Offshoring IT

prostoalex (Alex Moskalyuk) writes "After the Presidential election process and U.S. foreign policy directions, outsourcing is a topic guaranteed to stir up heated debate. Bill Blunden's Offshoring IT is not a 'how-to' guide, as one might expect from the title. It's a collection of stats, figures and opinions on outsourcing information technology to foreign providers." Read on for the rest of Moskalyuk's review; watch out too for my upcoming review of N. Sivakumar's Debugging Indian Computer Programmers: Dude, did I steal your job?. Offshoring IT author Bill Blunden pages 138 publisher Apress rating 5/10 reviewer Alex Moskalyuk ISBN 1590593960 summary The good, the bad and the ugly (but mostly the bad) on IT offshoring

Bill Blunden is the author of Cube Farm - a humorous autobiography and story of author's fruitless employment at Lawson Software. A physics major faced with the grand prospects of waiting tables after college graduation, Blunden is not a newbie in the unemployment world. Offshoring IT promises to give the reader "the good, the bad and the ugly" of IT outsourcing practices.

The book is not very long -- just five chapters -- but it's thorough, as each chapter packs data and statistics from various government and commercial reports. "Setting the stage" talks about general trends in the software industry and cost of education. "Measuring the trend" tells the reader which companies outsource, why they outsource and who's helping them with outsourcing. "The Offshoring Obstacle Course" describes existing outsourcing processes - when exactly should company start thinking about outsourcing, what type of jobs is most likely to go offshore, what's the difference between India, Ireland, Israel, Russia and Mexico. Finally, "Arguments in Favor of Offshoring" made it into the book just because the publisher requested a fair look at the other side's arguments (which shows which "side" Mr. Blunden is biased towards). "Arguments Against Offshoring" is truly the author's work with major myths and excuses about offshoring debunked.

Blunden points out that in order to compete in the global marketplace, countries like India invested in their educational system and constructed high-speed data networks, which provided the foundation for companies popping up with the capability to take over remotely as call centers, software development houses, and R&D departments. Meanwhile, the cost of going to Ivy League schools keeps going up, leaving the fresh graduates with six-digit debt -- debt which the Student Loan Corporation (division of CitiCorp) expects to be promptly paid. The cost of college education for those who choose to go this route stipulates adequate pay requirements after graduation, and in the world where IT is going offshore, the paycheck is often just not there anymore, which leaves the fresh grad owing money and needing immediate retraining or a career switch.

The book delves into specific industries and companies, looking at the outsourcing numbers and potential for jobs to be offshored. Blunden notes that while corporations made their offshoring figures public before, lately the backlash against going offshore has made PR departments suddenly avoid the topic. Blunden refutes the argument that only low-level jobs are being outsourced and points to Intel designing CPUs for wireless devices on campuses in India.

Chapter 3 focuses on reasons for outsourcing. According to Blunden, the more face-to-face interaction and management effort a job requires, the less likely it is to be outsourced. At the same time, many companies are currently exploring offshoring some of their projects, claiming that only non-essentials are going abroad. Outsourcing of small projects allows them to establish the necessary processes and test their service provider, so that when a bigger project comes along, the management can feel safer working with the same offshore provider.

Chapter 4 deals with pro-offshoring arguments. Even though the author states he only had to write this chapter to satisfy the publishers, the arguments he picks are ones that appear in the press quite often - namely, that offshoring means more efficient allocation of resources, better revenue projections, and increased shareholder value. In Chapter 5 Blunded goes on a crusade to discredit these arguments, though, saying that offshoring does not benefit average Americans, that only the top 5% of income earners benefit from increased shareholder values, and that frequently top management receives additional benefits while laying off the proles.

While the first two chapters of the book are filled with data, numbers and statistics, the last three chapters mostly read like an rant on the current state of affairs, which many of us may have gotten for free from the older members of the family at Thanksgiving. Blunden does have some valid arguments about the increased danger to national security and wealth due to offshoring, but you can't help but notice the feeling that the author feels entitled to a job provided by an American corporation, even though corporate America is bad-mouthed in the next sentence. To give Blunden credit, he mentions that sometimes reasons for offshoring include the low popularity of call-center and data-entry positions in the U.S. Americans view doing support for AOL and data entry for Cingular as grunt jobs, just temporary positions on the way to a better life, while for many Indians it is the ultimate career, and are thankful to the provider for giving them the opportunity.

Blunden also does not distinguish between different types of IT workers. The aforementioned AOL support soldier and top NASA scientist, designing microcontrollers for the next space mission would be aggregated into the same "IT worker" category. There's little detailed statistics on what sectors of IT are prone to outsourcing and which are pretty stable to be in. Sometimes the author plays little tricks with the reader to make his points across. On p. 106 he talks to an invisible IT manager: "Sure, you can hire six Indian engineers for the price of an American engineer. But if an American engineer can do the work of six Indian engineers, what's the difference?" Oops. Notice how by the time we get into the second sentence the equality in price gets substituted by equality in productivity. Just because 6 Indian salaries would equal to one American, the author assumes the productivity level is going to stay the same, making the example nonsensical, since why would you outsource if it's the same money and the same productivity?

Overall, it's an interesting book to read, although somewhat depressing, as it provides little pointers into how do the readers stay competitive in this marketplace or what needs to be done on the personal skills level to make oneself more valuable. You can definitely tell which side the author is leaning, but subjective writing makes the reading more interesting. Nevertheless, the title does leave an impression of being one giant complaint about the current state of affairs, and I don't think I will be re-reading it. Perhaps just loan it to my friends, who are in college pursuing IT-related careers.

In an attempt to stay up-to-date with his skills Alex reads and reviews many programming and technology as well as keeps the list of free ones available on the Web. You can purchase Offshoring IT from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Comments

...Israel?

[Penguinisto]

Politics aside, one would think that storing company trade secrets and/or data in a place that sees way too many explosives going off wouldn't be an obvious first choice.

Nothing against Israel (I personally support their efforts as one of the only democracies in the region, and they do have the toughest military on the planet), but one would think that the Middle East would be fairly low on the list of places to put one's IT future.

(Then again, considering the fights over the Kashmir in India, and the Mafia in Russia, etc etc... maybe it wouldn't be nearly as risky? As a guy in the US, The more one looks at it, the less one would sanely want to put their property at risk outside of US or EU borders in the first place...)

/P

Re:...Israel?

[kahei]

The EU, land of safety and home of the IRA... basque seperatists... Red Brigades... Jean-Marie LePen... and coming soon to a European Union near you, those Kurd-slayin', Armenia-crushin', fun lovin' Turks!

Outsourcing made simple

[HMA2000]

Two parties will not willingly engage in a trade unless both parties are better off afterwords than they were before. Discouraging trade to the benefit of a small minority of people (those who will lose their job to outsourcing) while hurting the vast majority of people (those who will receive the outsourced jobs and the consumers that will receive the products produced with more cost effiecent labor) is a recipe for disaster. This works at all levels of economics.

Re:Outsourcing made simple

[ASCIIMan]

Correction: Two parties will not willingly engage in a trade unless each party thinks their party is better off afterwords than they were before. Economics is not what you learned in school.

Re:Outsourcing made simple

[antifoidulus]

Except you neglect to mention that offshoring isn't trade, it is simply receiving services in exchange for green pieces of paper, and it cannot last(and given the way the dollar has been sliding, will not last). When you talk trade I think of actually trading stuff, ie some programmer in India makes some app, but in return buys some manufactured goods in the US, but ironically despite all the Indians I see on message boards spouting the value of free trade, India's economy is one of the most protectionist on earth. So until Indians start buying American stuff, I am going to resist outsourcing, not because I am against free trade, but because this shit is not trade.

Re:Outsourcing made simple

[TopShelf]

I suggest you sign up for some Economics 101.

Goods and services are both aspects of economic activity that provide the benefits noted by the original poster. The only substantive difference is that it's more difficult for officials to track trade in services since you don't have the same documentation available as when goods pass through Customs.

Re:Outsourcing made simple

[Waffle Iron]

Two parties will not willingly engage in a trade unless both parties are better off afterwords than they were before.

However, what's good for an individual party is not necessarily good for the nation as a whole. For example, if I dump my used motor oil down the storm sewer, that's good for me because I got rid of my old oil quickly and cheaply. However, it's not good for the well-being of my neighborhood.

A similar situation holds true for the trend of offshoring all of our manufacturing and engineering know-how. For each individual transaction, outsourcer may temporarilly come out ahead and have an advantage over their domestic competitors. However, over the long run, the net effect of this group behavior is to transfer this country's technical know-how to foreign countries while simultaneously letting our technical skills atrophy. After enough time, we lose control over our own future because we become dependent on foreign suppliers for even the most basic products. Moreover, the fact that currently we export far less than we import is creating a massive debt situation that may one day lead to a financial crisis.

Eventually, we dig a hole where we've lost basic capabilities that are vital to our economy, and regaining it would require re-bootstrapping entire industries from near zero. If too much of this happens, it begins to become a national security issue. Much more is at stake than any one company's next quarterly earnings report, but that's the only factor currently driving this trend.

I believe that a better approach to increasing the productivity of the US economy is for companies to invest more in automation. It's more work up front, and a lot of jobs would still be lost, but at least we wouldn't be simultaneously forgetting how to make vital products, becoming more dependent on other countries for our survival, and racking up staggering foreign debts.

Re:Outsourcing made simple

[baalz]

I'm so tired of hearing arguments in this vein. Just like any utopian ideal the perfection of a free market breaks down in the real world. There are many, many things which complicate the issue beyond the "economics 101" stage that people for some reason incessantly parrot (hint: there is a reason there are classes above 101). The free market is not some divine mandate which me must uphold, and neither is it anywhere close to perfect in the real world. Your argument seems to be that a total hands off approach will maximize the benefit to society. The problem with this oversimplification is the factors you're not taking into account. Here are a few, I'm sure your imagination can come up with more.

1) American policy should be based on what's best for America. The benefit to other countries doesn't significantly enter into this consideration.

2) The benefit of cheaper products for American consumers is offset by the decrease in buying power. Wealth concentration is increasing, and the middle class is shrinking. Look at the bigger picture. If executive salaries are skyrocketing while money is pouring out of the country, where do you think the money is coming from?

3) Displaced workers incur a cost on society. In the best case scenario they are retrained, presumably at a non-insignificant cost for some other high-skilled job. More likely they work a more menial job, slipping down the economic food chain and contributing less than they were in taxes and using a larger portion of government funded programs.

4) Cost to society is more than a dollar value. Even IF there is a positive sum transaction displacing workers where every single worker manages to find a comparable new job there is a psychological cost. How much time has the Slashdot collective spent stressing about long term job prospects? What about white collar workers in other fields who can see the trends? What about people who have to move away from friends and family for a new job? Or work in an area which is less fulfilling to them? These costs are impossible to quantify, but are an example of intangible costs.

5) Where does this trend leave us long term. Even if every individual transaction is economically beneficial, what other impacts does it have? The collapse of the middle class is one possible impact. Rampant inflation as the US dollar fails is another. These are really other topics of discussion, I just mention them to illustrate that there are more considerations than A + B > C

Re:Mini Ask Slashdot

[jellomizer]

Find jobs that you need to be in front of people. This includes support, Consulting, Networking, and Maintenance of current application. Also try to be in front of your customers Eyes a lot dont lock your self in the office and only comunicate by Email and Telephone. When you are in front of the customer/Employer they feel more connected to you and you are less likly to be outsourced.

Unfounded anxiety?

[Ikn]

To be honest, it's stories like this that make my hesitant to go the IT route now that I'm in college, though I think I'd enjoy it. I wonder if there are others with me, and how big of an effect this might have in the supply of IT workers in coming decades?

Re:Unfounded anxiety?

[KontinMonet]

When I first started in the IT business (many moons ago), wages were excellent and the politics were bearable. Over the decades following, I have seen wages fall in real terms to about 1/3 of what they once were. Meanwhile, the politics in IT departments are about as vicious as any Brussels or Washington back (and front) stabbing operation.

IMHO, the trend downwards on both counts will continue with outsourcing. I now tell anyone who wants to join the over-stressed lifestyle of IT development world to study who they might work for, and what they might work on, very carefully indeed. And keep up with all the technologies, re-train yourself in something every two to three years. How many people out there lost out because they stuck with Fortran, DFDs or VMS? I know some, albeit a very few, gained because those skills became scarce but in general, you end up in a dead-end maintenance job if you don't re-train regularly.

Re:Mini Ask Slashdot

[gcaseye6677]

As long as you can bullshit the HR person and then do well in a technical interview, you should have no problem. Few employers will care about your GPA unless it is really horrible. I was only asked about my grades in maybe 2 out of 10 interviews and only one employer wanted to see transcripts. Being tall and friendly will help more than you would think.

You sure about your example?

[inetuid]

"Sure, you can hire six Indian engineers for the price of an American engineer. But if an American engineer can do the work of six Indian engineers, what's the difference?" Oops. Notice how by the time we get into the second sentence the equality in price gets substituted by equality in productivity. Just because 6 Indian salaries would equal to one American, the author assumes the productivity level is going to stay the same, making the example nonsensical, since why would you outsource if it's the same money and the same productivity?

Dude, isn't the the author's whole point?

Re:You sure about your example?

[shis-ka-bob]

You are dreaming if you think that the average American IT employee is six time more productive than the average Indian IT worker. As a group, the Indians that I have met are well educated, with significantly better math skills than most US workers. They have excellent English, often with better grammar than us. If we are competing on a 'large coding' contract, it is uncommon to be able to justifly the huge rate difference

However, the dollar is devaluing. This raises the cost of the Indians relative to the Americans. It also makes the Indians richer. This is how the market is supposed to work. We will reach a more level playing field. But is is one that many Americans won't like. Many economists are becoming increasingly concerned with a 'melt down' in the value of the US dollar. Think about this from the view of a foreign banker. They keep putting reserves into dollars, and we keep driving down the value of dollars. Before long, they are going to prefer Euros and Yen for their reserves . If they walk away from treasury bills, we might see the 'dollar melt down' scenario. As long as we are running trade and budget deficits, we are going to see the dollar devalue. So, in a rather perverse way, the policies of the current administration are reducing the danger of outsorucing.

Staying competitive?

[kahei]

Well, in answer to the reviewer's doubts, the key to staying competitive in the marketplace (as a worker) is to actually know something, like biochemistry or exotic option valuation or how to flatter to auto company executives. IT knowledge is a perfect adjunct to the real skills that get you a job. That's the same as ever.

In terms of what to do about the increasing concentration of wealth made possible by advances in comms, transport and free trade, though, I dunno.

If in doubt refer to ancient Rome -- they lost their well-off middle class in a few short decades once the Senate families had gained enough leverage to begin consolidating huge estates. Those Romans who still remained socially mobile (as opposed to the other 95% whose families were plebs forever) did it by going abroad and setting up shop in ever more remote and volatile provinces, often via the armed forces. Note how the age of consolidation of wealth in Rome came at around the same time as the major wars of foreign expansion and the shift from kinda-sorta democracy to straight up God-Emperors.

In other words, at the same time as Roman wealth became immobile (locked up by the major families that ruled Rome) the increasingly aggressive foreign policy made new, more mobile wealth available. This might happen again.

As a member of the 'reading slashdot at work' class, I have no ambition to share in it :)

Dude, did I steal your job?

[Anonymous Coward]

Only if you consider any job on this planet to be an American job first. Just another example of American arrogance.

Re:Dude, did I steal your job?

[JavaLord]

Only if you consider any job on this planet to be an American job first. Just another example of American arrogance.

No, just American jobs should be considered "American first". most other countries (including India) engage in some type of protectionism for their workers. Not only is it for their workers, but it's a matter of national security also. If most of your cars are made overseas, who will make your tanks in a time of war? If most of your technological items are made overseas, who is going to manufacture your weapons in a time of war? If most of your IT labor is coming from overseas, who is going to maintain your important computer systems? If most of your food supply comes from overseas who is going to farm for food after your supply is cut off or poisoned? If most of your energy (ie OIL) is imported from overseas, what are you going to do when that supply is cut off?

This isn't "American arrogance" it's common sense. Outsourcing whole industries can put your country at risk. Most countries are smart enough to realize that.

Re:Dude, did I steal your job?

[GoofyBoy]

>just American jobs should be considered "American first".

Its "American arrogance" that is blinding you to the fact that Americans are the ones outsourcing American jobs.

Americans are screwing Americans. Gee, I suppose its is "American first".

Re:Dude, did I steal your job?

[NamShubCMX]

Although I disagree with the tone of your post, I must add that the indian guy DIDNT STEAL YOUR JOB.

Your CEO shipped your job to him for the shareholder.

Can't really blame the other guy now... right?

Re:Mini Ask Slashdot

[stinkyfingers]

I was in your boat. I graduated from a near-Ivy (think UNC, Northwestern, Stanford, etc.) with a *very* mediocre GPA (literally, find out the lowest GPA for which they'll give you a degree and add less than 0.1). I've been employed in the field of software engineering for every day of the 10 years since I've graduated.

Want to know how? It's all about exhibiting a willingness to work hard and take pride in your work. I've worked with guys who were smart, but of course, they thought they were too smart. It showed in their work because they couldn't do the job asked of them rather than the job they thought they should be doing.

Spend the rest of college passing your classes, of course, but also work on your interpersonal skills (drinking and partying foremost upon them). Oh, and stay out of serious trouble. If you can get a security clearance, you can always find a job in the field.

Outsourcing isn't new at all

[TopShelf]

Americans view doing support for AOL and data entry for Cingular as grunt jobs, just temporary positions on the way to a better life, while for many Indians it is the ultimate career, and are thankful to the provider for giving them the opportunity.

The same could well be said for a wide variety of low skill jobs, which have been both outsourced (foreign manufacturing) or relegated to immigrant labor (meat packing, general labor, etc.). America has a strong cultural bias that looks down upon "low-skill" work, which has long provided an opportunity for other countries to fill those gaps in our labor markets. The difference now is that the competition is taking on the white-collar workforce as well. Horror of horrors!

Give us our cheap foreign-made manufactured goods, but don't you dare let them hammer out code as well!

Personally, I think it will be interesting to see how the currency trends of the past year (which are likely to continue in the same direction) affect outsourcing. American labor is getting cheaper day by day...

Re:ECON 101 for techies

[jellomizer]

While although I think the parent post was ment as a troll, there is a point. A lot of lot of the techjobs out there actually require little skills out there. With my BS in CS I am doing work that that is trained for people with 2 year degree. An people with a 2 year degree are doing things that most technical people can do out of highschool, sometimes Jr. High. Because all the old people are afraid or don't have the time to understand computers they push the jobs for us and they pay us well because there are a lot of people afraid to open up a PC and Swap a hardrive, or even try to think about computer programming. The skills themselves are not hard and anyone can do it for most of the jobs out there. But because of the fear and misticsm behind computers we are looked on as magic users thus get paied well for our work. As time goes on expect our income to drop more as more people realized what we do isn't as hard as it seems. Our jobs have lost the ohh ahh status and down to a normal job status. And most of us feel left down because we put a lot of effort in getting a high paied easy to do job and now the payoff isn't as big as you expected. Or for other people who mad a lot of money and now had to take pay cuts while there expenses are still at the high payed money. I feel for them because I am in the same boat with a Car Payment more then I can comfortably afford because when I bought the car I was getting 10k a year more. But the truth is that job salaries are based on supply and demmand as well

Length

[Peden]

"The book is not very long -- just five chapters -" Since when was a book's length defined by it's numer of chapters?

Re:Mini Ask Slashdot

[superpulpsicle]

Sounds to me like you are suggesting U.S workers should stick to the lower paying jobs... support, maintainance etc. While letting other countries have all the high paying hard-core engineering jobs.

Re:Mini Ask Slashdot

[Anonymous Coward]

Will my computer science degree land me a good job in the field, or will I have to teach (respectable, but I would rather not personally), or join the military or something to be doing something that involves my expensive education in a meaningful way?

My advice: Get a sex change, then take up a life as a street hooker. You'll get fucked over slightly less, and won't have to worry about your job getting outsourced.

Looking down

[kahei]

America has a strong cultural bias that looks down upon "low-skill" work,

Pity America tends to look down on academic achievement as well...

The difference now is that the competition is taking on the white-collar workforce as well. ...whoops.

A Bit on the Racist Side

[boutell]

In the finest slashdot tradition, I would like to take this opportunity to suggest that purely on the basis of a quote in a review, the author's views sound a wee bit racist. Specifically, I don't think the reviewer goes far enough in his criticism of that quote about one American engineer doing the work of six Indian engineers. I can see a rationale for one American call-center employee equaling several offshore employees, maybe -- if the Indian call-center employees are not as culturally as well as linguistically fluent in American, so to speak. But that's a tough argument to swallow with engineers; cultural barriers are much less relevant there. And the Indian engineers I've met are no slouches, either.

Re:A Bit on the Racist Side

[Duhavid]

There is value to being local, even in code. The knowledge of what needs to be done is embedded in subject matter experts "in" the business, for the most part. Having the ability to meet, talk ( time zones ) and show progress is enhanced when the developer and the SME are easily accessable. Also, I presume that the author was considering that the local developer had probably been working on the project for some time, giving them the domain knowledge needed to successfully complete the project. Compared to a fresh new outsourcing partner, that *is* an advantage to the local developer.

Another related note, it is difficult to fully specify what you want built, even when you are a big shop that has experience with specification work. Even assuming both developers ( local and remote ) having the same knowledge of the domain, the ability to duck over and have a few words *right now* are invaluable. ( Not that I expect a PBH to understand this.. ).

Another unrelated note. Working for an Indian company producing a product for company "X" in America, and being an American working in company "X". Who would you expect to put company "X"'s priorities first?

I dont think that racism is nessesarily present.

And no, Indian engineers are no slouches. Neither are American ( caviat, I dont include the "I can do a website, but nothing else" in "engineers". )

Re:A Bit on the Racist Side

[theonetruekeebler]

Stop thinking "Indian Engineer" and start thinking "Engineer in India" and you'll find your insinuations much less significant.

And Racism != Cultural Bias. Relationships between coworkers, between superiors and subordinates, and between employees and customers, all become substantially easier when they share a cultural frame of reference. Granted, engineering and other technical tasks are culture-independent, but (and this is important) only after a fully mutual understanding of the nature, purpose expected results of the work have been established. Cultural barriers can make those a genuine PITA to understand.

I have worked with many dilligent and extremely competent technical people from all over the globe. One extremely sharp fellow I worked with, when he was fresh off the boat, was given the task of putting together a UI for a set of data tables. His design and aesthetic decisions were appalling---from the point of view of our American customers. So I showed him an existing, well-liked design and told him, "Do it like this." He did, and it was excellent, as was all his subsequent work. Why? He got the cultural clue he needed to respond to his customers.

Again, race != culture. Cultural difference can cause a huge barrier even when race is totally irrelevant.

It cuts both ways: I work for a company in India

[MarkWatson]

Since I live in the mountains of Northern Arizona, almost all of my work is telecommuting. For the last 8 months, I have been working for company in India and it has been working out fairly well. Sure, I don't get the same pay as I did when I worked in an office in San Diego, but flexible hours so I can spend more time with family and friends makes the whole thing work for me.

With the US economy heading south (foreign central banks finally seems to be dropping the dollar) I think that it is time for us in the US to realign our priorities:

1. avoid debt like the plague - unless you need to literally borrow to feed your family
2. consider doubling or tripling the amount of time you spend on "self education" to stay globally competitive
3. learn to totally appreciate non-material things like love of family and friends

I think that by and large things will be OK here in the US as long as people adapt to a sliding material life style. (It would also help a lot if everyone tried harder to conserve petroleum products! The patriotic thing to do is to try to help reduce the trade deficit.)

-Mark

Re:Mini Ask Slashdot

[soxin7]

Although I believe that is some sound advise you espouse wrt job security, the trend in offshoring is a macro economic topic. The decision to offshore anyone's job will probably not be affected by how much or little time you spend out front as opposed to hidden away in your office. Rather the decision is made from execs who probably do not even know you work there. They want or need to take advantage of the real (or percevied) benefits of offshoring, namely cost/benefit. Thus if they can find a way to make the 'wdiget' cheaper, they will. So the question remains, how can someone thousands of miles away be in front of the customer? Well they can't in the traditional sense. But if you can change customers attitudes while providing something which is 'good enough' and cheaper, then it is probably something which will be considered worth the risk or at least trying.

Built-in outsourcing

[Anonymous Coward]

I think it is ironic that the law of supply and demand only applies overseas.

A company in the US sends jobs overseas because it is cheaper. It is cheaper because the cost of living is lower, and there are more people so the cost (salary) for each one is less.

Yet, here in America, you could have the same thing, but it would take these same companies investing in their own communities first. For example, if a company were to spend money educating the future workforce in its own community, there eventually would be an abundance of qualified people right here at home. More supply = less cost, right?

And if people would stop shopping at Wal-Mart et al. and endlessly consuming the goods made overseas, we'd eventually have lower cost of living here as well.

I have no sympathy whatsoever for someone who loses their job due to outsourcing. Losing your job sucks (it happened to me twice in one year, but not because of outsourcing), but my guess is the people losing their jobs are the same people demanding 32" color TVs for $200, DVD players for $40, gallons of pickles for $2.97, and shopping at dollar stores.

All we do in America is consume. Everything in America is disposable. Why can't jobs be disposable, too?

You reap what you sow.

Re:Mini Review

[pkphilip]

Talking of English - what makes you think that Americans speak better English? Care to back that up? A lot of Indians speak much better English than many Americans.

Re:ECON 101 for techies

[mankey wanker]

Man, is the parent post poorly written...

Your main problem is that you think what you do is easy. Doctors think being a doctor is easy too. Lawyers, same thing. For anyone without the requisite skill set, it is *NOT* easy at all. Now I do not refer to swapping out a hard drive, but how about figuring out a hardware conflict or some other more complicated software engineering issue? How about setting up some basic security for a 24/7 connected system? We slashdot types read and study these issues daily for what amounts to hundreds of hours a year - and the average person is willing to pay good money so that they do not have to do the same. Could they do the same thing? Sure, they can all become doctors and lawyers too, right?

What you really have to understand is that half the population of the U.S. is so stupid that they couldn't even be bothered to discover the true findings of the 9-11 Commission and voted Bush and his "lootocracy" back into power. Where do you think that level of intelligence leaves them when their mouse driver suddenly goes wonky on them?

A fellow IT person is not going to hire you, but what about the millions of soccer moms? How about their husbands at work?

With all that said, I wouldn't bet much on the progamming part of the equation (even though it is harder and requires greater intelligence in my view); you have to bet on the service side of things and work on your people skills. Good communication skills will help, as will a better grasp of basic grammar and a spell-checker.

Re:Mini Ask Slashdot

[cayenne8]

" Unless you live in an area where there are already tech/IT jobs, be prepared to move, or work at Best Buy. "

I agree...you gotta be mobile and willing to go where the work is in the US.

Try to get a decent job..stay with it a couple-three years..and then, I'd say look into getting into the contracting circuit...do some consulting, etc. Being young and mobile..this is the way to go, nothing holding you down in one place. You get to do many jobs...never get stuck in a boring dead end job..you can be independant...etc.

Today...there is no such thing as company loyalty to the employee anymore...so, if there is no real job security in a direct job...might as well make contractor money if the job security is the same either way...

Re:Not all Americans get screwed

[mankey wanker]

And who will buy these new cheaper products when they are on Wal-Mart welfare? Short-term you may be right; long-term your strategy is called "shooting yourself in the foot."

You need a robust middle-class in the U.S. unless you just intend for the U.S. to become a third world labor market.

Is that your purpose, you cheap labor republican?

Do you shop at Walmart?

[SirLanse]

You gripe about losing jobs:
Are you walking in shoes made in China?
Are you wearing clothes from Malaysia?
Are you driving a car from Japan?
Do you shop at Walmart?
Who do you think you will get sympathy from?

It is not in our best interest to build up India.

[i41Overlord]

You are correct when looking at it from the overall world view, but we're talking about decisions made by the US which affect the US. Right now we have the money and we're quickly giving it away with these huge trade deficits.

Yes, eliminating outsourcing would hurt the vast majority of people who benefit from outsourcing. Most of those people live in China/India. But it would help the minority of people- those who live in the US. The average US worker does NOT benefit from outsourcing. Sure, the TV he wants is now half the price. But he can't buy it because his job is about to go to India. And if he does still have a job, that TV isn't such a great deal anymore because of the pay cuts he took to compete with foreign labor. So now we're back to square one, with the exception that another country has skimmed off the money.

Whereas before all the money stayed within the US, now it is permanently leaving our hands. Whereas before goods cost more but your town was in better shape because people had good jobs, now goods are cheaper but your town has declined because people have lost their jobs or taken pay cuts (and at the same time a town in India has been modernized with your money.)

Outsourcing is a short term solution whose long term affect is mainly taking money from the American workers and distributing it between American execs and the population of third world countries. It has a sapping effect on America. Those who make the decisions (execs) do benefit greatly, but for every American exec there are thousands of American workers who are losing out.

The US has a very small population compared to China/India. They could take every one of our jobs and still have hundreds of millions of people left over to fight over those jobs.

And this isn't uniquely a problem the US has to deal with. European counties, with their small, relatively highly paid populations are subject to the same demise. Who wants to pay a German engineer $50,000 when you could pay a whole team of Indian engineers the same wage?

"We are undone, my dear sir, if legislation is still permitted which makes our money, much or little, real or imaginary, as the moneyed interests shall choose to make it." -- Thomas Jefferson"

Simple answer!

[bstarrfield]

Outsourcing exists to cut labor prices for those who control capital (either physical or intellectual) so that they may earn a higher profit. That's it. Nothing more. It doesn't mean that society benefits, or that a nation will be richer after trade. All that matters is reducing the cost of labor.

Ricardo's theory of comparitive advantage assumed that labor and capital was essentially restricted to individual countries, and could not be exchanged. Ricardo did not foresee a situation where all labor costs would be cheaper in a differing nation. Put very simply: where, exactly, does the US have a comparative advantage vis a vis India?

If you want the US to "compete" against India and China the only way you can do so is to drastically cut US wages. Hence, a side effect of "free trade" is a "race to the bottom" where worldwide wages plumet to that of the lowest cost labor market. The net effect would actually be more economic efficiency - more goods produced at a cheaper price - but the effect on a Western nation would be - is - disasterous.

What's good for the capitalist is not necessarily what's good for the country. Should the wealthiest - say the Walton family - be made wealthier in order to sacrifice literally million of American manufacturing jobs? The benefits of offshoring are received by just a few, the costs impact all of society.

Besides, there is no "free trade." The Chinese currency (Yuan) has been kept artificially low vis a vis the dollar for years. The Chinese government has access to prison and forced labor, lower enviornmental standards, etc. that put the US at a distinct disadvantage.

Let's stop it with all this racism, okay?

[dominion]

What we need to understand here is that tech workers have experienced in 4 years what it took 80 years for auto workers to experience.

Job starts out as highly technical skill relegated to a privileged elite of the working class.

Job gets automated and simplified, pushing skillset availability to more and more people.

Job gets outsourced to placed with cheaper labor.

It's not the fault of the Indians that our tech jobs moved there, just like it's not the fault of the US Southerners that our auto jobs first moved there from the north, or the fault of the Mexicans that they moved there, or the fault of the southeast Asians that they moved there.

This is how capital works. Whoever can be best exploited gets the contract. Do you have no labor laws, a brutal dictator that puts down unions with bullets and tanks, and a crushed, oppressed populace willing to work for pennies? Well, then, sign up, because you're ready for investment!

India is getting the US tech jobs. They won't have them for long, because they have a pretty well functioning democracy, strong labor laws, and all the things that corporations prefer not to have to deal with. Plus, these tech centers are usually run like white collar sweatshops, and as soon as people there start to organize and form unions, the outsourcing will high-tail it out of there to somewhere a little less problematic (ie, free).

That's how things go, and I'm as against free trade as anyone, but the idea that you can stop it with protectionism and a "Buy American! (tm)" attitude is ridiculous. Look at how far that got the auto industry.

The only way to change the face of outsourcing and globalization is for the AFL-CIO to get off their asses, and stop sending millions to the Democrats (who have sold them out over and over), and start investing money in union movements in the countries where the jobs are going. If corporations are going to move a job somewhere else, we need to make damn sure that the new people they employ will have a good wage, decent hours, a union, and a safe, sane working environment.

Will the mainstream unions (or tech workers for that matter) ever start supporting overseas labor movements? I hope so, but I don't have much faith. Everybody's too wrapped up in this xenophobic, protectionist BS that won't get us anywhere.

We also have to look at IT as far less "special" than we thought it was. We are not the gifted wunderkind of the world. We are not the digirati, forever sipping lattes and controling the world from our laptops at the beach. We are nothing more than skilled labor, working folks who will be screwed over by CEO's and their profits, just like everyone else.

Once we realize that, then we get out of the dream world we've been inhabiting for way too long. And that's when the real fun begins.

labor

[totipotentsoul]

The real problem with outsourcing is that we are training the rest of the world to do our jobs better. We create labor forces that will eventually undermine our own national economic security. I don't think that Americans are innately entitled to these jobs, but that's really not how national security works.

Modest-ish proposal

[sjames]

A key for Americans who need to survive outsourcing is to become as inexpensive (once time and language barrier are considered) as offshore labor.

In turn, this means reducing cost of living so that the (much) lower income is sufficient. For that, I recommend offshoring the ofshore-ers. That is, We need to skip the American middleman and buy our goods directly from the source for dirt cheap.

This is how 'the rest of us' can effectively offshore the jobs of the managers who are offshoring our jobs.

Somehow, I'll bet the same American companies who do the most offshoring will suddenly line up outside of congress screaming bloody murder about the need to protect America by forcing us to buy from them!

The real problem is impedance mismatch between economies. Offshore workers cost less because the goods and services they need for a decent living are much less expensive and because of the exchange rate between U.S. dollars and their local currency (though that seems to be changing lately).

You are joking right? Murphy was an optimist.

[Stuart Poss]

Your argument that investing abroad is relatively unsafe seems rather peculiar to me given current sociological, financial, and political trends.

The U.S. has the highest rate of murder and deaths due to gun violence than any other industrialized country. Northern Ireland gave us a run for our money for many years, but of late the worst of their political troubles seem behind them and they are falling from challenging us on this point? Regrettably, Iraq seems to be the new nation attempting to challenge our lead in this unfortunate statistic, although the statistics are skewed since we are responsible for many of these deaths (about 100,000 by some estimates; about 10,000 - 20,000, if you prefer to believe only in official Pentagon accounts).

Health care costs are rising as US longevity is leveling off (or falling in some regions of the US; infant deaths are on the rise again throughout the US, evidently in part due to the limited availability of vaccines). With the passage of new rebooblican efforts to better support the drug and insurance industries, we can expect even more Americans to be priced out of the market for health care (now rising at about 7.5%/yr) or be kept out those few courts of justice for which political appointees haven't already made the notion of justice quaint or new "tort reform" laws written by industry lobbies are designed to guarantee. In any event, your chance of dying for lack of affordable medical care is increasing (unless of course you are a politician and then you can borrow other people's money and let them pay for it). Virtually the rest of the industrialized world has state supported health care, so their competitive advantage will only increase relative to ours.

Our current account deficit continues to increase even with the drop of our currency, so in its wisdom our new rebooblican congress has found it necessary over the last year to increase the US debt ceiling 3 times to keep their charge card in working order (one would have thought that borrowing more money in the last 4 years than all other previous administrations put together have in the history of the country would have caused the rebooblican leadership to pause, lest it make the notion of "conservatism" seem more like a mask at a costume ball than a policial ideology, but no matter one will never see an embarrassed rebooblican). In any event, this should guarantee that our currency will continue to weaken at a faster rate. Current US fiscal and monetary policy really only now consist increasing the amount congress and the white (wash?) house can borrow to finance its debt. The fed continues only to create money just a little faster than we send it abroad to make our interest payments in a frantic effort to avoid the inevitable financial panic that will come when the currency falls so much that inflation will rise rapidly requiring the Fed to raise interest rates precipitously relative to real economic growth. Don't worry this probably won't happen until the 3rd quarter of 2005 and it won't start in the US markets first.

The value of the dollar is dropping and consequently, any dollar denominated asset invested in the US is likely to be relative looser, at least over the next 5 years (no one in DC is predicting a surplus before then, are you?). Even today, the White House suggested they were going to put the extra money needed for "solving" the social security crisis on the rebooblican charge card (you know, they charge, you and future generations pay). Add this to those extra tax breaks for wealthy campaign contributors (that really don't start to kick in until this tax year) and you can be pretty sure our currency is headed for the cliff. You are better off putting rupees under your mattress rather than dollars for a good rate of return. Those buying our debt are already beginning to clamber for something more tangible than worthless paper backed up only by debt they largely already own.

The good news is that as the dollar drops, it is more likely that foreigners will b