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In SIlicon Valley: Profits up. Employment Down.
popo writes "The New York Times (free yada yada) has an interesting report on the changing landscape of Silicon Valley tech companies: Profits are soaring but employment figures are not. This dynamic points to significant future shifts down the road for Silicon Valley companies like Electronic Arts and Cisco. Interestingly, the culprit isn't just outsourcing. Huge leaps in worker productivity and automated processes are also responsible for the decreased need for new labor."
We're talking about Silicon Valley here, isn't that where most of the automation is coming from in the first place?
I for one welcome our new self-automating IT-overlords.
Not to mention the recent trend (last 5 years or so) of mandatory overtime... If everyone works the equivalent of 1.5 people then employment doesn't need to go up. Profits are starting to match effort level, and that effort level will just equal burnout eventually. When that happens, employment will go back up or profits will start to go down.
This sig used to be really funny...
Right Here
Have you Meta Moderated t
Where are those profits going? To the low level workers that actually make it happen, or to the CEO who is already wildy rich? I wouldn't be surprised to see wages not going up for the majority of workers despite increased profits.
Game! - Where the stick is mightier than the sword!
... even more so.
Programming is teh act of automating complexity, typically made up of less complex, but still the same...automations. It is done so that the user of the complexity can use and reuse the complexity thru a simplified (in relationship to the complexity) interface.
With this it is inherent that the field of programming is something of a job intended to work itself out of a job... Otherwise there is a serious problem exposed in the software industry.
There will always be jobs in programming but tasks will change and as programming automates more and more of its own field, simplifying the process, so will it allow more and more to do programming/automating, for themselves, perhaps not strickly as a programmer 9-5 but as a task to do as part of other main duties of onmes position at a company.
Simply understand the inherent objective of progamming and carry it on out in its evolution..
But also the much higher overtime in larger corporations on scales than was traditioally only seen in startups.
And the fact that a lot of the new things are not outsourced as such, but still developped by small companies and then bought by these large ones.
"The prospect of technological leverage will of course raise the specter of unemployment. I'm surprised people still worry about this. After centuries of supposedly job-killing innovations, the number of jobs is within ten percent of the number of people who want them. This can't be a coincidence."
-- Paul Graham (2004-09), What The Bubble Got Right
(If the doom-sayers were right, then there would be a total of ten jobs in the world today.)
In the last three years, profits at the seven largest companies in Silicon Valley by market value have increased by an average of more than 500 percent while Santa Clara County employment has declined to 767,600, from 787,200. During the previous economic recovery, between 1995 and 1997, the county, which is the heart of Silicon Valley, added more than 82,800 jobs.
And this is happening all over the place, not just in Silicon Valley, and in all industries, not just IT. In other words, folks, whatever you call the current economic situation, it is not a recovery. Traditional aggregate measures like size of GDP, or GDP per capita, or total corporate income -- and the changes in them that have traditionally been used to define words like "depression," "recession," "recovery," and "boom" -- are meaningless if the number and quality of jobs don't keep pace. It really doesn't matter how much the executives and boardmembers are making. If the increased profits don't translate into good jobs at good pay for regular workers, nobody's recovering a damn thing.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
A significant number of tech people were never attracted to the area since the cost of living increase exceeded the salary increase. Companies have moved to spread their tech base outside the main "Silicon Valley" proper. The jobs have spread up the East Bay to Sacramento, while headquarters remained in the Silicon Valley area. Jobs have also spread to other outlying cities. With the advent of cheap broadband in rural areas, software engineers and project managers can live anywhere from Alabama to Oregon and maintain a nice home instead of two bedroom apartment.
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Huge leaps in worker productivity and automated processes are also responsible for the decreased need for new labor
Employees are working longer hours and are expected to put in work during the weekends and holidays (yes, I'm bitter because I am putting in hours today)
Same thing happenned to machinists.
You start off with a blacksmith. Lots of them are needed to do anything and it costs a lot and they are highly skilled and treasured.
Then the blacksmith learns to build metal bending machines. You take a bar, put it in the machine, pull hard on the lever and it bends.
Thus it makes more complex devices easier to build. The blacksmith becomes more highly educated, more refined. Becomes the inventor.
He uses the metal bending machines to build complex machines. shavers, benders, cutters, drills, and such. Those in turn make making more and more complex machines that are larger, stronger, and at the same time more exact and easier to use.
Then comes interchangable parts. Things that took generations to figure out, years of discipline hard work to learn how to build, can now be built in previously unimaginable large numbers AND be more exact AND be made by semi-skilled labor.
Then they build entire factories. Machines the size of apartment complexes. Things so automated and exact that it boggles the mind.
Were is the place for the original blacksmiths that started all this? No were. All you need is a highly educated guy at the top doing the design, and somebody with a IQ hirer then a 105 to stamp out the molds and feed the machines the raw materal.
Such is the same thing with the programmer.
The original blacksmiths were the guys that took individual transistors and designed thinking machines. They used wires coated in varnish and wrapped around metal pegs to build curcuits.
They developed their own languages to go with the custom machines.
Then along came wide use of intergrated curcuits. Discs and memory to store instructions. Machine language became well understood technology and people built and documented assembly.
Then you had standardizations happenning. Fewer new unique machines were built and ones that were created were built with a eye on backward compatability with previous generations of computers.
Then along came C and Unix to make realy portable programs. Fewer and fewer machine archatectures were built, with standardized abstractions and ISAs for compatability.
All the computers resembled each other in operation and performance. They became faster and faster. Software that was not portable became obsolete as soon as it was finished written.
Now we have a few archatectures. They resemble each other closely in theory and executions. Portable software is the norm. Nobody fucks around in assembly unless they absolutely have to and that's avoided as much as possible.
Nobody is hand-making curcuits. Nobody is building memory from hand or wiring up peg boards. It's all done thru IDE's and thru standardized libraries provided by large monolythic system developers. The computer is disposable and faster then ever, the software can be gotten from the internet in minutes and new programs can be written in weeks that would of taken years to accomplish just a couple decades ago.
That's how technology works. It makes doing complex things very easy.
A person can go into Enlightenment 0.17 or use Python with Gstreamer framework to build a DVD player with fewer then 100 lines of code, and have it run on AIX, PPC, ARM, x86, x86-64, IA64, Sparc and others with almost the same level of effort.
7 it was very expensive just to have a computer that could even play DVDs.
From reading this, and another article by Richtel about US mom and pop businesses outsourcing their manufacturing, it seems that people who run things or design things still have jobs. That's just not many people.
The assembly has moved to China. You probably don't want those jobs anyway -- when they were here they were lousy jobs, but now they are unthinkable (unless you like breathing lead). Design and prototyping still gets done in Silicon Valley.
Even so, actual engineering is moving to Taiwan. Imagine you want to make a board. The assembly guys (Chinese, in Shanghai) need to talk to the engineer and ask some questions about a substitution. Better if he is Chinese in Taiwan, right?
Even more disturbing (as a non-Chinese-speaking American) is that actual innovation (the stuff we are supposed to be good at) is getting done in Taiwan. E.g. stuff that allows a cheapo processor to have 5 fast ethernet interfaces. Your routers were probably designed in Taiwan, and labled "Cisco" or "D-Link". But Cisco didn't design it -- it was probably someone like these guys: Zyxel (Taiwan)
Americans need to lose the laziness and start working harder (if they want to be able to pay for enough gas to fill a SUV). This is inevitable. As long as there was no China, the Taiwanese could make decent money on the bottom. Now that Red China is here, they are getting pushed up; they have to do fancier work, or they will live like the Chicoms.
If the Africans ever get their act together, their wages will be lower than the Chinese, and that will be it for the rag trade. North Carolina will not make any textiles/clothing at that point.
http://www.thebricktestament.com/the_law/when_to_
If you read TFA carefully, you'll see that employment picked up starting in March.
Leave it to the NY Times to spin the story.
"Profits Up, Productivity WAY Up, Employment Finally Starting to Increase Too" would be a reasonably accruate way to report this. Nevermind that though.
NY Times is the official newspaper of half-truths and selective reporting. It's Micheal Moore without the showmanship.
Why does anyone believe Silicon Valley represents the economy as a whole? SV was unbelievably inefficient during the dot bomb era. It's never going to be like it was.
Quick story: I was involved in a company that got $19 million in VC capital. What did they spend it on? Employees. Lots of employees. What were they supposed to do? The idiots in charge didn't care what they did -- they just wanted to grow as fast as possible, and give the illusion of a large company so they could go public. This was the thinking during that period.
You can't use SV to make ANY predictions about the overall economy. That area is too screwed up and too overpopulated.
Sometimes it's best to just let stupid people be stupid.
Catch 22. If your company is not in the mode of hiring young unexperienced workers and developing your own internal resource pool, then this is the quandry you face.
Some point over the past decade corporate america decided that employees were 100% expendable, you could hire them part time or on contract if you needed them desperately. Longevity in a company is becoming a rare experience.
Never mind that contractors cost 2x as much as an internal employee; never mind that in specialised industries you can't find the skills you need no matter the price; never mind the fact that it takes on average 3-6 months for a new employee to understand his environment and become productive (its called 'corporate memory').
My favorite bit is that if every corporation behaves the same way and attempts to 'steal' resources developed by other companies, in the end the whole industry has cannibalised itself. No-one is developing the workforce as an asset, so it stagnates. There's only so much 'personal improvement' someone can do with personal resources to develop their careers...
For example: if you're a seasoned developer or operator of MVS or Tandem I'm sure you won't have a hard time finding work. Too bad most companies don't have succession planning in place for their 55+ year old staff...and lots of colleges are teaching MVS skills nowadays, right? It is unreasonable to assume the labour market can respond to this need on its own.
John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
As far as I can tell, your argument basically seems to be "if I do the same job in 2 hours (yes, via scripts or whatever) that a bad worker does in 8, I should get the rest of 6 hours free". Which is a strange request, seein' as it basically asks to set everyone's job requirements to the slowest possible worker.
It's not how any other job works, nor how progress happened. E.g., the reason we have an abbundance of consumer goods today is that, yes, we can produce in 8 hours _more_, say, cloth than a 16'th century weaver could produce by hand. If the line of thinking had been, "yay, I produced 10 ft worth of cloth in 10 minutes, that someone would have needed all day to make by hand, therefore I can go home after 10 minutes" we'd still be living in the 16'th century kind of poverty. We'd have lots of free time, but wouldn't be an inch closer to having today's standard of living.
Anyway, when the rest of us rant about overtime, we don't mean "waah, but they make me work a whole 8 hours a day." What we mean is more along the lines of having to work 12-14 hour days, 7 days a week.
E.g., since Electronic Arts is mentioned, I can't help remember the recent story (you know, the employee's wife's blog) about EA over-working its employees to the maximum. In fact, until some of them couldn't even focus any more. And they were demanding that kind of hours not because the project was desperately over the deadline or over the budget, but from the start. Just because some greedy fuck figured out some version of "muahahaha, so I can get more than twice the work out of them for the same money. And if they burn out afterwards, who the f-word cares about them?"
I find it inherently abhorrent to read about EA bragging about profits and _reducing_ the number of jobs, while demanding that kind of massive overtime.
Now I can see some excuse in asking for short-term _temporary_ over-time to save a project in the final stages, or until more people can be hired to handle the unforeseen load. But actually planning to _fire_ some more, because, hey, you can overwork the rest to make up for it (and then fire them too when they get burned out), has a certain slimeball quality to it.
A polar bear is a cartesian bear after a coordinate transform.
I left. Right at 8 years of writing multithreaded high-reliability software for the financical industry, so I'm someone employers look for.
But I got tired of being filtered out by recruiters and clueless HR departments for not having exactly the right buzzwords. And then the jobs that did come up having ridiculously low salaries attached.
I just quit the field, left it. Doing a stable, low-work-level, 40 hour a week for the same money as the low-ballers wanted to pay.
I code in my spare time, and maybe I'll do something with that, but I'm never coding for someone else again.
You pushed it too far, asking for too much for too little.
As a "30-something" myself, and realizing I have practically no savings - I think the problem runs a little bit deeper than "skipping the purchase of that 60" plasma screen".
I know a surprising number of guys like myself, who worked hard in our 20's and started "getting ahead" in I.T. careers, only to start back at the bottom due to divorce. These often lead right into being forced to file for bankruptcy, compounding the problem.
My 401K savings was wiped out with legal fees, and I haven't been able to get another job that even offers one since then.
It's fine to talk about wealth being more "widespread" due to things like 401K's and mutual funds, but those of us who primarily work for smaller businesses don't often get in on any of that. You hear a lot of talk about the small businesses being the "real future" and "cornerstone" of America - but working for them seems to rarely connect someone to any of this wealth that's supposed being "spread around".
I don't mean to be inflamatory about this, but the way that companies are being run in Silicon Valley just WREAKS of the Harvard MBA way of doing things. Seriously guys and gals, if you ever have the priveledge of running your own company, don't ever ever hire one of these snakes. You'll find yourself drowning in the bad karma that they'll pump into your company/life. 'Nuff said.
n 1950, the top 10% of people owned more than 90% of listed companies' shares! Insane, but true.
Now, the number is more like 50%
Sure, but what percentage of workers were employed by listed companies in 1950 vs today?
Joe's grandfather owned a hardware store in 1950. He might not have owned any stock but it's didn't matter that much becuase he owned the whole store.
Joe doesn't own a hardware store. He works for Osh. As a corporate employee, he either owns stock or he owns nothing.
Corporate America has expanded a great deal since 1950 at the expense of sole propriterships and partnerships. The rank and file now own more stock then they did in 1950. But do they actually own more of the means of production? That's not clear.
The problem is that, by and large, the software industry is stupid.
If you work a 9.5hr shift regularly, you are not as productive. If you had just worked 8 hours, you'd notice that you'd do about as much work as in 9.5hr. That extra 1.5hr of labour at the end of the day, a day where you are already tired of work, and likely to make mistakes, is not good. At first you gain a benefit, but then the lack of leisure time cuts into sleep.
At that point, you arrive for work less rested, and productivity keeps declining from there. You can't recover. It's why, over the 17th through early 20th century, labour hours decreased. The most recent being when Henry Ford proclaimed that thereafter the minimum wage in his industries would be five dollars for a day of eight hours.
I don't know why there is this huge cult around working long hours, with no vacations, and killing yourself with overtime in the US and in tech jobs. I don't hear about people dieing from stress in th EU, where they have 6 weeks of vacation a year.
"if I'm smart enough to make the system work for me, I deserve to do less work"
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