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Outsourcing To Rural America
An anonymous reader writes "News.com is running a story about Rural Sourcing, a company attempting to make outsourcing to rural America as cost effective as sending jobs to India."
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What I'd like to know is how much money the "inconvenience" factor counts for . . . Sounds like a catch-all category for costs that is used to magiacally make rural sourcing as cheap as outsourcing to India.
Like you, I am from the rural midwest, but was blessed with the opportunity to move back to my hometown and run a good sized network.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
The difference? You can follow your job to Indiana. Even better is that rural areas have lower costs of living, thus making $50,000/yr a very good wage to have.
Honestly, this isn't anything new. In Wisconsin, we had several big companies move (American Family Insurance, Lands End, etc.) because they could run their operations far cheaper while still being within driving distance of Chicago. It's really a win-win situation for everyone.
Javascript + Nintendo DSi = DSiCade
Silicon Valley or Silicon Alley: Get paid $80K, pay 28% federal tax plus 9-10% state/city tax. House costs $500K-$1M.
East Buttfuck, Wyoming: Get paid $50K. Pay 25% federal tax plus 0.0% state tax. House costs $60K-$100K.
If you've saved enough money for a down payment in the People's Republic of Kalifornia, you can buy a house for cash in rural America. And if you've been there long enough that you actually own your house in the People's Republic of Kalifornia, you can sell it, buy a house and a Ferrari, and have change left over for a fucking Porsche in rural America. That's right.
Wanna visit the opera? Hop in the Ferrari on Friday after work, tear up the asphalt (long live long straight highways featuring speed limits defined only by the words "reasonable and prudent" -- it's like the American Autobahn!), party your ass off all weekend, and come home on Sunday.
One look at the horrible things he's done to a Ferrari should make any self-respecting geek aspire to make John Romero our bitch. The best part about rural America isn't that a middle-class IT geek can enjoy such a lifestyle -- it's that he or she can pay for it on the interest and tax savings alone.
Who is John Galt? When you leave a high-tax state for rural America, you are.
Face the facts. If you say that India is a outsourcing success story, look at the reasons why. On average, goods in India, barring housing and cars, cost only 20% (or less) of what it costs here in USA. On top of it, the standards of a good life and luxury are far lower than in the US.
In California, you call yourself middle-class if you have a 0.5 mil house, a boat, 2 cars etc. In India, most middle class folks consider a car with a boot as a luxury car (i'm not joking, Hyundai Accent, Ford Ikon, Fiat Siena etc. are considered high-end luxury cars). Even a person driving a small hatch-back considers himself/herself as having acheived something. This is why the big multinationals can afford to pay 10% of what they pay in the US, and still manage to retain a happy workforce!
Add to that, an abundance of intelligent, hard-working, English speaking people, extremely willing to slog for 12 hours a day so that they can save enough over 3-5 years to afford a Maruti Suzuki 800 (yes, it's a ~780 cc car), who can compete with that? Yes, there's still issues, such as infrastructure, accents, timezone differences, etc. and lots of bad apples in the workforce too, but it still doesnt overpower the cost advantage.
It's a bit like how the x86 architecture took over the computer world. People assumed initially, and rightly too, that x86 was inefficient and too cheap. What they didn't count on was that as x86 sold more and more, it also innovated and improved, and very soon, offered a double-whammy cost AND performance advantage over the other proprietary systems. Again, people pad up the costs by factoring communication cost, travel cost etc. What they don't realize is that these costs are firstly, marginal, and secondly, reducing over time.
The cost of living in the midwest or in rural America might be somewhat less than the metros or the coasts, but it cannot compete with the cost advantage offered by countries like India, Taiwan, China etc.
IMHO, rural america can compete effectively with other IT companies. Only, they need to sing a different song. They have to be flexible and play on their natural strengths and not on their weaknesses. For example, if a lot of techies in the small towns and villages got together, formed a virtual company or organization, and offered standardized software solutions to local businesses and institutions, there is NO way that the big city businesses or another country could compete with them. Don't compete on cost, compete on value.
I worked at a development shop in Little Rock, Arkansas for a couple of years before getting married and moving to a very large U.S. city (I think it is #4 currently) when my wife was accepted to medical school here, so I think I'm qualified to do a bit of comparison.
I think that there are a lot of cities in the U.S. in the 100,000 - 200,000 population range that people don't really consider for whatever reason, either as places to live or for corporations. Little Rock, for example, had most of the shopping, dining, etc. of a larger city but without nearly as much pollution and traffic and with a lower cost of living to boot. To respond specifically to some of the comments I've seen in this thread so far: we had Starbucks, pizza delivery, clubs/raves (if that is your thing), a symphony orchestra, and a minor league baseball team (the only thing that I would miss if I moved back would be the professional sports).
I think there is rural, as in one gas station, one stoplight, and a Sonic...and then there is "rural", as in "not one of the 50 largest cities in the US", and I think businesses would do well to look more closely at the latter.
I've been working with outsourcing for over a year and 1/2 now. We've been talking about how we should move to some rural area with low taxes, property values, and housing costs for a year now. It just makes sense IF you can get quality individuals working for you. And it will happen more frequently as fed up highly talented individuals get tired of the rat race and decide to move somewhere, uh, less rat racy. I know of one person on the team who now works from Idaho after moving from Chicago. Do the math, Idaho cost of living is < Chicago and they experienced no pay decreases! Another person moved from Chicago to rural Wisconsin and kept the same pay. If the company is willing, you'll see a migration from the cities to the small towns over the next few years. I personally think it's great. The 80's and 90's were an era of migration from these rural areas where the jobs had been drying up rapidly (I'm a case in point, couldn't get a job in my hometown doing what I do, still can't). Hopefully that trend will reverse somewhat. America is loosing it's small town / rural heritage and I believe that heritage is part of what made America a great place in the first place.
Fat, drunk, and stupid is no way to go through life, son.
...would have a point. Unfortunately for your argument it isn't.
It's true that the US and Canada did conquer many tribes and take away a lot of land, but most of the remaining tribes weren't conquered, rather they tended to settle with the US and agreed to a series of treaties. Eventually the US government decided to settle with the tribes uniformly so they could co-exist with the states, while being bound by federal law.
Now, if I can address you last comment.
Personally, I think the Indians should feel lucky that we gave them anything at all instead of just assimilating them into our society as just one more ethnic group in the already-growing melting pot.
If you were an Indian, that statement would probably sound a lot like: Personally, I think the Jews should feel lucky we didn't gas and incinerate them all.
While saying circumstances could always be worse is technically a valid point, it's appalling and bad form to use it to play down culpability for any atrocity.
Cool! I'll be by soon to shoot you and take your land. You might mind, but I don't care! Fuck you, you fucking fuck! It'll be mine soon, 'cuz whoever has the most guns wins! I'll also kill your whole family, just for kicks. Yeehaw!