-of-work IT ass would be a lot thinner. Because while IT has never associated itself with labor, the Democrats love you quite a bit more than the "Work, slave!" mentality of the Republicans. Unless you've sold your soul to Texaco or to Big Oil, that is.
does anyone wonder if computers would have taken off so much, and started to appear on every danged desk ever (ever) without having been made affordable by cheap manufacturing labor overseas?
i certainly doubt computers would have ever reached such widespread price appeal if not for outsourcing their construction.
if televisions were manufactured in america, they would be expensive as hell. if this was cathodeslashtube.org and we all programmed tivo funcitonality for tv's and other related service industries i'm sure we'd be glad for our jobs. but of course, we wouldn't have them in any great number if televisions weren't commodotized. well, now computers are a commodity (boy were us mindful people grateful for that 5 years ago!) and so are many computer programming services! oh no!
so yeah, business sucks, lost jobs and all. but honestly, what if we stepped past our bias (we all want to be employed, just like those autoworkers who contributed to a net gain of something when their job loss meant more affordable cars) perhaps we can see a future (an unlikely one) where the benefits of cheaper software development trickle down like many other products that benefited our economy because of their cheap manufacture.
cheap computers begat a huge service industry. is it too farfetched that cheaper software development might trickle down into more feasible implementation of 'smart' products now that you don't have to pay a small towns worth of taxes and benefits to develop some measly software.
where this trickles down to....well...somewhere
- I'd prefer not to.
Stop calling assembly manufacturing please, some of the biggest FUD out there now. Use the correct terms. Picky point but it's true. We used to manufacture cars, now we do not, we put together car kits.
And how is it "all of us" when it's not "all of us" who can get these cheaper goods and services? Aren't you leaving out the ones displaced, out of work, rehired at less wages, etc? That means it's not "all" of us, correct? Seems like you are assuming two things at the same time, that outsourced jobs result in zero loss of jobs here, and that they make more jobs at the same time. Say whut? How are people who have now much less money or no money supposed to take advantage of just cheaper trinkets, when basic bills and utilities aren't even being met?
Sorry, it ain't working, been hearing this scam pushed for over 20 years now. Stuff in general costs more, and good well paying jobs are much harder to come by, you can't just pick and choose a few selected entries like CPU chips or something and call it the total economy. Got the personal memory, don't need an article to tell me that. Stuff costs more now, not less, generally speaking.Yes, there are new products on the market, but in general, nope, stuff costs more. Food, energy, housing,clothing, all costs more. People have lost purchaising power, not gained. Bankruptcies are at record levels-why if these games are making the economy so good? Why is that? Really, why? Savings at all time historic lows-why is that? if we are all so better off, wouldn't it be trivially easy to sock away more now? But it's not happening. House notes are now common at 30 years, I can remember when 10 was common. Why are they at 30 now, is it because houses cost more, or less? and yes, I even mean the same excact size houses in the same areas. And interest only loans? Excuse me? WTF is that noise? People are getting so desparate to hang onto their houses-just a place to live- they basically agree to rent them forever? That's simply...weird, but I'm seeing the ads now on Tv and such, never used to be that way. Car notes are at 60 months now, I remember 12 month loans, and any random middle of the road joe normal blue collar paycheck could pay them off to boot, let alone a white collar at 2x the average wage. And some people are being forced to a perpetual lease, they can never really own a car (that runs and ain't beat to snot) now, it's turned into an expected monthly utility bill because the lease is all that's affordable. I remember when leasing was extremely uncommon for joe sixpack, now they push those magic cheaper numbers because outright purchase is so hig-where's the cheaper cars at? I remember a ton of cars brand new at under 2 grand when I first started driving, where are they now?
Less people have jobs with full benefits now. More people have lost their primary jobs and have been forced to take lesser paying jobs with less or zero benefits, sometimes not even getting a full work week. They just screwed people over on overtime this week with that new law to boot. More households require two checks to function, when one used to cut it easily.
How is this "better"?
Nope, the US did well when we pushed a full, completely diverse, vertically integrated and protected economy, the whole magilla, manufacturing, agriculture, energy production, etc, all of the above. It went downhill when they pushed swapping the cow-working- for the magic beans of get rich quick "investing" in whoknowswhereistan and making millionaires into billionaires. The only servicing I am seeing is the US middle class getting "serviced" right up the tuchus by the same old slick snakeoil guys.
The better era with a better styled economy would have been the 50's to late 60's. Since then, coincidentaly with allowing dumping of autos and the start of offshoring,and allowing huge tariff imbalances, and also giving TAX BREAKS to offshore, we've gone steadily down hill. Just because we have some shinier stuff now doesn't mean we have a bette
Outsource your local Congressman this November. Colorado just outsourced, replaced, it's 20 year Congressman, Bob Shaffer, in it's recent primary election. 20 YEARS! Yahoo!
...
:)
We did it! You can too, this November.
http://outsourcecongress.com/
1) GO TO http://issues2000.org/
2) Click on your State.
3) Scroll down to IMMIGRATION. If your Congressman voted yes on mass immigration VISA bills
4) Vote 'em out.
The benefits of Outsourcing Congress is tremendous!
Score & Karma: SASA: Slashdot Approval Seekers Anonymous
Living in Russia and seeing some potential for outsourcing started three years ago a process to build team of software developers based on completely remotely work with one German guy. This though it was a bit difficult ( as pure remote team without bureaucracy of managers etc) But this succeeded, and thought of cause this brought jobs to former USSR countries ( as my guys were from Russia , Ukraine, Belarus) but also this made my partner richer and finally he started to hire local guys, extending his business from one man company to 'normal' GmbH.
Maybe other things on which I worked are less country skills specific, nevertheless I think that without me the developed soft would be just unviable - my partner customers were not ready to pay high prices for the specific simulations ( for example I was working to created realistic vehicle dynamics to properly simulate dynamical parameters for design of sound properties of the passenger cars - so that my dynamics should really be close to that which real cars exhibit) and while this simulation was important - nobody was sure that this is what needs investments ( but this is another story - how guys were savvy in business) - anyhow - lower costs on development allowed the business ( of partners of my partner) to move and develop nessesary things and when being developed it rewarded all involved ( though they did not predict that forehand risking their money..).
As another example other members of the team which I led would also allow for my partner for fast accommodate to business demands -for example he would be asked by his customers from time to time for development of very special video processing software - in case of hiring local guy - he would just lost time fining appropriate candidate for part time job - there are no much highly skilled video processing guys who are available for short term jobs, while lower cost would just allow develop customized soft but also keep them on development of spare things such as that mentioned video capture shareware program ( which I passed for the development for other guy - finding him here) and have someone always ready for urgent for any new video processing demands from customers. And finally - when shareware will go this will also allow to hire local German guys to extend software, provide customer support etc. That just few insights of possible benefits. But overall my experience gives the picture - for a German guy outsourcing allowed to start business, to grow it, allowed to hire more people and will allow to hire even more in future. For him outsourcing highly benefited him. Though the process has some pitfalls - due to them I just stopped the work. This requires really high skills to communicate on all sides. And if (in my case German side) lacks motivations to support quality communication the job might start to be just a nightmare ( not for outsourcing side ... as it has all the benefits). Anyhow - though my personal dreams were not realized - the guys from former USSR are happy to continue to work on the company. And the company will keep development. As for me, after all my experience to create things like I already created will probably allow someone else create something similar but more efficient ;) and will ( I hope) both sides.
Anyway - I think (as my experience of outsourcing says outsourcing brings benefits to both sides ) - it will keep develop. And with widespread of new means to communicate ( I mean voice and video in addition to email exchange ) there would be more cases of outsourcing in small companies and custom software develop and it will be more efficient than it sometimes happens now - when outsourcing for most of the companies is the first experience.
As for the fact that different to my experience outsourcing schemes might hit western workers. I could agree. But here seems that if there is a way to regulate the things cleverly so that outsourcing harm less maybe it worth to think on that possible solutions. But outsourcing in ad
Global job competition is fine if and only if the following are true:
;)
1) We all have the same environemental laws.
2) We all have the same wage and overtime laws.
3) We all have the same workplace safety laws.
Since none of these are true on a global scale, what actually happens due to capitalist economic pressure is the jobs follow the lowest wages, longest work hours and weakest environmental and worker safety protections, all of which suck hard for the 99% of us who don't own companies.
What we need is international labor laws mandating global minimum wage, global maximum hours of work per week, and common environmental and worker safety laws which err on the side of too protective. Violation of these laws should result strong penalties such as complete confiscation and redistribution of the violator's share of company ownership or even imprisonment for egregious offenses.
The bullshit of "go compete with Joe ThirdWorld in a completely unfair competion and like it" spewed by the plutocrats and their government lackeys is completely unacceptable. I'm not pushing communism (total government ownership of capital) or even socialism (partial government ownership of capital) here; I'm just demanding a fair playing field.
Now take it a step further: one common currency. Eliminate the parisitic drag on the world economy caused by currency speculators drawing money out of the world economy without providing goods or services. The global economy is like an engine and currency is the oil in the engine. Without enough currency available, the global economy runs poorly and eventually seizes up. Currency speculators are a slow leak in the oil pan.
When we have no more economy, we'll probably have to =/
Have any of you bothered to appreciate the spin of the source of this drivel?
Just a thought.
The REAL jabber has the user id: 13196
What you do today will cost you a day of your life
Isn't this the Load-Of-Crap theory?
This probably applies to all sectors, not just IT. The masses demand products and services for as little money as they can get away with. In order to price items competitively, companies focus on reducing costs as low as they can, even if it means using cheap parts, reducing/eliminating quality control, and hiring cheap labor. Cheap labor means people can't afford to spend money on quality products, so they demand even lower prices. It's a downward spiral -- we're saving money at the cost of good jobs. And from what I can tell, this has been going on since the start of the industrial age.
We'll see an influx of Harvard Software Architects.
--Rob
Towards the Singularity.
How is outsourcing beneficial at all in the long term? To me it is a short term solution to increase the stock value of a company. I don't know if it is just me that thinks this, but it seems to be like the middle class America is disapearing, does it not seem that outsourcing is to blame for this? To some degree I can see some jobs getting outsourced (like Levis jeans for instance) where a developed country such as the US is wasting resources, this won't hurt the economy, but when companies like Nortel Cisco and IBM and pharmaceutical, and R&D companies start outsourcing university level jobs, this is a problem IMHO. Take a look around, the middle class America is slowly slipping away.
The retribution will begine after the Revolution
Let's just ask all the factory workers how well that plan worked out for them in the 80's.
Since the percentage of Americans living in povery has jumped up, I'm doubting we'll get an encouraging answer.
god I love it when someone finally has a clue
What if N developers migrate to N management positions and 3*N offshored developers?
Now you have more total global employment, higher value US employment, and more productivity for everyone.
I know that is the rosy scenerio, the other (obvious) one is all the jobs go away and we're all unemployed.
Fighting against the second with protectionism doesn't work. Working towards the first scenerio can work.
I won't argue it is easy, or it will happen quickly, just that is how I think we should view this opportunity.
"Opportunity is missed by most people because it is dressed in overalls and looks like work;" --Edison
things that require an intimate knowledge of American culture or a physical presence (like some sales).
Which IT jobs require a physical presence but do not require direct interaction with customers? I have a BS in computer science, but I also have a diagnosed disability that makes it much harder for me to recognize that I am being impolite in front of strangers. What should I do?
Seems to me the best thing given the argument that outsourcing is good is to lay off everybody in Country A and let Country B produce both Excess Wine and Excess Cheese to sell to the people in Country A who are now on unemployment.
The key is to realize that country A and country B have no common exchange medium. In order for Country A to buy from Country B, they must sell something to country B of equal value. The trouble is, country A makes nothing that country B wants.
If there is common exchange medium, say, gold, then country A will buy all their wine and cheese from country B until they run out of gold. Then we are back to the start. Country A has nothing to exchange for country B's wine and cheese. Country A has to go back to making it's own wine and cheese even if it is less efficient.
In the real world the US can not keep buying more goods and services from China and India than we sell to them. It drains our reserves. Eventually, the reserves will be gone and we will no longer have the means to pay for those "cheap" foreign goods. We will have go go back to makeing our own. This will be hard becuase we previously dismantled our industry.
If the US would devalue the Dollar to 25 Canadian cents, then all the outsourced jobs will come back...
Oh well, what the hell...
All these economic "experts" just crack me up the way they declare to know what the future holds. It's a joke. They act as though their economic theories are as strong as the physical laws. Guesses. That's all they are.
Outsourcing might create new and better jobs in the long run. But, it might not.
One thing's for sure. Telling people who have lost their job due to outsourcing (or insourcing, for that matter) that it's going to benefit them long term is insane. No one can predict that with any certainty. And, so far, they've been wrong.
Even worse, they make it sound as if the corporations are doing the laid-off worker a favor and/or they are doing it for the long term benefit of the country. Nonsense. They are doing it to cut costs today. They're shopping for labor outside the US for the same reason people shop at Walmart. To save a buck today. Tomorrow doesn't matter.
Neither the long term welfare of the American worker nor long term economic effects enter into their decision making process to outsource labor.
Outsourcing worked so well for the automobile industry. Just look at Detroit now. So many people have jobs.
So what its say is that there will be more tech jobs but they will be at Compussr or Bestbuy etc, rather than the stimulating, creative jobs we want (anyone who complains about a cube farm should go watch clerks or work at say a cvs.
Damn the man!
Now, we pay the N managers 60$ per hour, and the offshore guys $10 per hour, each. So the net cost is $90 per hour for 3 times as much work as one onshore guy at $50.
So, which company will succeed? Output of one man at $50 per hour, or output of three for $90 per hour?
There is a net benefit to society, the ex-programmer is making more money, and he's producing cheaper code. There's a net benefit to the offshore society, they are earning reasonable wages in context.
The loser, admittedly, is the competing on-shore programmer, who either has to drop his hourly rate to $30, or figure out how to become more productive, or go and find 3 dudes to write code for him. Any of those three is a viable strategy, I'd suggest option 2 is the least stressful and the most satisfying, since I don't enjoy management or poverty.
If someone makes a counterintuitive claim about IT outsourcing, it should not be scorned without thought.
There's a company in the Pacific northwest that claims the only way to make money in software is by keeping source code secret and restrictively licensing it and DRM-ing it up the wazoo. When you claim that Open Source is a viable business model you make a claim that seems just as counter-intuitive as that of those advocating IT outsourcing.
If you want the b-school types to seriously consider Linux, you should be open to seriously considering things as threatening to the working engineer as Open Source is to the monopolist.
I don't have a dog in the outsourcing fight. I think that if you're a world-class hack, it doesn't matter if you work in Borculo or Bombay.
Do you have anything more to add to the discussion than "Nuh uh"?
Feel free to mod me "-1 - Angry Jerk".
Medical outsourcing is beginning, with such things as mammograms and x-rays. Low-paid, quickly trained workers analyze them and send results back. While this benefits the hospital because of the lower costs, thus lightening the load on your wallet, wouldn't you rather have someone better trained analyze your medical info?
Do these outsourced jobs fulfill all the reporting requirements of CMM ????
We americans seem to be putting ourselves into a death spiral, partly fueled by all this CMM paper nonsense. I see my timeon projects being reduced to 20 minutes coding and 7hrs 40minutes paperwork checkboxes per day.
They Live, We Sleep
That would be fine if the first world competitors were also forced to give up their 'unfair' advantages.
So, close most of the schools, switch the electricity off randomly, and install corrupt governments. (Oh well, sounds like California).
Outsourcing is vandalism, like breaking glass, that ends up costing everyone. Caroline argues that outsourcing (dollars spent somewhere else) benefits everyone, including the programmer who's picking his nose and filling out resumes instead of being paid for the same work. It is clear that the programmer would differ. The programmer would also argue that the outsourced work is inferior in quality and that he's not allowed to compete effectively due to further government vandalism though insane IP laws. The supposed work that's created is click and drool upkeep of Winblows, which pays very poorly, while others do the brain work. Everyone pays the price for this, if they are not sensible enough to use free software, by paying monopoly fees for software that could and does cost much less. These hidden costs are carried by all in the form of higher general costs lower efficiency and inconvenience. The situation with non free software is much closer to the case of the boy who's paid by the glazier to break windows. That's what the upgrade train is.
Friends don't help friends install M$ junk.
Probably most of you whine about how we don't do enough to help the poor, and then here are some hardworking guys in foreign countries struggling to pull themselves out of their poverty, and you want to close the door on them.
Go read Adam Smith's "The Wealth of Nations , and you will discover how trade barriers simply impoverish both sides of the barrier.
Stop thinking of just your own greedy selves, and think of the welfare of mankind. Think about how it shouldn't have to matter what country a man is born in, he should have the same chance in life regardless.
Shame on you all.
Oh, and yes, I am biased, because hiring Russians allowed me to start my own company without any venture capital (Namesys), and I am a perfect example on a small scale of how globalization is making the US into a corporate headquarters location for the globe.
And yes, I am sitting around in the US doing the menial labor of running tests on the code my guys write for my US customer at its site because I could not get visas for my guys to come here, when I could be designing the next product instead.
I don't see how Americans becoming specialized in being the entrepeneurs of the world is such a bad thing.
Then you don't believe in copyright or patents, do you. Those have been distorted so far as to be worthless.
Friends don't help friends install M$ junk.
--- Every day I am forced to add another to the list of people who can kiss my ass...
No, but he said "nuh uh" using emotive similies, so if you disagree with him then you are in favour of rape, child-abuse, and murder. Shame on you!
content management for designers
No corporation made a ton off screwing people.
Are you kidding? Hum... let's see. Enron leaps immediately to mind. Standard Oil follows closely behind, as do: Bank of America (their practices in charging late fees for bills payed on time), and WorldCom. Just to name the cases that have been proven, off the top of my somewhat-ignorant head.
This fact is indisputable: corporations fuck citizens *every day*. Enron got away with it for years, on a vast scale. Most others are more modest in their fucking-with-America activities, but they still do it.
Most people with fuck over their fellow people if it'll make them a buck, and they thought they could get away with it. I might, even. I like to think I have a bit more integrity than that, but I make no promises.
Show me a "thriving" socialistic country, moreso than the US and you can prove me wrong.
So socialism sucks. I think anyone with half a brain could have told you that, considering human nature. That doesn't necessarily mean that capitalism is the best method, either; it doesn't even prove it's a good one. In fact, I'd say it isn't, based on... well, human nature. There's a lot we haven't tried.
And the US government meddles with the market a lot more than you realize, I think. Most US foreign policy supports US corporations, moreso than US foreign interest. I'd even say the US domestic policy favors the corporation over the citizen; that'd be a tougher argument to win, though.
Microsoft is to software what Budweiser is to beer.
In four days my Bellsouth job is going to Manilla. Nope, can't say outsourcing is good for me.
Most people with fuck over their fellow people...
D'oh! That should read, "Most people will fuck over..." Sorry about that.
Microsoft is to software what Budweiser is to beer.
Friends don't help friends install M$ junk.
One - lots of jobs yesterday and lots of jobs tomorrow, but no jobs today = lots of economic pain for us
Two - sure, we are raising the foreign economies, but we need to raise them a lot before they will buy anything we produce. Take Computers - what's the annual income in India or China vs cheap hardware? It costs months/years of salary to get one, so they won't be buying much from Dell.
also thinks outsourcing is "good for you."
John Kerry is a Joke!
Yeah that's great, except you can't offshore outsource lawn mowing
You can't offshore it? Maybe not. But you can still lose it. There are a slew of "undocumented workers" in most states (at least western and mid-western) who have those jobs: the blue-collar, low-income and unksilled labour jobs.
Proponents (not perhaps without some justification, I suppose) argue that since no Americans want to pick strawberries or mow lawns for a living, without the illegal/legal migrant workers, the work will never get done.
But how soon will it be before proponents of white collar outsourcing start saying that no American would want to do low level I/T Work - eg., Call Centers, 1st Line Tech Support, basic coding? I think it's already being said.
Those with the "have" are in a position to call the shots here. Or put another way, capitalism being tied to the private ownership of the means of production allows the private appropriation of surplus value. Companies outsource more for marginal benefits at best it seems, and yet nobody things to cut the salaries of the top executives?
If anyone thinks I'm taking this too far, then why are the CEOs and top executives of some of the companies responsible for the most outsourcing making millions of dollars? (Carly Fiona and Sam Palmisano).
"Teachers leave us kids alone
The reason it doesn't take hold is that Argentina has no say in US fiscal policy. As long as there isn't One World Government, there's no global economy. It's just a bunch of squabbling mini-economies.
They would have little say over US fiscal and monetary policy. No problem there.
If it were truly a global economy, then every location would be the same as every other location. But I can't live in the US on an East Asian salary, now, can I?
This argument doesn't work as much as you'd like it to. A person can't live in New York on a Galesville, Wisconsin salary. (granted the quality of living is 10x better than your example) but it is a global economy. Everyone has something that someone else wants, in some countries its diamonds, others cheap labor, others bannanas. An example of somethings people don't really complain about is textiles. There are little to no clothing makers in the United States, almost all of the worlds clothes are made in Pakisan or India. People complain about sweat shops generically. I think a person is much happier (relativly) making 5 dollars a day running a machine or sewing at a borring job than farming and starving. Whatsmore these jobs left the US 30 years ago. There are NO Televisions made in the US either. Or wood pencils and erasers, or bannanas.
Politically, I have mixed feelings about dealing with China (The largest player). From an economic stand point, it is good for everyone in the world if goods and services can be made where it is most efficient or cost effect. But China is simply a country that is trying to have the money from capitalism while cold a firm red hand on communism, we'll just have to wait and see.
Just my incoherrent .016632 Euros
July issue of Software Development magazine had an editorial on this. Two points from it:
1) Multinational companies take in a lot of money overseas. They face a huge tax bite when they move that money into the U.S. Thus, because of our tax law, they have a large extra incentive to move jobs overseas. (article had figures)
2) Related issue: H1B workers have a very tough time switching jobs, due to our immigration law. Result: they have very little negotiating power with employers, so H1B salaries are depressed.
Give me a true free market, without government distortion, in which I can move my labor across borders as easily as corporations move jobs, and I'll quit bitchin.
The currency idea is an intriguing one. I'd go a step farther and propose a global version of the idea being implemented in the European Union. The EU provides a common currency and strict requirements that limit the behavior of member countries.
Workplace saftey and working conditions laws are a key point here. As others have pointed out, the cheapest labor is slave labor. Third world countries can outcompete first world countries by enslaving millions and forcing them to work in terrible conditions. This is in fact happening in many parts of the world as we speak. The capitalist economy demands it.
Consider the results of implementing US class labor laws in all third world countries, and sanctioning those that refuse to comply. Workers would be treated far better and paid far more, but only those who keep their jobs. Most companies, being driven by greed, would play complex shell games that resemble the current Bahamas tax havens in an effort to skirt labor laws and cut deals with the sanctioned nations. Particularly dictatorships, which play by the rules of the man in charge. A man who is easily bribed.
With a global currency instituted, these dictators would not be able to print and manage their own currencies in the global market, but they would be able to steal currency that falls within their borders, replacing it with local money, to finance their own interests.
Corporations would soon play the same shell game. Countries that don't follow the rules set up impoverished local economies, which are drained by vampiric corporations that use local labor, pay with local money, and rake in international money. In such a situation the workers are essentially working for free, and even providing their own food. There can be no cheaper labor, so a complex web of holding companies and hidden deals will be arranged to allow greedier companies to exploit the countries outside international law.
Soon the abusive companies would gain a substantial competitive advantage over those that only operate in the legal zones. By smuggling in cheap goods, they would undercut competitors and create a result identical to Prohibition in the US.
Remember what happened there? The evils of alcohol, which was ruining society, were fought by banning liquor altogether. Only criminals could distribute alochol, so criminals did. The US mafia went from an insignificant annoyance to well funded, well armed, immensely powerful criminal empires. The same thing will happen on a much greater scale if the world is divided along legal lines into "legal" and "illegal" countries. Some international corporations will turn to crime, create private armies to defend themselves against enforcement, and bring down the whole system, forcing reversion to the current model where each country controls its own destiny, free from international law.
--check it out!
The parent post is at best devil's advocate, and at worst a clear and obvious troll. Just look at some of the exaggerated claims.
Major international companies would "play shell games" to cut deals with slave-employing dictatorships? Please. Somehow, we manage to hit Cuba and North Korea pretty hard with sanctions. the Wal-Marts of the world simply cannot escape enforcement and use illegal sources as their primary suppliers.
And just look at what happens with goods that are still illegal, if you want to refute that ridiculous Prohibition analogy. Modern drug cartels aren't as economic as you'd think. They cut every corner and use every unethical trick, but the costs of smuggling, violence, private armies, and police actions make drugs enormously more expensive than they would be if they were produced legally in the US by well-paid union workers. Criminal organizations cannot compete with legal ones in any environment that has enough law enforcement to protect the legal ones from outright violence.
All of the arguments the parent presents against a unified currency are totally unrealistic. The fact is, a properly implemented unified currency and *good* universal trade, labor, and environmental laws would be greatly beneficial to just about everyone in the long run, except those living under oppressive governments-but those guys are screwed anyway. The reason this doesn't happen yet is because nobody can manage to do it right. The UN is stifled by bureaucracy and politics. The EU, while fairly successful, has a slew of problems to deal with, and remains an immature, experimental attempt at implementing the original vision. Any body capable of enforcing global law would fall victim to the same traps that cause problems for democratic national governments. Nobody is yet willing to create an entity that has no external competition to force it to correct its mistakes, so it will be a long time before we see globalization done right.
--who would win in a battle where the only weapon is rubber chickens filled with nitro glycerine: Anti-Slash vs. GNAA??
Well, it is. People who claim it isn't are forgetting to factor in the opportunity costs, the "hidden" costs which are actually the out-of-sight places where value is taken from to "generate" growth.
They may not be traditional hidden costs - they may be things like your own stress level, mental or physical health, societal function, etc - but they are costs.
Sure, new opportunites for growth open - at the same time, the cost of these opportunities opening is that other opportunities close. And there's now way of telling (guessing, estimating, yes - but not telling for sure) whice were the better opportunities in the long-term.
It's not so different from the organisations claiming "losses" from copyright infringment, non-favourable IP laws, and the invention of motor cars - it's not a loss, it's just the loss of the "right to make a profit" in a direction they'd planned.
What part of "a well regulated militia" do you not understand?
The problem is that you are not comparing like with like.
I'll take an Australina example.
A modern car has catalytic converters ($600) airbags (say $1500) 17 inch wheels, a 240 hp motor, climate control, ABS, CD player and a 4 speed auto box. It costs $A 35000. The median Australian wage is 49000
Now, thirty years ago the catalytic converters, airbags, climate control, ABS, CD player and 4 speed would have quite simply been unavailable. You might have been able to get 240 real hp... but I doubt it, unless you built the engine yourself.
Anyway, turns out a V8 Falcon, slightly less powerful, and quite a lot lighter, would have cost 5567 (I'm not sure if that is pounds or dollars). It rode on 14 inch wheels and had a 4 speed manual box. The median pay was 7228
So, a new falcon without all the 2005 car's gizmos would cost 77% of the avergae wage in 1975, and the modern car is 71%.
So, in this example, at least, you are wrong in detail, and are ignoring the added value in the modern product.
Proponents (not perhaps without some justification, I suppose) argue that since no Americans want to pick strawberries or mow lawns for a living, without the illegal/legal migrant workers, the work will never get done.
"Free trade" proponents always say that. The truth is that Americans don't wan't to pick strawberries for the salaries the growers offer, because you simply cannot support a family in the US on those salaries. If the growers up the salaries, then Americans will do it, but that makes the price of strawberries go up. Then we'll just buy strawberries from Banana Republic where they're willing to work for $1/day and can actually support a family.
Those with the "have" are in a position to call the shots here. Or put another way, capitalism being tied to the private ownership of the means of production allows the private appropriation of surplus value. Companies outsource more for marginal benefits at best it seems, and yet nobody things to cut the salaries of the top executives?
You haven't been following the news lately. CEO salaries are out of control because of all the "good ol' boy" networks in these corporate compensation committees. Stockholders can't get rid of them because too much is held by insiders. Look how the effort to oust Eisner at Disney failed, and he's been paid insane salaries to run the company into the ground.
The problem is that CEO's and their ilk live in a totally separate reality from the rest of us, and have lost any sense of "social responsibility". And the last defense we have against the "aristocracy of wealth" is the estate tax, which the Bushies want to permanently abolish.
Also, there is a movie released in 2003 called The Corporation which, as one of its premises, stated that if you consider the typical corporation as a person and diagnose it using the Diagnostic and Statistical Manual of Mental Disorders, it would be a sociopath.
Hopelessly pedantic since 1963.
"outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs . . . "
Except the gain in IT jobs will also be outsourced to India.
MUCH better. Jesus Christ, whose idea was this colour scheming thing? Can we have some code to set it in our ~/user_prefs or something, please?
what do you think the bank does with the money? put it under their big corporate mattress?
they hire people or they buy a car or a jet or invest it in other companies. anyway you slice it that money gets put back into the economy and ends up creating more jobs.
but hey go on and believe whatever you like. just try not to choke on your drool while you're learning to tye those shoe laces. WTF.
is to change your life and lead a more self sufficient lifestyle. Wean yourself from the corporate teat, needless consumption, and money. Establish your own homestead.
Of course, for most people who have never grown their own food or lived on a farm, this is not an easy thing to do. In addition, it is impossible to be completely self sufficient.
Humans have survived for thousands of years without a corporation to take care of them.
I appreciate your response.
I was being rhetorical when discussing CEO salary. I had in mind Ricardo's view of "the iron law of wages". Put essentially, if an employer (according to Marx, Ricardo, Malthus, perhaps others) introduces new machinery that will double the output of the worker in a day. Does he then double the wages? Not at all; he keeps the surplus value for himself.
Subsitute cheaper labour for new machinery. Yes, the old-boy networks exist. They are a neccessity to justify this sort of behavior.
I also recommend the movie you referred to. Well worth watching.
"Teachers leave us kids alone
If a large prison/slave labor pool is what it takes to win, WE WIN AGAIN. Why? Because the United States has BOTH the greatest number of people in prison AND the highest percentage of its citizens in prison.
USA! USA!
Sometimes it IS better to be lucky than good (or smart).
Catherine Mann, from the Institute for International Economics, has a look at What Global Outsourcing Means for U.S. IT Workers up over at Queue. She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US.
I say outsource her job, then see what she has to say about it.
And when they start catching up to us there, then what? Of course, at a certain point, they will catch up to us, but so what?
Yeah, I know, inhabitants of large industrious nations always think their time in the sun will last forever. And yet, they never do. Even the Indians and the Chinese, which have seen their nations come and go big time over the last 2K years or so. And that thing or things that takes them out of the limelight always plays out a bit differently each time. Watching the US now reminds me of Spain after having grown fat on the riches of the New World, just before their loooooong fall.
It just pisses me off to listen to the excuses why we dive head first into waters we know not.
Luke, help me take this mask off
... and here's why: Third world countries also get screwed over by outsourcing because we don't pay them what their work is worth. There's no need for them to industrialize then if they're getting all of these jobs simply because they're willing to work for less. Thus they're sitting there barely making a living wage, never actually advancing, but doing whatever menial work is given them by outsourcers.
"Offshoring will result in cheaper products, which will increase demand, which will result in richer companies, whose wealth will be sprinkled onto unemployed U.S. workers like fairy dust."
- The Onion
Table-ized A.I.
One would think that after almost 4 years of our economy being in the crapper, and the fact that during all of that time outsourcing was becoming more and more popular, you wouldn't find people trying to argue that it's actually a GOOD thing. That's like saying the Soviet system really does work. Sorry! It's been several years and it's not helping!
Where is that outsourcing related ecomomic boom?!
Day took yer job!!!!
Day took ur jobs!!!!
To solve the outsourcing problem well all have to get into a large naked pile and...nevermind. I'll stay unemployed.
The U.S. can simply become isolationist and not allow imports from other countries. Then when Germany and all the other "developed" countries have raced to the bottom and become Third World countries themselves, the U.S. will be the only country left in the world with a decent quality of life for its citizens.
Everybody else has protections or political influence to protect them. Farmers, dentists, truckdrivers, etc. all have unions, trade-groups, etc. that protects them from foriegn competition. Even lawyers can limit the number of law degrees awarded, and limit them to citizens, keeping their kind wealthy and protected from too much competition.
It is time IT now gets a piece of Protection Pie. Otherwise we will be sold down the river to the lowest bidder like factory workers were.
Table-ized A.I.
...is the United States.
Outsourcing != Overseas exportation of jobs
If a company outsources to another company in the same country, it is at worst a zero-sum. Factor in some additional management positions, the revenue generated in the real estate, office supply, and other non-IT industries, and the migration of jobs away from large corporations toward small businesses, and suddenly you have a net benefit.
How can the eyes be the Windows of the soul when they never blue screen?
I guess the definition of "low grade job" is highly subjective? A low grade job here in Oregon is McDonalds. Minimum wage, no benifits, no vacation, etc etc.
Regards,
~Joshua Norton
The main skill that American's have over people in India in China is Americans can go into debt.
We can get credit cards, huge home equity loans, bank loans, cash out refinances,etc. at ridiculously low interest rates. We then spend our money telling the Chinese and the Indians what products to make and they put their savings in the bank which puts it in U.S Treasury's and mortgage backed securities and then they lend it out to us again, etc.
If this keeps on going soon the whole economy will consist of people borrowing against assets to employ people in other countries to make stuff for us. They are paid in money that they lend back to us with interest.
What about all the benefits that the US economy gets by being the ones that produce those IT products that need IT workers to support them?
She believes, if people outsource, the products that are made will be cheaper and more companies will buy them, and the manufacturer of said products will have more money to put into the U.S. economy, but didn't we learn during the Regan years, that this belief is far from true. The reason this isn't true, is because the goal of a corporation is to maximize profit, and frankly running a corporation in the united states is far more expensive than building your infrastructure abroad; they will end up investing more of their money that they gain abroad, there is no reason (incentive) to invest back in the U.S..
The U.S. has more people in prison than any country in the world and a greater percentage of it's population in prison than any country in the world.
Pre-Reagan it had almost no corporate prisons now about 1 in 20 prisoners is in a corporate owned and operated prison. A for-profit prison.
Mandatory labor in prisons is on the rise, mostly competing with low-end U.S. jobs. At the same time the minimum wage is a third lower in spending power than it was 30 years ago.
According to the US Census Bureau the US poverty rate rose to 12.5% from 12.2% in 2002.
"The people that once bestowed commands, consulships, legions, and all else, now meddles no more and longs eagerly for just two things - bread and circuses." -Juvenal
These people make $3/day and can do a good job. Why should I pay some American $150/day to do it? Even if I was feeling charitable, I wouldn't do that: I'd hire the foreigner for $10/day or something (hell, even $50/day!), because he needs the money more than Americans do.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
The problem is not slave or prison labor: the engineers and software developers in China and India are not prisoners or slaves. They're simply very intelligent people from a country with a lower standard of living. With a global market, prices tend to equalize, so their standard of living is on their way up, as their labor is currently available for much less than the global average, while the standard of living in the US and Europe will eventually decline, as the value of its labor is far above the global average.
In short, the issue is that the US and Europe are richer than the rest of the world, despite the fact that they are not necessarily better than the rest of the world. As this evens out, the rest of the world will get some of the jobs.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I will mow your lawn for $500/hour.
Oh, you say you can find someone to do it for less, and will hire him instead...?
So if you won't pay me $500/hour to mow your lawn, because there's cheaper rates available, why should I pay American workers the high wages they're asking, when there's cheaper rates available? Do they somehow deserve my business more than some guy in another country does? Do US workers deserve to be richer than Indian workers?
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
The issue is that US programmers are asking for a lot more money for the same job as compared to Indian programmers. Why should we pay them this money, when others will do it cheaper? Just because they're in the same country, and we're patriotic? What if I was your neighbor, and offered to mow your lawn for $500/hour... would you hire me just to be nice, and support your neighbor, even though I was charging much more than other people?
In short, why shouldn't I pay the guy in India, who also needs a job?
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
There's a lot of jobs being outsourced to people who are living fairly comfortably in other countries. Remember, not everyone lives as opulently as US/Europeans: not everyone owns TVs, or cars, or many other non-necessities (or goes out to eat all the time).
If I had gotten used to making $80,000/year by mowing lawns for $500/hour, and suddenly a bunch of people appeared willing to do it for $20/hour, I'd be out of luck, but it wouldn't be exploitation. And it sure as hell wouldn't make sense to keep paying me $80,000/year to mow lawns, because I wouldn't deserve $80,000/year for that.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
The problem with your progressive tax is expressed fairly well by Reteo Varala. It's exactly what the powers that be want in order for them to be more dependent on the government.
:)
A better tax idea would be the Fair Tax plan. The idea is to abolish all forms of taxes except one, the retail sales tax. And by all taxes, I do mean all. No income taxes, no business to business taxes, none. Just a sales tax on items you purchase.
This allows our businesses to thrive and removes the "rich vs. poor" in taxation that the political hacks use to promote class discriminations.
You can find out more about this here. www.fairtax.org Good reading
Exactly!!
Why must we punish those that have the desire and ability to achieve in this world? If we do that, then we degrade ourselves to being afraid of achievement as a future goal. And at the end of the day, what is the total sum of everyone's productivity?
Sounds like a form of socialism that put the Soviet Economy into the shitter.
Life is not for the lazy.
If you can't find a job, why not make one? I thought America was the land of opportunity?
No, seriously. Is it that hard to start companies up? I live in an economically depressed area in Canada that makes the US look like a Mecca - unemployment rates are about 20%, yes, 20% here. Things would be very bad without the social programs Canada prides itself on. Yet there is a triving little manufacturing sector.
Want a tip? Find out how to make an existing company more efficient, thus profitable. Then go make a pitch. You might be suprised.
..don't panic
I'm suspicious of the timing of this article-
Right after a bad jobs report also considered to be timed just before a bunch of republican national convention hype.
It's hard to doubt that some cases of trickle down will happen but mostly I see something warm yellow and smelly trickling down on the face of the lower tech sector.
Firefox &
It seems to me, that the more jobs that we have here in the USA (apologies to those readers that are not in the USA), that the more tax dollars the goverment will take in in order to fund the ever increasing beast called the Federal goverment.
2 004/20040827/default.htm/
Alan Greenspan said the following today:
"Early initiatives to address the economic effects of baby-boom retirements could smooth the transition to a new balance between workers and retirees. As a nation, we owe it to our retirees to promise only the benefits that can be delivered.
If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels. If we delay, the adjustments could be abrupt and painful.
Because curbing benefits once bestowed has proved so difficult in the past, fiscal policymakers must be especially vigilant to create new benefits only when their sustainability under the most adverse projections is virtually ensured."
"Although domestic investment has accounted for only half our recent productivity gains, its contribution has historically been much larger. Should the pace of efficiency gains slow, it would fall to the level of investment to again become the major contributor to productivity gains. Investment, however, cannot occur without saving. But maintaining even a lower rate of capital investment growth will likely require an increased rate of domestic saving because it is difficult to imagine that we can continue indefinitely to borrow saving from abroad at a rate equivalent to 5 percent of U.S. gross domestic product."
http://www.federalreserve.gov/boarddocs/speeches/
Phase 1: Offshore jobs! ...
Phase 2:
Phase 3: Employment!
wtf
That's true, the "next big thing" is late, but thats not original to this day and age. If you really believe it is, just go and talk to the people who lived during the industrial revolution, or some steel workers or..... Of course what the "next big thing" is, is not obvious to those who just lost their jobs in a different field.
----- Question authority, but not ours. Hate the man, but we're not him.
nt
But that statement doesn't hold for all wages, which have risen, even during our down times economically. You can't have it both ways regarding "execs" and the rich. It was just fine when they took (by far) the biggest hit (in terms of % change in income) from the economic downturn. But now their earnings are rising much faster than yours, its not ok?
CEO compensation has all sorts of problems associated with it, but don't even try to sell me that "CEO's are getting richer and everyone else is loosing ground pap". People have been selling it for the better part of a century, and history proves them wrong time and again.
----- Question authority, but not ours. Hate the man, but we're not him.
In the last 4 years I managed to double my income. I am getting close to 100K.
I do not consider that a bad pay raise myself.
I am only talking about salary, I had no stock options, or any other "tax deduction"
I am getting sick and tired of people bitching about lack of jobs/income etc.
The only person holding you back is you. Stop bitching about things and start to make things happen.
So software development jobs are going overseas, I never left the USA, instead I made adjustments.
It is quite possible IT outsourcing will hurt a lot right now (though as per this article, some have made an argument it won't, so who knows), but from a long term perspective, it seems to be a good thing.
;) But seriously, the positive impact this has had on India for one, is a great thing. If the effect spreads some more even better. When the general population of the world is better off, that improves (1) stability, (2) gives us less things to worry about, (3) increases the pace of technological progress (cf. Japan in earlier decades), und so weiter. Bascially, while some people in one industry in one country lose for now, we all gain in the end.
:) ), so I can be cavalier about it. But it is just my suspicion that ultimately outsourcing is a good thing, at least in large part.
Stick with me here, this requires thinking at an international level here, which I know we Americans hate doing.
Anyway, my job isn't on the line (I do work in technology though, but academic jobs don't get outsourced very often
was one of the most intellectually dishonest pieces I've seen in a long time.
First off, both of the major categories cited are part of an overall pool that is decreasing according to the BLS There were
2.933 Million workers in "Computer and Mathematical Occupations" according the BLS in 2000
2.827 Million workers in "Computer and Mathematical Occupations" in 2003
Secondly, this job category has been affect massively by immigration polices that IT companies paid congressmen handsomely to get:
In this period, we had 300K new H-1b visas issued inside the cap to folks that went to work in IT.
Probably about - 80K visa holder went home at the end of their visas(about 50% get permanet residency)
80K The US pool of IT workers expanded by about 80K (natural increase--this is probably way too low because the retiree pool is small and the academic programs expanded dramatically)
20K visa holders "went illegal"(Which they can do now that they have friends in the USA). This proportion is a guess. This number may be quite a bit larger due to the tendency of folks to use business visas this way.
100K IT workers that came in outside the cap to folks in IT (this is an estimate)
100K IT workers that came in under L-1 (this was lower then and is just now getting ramped up(this is an estimate)
100K IT workers that came by other means(married a US citizen or chain migration)
The estimates are necessary because the figures the government keeps are so bad.
If we had the above up, we get around 640K. So we are looking at about a 21% displacement rate of US tech workers overall during this period-and this is probably much higher in some categories like DBA's and programmers-and much less among statisticians and actuaries from looking at the BLS category.
The issue here is that in many cases there is an active bias towards hiring foreigners for these jobs. Businesses like Enron like having a workforce that they can control (due to the illegal nature of their business). Managers at places like Hewlett Packard see as part of their personal "bottom line" the ability to get friend and family "green cards"(which would be worth upwards of $100,000 if they could be purchased on the open market). It is quite simply worth considerable investment and organization to obtain those immigration rights. Acting like simple "education" of US workers will solve the problem is sadistic in this context.
Let's help the rich guys get richer, and the poor will do better because the stuff falling from their table is more nutritious.
The problem is that the rich guys are getting WAY richer than the rest of us, and faster too. When the country grows wealth, most of that pie is ending up in the coffers of rich people and rich companies. This is a basic inefficiency in the system. People just love to complain about taxes soaking up a big part of the GDP, and thus slowing growth. But nobody talks about concentration of weath into just a few companies and families doing a similar thing.
Think about it. When a company like Ford has more than 20 billion in the bank, but isn't really adding piles of new jobs, we have to ask ourselves "what are they waiting for?" When Ford hits a bank balance of 100 billion, will they suddenly start adding jobs? Is that the secret they aren't telling us?
And that's why I am skeptical of the arguments for outsourcing. Manufacturing products overseas is a completely different than sending service jobs overseas, and she has to realize that.
No weapon in the arsenals of the world is so formidable as the will and moral courage of free men.-Ronald Reagan
It's not a 'net benefit to society' because the rich fuck who owns the company (or the rich fucks who own the bulk of the stock, if you prefer) don't pass that money out to society, they keep it. What's really happening with outsourcing is the wealthy are counteracting the gains made post-WWII in order to once again forge a society where their every whim and fancy is made real to the extantant human ability allows.
Us proles got it too good right now. The problem with a middle class is there's always one greedy bastard who wants to be rich. And the only way to be rich is for someone to be poor. Don't give me that crap about standards of living and 'reasonable wages in context' either. By definition, a rich man recieves a great deal more of socieity's wealth and power than a poor man. If somebody has more then somebody has less. We're starting to bump up against the limits of our plant, for metals if not for energy. If people are allowed to be their usual greedy, nasty selves like they have been for the past 2000+ years the future is gonna be ugly. Real ugly.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
because the workers in those countries are treated like shit. The trouble with our new economy of cheap foreign goods and labor is what happens when those poeple get tired of living like shit. I'm not saying they're gonna rise up, because if they do a modern military and management system will just slap 'em down, hard. But eventually the employeers are gonna realize they can make just as much money selling consumer goods to Indians as Americans, and suddenly they're gonna stop supplying us with all these cheap consumer goods. Meanwhile our economy has ground heavily dependent on them because nobody has a job worth a fuck.
If there's any hope for these people to be treated like anything but animals (and for some equality in the world economy), we need to force their gov'ts to act by using tarrifs and sanctions that demand they hold thier employeers to the same standards we do. Then again, that's about as likely to happen as every worker in India getting a free pony. Oh well, enjoy your $30 DVD players, I know I will.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
but the major logical flaw was painfully obvious. There is no direct correlation between cheaper products and higher corporate sales. In the consumer market this would hold some weight, but low prices are not the primary factor in corporate sales especially when you cannot predict in which way these products will be technically different from the expensive domestic products produced for the corporate market. It is quite possible and even likely that these overseas products will tartet the low-end consumer market and be less approrpriate than exsiting equipment for the corporate sales segment resulting in lower sales. In sum, increased corporate sales cannot be directly inferred from lower prices alone.
They are basically a lot of the same names as the folks that are major shareholders in the companies that paid congress critters to write bad trade deals and bad immigration policies that made this whole mess possible. The IIE is basically an intellectual infomercial posing as a legitimate scholarly institution.
You are right that economics is not a zero-sum game. Outsourcing will result in more total wealth in the US economy. But what you overlook is that this is not always a good thing. Here's how it works:
Start with a CEO getting $1 million/year. He figures out how to outsource the jobs of 20 engineers, each getting $100k a year, to India where their replacements will get $10k/year each, saving $1.8million. This enables him to boost his own salary to $2 million/year, and distribute $0.8 million to the stockholders as dividends.
All this extra wealth for the bosses enables them to hire more gardeners, maids, etc and to dine more often at upscale restaurants which provide super service by having lots of flunkeys. The fired engineers eventually get some of these jobs, at $20k/year.
Now let's see how an economist would view the change. Total incomes in the US at the beginning were: CEO $1M, engineers 20 times $100k, total $3million.
Total incomes in the US at the end were: CEO $2M, extra dividends to stockholders $0.8M, ex-engineers 20 times $20k, total $3.2 million. A gain of $200,000! You think that's great? I think it stinks.
"If somebody has more then somebody has less." Of course, because it's all relative. But people being their usual greedy selves for the last 2000+ years has made the poorest richer than they would have been hundreds of years ago. You see, when society benefits as a whole in the long run, the poorer will remain poor (compared to the rich in society) but better than they were in history. That's not much concelation if you're 'poor,' but it does stand up as an argument against your assertian that the poor just keep getting poorer. I'd rather be poor now than poor 100 years ago.
"This outsorcing trend will (almost) certainly be a Good Thing for the third world and all humanity in a few decades."
Maybe. But I have the distinct impression that things aren't going to be as simple as people assume.
Remember the world is not only a big loop, but a lot of little loops, all interconnected (some reflected through time). And just being human tells you that we can only understand a fraction of that interconnectivity.
It may be a win-win in the end, but it all can be a loss-loss too, when an accounting of all factors have been made. Some natural, most human.
I think a little humility in the face of our ignorance would do humanity some good, for a fall is preceeded by pride.
1. So far American IT companies are charging the same prices for software despite outsourcing.
2. Outsourcing means the software will be made overseas. If it generates IT jobs it will not be high quality jobs like programming/development. It means getting paid $9 an hour by AOL to tell someone how to find google with their browser.
If slave/prison labor is more economically productive than free labor, then why is it that free market economies consistently bury the unfree ones? Since when has slave labor ever been competitive with free labor?
Also, what were people making in the IR? Pots, pans, furniture, shoes, clothes, for the mass market. Things the mass market never had before.
Basically her idea relies on the premise of certain things which I don't agree are facts. She bases a lot of her facts, with no figures to support them.
"Going forward, the global sourcing of software and IT services will further reduce the price of these products, yielding a further increase in jobs demanding IT knowledge and skills."
Little evidence is given for the reduction of the price of IT products and the reducing of price due to outsourcing. It can be argued that IT products are reducing due to cheaper production methods and competition. Most IT hardware is manufactured in the East and has for a long time, so with hardware in particular, this really doesn't fit with the outsourcing theory.
The increase in services and software does not mean a tenfold increase in purchases. It would interesting to see if the purchases were made by companies or by the public. Additionally, since service jobs, such as tech support are outsourced, it is likely this will only generate revenue for the company overseas. Whereas 50 thousand more copies of a major software package could be purchased without the guarantee of an additional job being created. I believe the increase in computer use, the increase in population and the increased use of the internet and other technologies are down to these increases.
The statistics showing an increase in jobs, could be down to many factors. However, due to her mentioning that 64% of IT jobs were not in the IT sector, it also means that many of these jobs are transparent and it is harder to determine how many jobs IT jobs are lost, yet the figures can be conveniently skewed when IT jobs are created or skewed by IT sector losses.
The statistics showing an increased number of programming jobs based on outsourcing is speculation. Since many programming jobs are now outsourced regardless.
I think any attributing of an increase in jobs due to outsourcing is speculation at best and at worst a potentially harmful attempt at creating governmental policy to support her wild theories. Once jobs are outsourced, they don't come back and suggesting it should be government policy shows a detemined lack of consideration.
It seems like a death spiral to me. It's very unlikely that Oracle & M$ & scads of other outsourcers will be selling their software to India & China at the rates they expect US citizens & corporations to pay. I think a better analogy is like the pharmaceutical industry -- Americans still pay outrageous sums for drugs that people in India could buy for pennies as "clones."
It's funny that outsourcing is good enough to undermind American/western jobs, but not good enough to allow Americans to buy cheap medication so that senior citizens end up running up to Canada to fill prescriptions, etc!
Basically -- whenever a "think tank" says "it's good for you!" you know it's good for big biz and bad for the worker!
Why? You should be happy as an American citizen that you don't pay in the upwards of $5/gallon.
The government already uses your tax money to subsidize oil (and gas by extension). Sure, you pay based on market value but not the full price.
I'm a liberal, but I'm also a pragmatist. When I see how I used to stand on economic issues I wince. Why not tax gas? My local highways and byways aren't fine, but that isn't where the tax should go IMHO. Makes sense though - pay as you go taxing (term=consumption tax). I drive so I pay for improvements. Beats making non-drivers pay for improvements (considering they are saving the environment and a bunch of our money in the long run). This is what you'd call an "efficient tax".
Think of it as toll roads. There were once private roads that you paid to drive on and thus take care of. Now, we all own the roads (well most) and we all, us drivers that is, pays for the upkeep. Roads do need upkeep plus more people driving every year means more roads, wider roads, and it goes on.
Problem is however that as gas is subsidized by income taxes I'm paying for some, ahem people, to drive cars which use gas (and my money) inefficiently. This means you SUV/hoopty owners...
I'm in favor of what you could call "consumer-side" economics. Consumption does drive production - no matter what the other liberals say. If you look at "supply side economics" you wonder how those people ever passed Econ 101. Creating too much supply without consumption and thus demand will only create a surplus and lead to lower prices which a producer certainly doesn't want. Especially when he thought he'd get $10 for a widget when now he has to take $7 or even $5. You want to be a price maker, like Microsoft, not a price taker, like everyone else. (Their case however is based on their monopoly, which is legal in these United States. It's their practices which get them into trouble.)
Consumerism is a byproduct. Sure, greed is bad, but we can't fight consumption when in it there is demand for product.
Cutting tax breaks for the poor is a good idea. It lets the people at the lowest rung not only consume more but also strive for higher pay. Belive it or not!
Take this example from an economics text book:
It's a hard balance to strike. When is a certain income enough that it should be taxed? That is, when can people afford it. Because the cost of living is different everywhere, what may be efficient in Seattle may not work in San Francisco.
Hey, no one said it would be easy. It just makes sense to cut taxes on the "poor" as they will inevitably be able to consume more common items. Cheaper milk is cheaper milk. If people substitute it for water, for example, then that effect is felt all the way up and down the line. Less taxes for the poor also means entry into markets they wouldn't be otherwise able to get into. Personal computers are a good example. "Rich" people could buy as many as they like, tax or no tax. Their tax break may get more boats sold but that only affects them and above. Therefore, trickle down can't work. See where I'm going with this?
I hope so because I'm tired of typing.
Get your Unix fortune now!
IT is an expense line in corporations. Executives don't understand IT, it is always delivering less thyan promised and taking longer than expected to do less than expected.
Off shoring doesn't make IT any more successful, it just makes it cheaper. Evne if it s worse, it is still cheaper, and execs can not judge if US workers could have done better. All they can judge is that it was still late and still didn't do what was promised, but was *cheaper*.
Any savings will go towards investment in parts of a business that CEOs do udnerstand and that they believe will generate incremental revenue. The mandate for IT will be hold the line or reduce bedgets. "Hey, you saved money last year in IT, so save more this year. We need to invest more in new widget factory automaiton so we can cut our remaining manufacturing jobs too!"
I was always confused by unemployment numbers. I couldn't understand why there were no jobs available when so many people were out of work.
Seemed to me that there should be plenty of jobs available, you know with everyone out of work and all....
Get your Unix fortune now!
Yeesh - get a clue grandparent a tower = $350 these days, Winxp + office = > $350. How is software cheap?
Slashdot, where armchair scientists get shouted down and armchair theologians get modded up.
Catherine Mann, from the Institute for International Economics, has a look at What Global Outsourcing Means for U.S. IT Workers up over at Queue. She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US. Ummm, did you follow that?
I have only one thing to ask: If your IT job is designing A, and A is what they're outsourcing, how do you get training from the company or afford to train when you have no job, to be qualified in B when that's all that is an available job?
Outsourcing is only ever good for the executive level of a company. There are no benefits for the "grunts" because whenever someone says "we're outsourcing your job", they mean "we finding the cheapest fucking labour possible, and we don't care what other qualifications you have. We'll outsource that too".
Modernized version:
Have you ever witnessed the anger of the good IT guy, James B., when his careless Corporation happened to outsource his job? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation--"It is an ill wind that blows nobody good. Everybody must live, and what would become of the Corporations, the foreign IT guy, and their customers if jobs were never outsourced?"
Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.
Suppose it cost the IT guy less monthly income and the Corporation a constant sum to relocate the job, and you say that the accident brings that monthly income (minus the cost of relocation of course) to the Corporation, the foreign IT guy, and their customers--that it encourages that trade to the amount of that IT guy's lost monthly income--I grant it; I have not a word to say against it; you reason justly. The Corporation hires the foreign IT guy, raises its executives' salary a bit, and passes the rest of the good IT guy's lost monthly income to its customers. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to outsource, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."
It is not seen that as our good IT guy has lost his prescious dollars by taking a lower paying job, he cannot spend them. It is not seen that if he had not had his job outsourced, he would, perhaps, have avoided forclosure on his house, not lost his car, and had money to pay his child's education. In short, he would have employed his lost monthly salary in some way, which this incident has prevented.
1) Everything would cost less.
2) Everything would come from a third-world country.
3) The largest employment sector would be in the transport of goods whether that be truck driving, warehousing, or stocking the shelves.
4) The second largest employment sector would be in business management.
5) Programming, IT and other high paid skill positions would likely be in third-world countries to keep down costs.
6) Everything would have to come from a third-world country because the largest employment sector would have low wages that prevent them from being able to afford anything else.
Of course this is hypothetical, but it seems to me that this is the goal of our economy.
I can't wait to hear the uproar when middle-management positions start getting outsourced to third-world countries to further lower costs.
Maybe truck driving wouldn't be a bad career after all...
Are you suggesting that the current demand for programming is totally fulfilled?
I hae ma doots.
I'm an engineer, not an IT'er. I am offshore, not USA. I'd regard 100 engineers arriving tomorrow from a third world country as an opportunity, not a problem.
YMMV.
At the firm I work for, we've had a really hard time hiring qualified developers. Our standards aren't that high: we're looking for junior or senior people who are reasonably smart, but not necessarily with any specialized knowledge. Supposedly, there are all these great people out of work, but none of them seem to show up when we put out reqs: all we get are mounds of great-looking resumes from people out of work for 2-3 years who, upon a simple phone interview, are obviously unqualified to be software engineers. I wonder how long it's going to take these people to realize that their having a job during the bubble was mainly due to a massive shortage of developer supply, not because they were somehow qualified.
Are you so pathetic you can't figure out how to raise your productivity by 50%?
If so you deserve to live on unemployment or enjoy your obvious career as a lawn care engineer.
The good people who work for me have a productivity at least 4 times that of the average guy. I see no sign that the offshore staff are that good.
Pull your finger out and stop whingeing. Yah whinger. Whiney whiney whiney.
History has consistantly shown that losing overpriced jobs, creates more jobs in the long run.
Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
But in the IR there were lots of people that lost their work on farms -- and couldn't get jobs in the new industries. They had Hell. Big social problem in the 19th century.
We computer people are like those people getting caught in the changes. But that probably this will make the world better over time, too.
Karma: Excellent (My Karma? I wish...:-( )
This sort of asinine logic really gets up my nose. Software development is still a sort of craft, code is not (yet) churned out like burgers or chocolate bars. So some sort of apprenticeship is still required if you are to have any expertise in the field. Anyone who claims that learning UML (or whatever) now provides you with the tools magically to produce quality designed systems (from which resultant quality software is generated) is talking out of their backside.
If you are to check the quality of code produced offshore (back in the West say), you have to do some form of code walkthrough, never mind re-testing. Testing and performance checks alone are not sufficient to determine code quality (what if a bug occurs and the code is obscure?). If all the code checks, design checks, testing cycles and documentation is outsourced, what are you left with, apart from some (relatively) simple management tasks such as project tracking?
But how are even these management tasks to be properly carried out if you don't understand the software development cycle (as your PM has little contact with software people)?
I read somewhere recently that 160,000 IT jobs had been created in the US last year - but there was no net increase in US software expertise because an equivalent number of jobs had been outsourced. The same is beginning to happen in the UK (although not quite as bad as the US, despite our govt's efforts otherwise). The number of students taking IT exams in the UK has dropped significantly, which is usually a pointer to where the money now is (ie,not in software).
As software people age, they tend to drop out of direct involvement with software (some become managers) whilst the new intake is shrinking. In other words, the apprenticehip is moving offshore. In 20 years, there will be very little expertise left in the West, the corporates will have moved the bulk of their operations to where the expertise lives. And I venture to judge that software will still not be automatically generated. We'll be left flipping burgers for the new class of Asian tourist (of which I see a lot more in London these days), who've come 'to see history'.
Did he inhale?
Shouldn't it be: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in India
Do you know what is even more amazing? That people who have no knowledge on the matter think they can do a better job than virtually every economist who has studied the issue.
What's really amazing are the people who only examine the issue through the lens of economics.
There are more values in the world than economics. Sometimes people do not do the most economical, least-cost choice because of (gasp) other factors. This is why, for example, countries protect their agricultrual base, even though it would be cheaper to import food -- in time of war, you need to grow food right in your own country, or your country starves.
American executives have forgotten that there are some rarely-spoken rules to this civilization game. If enough workers are idle, and losing everything they worked for their entire lives, their desperation will not be assuaged by explanations of why it is economically more effiecent that they starve. They will kill the executives who stopped playing the rules of the civilization game.
Yes, it is true that the Indians and Chinese are cheaper to hire. But the Indians and Chinese (the ones not already in the U.S., anyway) are not within rifle shot of the American executives. Americans are. I think the executives have left that factor out of their calculations.
But... if I'm unemployed, I won't have any money to buy these "IT products", no matter how cheap they are. This is a worse idea than that "trickle down economics". Sure, the rich will make more jobs ...in house cleaning and other dead-end 'careers'.
Inter-country outsourcing sucks, in that I am not seeing any of the positive effects of it for US, and it has been about 3 or 4 years that it's been going on. Granted, 3 or 4 years is not a long time in terms of economics, but why should I care, if I have to spend those years unemployed, living on a subsistance level?
OTOH, I'm all for intra-country outsourcing. I am actually looking forward to a time when I can telecommute, and do 90% of my job from from another state, where my salary will go farther...
Previous poster said: People need to learn that having to change and adapt in order to survive is a fact of life.
My response:
Except that the technology and works we keep producing keep requiring more education and resources on the part of the worker into near infinity until a split and more specialization occurs, but at our current rate people are being wrung out for every last drop of time they have. More and more coroporations and businesses are the ones that establish the rules and contracts and more and more of them are sucking up peoples time while the workers standard of living is increasingly dropping. Blanket statements like "it will all work out" or "suck it up" is short sighted stupidity, tell that to a 3rd world country in the midst of economic development where they take protectionist measures so that they dont devestate peoples ability to support themselves. The desire for maximizing profit is antithetical to producing happy productive workers, when the time they've invested in their education and skills is enormous but the market is changing so fast that having to reinvest the same amount of time (4-6+ years or more) is just not an alternative in countries where you have to pay for your education, look at student loan default rates, they are only going to increase. Someone who's in debt and can't get an entry level job to pay off his already existing debt for his education is going to be stuck in a lifetime of debt or he will have learned his lesson that education is just not worth it and less and less people will go to higher education because the economic incentive is no longer their, and the price of education is actually non-competitive in their home country so if they are smart they will move to another country where they can exploit the lower costs of education, and the institutions at home will suffer. There are a myriad of complex inter-relations you're simply ignoring and that for many people the huge system they are a part of straps them into lifes that they will not escape because the causes, effects and problems are generational.
There is a human cost that taking capitalist principles to the extreme will eventually backfire. This assuems advances in education and the speed at which people learn will keep up with what is economically valuable in the job/skills market.
You ignore that those 'other jobs' are not high paying. Therefore the value of their work is depreciated and healthcare, environment protection laws, etc and standards of living that they worked so hard for (by the way which cost enormous amounts of resources and money) backslide assuming that technology and human advances in education and key areas do not keep up with or can't keep up with those who are willing to work for lower pay due to gross differences in the work and output you can buy in a cheaper country.
The way the current capitalist system works is like a game of risk where you go in exploit the low costs of the country, and lack of protection laws, slowly raise the standards of living as the people realize they're getting exploited the put laws into effect, etc,etc. Increasing the costs for businesses, then the capitalist go back to countries that they have devastated/reduced peoples wages and standard of living so badly so that they can no start the exploitation process again.
When you put the economy first before people sooner or later you're asking for a backlash or revolution if there is not technology/advances to keep humans up to speed with these enormous economic behemoths without having sacrificed their entire lives to education/training systems just to have a life of constant debt/economic hardship.
Well I dispute that the it is a stupid scenerio.
With the exception of a school classroom never seen a 1:30 manager worker ratio in any field I've worked. When I say manager I mean manager, leader, supervisor or any of the other titles they give people who have the task of watching and supervising others.
FWIW I'm an Engineer, maybe other fields are diffrent, but I doubt it.
IT people care about doing it the best they can at their jobs, and are being mostly kicked in the nuts for it.
I would think complaining about job cuts because the company needs to show better results at the end of the Q is fair and makes sense.. while it is true that business is only about money, there's supposed to be a social contract between employer and employee that right now doesn't exist.
All these headcuts must leave a lot of empty space, but people are still gathered in cubicles... "Look, this is my cubicle farm" says the proud manager while pointing ahead with a certain feudal air. "They will never get doors even if we know they would be more productive"
As long as employees are seen as business expenses instead of inversion, the corporate plundering will continue.
Unions can't protect you from competition.
We recently had a company on strike for a year, it finally ended. In that time the jobs moved offshore.
The owner was very clear about it, he has offshore competition, and can only remain competative if you cut your wages by 50%. They said no, now they don't have a job. The union protected them right out of a job.
The only job in that list that can be effectively offshored and isn't is farming. The subsidies that first world governments give to their farms is insane. That industry (or some parts) are totally dependant on government subsidies and funding to exist.
This money however comes from your taxes, and raises the cost of living for every person in the country, making us even less competative with the rest of the world.
You have to be as competative in the job market as the company has to be in their market.
People won't pay more depending on where a shirt is made, so the textile industry has moved mostly offshore. As long as most people will buy the products from the lowest bidder, the companies will do the same.
Wow! Thanks for saving me the trouble of responding to the article. You sum up my viewpoint perfectly and articulate it better than I would be able to.
Paul
Is the only thing experiencing growth from investing in the cheap labor of underdeveloped economies.
(ex: true story)
I saw an advertisement for a pair of New Balance (tm) running shoes in the newspaper yesterday. $129.00 U.S. How is the cost savings in dirt cheap labor being passed on to the consumer when these shoes are this expensive? Besides that, the last pair of New Balance shoes I had the soles came unglued on.
(ex: another true story)
I wanted a big room fan last year, so I went to a home fixup center and found an 18" floor fan with a remote for $20.00 U.S. It was inexpensive and made in China. The following week, I noticed some kind of oil leaking down the stand. About 6 months later, it made a screeching noise, and quit working. So what? Two other fans I have had for four years. They are made in the U.S.A. and still work great. How has the cheap outsourced chinese manufactured fan saved me any money here? By the same token, if ten people bought the same fan, and all 10 threw the fan out, there are now 10 of these fans in the landfill (multiply by some statistically correct number here).
Another question I have is how is the use of toxic materials regulated overseas? I noticed a tag on a new keyboard the other day that cautioned me to wash my hands after handling the cord because it contains lead. So Memorex is getting cheap keyboards made overseas, with toxic manufacturing processes, and I still get to pay the same price for a keyboard that I did five years ago? How is this a more desireable product for me?
I do not believe any benefit of outsourcing is going to be passed on to the consumer, or former employee. I believe outsouring manufacturing and labor is simply a way for the 10 people at the top of the food chain to make an obscene amount of money by selling a product for the same price but getting it produced for 100 times less cost.
Join the Slashcott! Feb 10 thru Feb 17!
Is it fair to force them to pay more? I don't think so. But then, again, I intend to join them some day...
In Soviet Washington the swamp drains you.
Try out this article from Reason Magazine in July.
Ten Truths About Trade
It goes into the concepts more than the numbers. Could make it easier to explain to others.
Lets face it... "IT" is saving companies huge amounts of money,
and much of it is quite simple. Not rocket science.
Its a third industrial revolution, with all that implies.
I doubt if the business community cares much. Businesses are not welfare programs.
Businessmen don't care about your vote.
Politicians do, so they are studiously avoiding this subject.
But I'm sure they are aware of it and are getting us ready.
Like pigs for the slaughter, as they say. Salaries for white collar workers are starting to fall almost as fast as those for blue collar workers have been falling for years.
Add in the costs of health care, prescription drugs and gas and most of us are already losing bigtime. Its only begun. Our economic system has no answer for what is happening. Its going to be a real crisis.
I mean, lets face it, businesses don't owe people anything. Its their stockholders that they have an obligation to. They have an obligation to make a profit, whatever it takes.
Ultimately, one of the biggest net goals of any business is clearly to eliminate most workers and their associated costs entirely, when it becomes possible. That day is coming soon for 90% of all (remaining) jobs. Seriously. Ignore me if you want. I don't care.
I can't see how most people don't see that. A company's products or services are not wedded to the number of staff or contractors they support.
So, expect that within 20 years or so, *very* few people will 'need' to work, at least in the high-wage countries, to maintain decent productivity.
At that point, you better have some money saved. We have already seen a huge number of jobs disappear and we have many more to go. When certain technologies become viable, there WILL be mass extinctions, as there have been in the past.
Just look at the black community if you want to see the future of most of us.
To the skeptics out there, I ask you.
When was the last time you dialed tech support on a product and was immediately connected to a human.. right...
But we are not there yet and we wont be for at least 10-20 more years..
Just give Moore's Law some time to work..
I see IPv6 as being a big part of the puzzle that still is not in place. Just look around you, so many jobs are just basically moving information between computers and making decisions on them. There is no reason computers cant do that. Farming and driving are also biggies, but there are millions and millions of dollars being sunk into solving those problems.
Short term, there are lots of scripting and software development jobs out there for people to help in the changeover. Yes, many of them will be in low-wage countries.
There is no incentive to keep them here, and clearly, neither of the candidates for 2004 care that much about the future of American humans.
Which brings me to the next question. What about people? Ultimately, we will have to deal with the social implications. Expect lots of bankrupcies, lots of broken homes, a continued fall in the birthrate. (a repeal of legalized abortion should help with a little of that to maintain our ability to generate cannon fodder for wars)
I don't agree with this, but one solution to the deteriorating safety in the non-gated-community areas might lie in 'offshoring' the care of the unwashed masses to low wage countries, contractually.
Penalties for crimes might go up, with the punishment being exile to slavery of some sort in the 'outside areas' - perhaps mines in space - or the forfeiting of organs - in the case of young, healthy individuals.. (since their 'labor' was no longer needed, the route of indentured servitude would possibly be closed to them.)
This is in line with what has happened in the first two industrial revolutions (which helped populate America and Australia, among others) For example,
Of course, there are other kinder, gentler options..China might be willing to take the poor and debt-ridden off of our hands for a fixed payment based on the debtor, their age, and life expectancy.
Oh, the magic of the marketplace!
Its true as most arguments would suggest that if I am losing my job, I don't really care whether the economy booms or dies.I still don't have money to buy food.
But we have to look at all sides of the 3 dimensional picture.You might think that only the big organisations make money or that INDIA gets all the jobs.But from the Macro economics point of view there are other jobs being created concurrently.If someone is losing out there are others(in USA) that are winning.Its how everything works.
All that is besides what outsourcing is doing for the country.After all the country IS earning more money along with the organisations which are outsourcing.
Having a biased point of view just won't work, you might even overlook the other opprtunites that come your view with the pessimistic attitude.
Lord of the Binges.
So it is just a fanciful tale. A majority of intelligent geeks are upset about something because they are emotionally unbalanced, not because they perceive a threat that you do not. Ignore them, and go about as you were. Please.
Together, we will drive the rats from the tundra.
I remember in the 80's when it was manufacturings turn. The argument was that we'd ship manufacturing jobs like steel, autos, and consumer electronics overseas. The U.S. economy would move to service sector jobs which were 'cleaner' and 'higher pay'. The result - manufactured goods got cheaper, CEO's and shareholders made more money, and workers - well, two out of three ain't bad.
... well, we don't know ... but somethings sure to turn up!
The promised 'retraining' didn't happen - manufacturing workers were lucky to get jobs flipping burgers or stocking shelves in Wal-Mart. The U.S. paid for those lower priced manufactured goods - with poverty, divorce, higher crime rates, and devastated communities. But free trade advocates won't tell you about those. Now they're trying to do it again. Move those high-tech development and R&D jobs overseas! Look at all the money the companies will save. Look at the big bonuses the senior managers will get! Don't worry - the jobs will be replaced with
So, if you're an American programmer. If you live in a high-tech center like the bay area or Austin. If you want to see into the future - just visit places like Youngstown Ohio. Drive past the moldering closed factories and steel mills. Drive past the boarded up stores. Take a good long look - cause that's your future.
[Insert pithy quote here]
Watch this Heartland Institute video
Do you have some support for this assertion?
Yes. First of all, the top one percent of income earners in the US have a MINIMUM gross income of $300,000/year, which is 7.5 times the median income of approximately $40,000/year. I do not subscribe to the proposition of "from each according to his means, to each according to his needs" but the distribution of income in the United States is obscenely skewed and it is getting worse, thanks to the Bush tax cuts. The truth of the matter is that everyone does better when EVERYONE does better.
utter rubbish
Very well said - it is not often that I see such a great summary of the fallacies of republic 'economic theories'.
Really, if it was not for the Chinese and Japanese Central Banks propping up the dollar in recent years, we would already be screwed.
It is impossible predict when chaotic events will occur, but we can agree that they should occur sometime: in this case, it is so obvious that the U.S. economy is going to tank badly, but it is likely not to happen for a year or so.
-Mark
Can someone explain to me why losing computer jobs to foreign countries is not protected under US trade laws? Steel, textiles, fishing, rice, sugar, etc. are all US industries whose jobs are protected by trade laws to prevent 'dumping' by rival countries. Why doesn't the same protection apply to IT jobs?
I'll answer my own question. There is no incentive for the government to keep IT jobs here until there is an effective, vocal IT workers union that can throttle a congressman and get his attention (in that order).
Outstanding response! As an addendum, the percentage of labor costs in agriculture is actually so small that the savings by using illegals instead of Americans - specifically to earn more money for the growers - is really almost insignificant - and a common red herring! Also, the actual legal basis for treating the corporation as a single person is solely based on legal fiction (I believe the author of "Democracy in America" - Kevin Phillips - was the first to point this out) - the origin isn't in any case law or legal precedent - actually an incorrect legal note (the synopsis on the outside of case law) that falsely claimed that to be the gist of a 1896 case.
David Stockman's take on it.
It's not because the money was taken from the rich, it's because so many people died during WWI/WWII that a) the survivors had their pick of what was left and b) the rich had to coddle the poor until their numbers swelled back up enough to abuse. That, and the cold war which kept the normal forces of capitalism in check with false patriotism and fear (i.e. you can't very well outsource all your workers in a world that unstable).
All that's changed, and the time is ripe for things to be rotten all over again. Your secure jobs and social justice are evaporating. They were illusions brought on by a very specific set of circumstances following WWII. The problem is there are an unlimited number of people willing to do anything to anyone to have their desires met. If you could have a society of 10 million well off people and perhaps 100,000 wealthy bastards, it stands to reason that out of those 10 million well off most will be willing to put the other 9,999,999 million into abject poverty so they can join the rich. While my assertion doesn't represent any hard research on human behavior, I think the past 2000 years will back me up.
Technology is not a solution to this problem. It just doesn't matter how much wealth technology generates, unless it can generate totally unlimited wealth (which it can't). There will always be plenty of those greedy fucks doing horrid things to other poeple just to join the ranks of the rich.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Software engineering is a "level", not a position. It is like training to be a manager. You don't become one just out of class. You have to be a programmer *first* before allowed to be a "software engineer" or architect.
And, losing programmers to India is not going to make significantly more because it is a roughly 3-to-1 ratio of programmers to architects/SE/etc. Are there going to be 3 times more applications now? I don't think so. The total savings from offshoring is only like 20% if you factor in everything. 20% is not going to create 3 times as many applications.
Plus, those stats contridict some recent stats I beleive came from the IRS that fewer people filed as "information technology specialists" or some other generic term for computer worker.
Table-ized A.I.
The traditional economic model assumes SOMEONE will make the item- until recently that person was nearby, because it was cheaper to use local labor as transportation costs were a factor.
What's interesting to consider is that as more outsourcing is done, the economies in those nations improve, the standard of living there rises, wages there rise, and costs rise. When you think about this, eventually it will become cheaper to produce locally again.
The key to this is the (obviously hugely idealized pipe dream) that one day the whole world will be at the same level of development. And then everything can be produced efficiently as possible, it won't be 'cheaper' to waste fuel shipping items that could be produced anywhere halfway around the world.
Of course this could all take a very, very long time, and things will suck in the mean time. Signs of hope that it might be quicker:
1) The internet has accelerated this process
2) Rising oil prices will increase the cost of shipping, making it a larger factor in the decision of where to manufacture
3) The US government's budget is horribly overextended, and perpetually on the verge of collapse. If/when the whole treasury bond system collapses, there's going to be some very interesting redistribution of wealth.
Basically as much as people talk about the (quite real) growing divide between the rich and poor in the US, the global economy and communication is doing a lot to start to finally end protectionism and balance things out. We'll see what happens.
I think that Cathryn Mann needs to read the USA Today article on the satisfaction ratings that the outsourced Help desks are getting maybe then she may want to retact her statement. Or maybe we need to outsource her job and the rest of the institute's jobs and let them live on unemployment for 5 or 6 months and see how they enjoy outsourcing then.
And I am not pullng this one out of wishful thinking. My company (a big international bank) is doing exactly that.
Many reasons for following this path (security, special regulatory commitments, etc).
A real shift in the way companies use software may quietly being happening and many people in touch only with msas consumer market sofware products are missing this quiet revolution.
If US people would have only access to lowly paid jobs then it would happen what has happened elsewhere: prices of goods will go down. Currently you have one of the highest incomes per capita in the world, you don't notice it, but please pray tell me how many people do you know that die of starvation, do not have access to a place to sleep or are denied basic health services.
To be earning so much money is a competitive disadvantage and there will always be pressure to get the jobs you currently have (offshoring, legal and illegal immigration).
There are many examples of this through recent history, you want the economic equivalent of having your cake (keep salaries artificially high) and eat it (without goods and services climbing as well). That ain't going to happen.
What to do? Regulate the work market, making it easier for other people to go and work in your country and for US people to do the same, thus talented people could compete in an even field play.
You should be looking at the EU in that regard, poorer countries like Spain, Ireland and Portugal are becoming wealthier and what once was thought could become a problem (masses of destituted Spaniards and Greeks invading Germany, France and other wealthy countries) just did not happen.
IANAL but write like a drunk one.
You just don't like it because you feel threatened.
/. US people never tire to complain.
Surely you missed the enormous drops in price of electronic goods, food and even energy (in real terms adjusted to inflation). People in the US never had it so good, yet here in
Your lifestyle is wasteful, you don't do anything to curb your excessive apetite for oil (you use too much) and food (you are too fat) and natural resources, but somehow expect that economics for leading such lifestyles will not catch up with you.
Absolutely mind numbing to understand.
IANAL but write like a drunk one.
Executives are the brains of the US economy, and
workers are the body with the muscle to produce.
Outsourcing is the US economy hiring someone else
to do its exercise.
Do you know the last time those numbers were updated? I'm not disagreeing with your arguments; it's just the numbers I've seen from the IRS recently are a bit different. Single individuals making from 29,050 to 70,350 are paying 4K + 25% of earnings above 29,050. See the tax imposed breakdown from the IRS for confirmation, as well as for other brackets and groups.
It is a solemn thought: dead, the noblest man's meat is inferior to pork.
Yep. 9 out of 10 eye doctors say looking directly at the Sun is good and will make your eyes work better!
No. Your envy is taking the better of you. Your "Yes" is evil... Making everybody equally rich is not possible. But by trying, you have a good chance of making everyone equially poor.
That page I found also addresses the wealth redistribution, so I'm not going to.
In Soviet Washington the swamp drains you.
These articles always neglect the second part of the race to the bottom: H1-B visa workers. While cheaper off-shore labor threatens programmer jobs, cheaper on-shore H1-B visa workers threaten the jobs of their supervisors. One may duck the direct jab of offshoring but the right hook of H1-B visa workers could knock them out of the ring (that is, their job).
The part that I particularly object to is this:
This is exactly the portion of the population that is most deserving of tax cuts because these are the people producing the wealth of the nation.
You said:
and I agree. This is not about redistribution of wealth, it is about controlling the degree to which wealth is being concentrated in a VERY few hands. You also said:
This is an unproven assertion. I could just as glibly assert, with better historical backup, that running record deficits AND cutting taxes during a time of international conflict (the US is not legally in a state of war at this time, but it is effectively so) will lead to runaway inflation and economic stagnation. This is especially true where the tax cuts effectively take money OUT of an economy that is not really growing in the first place.
The current administration's economic policies are irresponsible to the point of being reckless.
utter rubbish
You don't detail, whether it is the Federal Income Tax, that increases for these people, or the total taxes paid by them. And you don't back the assertions that these people "produce the wealth of the nation" with anything, nor do you say, how much they were paying before and after the changes -- may be they are still well rewarded for their heroic wealth production. In other words, you are spinning...
I strongly dislike the increase in government spending too.
In Soviet Washington the swamp drains you.