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Small Town USA Competing With India
William Hood writes "According to a news article at ABC, companies are sometimes opting to outsource to rural USA rather than foreign countries. Although it still achieves the same result of lowering the value of a job, I think the idea of moving to a larger house that costs less in a town with no traffic is a much better option than flying to Bangalore to train your replacement." From the article: "Sebeka is 14 miles from the closest traffic light, hours from the nearest Starbucks coffee shop and a far cry from the Chicago suburb he left. 'There is no traffic,' said technical consultant Clayton Seal, who also works in Sebeka. 'Anytime, day or night, you can cross Main Street -- almost don't have to look 'cause there's nobody there.' Seal also lost his job to outsourcing."
Although it still achieves the same result of lowering the value of a job
We are still a capitalist society. If someone is willing to do a job just as well (or better) than the guy currently doing it, and for less money, what do you think will happen?
For the guy that is accepting the job out in the country this may be an good thing idea because the cost of living is often much less out in the country than in the burbs or in a big city. I'm sure there are also people out there that like both working with computers and living on farms, all with the added benefit of having little to no commute to worry about.
Another good side effect of this would be bringing money into smaller, rural communities without bringing in Walmart (I live in Kentucky and there are many such areas neighboring the town that I live).
Regardless, I agree with Hood, I would very much prefer to hear that jobs are being outsourced more and more to Americans rather than being sent overseas to India.
Some positive things I can personally attest to about living in a rural area:
Your kids can graduate as Valedictorian or top 10% with relative ease
You can turn your TV/music way up and no neighbor cares.
Because it takes longer to get from A to B, you get a lot less visitors, particularly annoying visitors.
You actually take grass for granted (note: When I went to college, people were surprised at how I would cut across a grassy area without even thinking about it--apparently grass was respected if it was next to a sidewalk).
More space for personal projects.
Less traffic (as pointed out in the article).
No "Homeowners Association"...if you want to do home improvements or park cars in the yard, have at it.
An excellent view of the night sky.
Those are just a few of the things I miss about living in a rural area...
On the other hand, a company that gets massive tax breaks and general corporate welfare on the cost of american citizens should not be able to sell those same american citizens out for cheaper foreign labor that the citizens that helped get and keep the company running in the first place could not ever possibly compete with, simply because they had the misfortune of living in a top-society that values the Fortune 500 more than they value employing americans and keeping the economy strong?
How is the economy going to work out when the only jobs in this country are service jobs and everything that is consumed is produced overseas? Including knowledge and intellectual property.
No, nobody has a "right" to a job - but that doesn't mean anyone has the right to sell the entire country short, either. There is a serious difference between the freedom of the employer and the freedom of the employee in this country. You probably couldn't even live on the street for what they're paying in a lot of cases overseas. Are you suggesting that people in this country are just whiney and lazy because they can't compete with a position that requires 10 years of experience and a 4 year university degree on $6/hr?
Wake up and stop buying the Fox News Channel business-line hook and sinker. Not everything big business does is glorious and representative of democracy and freedom. A lot of it is underhanded, backstabbing and unpatriotic. Like using offshoring as a forceful threat to induce Americans to accept lower wages and worse working conditions.
Obviously written by someone with no knowledge of the housing market.
Most large metropolitan areas are, and have been the last 5 years or so, in the middle of bubble markets. Some are worse than others, but in almost all cases, those that make the median incomes cannot afford the median home.
Take where I live, Washington DC. We're in one of the worst bubbles in the history of the United States. People who make six-figure salaries cannot afford homes within 50 miles of the District. Even housing in far-flung communities like Fredericksburg VA, Waldorf MD, and even Martinsburg WV are skyrocketing.
The reason is speculation. People are willing to purchase homes they cannot afford out of the concept that they will make massive returns on it later on. They're right -- up to a point. Eventually (many are saying within the next couple years) the price point will level off because there simply aren't enough people who can afford those prices, then once it levels off, the speculation will end, and prices will plummet. Personally, I think it's all a scam engineered by real estate investors, which is why I'm renting.
Rural areas have been spared this. Making 100k a year, you can only afford to rent in and around DC. Making 50k in a rural area, you can afford a large home with acrage and still have enough left over for a very comfortable lifestyle. You won't be wearing the latest fashions and drinking at the finest clubs, but, you won't be expected, to, either.
There's always other friends, and besides, children would probably be better served growing up in a rural area vice a city, with all the problems that they come with.
It's all contingent on what's important to you.
" How exactly do you buy a larger house on a smaller salary? Chances are, if they move you to a more remote and cheaper part of the country, they're going to reduce your salary to an adjusted range for that region."
Easy they cut your salary by 20% and homes cost 1/5 what they do where your from.
I am thinking of doing this with our current tech support center. The difference is that we are planning on paying the same as we currently do. We are in South FL and frankly we can not FIND anyone that will work for $12-$15 an hour to do tech support. Home prices have gone up over 100% in the last 4 years. The average home costs over 200k now. The schools are over crowded and traffic is out of control.
Depending on what is important to you small towns can offer a better standard of living than a big city for a fraction of the cost.
If you want.
Clean air.
Good primary schools
little traffic.
Outdoor activities like, cycling, hiking, camping, hunting, and fishing.
Then a small town might just be perfect for you.
If you want
clubbing.
bars.
Chinese food that will melt your eyeballs at 2:00 am
Art galleries.
Live Theater.
then yea a big city is a good choice.
Yea you do sound bitter. My customers do not care that that a home is going to cost 300k here soon. They do not care that gas is almost $3 a gallon. They do not want to pay twice what they are paying now for technical support. I do care that the people that work for me can not afford a home and that the schools that they have to send their kids too suck.
We will give them a choice. They can stay hear of move at the same pay.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
My boss is always looking to outsource our jobs to India, China or Poland. Fortunately they are so paranoid about people stealing our business ideas, they never go through with their plans.
You will notice a distinct lack of protectionism when it comes to outsourcing jobs. When our industries are being undermined by cheaper foreign imports, the government starts introducing tariff barriers and/or quotas. This is because the rich people at the top of the chain are being affected. In contrast, job outsourcing benefits these same rich people, so there is no reason for the government to introduce protective measures. The government only protects its direct paymasters, not the little fish.
Sometimes I wonder if it's harder to understand tech support outsourced to India, or southern US.
What surprises me is that firms seem more than willing to outsource entire projects to another country or to some out of the way rural place, but as soon as the subject of current employees working from home comes up, it immediately get's dismissed for reasons usually related to "making sure the work is getting done".
A few data points from Plattsburg, Missouri (pop. 2,375), where I call home... based on what I can tell (and I've lived in Chicago and SoCal, as well as other rural areas) these data points could be duplicated in many areas:
"It was a summer's tale: Just a boy, his Linux, and a head full of dreams..."
Don't worry about it.
Firstly, offshore outsourcing in computer science appears to be grinding to a halt, according to a few sources, mainly because overall it doesn't really save money. Slashdot won't report it because their parent company, VA Software actively supports outsourcing. OSTG has plenty of adverts on it (not here though obviously - two-faced bastards).
Secondly, no manager wants to get too carried away with outsourcing, because inevitably their job is next, especially seeing as they will have an enormous salary.
Finally, as even Slashdot will report, India is becoming too expensive(!!) for outsourcing. However, not many countries have as many English speakers as India, so it isn't as easy to achieve.
There's a good joelonsoftare article on why it makes sense to hire programmers based on skill, rather than salary.
Rural America is quite different from rural Europe in that it typically consists of very marginalized societies that live in their own communities governed by their own rules and frequently exist outside the main judiciary system. Yes I'm talking rednecks with shotguns here.
Rural America, unlike rural Europe does not benefit from equalization funds similar to Europe and resembles Bangalore India much more than it resembles villages in coastal France or northern Scotland.
When you move to rural areas you also give up a lot that is taken for granted in urban environments, that is selection of foods and products, access to culture and amenities and the ability to mingle with like-minded people. There simply is just a lack of everything.
Now, the housing cost compensates a little bit especially if you intend to have more than a couple of kids. What you have to offset this against is the real possibility that even if you manage to hold on to your job your spouse may not find gainful employment in a rural or semi-rural area. This is frequently a problem for my co-workers who have well educated but frequently underemployed spouses and girlfriends.
Rural areas may get hit hard by the impending energy crisis. There is nothing for public transport in where I live and no real chance of seeing any. Having a car is an absolute necessity to even stay fed and clothed. Driving distances tend to be enormous. My work place is 60 miles from my house while the nearest grocery shop is at least 5 miles away.
As a European I can't get over that I have to travel that far for milk and bread with no walkable community. And I'm actually in the main town's subdivision!
Having ended up where I am I'm seriously reconsidering returning to Europe. You can make a little more money working here vs Europe but you have to sacrifice sooo much more!
Your pizza just the way you ought to have it.
While I agree that what is happening with American companies outsourcing is highly unethical at first sight. But the more I think about this and look back on history, the more I'm starting to see that America has been spoiled with a quality of life far beyond what should normally have been. This is in part to the tapping of cheap labor.
Now fast forward today... We have international travel and instant communicans that it makes globalism that much closer to home. As such, the process of outsourcing (and insourcing too) is what happens when you reach a point of achieving Global-Economic-Equilibrium. As each country demands higher pay for the services they are selling, you simple re-outsource to Africa, Mexico, Asia...etc untill the cost of their services equals that of what can be bought in America.
Now you might think this really *sucks*. But let me ask you something. Would you rather force to keep jobs in America so you can buy your next "X-Box"? Or, would you rather the jobs be offered to 10 people in your place that just wish to have clean water and shelter over their head? In retrospect, I now know what the ethical choice should be.
Basically to sum things up, we Americans and Europeans are spoiled and don't realize just how good of a life we have it. Untill the rest of the world catches up in skills and industry and thus demand higher wages themselves, expect the 1st world to stagnate for some time. Keep in mind this will only be a temporary event that might last for 20+ years from now. However, the fostering of free enterprise does alow for democrocy at the same time which should make for a safer and more peaceful world.
Life is not for the lazy.
Not necessarily:
* City magnet schools are some of the best, if your kid is smart and can get in
* Rural areas have their social problems, too, often more so than cities (witness the recent problems with crystal meth in the Midwest and West)
* Kids can actually *walk* in cities with less of a risk of being hit by a car (counterintuitive, but cities have sidewalks and traffic doesn't move that fast). Not to mention that there are interesting places to go to within walking distance. I see a lot more 10-12 y.o. kids out walking on their own in NYC than in any rural area
* Gangs are still a problem in "rural" areas. Look at some parts of New Mexico for an example of this.
* Don't think that rural areas aren't polluted. Pesticide runoff and industrial pollution (like from mining and coal burning powerplants) is more of a problem than one would like to think.
Cheers,
-b.
Since when have markets EVER worked the way you describe? Your proposition reminds me of my vegetarian friends who don't eat meat because they think that if we consume less meat, it will help solve world hunger problems. That's NOT why people are hungry, we throw food away every day in this country. We have more than enough surplus to feed the entire world. It's because markets are inefficient. If all Americans decided to quit eating meat tomorrow, that still wouldn't change the fact that the reason people go hungry is because they don't have money, and without money, you don't get to eat in a market based economy.
The same goes for your example of labor outsourcing. Corporations are not doing this to provide running water, etc. to third world countries. Only a small minority in India are benefitting from any of this outsourcing, the rest are just as poor as they ever were. It would be nice if corporations were actually installing infrastructure, but that's not reality. The reality is that they are doing the bare minimum, like making sure that the warehouses that the employees work in have electricity, and running water, but when those employees go home, they still live in the same 3rd world standards that they had before. Again, this is a small minority, the rest are living in poverty. The net effect of outsourcing has been to lower the standard of living, not to raise it. As soon as the standard of living gets to high, the corporations will move. The goal is to drive wages down to the lowest level. Small miniorities of rich people will benefit, both in the US and in the 3rd world, but everyone else will suffer.
You keep describing this as a process of wealth redistribution to the 3rd world, when the reality is that the wealth is being distributed to the rich. The way markets have worked, and the way that they have always worked, is that the poor get poorer and the rich get richer. The net effect of free trade is not redistribution of wealth to 3rd world countries, but is in fact to redistribute wealth out of the hands of the middle class and in to the hands of the upper class. I would quit thinking about this in terms of nationality, that only confuses the issue. Free trade's goal is not the redistribution of wealth between nations, but is in fact a policy that redistributes wealth between class. Making "India" or "China" richer means absolutely nothing. Nationalism no longer has meaning in this world of globalization. The proper way to view this and to gain understanding into why free trade proponents love it so much, is to view it in terms of class. When one does a class based analysis, and looks at what this policy is doing to each class (middle vs upper vs lower), it becomes obvious that around the world, free trade has taken money away from the middle and lower classes, and put it in the hands of the upper classes. The rich in India, China, US, etc. have gotten quite a bit richer treating and trading middle class labor as if they were commodities, and the poor have gotten quite a bit poorer as a result.
I moved to a rural area 9 years ago and I lost so many of those big city conveniences. I lost all the metal detectors to protect my kids. I lost the drug dealer on every corner. I lost all the street gangs. I lost all of the crime. I lost having to lock my doors. I lost having my car broken into. I lost the traffic. I lost $250k houses and replaced them with $50k to $100k houses that are bigger with land measured in acres. I lost having to pay $10 a person to see a movie (In the next town admission for 2 adults to a movie, a large popcorn, and 2 20 oz bottles of pop is $10). I lost crowded schools (my daughters high school graduating class will be 18.) I lost crowded state parks. I lost fighting for hours every weekend to put my boat in at the lake. I lost crowded camp grounds. I lost all the lovely air pollution. I lost 3 hour waits to renew my drivers license. I lost high priced doctor's office visits (a visit to the local hospital emergency room at 2 AM, x-rays, doctor's fee, cast, pain medication, and follow up for a broken hand was $409. The one local doctor who still make house calls for $35 moved into town 5 years ago.) I lost having to worry if my wife breaks down that the car load of 5 or 6 teens that pull up behind her are up to no good. I lost the shitty workers at local stores (they bag my groceries for free and ask which of my cars I was driving today so they can carry them out.) I lost the fear and distrust of the big city (the day I moved in I was at the local hardware store and forgot my check book they just asked me for my phone number and address and would send me a bill if I didn't make it back to the store.) Your right I lost all of those wonderful big city things.
As for moving your kids so what, I know more then a dozen IT workers who moved over 500 miles to get a better position. Sorry you didn't get to enjoy the dot-com boom but I did and still had the life style of a rural area. I flew to either the west coast or east coast every week and loved it. At this point in my life I want to make a change and I am back in school full-time as is my wife something I would never be able to afford if I still lived back east.
In rural areas of South Dakota you can buy houses for $7.5k - $20k that are the equivalent of the older homes that are rental property in most larger cities. Want a lake front home that is $150k to $350k. It is a small lake and you can only drive your jet ski for 60 miles one way and have to turn back.
Spend the rest of your life trying to find a job where you can't be replaced is a dream. When you grow up and want to join the big boy's world come back and talk to the rest of us. You remind me of the whiners on my first job after I finished my engineering degree they pissed and moaned that I was paid a lot more then them. Sometimes you have to make sacrifices to achieve something. You want your cake and eat it to. Sometimes you have to make changes in life you don't want for the benefit of your family or career and relocating is one of them. You think you will ever find a position where you are indispensable you are nuts. Virtually anything and anyone can be outsourced over seas.
The point of the article is that while you can hire a moron 10 time zones away that has no idea what a vertical producer of something does for $5 an hour you can also hire an American in a rural area $20 an hour who does understand your company and market. In a rural area that person can live better on $20 an hour then you can on $40 an hour in most big cities because of a lower cost of living. I am willing to bet a lot of IT workers are paid a bit below $40 an hour. The midwestern work ethic is something you most likely wouldn't understand either. If I was going to open any kind of manufacturing or high tech company it would be in a rural midwestern area because people out here tend to be less likely to job hop because of limited opportunities and they tend to stay with the same companies for many years because most people here never move away. Where did it say in TFA that they are tr
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