Study Finds Cost Major Factor In Outsourcing Positions

theodp writes "Debunking claims to the contrary, a new study from Duke University asserts that it is purely cost savings, and not the education of Indian and Chinese workers, or a shortage of American engineers that has caused offshore outsourcing. 'The key advantage of hiring Chinese entry-level engineers was cost savings, whereas a few respondents cited strong education or training and a willingness to work long hours. Similarly, cost savings were cited as a major advantage of hiring Indian entry-level engineers, whereas other advantages were technical knowledge, English language skills, strong education or training, ability to learn quickly, and a strong work ethic.' The article goes on to point out that despite this, outsourcing will continue to be a problem for US workers in coming decades; new elements of traditional corporations like R&D may in fact be next on the outsourcing chopping block."

Comments

Summary of the Corporate Attitudes

[AKAImBatman]

new elements of traditional corporations like R&D may in fact be next on the outsourcing chopping block.

Allow me summarize: "It's too expensive to be competitive, and we don't have a vision for being competitive anyway. So we're going to make our shareholders happy and shoot ourselves in the foot. Twice. Just to be certain. But hey, think of all the money we'll be saving!"

Re:Summary of the Corporate Attitudes

[ccarson]

Outsourcing R&D is a horrible idea. It's our strong suit not to mention our last line of defense against cheap foreign labor.

Re:Summary of the Corporate Attitudes

[Seumas]

Here is a simple comment I always make on this subject.

Corporations and government refer to outsourcing as being competitive. After all, if an American can do the job just as well or better than someone outside of the country and can do it cheaper, then they can get it. After all, that's capitalism, right?

However, while the corporation can pull from a global pool of employees and pay for those in the cheapest nations where my hourly income covers their entire paycheck and their regulations may be less restrictive, I as a consumer and an employee do not have the same pleasure in my own country. I have to live in the place the employer has built their headquarters which has $1,500/mo crappy apartments, $4/gal fuel and $4.25/gal milk and the guy who pumps gas at the local station earns twice the average tech income in a lot of other outsourced countries.

I've never heard an outsourcing CEO attempt to reconcile this difference in any way.

Re:Summary of the Corporate Attitudes

[yams69]

If the Chinese and Indians are smart enough to deliver the quality of R&D American companies are expecting, they're also probably smart enough to set up their own companies and keep the profits for themselves. This could be a good thing, though, since it would lead to the extinction of the American executive dinosaurs who plan to outsource every job but their own.

Re:Summary of the Corporate Attitudes

[thePowerOfGrayskull]

I've never heard an outsourcing CEO attempt to reconcile this difference in any way. Ah, yes-- but have you ever asked one?

Re:Summary of the Corporate Attitudes

[voice_of_all_reason]

If corporations can outsource labor, why can't I outsource purchase?

Software developers put stipulations on resellers that they can't sell to certain countries.
Video games and DVDs are region coded to make foreign-purchases difficult to use
Buying medicine out of the country can get me sent to prison

They have their cake, and eat it too. Then kick us in the balls for good measure.

Re:Summary of the Corporate Attitudes

[Proudrooster]

You are correct! We are also going to shoot our country in the foot and one day wake up to the realization that a country of mere consumers can not survive without decent jobs. Our government is corporately owned and operated so the options for change are most likely 1) revolution or 2) foreign invasion (Mexico, China). It's all too sad to think about.

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

Software developers put stipulations on resellers that they can't sell to certain countries.
Video games and DVDs are region coded to make foreign-purchases difficult to use
Buying medicine out of the country can get me sent to prison

They have their cake, and eat it too. Then kick us in the balls for good measure.

Kick them back: don't buy it.

Well, not buying the medicine might be a problem, but the rest of it? Just don't buy it.

Re:Summary of the Corporate Attitudes

[qwijibo]

Why do they have to reconcile the difference? It's a race to the bottom and worst case scenario for the CEO's is retiring early. What's the worst that can happen for them? More people are willing to work locally for peanuts?

Re:Summary of the Corporate Attitudes

[raehl]

If corporations can outsource labor, why can't I outsource purchase?

Republicans?

Re:Summary of the Corporate Attitudes

[maxume]

The US has 5% of the worlds population and 20% of the worlds economic activity(by GDP). The decrease in US economic activity as a percentage of the global total is nothing other than normalization. Movement of money elsewhere is basically unsurprising when you consider the relative ease of technology transfer vs technology development.

Re:Summary of the Corporate Attitudes

[AKAImBatman]

From TFA:

[The study] asserts that the United States is risking losing its global edge by outsourcing critical R&D and India is falling behind by playing politics with education.

Duke's 2005 study reported serious problems with the quality of Indian and Chinese bachelor-level engineering graduates, and predicted both shortages in India and unemployment in China. The current report finds these predictions to be accurate, with China's National Reform Commission reporting that the majority of its 2006 graduates will not find work. There are also oft-heard whisperings of a engineering shortage in India, though private colleges and "finishing schools" are going far to make up for the Indian deficiencies, the report said.

"Respondents said the advantages of hiring U.S. engineers were strong communication skills, an understanding of U.S. industry, superior business acumen, strong education or training, strong technical skills, proximity to work centers, lack of cultural issues, and a sense of creativity and desire to challenge the status quo," wrote Wadhwa in the 2007 report.

Thus the basic issue is that you're giving up your best and your brightest who are ALREADY familiar with your business and the local marketplace, and you're replacing them with cheap "yes-men" who have no concept of your business, cultural barriers, aren't even in the same time zone, run effectively unchecked by the corporation, and have little chance of being India or China's "best and brightest". (As you say, those people are making their money elsewhere.)

For a good feel for what's happening with outsourcing, check out these horror stories:

http://img.worsethanfailure.com/Comments/Discount_ Enterprise.aspx

http://worsethanfailure.com/Articles/Of_Course_We_ Tested_It__0x2e__0x2e__0x2e_.aspx

While not every company sees results this bad, I've heard very few positive reports. And more of those were before the outsourcing "craze", when it was easier to find the competent developers overseas.

Shades of the tech bubble? Yeah. I'm glad we learned so much from that debacle. :-/

Re:Summary of the Corporate Attitudes

[MenAtWork]

hmm! i miss the point here, they are outsourcing to be ecnomically (that is price wise) competitive and they are mostly on-shoring research to be technologically competitive. As with natural selection markets work better when there is freedom to try/fail/relocate/die/exist and in the short term be successful at surviving - no real different that what we went through since the time of the one celled bacteria. Money incidentally is one of the criteria of success for the organism called company in a ecosystem called markets. my two bits at an analogy, sk

Re:Summary of the Corporate Attitudes

[hashfunction]

Actually you can and do in some areas. For instance, if you buy from ebay a lot, you will notice that all the light weight electronics stuff comes directly from Hong Kong, Taiwan or China. I ordered a case for my cell, car charger, memory pro duo card and a book, all of whom came directly from Hong Kong or taiwan, complete with the customs sticker on top!

Re:Summary of the Corporate Attitudes

[canUbeleiveIT]

If corporations can outsource labor, why can't I outsource purchase?

You can. But when they go to make a purchase, most people make price the priority--just like companies. Boycotting will never get the momentum necessary to change corporate behavior. It didn't with the "buy American" campaign as it pertained to cars and it won't work now.

I honestly don't know what can be done but I'm willing to entertain the idea of the government taking a hand in this.

Re:Summary of the Corporate Attitudes

[AKAImBatman]

I think you're missing the point*. I'm perfectly happy with outsourcing jobs as long as the guys over the pond are able to do the job as effectively as U.S. developers. That's how competition works, and I'm all for that. However, TFA shows what I've been saying for a while now: Outsourcing rarely results in high quality work. In fact, many companies are being taken for a ride, because they don't do any of the shopping around and due dilligence that they would normally do with a U.S. company.

Err... scratch that...

They're getting taken for a ride even worse than U.S. consulting companies (very few gems there, either) because there's even less accountability involved. As long as the foreign company can keep stringing along the U.S. company, they keep making money. It doesn't really matter if their "developers" are some guys they just pulled off the street. (Hey, that sounds a lot like Accenture!) They produce something, and the executives on the other side of the pond don't know the difference. For all they know, the entire source base could be:

public class Suresh { public static void main(String[] args) { System.out.println("Suresh is Brilant!");}}}

As long as something keeps coming in, and the PowerPoints show beautiful progress, then the project is on track, right?

* Note to self: Quote TFA next time, because no one reads it anyway.

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

There is another name for this. It's called the "Demise of the Middle Class". Today's corporate profit taking and outsourcing for the sake of lower costs and being "cash flow positive", will ultimately translate into lowered salaries, fewer high skilled jobs, and a dumbing down of American. We will become a predominantly service oriented society. This will translate into poorer quality blue collar jobs, lower need for skill or education, and lower consumer spending power, And this will
come back and bite these same businesses tomorrow as your average worker will afford and buy less goods and services. America will be the India of tomorrow. A few rich people, and a large number or majority of poor people. There will, however, be one major difference between the USA and India. We will continue to worship our celebrities and athletes, and will continue to pay ridiculous compensation packages to our beloved CEOs regardless of their performance or company performance.
The employees, shareholders, pensioners, and customers get shafted, as we see, time and time again.
But salaries and the cost of living in India is going up, which is good for us. China, on the other hand, artifically keeps their currency devalued. As a result we import far more manufactured goods than we sell. There is a trade imbalance and we, as consumers, lose in all respects except "Everyday low prices". Our industries are leaving, our jobs are leaving, and our raw resources are leaving. In return we get Walmart type monopolies and a world that is "Made In China". And we get a bunch of senators and congress who pollutes our minds with stupidities such as "flag burning", "global warming" and "abortion" while they sell the country, our consumer rights, and our souls to the banks, credit card companies, big oil, predatory lenders, the insurance companies and anyone else that's willing to pay big bucks for their almighty election campaigns.

Ah, the power of big business, their lobbyists, and a congress that only cares about election contributions and the quest for power. We are slowly trading places with India. India, China, Vietnam etc will be designing the technology of tomorrow and they will sell to anyone willing to pay.
Why study science or math here in the USA - unless, of course, your goal is to understand baseball statistics?

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

And, as with everything (yes, including OS's), you get what you pay for (...grammatically frustrating, but common saying.).

This is no more wrong than destroying our economy with free software and free operating systems. We all know, but maybe unwilling to admit, that outsourcing IT jobs to other countries does in fact devalue all of the IT positions in the US. The same is true for software and OS's. It is just a matter of time before free software and free OS's cripple the US economy much like the durable-goods crisis of the last century (The Great Depression) did. But, that is the design, isn't it Mr. Stallman and followers?

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

Don't forget the democrats... If its not made with in the US with union labor, you shouldn't be able to buy it from overseas.

Re:Summary of the Corporate Attitudes

[Azarael]

It doesn't really matter if their "developers" are some guys they just pulled off the street. (Hey, that sounds a lot like Accenture!)

I got a laugh out of that one. The funniest part is that Accenture could practically do that because of how screwed up, inefficient and wasteful their clients are. Personally, I work in the logistics industry and you can pretty much look at anyone's shipping data and with a minimum of effort, point out hundreds of thousands of dollars (at least!) that is just flying out a window. Maybe in the future we'll be outsourcing to get a Clue(tm).

Re:Summary of the Corporate Attitudes

[qwijibo]

There is one thing that American companies can do that doesn't seem as common in other cultures - launch projects going in 1000 different directions at once with the hope that 9 of the projects will make enough money to pay for themselves and 1 will make enough to pay for the other 990 that were dismal failures. Do other cultures value the willingness to fail miserably time and time again in hopes that one plan will be fabulously successful? Large companies can get away with this approach because they don't risk going out of business with failure after failure.

Google is a good example of a company that is doing very well with search and ads, but it seems like everything else coming out of them is free/ad revenue supported. It may very well be a sustainable model, but putting a lot of smart, creative people together doesn't magically make profit.

Re:Summary of the Corporate Attitudes

[AKAImBatman]

The funniest part is that Accenture could practically do that

What's this "practically"? I worked side by side with Accenture consultants at a previous job. (We embedded employees inside their organization. It was the only way to get the job done after management screwed up by hiring them in the first place.) The employees are good kids and all, but they are just people hired off the street. They learn most of what they do on the job. While they try very hard to get it done, they don't have the first clue what they're doing and end up making a massive, unmaintainable mess. The result is that the system gets so large and complex that you need more and more manpower to keep making progress. Eventually, it becomes too costly and the project gets canned.

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

This is simple...

If there was a better education system here, then outsourcing wouldn't be able to work because we could not get the commodity education over there. Additionally, if more people were educated, it would drive down costs here since there would be a larger supply of labor.

Re:Summary of the Corporate Attitudes

[Daishiman]

Who told you they're shooting themselves in the foot? I'm a sysadmin working in South America for two American accounts that have been outsourced and customer satisfaction has actually increased because we have more formal processes and more motivated people. Mind you, this isn't entry-level tech support, so we're talking about much more experienced people with excellent English and know-how in the profession, but just because you spend most of the time hearing about the misfortunes of corporations that don't know how to outsource doesn't mean that it's all gloom and doom for everyone else.

Core Security, for example, has a significant amount of penetration testers and white hats working here and they're just as competitive as their first-world counterparts.

Perhaps if IT is such a difficult carreer path in the US you should simply stop beating the dead horse. I have yet to see any proof that our American counterparts are so much more (if at all) competent than us that they deserve their massive, $80000 dollar a year salary. I mean, these supposed "professionals" put in root filesystems of 50 megabytes on AIX boxes and installed oracle in the root volume group.

Re:Summary of the Corporate Attitudes

[OakLEE]

Allow me summarize: "It's too expensive to be competitive, and we don't have a vision for being competitive anyway. So we're going to make our shareholders happy and shoot ourselves in the foot. Twice. Just to be certain. But hey, think of all the money we'll be saving!" Actually, what they are saying that it is too expensive for them to remain competitive the US. They in fact do have a vision for remaining competitive, and that involves moving R&D to China, where the costs are lower.

Whether you like it or not, the outsourcing of R&D occurring now is no different from the outsourcing of manufacturing that occurred the 1970s and 80s. The internet has made communication across vast distances cheap and affordable, much like advances in technology in the 1970s made the transportation of manufactured goods over long distances cheap and affordable. While the Structural Unemployment, caused by this sucks, the internet's existence comes with many benefits (email, wikipedia, pr0n), just like the advances in shipping technology did (overnight mail, mail-order businesses, Japanese Electronics). In the long run, we even benefited directly from the outsourcing of manufacturing in the form of cheaper goods.

Outsourcing, like it or not, is just a cost of progress, and much like the Luddites, we can either accept this fact and find other jobs, or start destroying trans-Pacific fiber runs in a vain attempt to save our current ones.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

You're missing something.

The amount of wealth in the world is NOT like a tank of water which, when the valves are opened, empties out and distributes the water all around. It's more like a large set of fountains fed by a small set of pumps. And corporate America isn't opening valves to let the water (money?) flow all around. They're taking sledgehammers to the pumps because they stupidly believe that by doing so, they'll get more than their fair share of the water. For the first few hits, they get doused pretty well, and they think "look at all this water! Hit it again!" But then the pumps shut down and that's the end of that.

Wealth is actively created by some groups of people and consumed by others. The United States is so wealthy because for most of this century we were CREATING much more wealth than anyone else in the world. We were able to do this due to a number of cultural and structural factors that aren't replicated anywhere else. For example, among all the people in the world, we are easily the most independent minded, the least bound by dogma and tradition (at least when it comes to science and technology). Our inventors have a "what the hell, let's give it a shot" mindset you won't find in many other places.

And before you start screaming "No, your innovators call came from Europe" let me state the obvious: WE ALL CAME FROM EUROPE. Americans are Europeans who decided to live somewhere else. We didn't just magically appear here; we colonized this place. Europeans may not want to hear this considering the unfortunate current state of the U.S. government, but we and they are the SAME PEOPLE, with the SAME CULTURE and SAME INTELLIGENCE LEVEL. The only discernible difference between Americans and Europeans is that Europeans try to behave more calmly than we do. We're a bit nuttier than they are. EXCEPT at soccer matches, of course.

If you want a perfect analogy for what's going to happen when corporations finally kill off technological innovation in the first-world countries, or at least strip people of the desire to do technical work for them (I don't think you can really kill off our ability to innovate, you'll always have inventors) just read this article:

http://en.wikipedia.org/wiki/The_Goose_that_Laid_t he_Golden_Eggs

Re:Summary of the Corporate Attitudes

[rolfwind]

The other problem is that by outsourcing your R&D, you are effectively building up your own competition, who, once they break away from you (in terms of employment) will leave you depleted of that knowledge (since it was outsourced) while competing with you with the latest know-how and for less.

It is one thing to outsourced certain operations like elementary customer help phonecenter overseas that probably will save the money in the long haul even with some lost customers, it is quite another to send your golden goose overseas just because they can "polish" it for less in the short term.

This has happened again and again in business. After World War II, Japan and Germany were greatly built up again first by being the outsourced manufacturer to American businesses (however they both long had industrial revolutions in the 18th Century) because they were relatively cheap, then they became competitors with their own exports.

However, there isn't much to indicate that there economies were built up at the loss of our middle class - to the contrary, but fears were widespread at the time with other concerns on attacks upon the lower/middle class job like automation - the 1960/70s in particular feared "robots" taking over all the work.

This time around though, it seems not the factory worker jobs at risk (since most of those are gone anyway) but almost any educated job is at risk - the only ones safe are low income menial jobs or bureacratic jobs (as it always has been). I would have said the service economy is safe but.... that may not be true either - I have read that some contract lawyer and doctor operations have been outsourced (doctors who analyze Cat scans and that type of thing).

Where does that leave America when our educated technical workforce becomes depleted and we are left with only a service economy while our competitors are built up with the latest know-how and the brightest workforce? Do we wait until we become a cheap economy again where things can be outsourced to us in a couple generations?

BTW, I don't believe in the viability of the purely service economy.

Re:Summary of the Corporate Attitudes

[maxume]

If all those yous are pointed at me, please stop doing that.

I don't disagree with much of what you said about the cultural values of the US being an important factor in making it an economic powerhouse, but try to realize, we have been exporting those values, rather aggressively, for 50 years. It shouldn't be surprising that it worked.

To the extent that our economy is driven by energy utilization(pretty much all economic activity is, nearly directly), and to the extent that the US does not have a majority of the worlds energy resources, the imperialism necessary to maintain our 'lead' will make the current situation in the middle east look like a fun vacation spot.

Re:Summary of the Corporate Attitudes

[Azarael]

At the end of the day, you pretty much get what you pay for. Accenture hires their entry level people straight out of school and probably doesn't devote a lot of resources to them (I have an idea on this since I was through the interview process, and know a few people) since they expect them to stay much more than a year. I'm sure that Accenture is more than happy & able to through senior level programmers at your problems if you're welling to hand them buckets of cash for the work.

What I'm really getting at here though, is no matter who you are (fortune 500 or not), lots of business units end up with shitty, poorly designed systems that were contracted out to SAP or some other ERP provider. Even if you have a good IT dept. in house, it can take a long time to build an in house solution, so you're a bit stuck either way you go.

Re:Summary of the Corporate Attitudes

[AKAImBatman]

Actually, what they are saying that it is too expensive for them to remain competitive the US.

Bullshit.

They in fact do have a vision for remaining competitive

More bullshit.

I've been in this industry for well over a decade now, and I've seen some pretty interesting attempts at outsourcing. You know what? Nearly all of them fail. It doesn't matter if we're talking about local outsourcing inside the U.S. or foreign outsourcing of cheaper "talent". 95% of the time, outsourcing companies are leaches that slurp up many times the funds that companies could use to hire competent talent. All they do is hire warm bodies on a company's behalf, then charge 10x what those bodies are worth. The majority of them are fresh out of college (if even), have no real experience to draw on, and have no experienced leadership to direct them.

For a similar set of leaches, see Technology Recruiters.

The truly competitive companies have one thing in common: They eschew the idea of outsourcing/consulting in favor of direct-hiring a good mix of experienced talent and promising talent. Combined with good management (which is usually required to get the talent in the first place), these companies are able to produce far more than their competitors on far less capital.

Re:Summary of the Corporate Attitudes

[Lavi Dave]

Ow! My Balls!

Re:Summary of the Corporate Attitudes

[AKAImBatman]

I'm a sysadmin working in South America for two American accounts that have been outsourced and customer satisfaction has actually increased because we have more formal processes and more motivated people.

Believe it or not, I'm actually very happy for you. It sounds like a few companies did some shopping around and found a GOOD outsourcing company. The fact that you're not located in the usual places lends credence to that fact. But trust me, from our perspective here in the states, outsourcing is rarely so rosey. I am not kidding when I say that American companies are being taken for a ride by outsourcing. This has been true since the idea of outsourcing to consultants really took off in 90's.

Suddenly, most companies stopped paying attention to the fact that they needed to show good value in their partnerships. They just heard "outsourcing == good" and ran with it. The fact that they were getting crap in return for their investments wasn't entirely lost on them. So they got the bright idea of (wait for it) offshoring the consulting for cheaper! That's right, rather than hiring talent and/or companies with a GOOD reputation, they can get even more crap work for less! W00T!

I really despise decisions like these, whether it's onshored or offshored. Unfortunately, the caliber of management these days is poor at best. There's no real attempt to foster management talent, which means that the new management has a disdain for talent in technology. Corporations are imploding on themselves, but they have so much capital that they can keep up an image that everything is fine and dandy. Yet we have strategic mergers and acquisitions of companies that used to be powerhouses unto themselves.

In reality, it will all work out in the end. Startups who know better will grow into their own megacorps, displacing those that have come before. Unfortunately, the process is going to be incredibly painful for all involved, not to mention counter-productive to the American economy. :(

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

From one of your links...

As Timothy found out ten months later though a frantic call from the prospect, that didn't quite work out so well. Already months behind schedule and 300% over budget, the programmers were only able to deliver a few semi-working screens. These, as it turns out, were entirely HTML/Javascript mockups. The "enterprise framework" programming they did manage deliver provided a very interesting interpretation of the word "enterprise" ...

Just fired one for this and put the vendor on notice if they send us a consultant like him they will be barred from doing business with us. We only let this go on for 2 weeks. Trouble is far too many can talk the talk, kiss butt and wag their tails... but few can actually walk the walk.

Me, when someone pulls this on me, I do what Tim does, walk away. Do you want cheap promises or a good track record of success? Is your mind open or are you mindlessly cheap? Far too many business managers think the techies that can-do, good communication skills, background in successful engineering, gone live with systems with 3000+ users in one day -- routinely without issues are going to work for your wages? Get a grip.

Re:Summary of the Corporate Attitudes

[AKAImBatman]

I'm sure that Accenture is more than happy & able to through senior level programmers at your problems if you're welling to hand them buckets of cash for the work.

Unfortunately, no. Accenture would just charge you more for the same workers. :-/

While you were there, did you learn a bit about career advancement inside Accenture? Theses junior coders (which are often billed as far more experienced) are not really expected to advance in technology. They're expected to learn how to become account representatives. i.e. Managers who's job it is to make powerpoint slides and tell the client how wonderfully the project is going. If you don't want to become an account representative, then they simply burn you out on crazy hours, then replace you in the next batch. :-(

Don't get me wrong, there's a lot of humor to be derived from the nuttiness of it all, but the bigger picture is actually quite frightening. And now the "offshoring companies" have picked up the same business model. Only with less accountability.

Re:Summary of the Corporate Attitudes

[Azarael]

While you were there, did you learn a bit about career advancement inside Accenture?

Yeah, that's the impression that I've gotten so far. It also doesn't look like there are any opportunities to move to other departments, each job pipeline has one entrance and one exit.

Don't get me wrong, there's a lot of humor to be derived from the nuttiness of it all, but the bigger picture is actually quite frightening. And now the "offshoring companies" have picked up the same business model. Only with less accountability.

Some people get the picture here and some don't. You really don't have to be a genius to figure out what downsides there are to off-shoring, then again we've all seen or heard of the god-complexes of executives, ruling from the mountain tops above, so who knows.

Re:Summary of the Corporate Attitudes

[moeinvt]

"If the Chinese and Indians are smart enough to deliver the quality of R&D American companies are expecting, they're also probably smart enough to set up their own companies"

Indeed they are. A Duke University study released in (I think 2005) concluded that over the previous decade, about half of the startup companies in Silicon Valley were founded or co-founded by folks from China and/or India.

The story is right on about cost savings as the driving factor. The perception that people in China or India are "smarter" than people in the U.S. stems largely from the fact that we are typically being exposed to the very best people coming from a pool of billions. With that many people, the absolute number that are 2 std. deviations on the right side of the bell curve is still massive.

Re:Summary of the Corporate Attitudes

[speculatrix]

and it's been proven with the US falling from the top slot in technology.

the theory is that you send all the jobs nooone WANTS to do overseas and get things done cheaply, giving you more money to invest in quality staff and projects to get a lead on your competitors by being smarter and more efficient with better products

however, investors (i.e. your pension funds) invest to make a quick buck, and the directors therefore do whatever is necessary to raise the share price long enough to collect their bonuses!

Re:Summary of the Corporate Attitudes

[Maxo-Texas]

I wouldn't. I'd be happy if I could buy things for the same prices they pay.

$10,000 vs $140,000 for the same heart operation.
$1,000 vs $6,000 for the same hair transplate.
$2.19 vs $20.00 for the same movie or album.
$.10 vs $5.85 for the same blood pressure medicine.

Companies make products for 50 cents and sell them there for 55 cents and here for $5.50.

And they get laws passed making it illegal to import those 55 cent products and sell them here for 60 cents (which would be real capitalism and would quickly undercut the $5.50 price.

I would not mind my salary dropping from $80,000 to $40,000 if the price of things were dropping from $20.00 to $2.19 and $5.58 to $.10 because I would be relatively better off.

And that's ignoring things like the 1/3 of the price of cars for safety features that are not required there and another 1/6 for legal costs that they don't bear because of our runaway legal system (and another 1/6 for some crazy pensions that are being dumped on my tax dollars soon) .

Re:Summary of the Corporate Attitudes

[Maxo-Texas]

The fiber runs through Fremont california I hear.

Re:Summary of the Corporate Attitudes

[Pollardito]

The amount of wealth in the world is NOT like a tank of water which, when the valves are opened, empties out and distributes the water all around. It's more like a large set of fountains fed by a small set of pumps. that's an analogy that even Ted Stevens could understand

Re:Summary of the Corporate Attitudes

[raehl]

Don't forget that Toyota cars are now more 'American' than Ford cars are.

Re:Summary of the Corporate Attitudes

[anders1234]

It is funny but in most replies Americans think they are so superior to the rest of the world and are well worth their salaries when it comes to software development. However, in my experience it is complete opposite. My company for instance who has software centers in Europe, US and Asia. The one office that is not performing is the one in the US. However they are exceptionally good in showing power point slides. All hot air. FYI: here in Singapore an average salary for a software developer with 1-3 years experience is around $3k SGD/month which is roughly 1.5k US. In China it is around 2/3 of that price for a SD.

Re:Summary of the Corporate Attitudes

[prelelat]

Outsourcing, like it or not, is just a cost of progress, and much like the Luddites, we can either accept this fact and find other jobs, or start destroying trans-Pacific fiber runs in a vain attempt to save our current ones. Okay I'll get a shovel and some un-employed people and we'll start knocking out that fiber. I figure we need three fat slow people so that if we get busted they will get caught first. This could be a problem though as people who can't aford food generally are employed.

I'm going to call it People Like Us Terminating Outsourcing. P.L.U.T.O. for short. The code word is clam chowder, color is white.

Re:Summary of the Corporate Attitudes

[Futurepower(R)]

"Outsourcing R&D is a horrible idea."

Any kind of outsourcing is a horrible idea. Look at the web sites of any online bank. They are stupid, stupid, and purposely stupid. After people in India learn how to write good banking software, magically some company owned by an Indian will have the best banking software.

There is only one reason for outsourcing. Non-technical managers want the technical responsibility as far away from themselves as possible. It is dishonesty only.

Walk down any street in India and ask yourself: Why are people in India so poor? They are poor because their culture is extremely self-defeating. No matter how well an Indian who is first- or second-generation educated is trained technically, he is still guided mostly by his culture.

The claimed cost savings are not there. They simply are not there. The "cost savings" come from situations like this:

1) It is cheaper to hire Indians for a sloppy, poorly defined project than it is to hire people in the U.S. for a sloppy, poorly defined project, and the result is the same.

2) Many top managers today are like kings. They have complete control, can be as destructive as they want to their company and to other people, and are very ignorant. So when it comes time for a technical improvement that will be a lot of work, and require a lot of responsibility and decision-making, moving the entire project 10,000 miles away seems attractive. The distance offers lots of excuses, and it just doesn't matter to the king how much money is wasted. The "cost savings" are what the king says they are.

We are going through a time in which most managers of technically-oriented companies know nothing about technical issues, and don't want to know anything.

Business magazines are part of the fraud. They assign writers who don't have any technical knowledge and give them 1/10th the time necessary to do a good job. The writer's only desire is not to seem too stupid, so he or she looks at other articles and imitates their ignorant imaginings.

Only one kind of manager can manage technical efforts: Someone who is extremely knowledgeable technically and is, at the same time, an excellent manager, and has a strong, insightful relationship with his group. Such people are rare.

In future decades, people will laugh at the efforts of today. Remember, Time-Warner bought AOL and immediately lost 88 Billion dollars. Remember the press conference when the "mouth of the south" Ted Turner said the deal was "better than sex"? Everyone at that press conference was a multi-millionaire who simply didn't care, and everyone at that press conference was so ignorant, there is no word in the dictionary that expresses the full profundity of their ignorance. You have to call them "iggerunt".

Re:Summary of the Corporate Attitudes

[dpilot]

They could REALLY save some money if they oursourced the most expensive employees overseas - the executives.

Maybe you're right, maybe outsourcing R&D overseas is the BEST thing to do for cost and profits.
But they'd better not wave an American flag or call themselves patriotic as they do so, because in the process they're destroying their country, all in the name of profit.

If they're that enamored of India and China, and if they're that willing to forsake their own country, why don't they just move there?
Who knows, maybe once America is toast, and India and China reach what America once had, they WILL move there. Then they'll start outsourcing future-expensive Indian and Chinese jobs back to future-cheap American labor.

After all, there's nothing more important than profit. Tonight take your wife in your arms, look deep in her eyes, and tell her lovingly, "I'd sell you into slavery for the right price."

Re:Summary of the Corporate Attitudes

[dpilot]

This is a key fact. If the American worker is SOOOOO overpaid, and American benefits are SOOOOOO expensive, and it's just IMPOSSIBLE to make profitable high-mileage cars, how is it that Toyota and Honda have profitable factories in America when Detroit is having a tough time making a profit shipping jobs overseas as fast as they can get away with? I'd consider a long look at boneheaded moves in the executive suite.

Re:Summary of the Corporate Attitudes

[blahplusplus]

"If corporations can outsource labor, why can't I outsource purchase?"

Don't you just love the doublespeak of free-market fundamentalists? Why can't we outsource the poor to countries they'd be rich? What about the disabled? We could save a lot of money if we shipped them to an economy where our dollars purchasing power is 8 times what it is in the local economy. Indeed the poor and disabled must think we're overpaid lazy slobs if only they had wits enough about them to move and pressure government into keeping their social assistance going while they lived a middle class life in china or india. Time to learn a new language!!

Re:Summary of the Corporate Attitudes

[antonyb]

Import duty and shipping costs.

They can sell their products cheaper by manufacturing them locally. The same does not apply to software development.

ant.

Re:Summary of the Corporate Attitudes

[billcopc]

putting a lot of smart, creative people together doesn't magically make profit.

Yep, you're right. Putting a lot of smart, creative people together with a SALES prick is a license to print money. Now if only we could get them to speak the same language, business would be a lot easier!

Creative babble: I like curves. Curves are nice. Transparent curves are better. Transparent curves with little waves in them. Yes, I like curves.

Sales babble: Bigger, faster, CURVIER curves. How many curves you need ? I've got a boat full of curvy curves and they're calling your name: "Cletus, your life is meaningless if you don't buy curves!". Ask me about our extended curving plans!

Me, I'm just your average lone wolf coder. I hate both the creative hippies and the obnoxious sales types. And I have no money. I rest my case.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

No, no, the "yous" were for Slashdot in general; i.e. the reader. Not you specifically. I've been in many arguments before where someone started talking about this german rocket scientist or that English computer specialist. I thought I'd head that thread off at the pass. :)

I disagree about your energy related point. Wealth does not come from energy resources. It comes from development and progress. If wealth came from energy resources, the West would not have become wealthy and powerful before they were invented, now, would it? I seem to remember that prior to the 1800's, the most energy you could generate was in your fireplace. Yet Europeans and later, Americans, without any major energy sources (besides that coal-fed fireplace!) mastered physics, chemistry, electronics, medicine, earth science, metallurgy, engineering... I mean, I could go on and on listing all the things OUR ANCESTORS created and shared with the rest of the world, but maybe you see my point already.

What was the rest of the world doing while all this was going on? Nothing at all. They mostly just reached a state of status quo and remained in that state until the West showed up and dragged them into the 20th century.

My point is that an Indian (for example) does not become an American just because he watches a few movies and practices his accent. He's still tied hand and foot by his culture, which penalizes original thought and non-conformity and values a crushing, limiting respect for the existing institutions of his system. I think that most Indians may not be CAPABLE of adopting an American mindset. You must remember that people are limited from birth by the cultural framework in which they're raised. You can't just wave your hand and magic up a bunch of innovators; it just doesn't work that way.

Energy utilization is completely and totally beside the point.

What was SUPPOSED to happen was the U.S. was supposed to respect its innovators and technologists and allow them to do what they do best -- design the future. We could have formed a mutually beneficial relationship with the rest of the world in which we design and invent things everyone wants, and they trade us some of the things we want (like energy) in return for them. We all could have focused on our strengths and teamed up.

Instead, the suits (who don't understand ANY of this and really only think about their precious "bottom line") betrayed all their technologists -- they fired them so they could hire cut-rate contractors from India and save a buck. Now, nobody wants to study science or engineering anymore (because most people don't want to be unemployed) and our greatest strength is diminishing rapidly. Mark my words: India and China are NOT going to be able to fill the very large shoes we are leaving behind.

The Aesop's fable I referred you to is an excellent analogy for this situation. :)

Re:Summary of the Corporate Attitudes

[murdocj]

Well, my experience is the complete opposite of your experience. My last company had a large Bangalore dev office. Projects that would have had one or two experienced US developers had 4-5 Indian devs, with an Indian manager. And the results were horrendous. Even the Indian devs who had been around a while and theoretically were trained and experienced produced terrible code, larded with huge chunks of copy and paste junk. I did work with one or two people in the Bangalore office who seemed to be good, but the overall impression was that the Indian programmers wanted to look like they were producing stuff very quickly, no matter how shoddy the results were. And unfortunately I think it paid off for them, at least in the short term. Long term I don't think they can get away with it, but who knows?

Re:Summary of the Corporate Attitudes

[maxume]

The amount of effort that goes into things other than gathering food is pretty directly related to how well you can gather food. A tiny little advance in agriculture translates into a huge advantage in how much effort a society gets to expend on development and progress(also, even the same number of people growing more crops increases their energy utilization).

The industrial revolution was built on the back of coal(wikipedia says the first practical steam engines were built around 1712). Metallurgy isn't something you do with a little bit of steel, and you don't get a lot of steel without a lot of energy. It, along with engineering(modern anyway) are pretty much a product of that revolution. Medicine was a joke until 1900, and 1950 medicine made 1900 medicine look like a joke, much like today does for 1950, so I would call it a product of an energy intensive society, not a precursor. Electronics are basically completely dependent on having a significant energy and resource(which require energy) infrastructure in place. Physics and chemistry enabled us to make use of more and more energy. At a minimum, energy utilization and technological advancement are in some sort of very interdependent symbiosis.

I don't believe that the American culture really produces so much more innovation than others, but if it does, where's the problem?

Re:Summary of the Corporate Attitudes

[mike27112]

And before you start screaming "No, your innovators call came from Europe" let me state the obvious: WE ALL CAME FROM EUROPE. Americans are Europeans who decided to live somewhere else. We didn't just magically appear here; we colonized this place. Europeans may not want to hear this considering the unfortunate current state of the U.S. government, but we and they are the SAME PEOPLE, with the SAME CULTURE and SAME INTELLIGENCE LEVEL. Ummm... I'm sorry, my memory's a bit foggy. Can you remind me which European country Subrahmanyan Chandrasekhar, recipient of the 1983 Nobel Prize in Physics, is from? What about Dr. David Ho, the first person to report the "healthy carrier state" of HIV infection? What about Steven Chu, 1997 Nobel laureate in Physics for his research in cooling and trapping atoms using laser light? And Daniel Tsui, 1998 Nobel laureate in Physics for his research on the fractional Quantum Hall effect? Chien-Shiung Wu? Tsung-Dao Lee and Chen Ning Yang? Har Gobind Khorana? I. M. Pei? Benjamin Banneker? Lewis Latimer? Garrett Morgan? Charles Drew? George Washington Carver? I could go on, but my point should be clear.

I'm not in any way contesting the fact that many prominent American innovators claim European heritage. To do so would be straight silly. But it would be just as foolish to ignore the vast portfolio of scientific and technological contributions of many Americans who do NOT consider Europe their motherland.

In neglecting the accomplishments of non-European Americans, you're completely missing the fact that America's reputation for innovation and discovery is built (in part) upon the hard work and ingenuity of some of the best and brightest folks from other parts of the globe. You're looking at innovation as if it's a contest between races. It's not. That's how the last season of Survivor began, but it's not the way American innovation occurs.

Seriously, if we're going to sing the praises of American resourcefulness, let's not forget the verse about peanut brittle :-p

Re:Summary of the Corporate Attitudes

[mojo0716]

I like that idea good one ;)

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

And corporate America isn't opening valves to let the water (money?) flow all around. They're taking sledgehammers to the pumps because they stupidly believe that by doing so, they'll get more than their fair share of the water.

Bullshit. Buying cheap goods rather than expensive goods is a net benefit. This goes for labour as well as goods - there's no real difference between buying a table made in China and buying an Indian to write your software.

Sure, there are losers in the deal - US table manufacturers can't compete with cheap plastic crap from China, so they lose, and US programmers have their wages held down by foreign competition. The winners, though, are everybody else - the people who can afford to buy cheap tables, video games or whatever, the people who own stock in software companies and so on. They're just less visible than a marginal employee who complains that he was replaced by an H1B, or by a company in China.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

You're still missing it.

Go back BEFORE we had access to modern forms of energy. We managed to INVENT these forms of energy starting with NOTHING. Think about the steam engine. Where do you think that came from in the first place? Someone invented it. And steel has been in use since the Roman Empire, so don't use that as an example. All you need to make steel is iron ore, a form of carbon to work into it, a hammer to work the metal, and a forge to heat it in. It's VERY ancient technology that predates the use of coal or steam.

By focusing entirely on energy you've managed to miss ALL of the action. Where do these things COME from? How does a culture create them in the FIRST place? They don't just appear, poof, like Moses' stone tables. Aliens didn't drop them off on their way to Tau Ceti.

We CREATED them. Before we had the energy sources you're obsessed with. Your energy line of reasoning is overly simplistic and misses what's really going on. While the rest of the world wasn't changing their way of doing things, Europeans and later Americans went from a totally ordinary agrarian culture to a world-spanning industrial, high tech culture capable of spaceflight in a matter of centuries. You cannot explain that with your energy theorem.

Nor can you explain (for example) the Persian Gulf's failure to accomplish the same thing even though they're sitting on enormous energy reserves. You can't explain India's or China's failure to accomplish the same thing even though they have vastly more manpower and untapped energy resources of their own (and they even had a couple of thousand year head start, which makes it even MORE significant a failure).

Your theoretical framework fails to explain the situation and you must adopt a new one.

Now, back to my point.

The suits, having as they do a very poor understanding of where innovation comes from and how they may support the intellectual structures that made this country great, are doing their level best to ruin everything that gave them their wealth in the first place. And, clearly I believe that they're trying to "kill the goose that laid the golden eggs".

To expand on this point, let me add that not only are they ruining lives by outsourcing the American middle class, in their zealous desire to protect their "intellectual property" legally with patents and trademarks, they are making it impossible for independent people to invent and release new and interesting ideas to the world. This impoverishes the entire planet, not just the American middle class, because an idea, once lost, may not be reinvented for decades, if ever. And even if an idea IS invented, if some corporation sits on it, stowing it away in their patent arsenal because they don't believe it's profitable, it's not going to help anyone.

An interesting point, though, is that Americans will still continue to invent because it is in our nature to invent. And we will share our inventions with each other, only it'll be on a face to face basis, crazy hobbyists sharing ideas with other crazy hobbyists. Some of this might flow around the world if we encounter a like mind over in Japan, say, or the Netherlands. But it'll all be underground because nobody wants to get sued by some giant, lumbering corporation.

Think of the result of all this. Just think about what I'm saying. Consider how it's going to retard human progress. Or, if you're interested, consider how it's going to affect the American and European economy (we're in the same boat, after all). First, the middle class shrinks and people spend much less money, then the first world nations lose their lead in innovation because it's all being done at the grassroots level and none of that is finding its way up to the mainstream... Then nobody's buying all those gadgets being constructed en masse in China, and as a result there's no demand for IT systems built by Indian companies... The world economy could collapse like the house of cards it's always been.

Back to square one! Tra, la la. Maybe next t

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

All of your examples are extremely recent, long after American and European colleges began admitting students from these other countries. We taught THEM physics, and now they're contributing. Reminding the world that we invented the stuff doesn't diminish the value of their current contributions. But do realize that if it weren't for Western culture, none of this would even EXIST.

Furthermore, you have to accept the fact that there is something special about Western culture that results naturally in innovation and rapid progress. Of all the cultures in the world, OURS is the culture that split the atom. OURS is the culture that put a man on the moon. OURS is the culture that determined the root causes of illness and learned how to treat it -- not with magic, but with science.

I'm not saying that it is impossible for other cultures to be innovative. However, I am saying that it is in our culture's NATURE to be innovative and I don't believe any other culture will be able to fill our shoes once our idiot leaders have poisoned the well (if they even succeed -- Americans tend to be pretty stubborn folk, who take their hobbies underground if they can't be paid to enjoy them).

Note that I am talking culture, not race. I live in New York, and MY culture is comprised not only of Europeans, but of people from every race on the planet. HOWEVER, everyone living here is living within a European-derived culture. Everyone whose family has been here for more than a generation or two has fully absorbed it and is effectively native to it.

You've got to look at the big picture.

I understand this is a matter of pride with you, but I'm actually correct.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

It's... It's... It's a series of TUBES!!!

Hehehehe

Re:Summary of the Corporate Attitudes

[Anonymous Coward]

"Allow me summarize: "It's too expensive to be competitive, and we don't have a vision for being competitive anyway. So we're going to make our shareholders happy and shoot ourselves in the foot. Twice. Just to be certain. But hey, think of all the money we'll be saving!""

Please, being competitive is all about screwing people over. Especially the workers... I'll make it real simple for everyone:

1) They money supply is finite
2) Money is energy, the more you have, the better off you are at making more money and securing your position from threats (other people), period. It feeds back off itself endlessly. Why?
3) As a business owner. It's great to have a desperate pool of workers from which you can pay nothing to do hard burdensome work so you don't have to.

Money is energy, and because it is energy you can control societies most profitable assets when it comes to acquiring things that require large investments of energy to acquire, maintain and control. Usually what people want is part of expensive infrastructure, so those with money or majority ownership can lock out others with impunity and deny others simply through interest rates and loans (i.e. you can live off the interest while putting most of your money to work seizing profitable assets).

I own a business and I take down a hefty salary because I am a miser. I look out for #1, as far as my workers are concerned in the current cultural climate. They are little more then servants to me, this is how capitalism really works: You better be useful or we'll starve you of status, energy and resources. There is a very thin line between being a business man and being a criminal. Marx was correct that the whole system of capitalist production is based on exploitation. People are forced to take any job because: They have no other choice, they can't "opt out" of the market due to 'complex' (i.e. non-market) forces like the discovery of electricity, technological advancement, etc. Some might classify them as "market forces" but most certainly man has existed and can exist with technology and without markets in the form they are in today.

The truth is it's about fraudsters in the stock market trading, and within companies thesedays. It's about the robber barons (CEO's, etc) people pulling down enormous salaries while their companies are tanking or their workers are being offshored and laid off, it's a form of sick social warfare through and through. Our culture does not see people as people, it see's them as things, to be mistreated, abused, discriminated, discarded, etc as owners see fit. It's an employers market I feel sorry for all the people that went and got degree's. I said screw that and went into business where *I* control the prices and the wages, that is the only way you win, either 1) Invest or 2) Go into business and be the owner.

Believe me I do not like it but I am forced to accept the system as it is to survive like many others, since talking about radically reforming peoples values and markets is more difficult then simply giving in, and fucking over others to get ahead.

Look at Ford's CEO's for instance, how is it they are pulling down that amount of money when their companies are economically floundering?

Re:Summary of the Corporate Attitudes

[sustik]

> The amount of wealth in the world is NOT like a tank of water which, when the valves are opened, empties out and distributes the water all around. It's more like a large set of fountains fed by a small set of pumps. And corporate America isn't opening valves to let the water (money?) flow all around. They're taking sledgehammers to the pumps because they stupidly believe that by doing so, they'll get more than their fair share of the water. For the first few hits, they get doused pretty well, and they think "look at all this water! Hit it again!" But then the pumps shut down and that's the end of that.

To clarify, you mean that: the US is guarding the few pumps (and does not let new ones to be set up) and that is where its wealth originates from?

> able to do this due to a number of cultural and structural factors that aren't replicated anywhere else. For example, among all the people in the world, we are easily the most independent minded, the least bound by dogma and tradition (at least when it comes to science and technology). Our inventors have a "what the hell, let's give it a shot" mindset you won't find in many other places.

This must be a different country than the US. The religous right has a strong grip on politics IMO. Have you heard that stem cell research and Kyoto is blocked by the president? Has this been going on in the last couple of years only and not decades?

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

No, I don't mean the U.S. is guarding the pumps. I mean that Americans and Europeans ARE the pumps, or at least have been up until now. Other countries are trying to set up pumps of their own, but this takes a lot of time -- you don't create the equivalent of 500 years of Western culture overnight! Meanwhile, idiot corporate types are running around smashing all the pumps we currently have on the assumption that the new pumps will be ready in time to handle the load.

See what I was trying to get at? It's not that Americans are the only source of innovation; that would be ridiculous. It's that we're particularly good at it, and we're useful to the world, and these corporate half-wits are trying to cut us out of the mix. It's not a good idea; this may sound pushy, but the world still needs us and will for a long while. And why shouldn't it? We're useful. "We" being the American PEOPLE, and our relatively unrestrained way of doing things -- NOT the government, or the military; these are a separate issue entirely, and most of us Americans don't like 'em anyway.

It's too bad the corporate crowd doesn't get it.

ABOUT THE CURRENT GOVERNMENT BEING PRETTY ANTI-PROGRESS:

Yes, obviously you're correct about that. Stem Cells, Kyoto, naturally, I'm with you. Many Americans are. Our government doesn't listen to us any more than our corporations do. This is part of the problem I'm complaining about.

Think of it this way, going back to my "Golden Goose" analogy. The goose that lays the golden eggs represents American and European technologists and scientists. The golden egg is the progress we share with the rest of the world. It's considerable! A nice gold egg. And it's made a ton of money for a lot of unpleasant rich people who would probably be doing something rather more awful if they weren't distracted by all that cash.

One day, the farmer and his wife (representing the rich corporation owners) decide that it costs too much to feed the goose, and after all, they can probably just cut it open and take out all the eggs at once. So they do, they cut open the goose and kill it. Too bad, the goose is just an ordinary goose. No golden eggs. Now the farmer and his wife are shit out of luck. It's a typical European fable meant to teach the lesson "don't be so greedy".

Now, to take account of the president, stem cells, and kyoto, we've got to really abuse poor Aesop's fable, but let's have some fun with it. Maybe it'll show you how I view the whole thing.

The President is the person who owns the land the farmer and his wife rent. Kyoto is represented by crop rotation and proper irrigation, which really is all about thinking ahead. But the President doesn't like that. It costs money, it inconveniences him, blah blah blah. So, no crop rotation or irrigation for you! Of course, the crops are going to get worse and worse and eventually the land will be barren, but he figures he'll have collected enough rent by then, he'll retire, pass the screwed up farm down to his kids and move somewhere else.

Now, stem cells are a tough one... Hmm... Ok. Let's say that one of the farmer's kids has an idea for cross-pollenating two types of corn that will result in better crops with less fertilizer and so on. He knows a thing or two about botany, so he gets ready to begin his experiments. But the President's neighbor is on some kind of religious "WHEAT PURITY" kick and he finds out about the cross-pollenation. It's a sin! It cannot be permitted! And if he sees the kid doing any cross pollenating, he's going to beat him up and burn his grain. The President agrees with him, but he doesn't want to start a ruckus because the farmer pays him rent, the wife is friends with his wife, and so on, so he just refuses to let the kid do any of his work on his land. He makes all kinds of excuses.

Meanwhile, down the road is another farm run by a Chinese family. They're interested in the idea the kid had with the wheat, so they're going to let him give it a try. He goes over there and does it. The wheat bl

Re:Summary of the Corporate Attitudes

[happyemoticon]

I'm not really sure how to describe this in economics terms, but I think, perhaps, that the GP's simile is more aptly applied to the fact that the some business leaders of the past two and a half decades have been performing activities which provide a quarterly cost savings at the expense of future revenues. In an extreme example, you could get great quarterly earnings by just firing everyone in your company and collecting on existing contracts, and then your company would promptly implode. It's difficult for me to see the net benefit there.

Re:Summary of the Corporate Attitudes

[NoMaster]

The real answer to this - and I'm surprised no-one has mentioned it yet - is that "American" automakers bear the crippling costs of pensions and healthcare.

(No, no, calm down - I'm not going to blame unions...)

I'm going to blame shortsighted governance and management. The pension and healthcare costs Detroit faces now are from plans entered into 30 years and more ago. Basically, back then they made promises to pay for things in a far-off and nebulous "future" - then, because that future was so far away, spent the money. Now the debt's being called in, they're in the shit, they're doing their damnedest to renege on those agreements, and there's every sign they're trying to offload it onto government.

As for the article - well, duh! IT and engineering types seem to have long thought of themselves as special irreplaceable snowflakes - while anyone with an ounce of sense and an eye to current events over the last 20-odd years has realised that the only thing that won't be outsourced to the lowest bidder is corporate management (who won't outsource themselves!), and the barest minimum needed of face-to-face sales / service (which have already effectively been outsourced to service companies, or to an untouchable class of minimum-wage slaves).

In other words, you're about as susceptible to changing social, economic, and corporate influences as the buggy-whip makers you like to lambast. Enjoy it while you can - because, unless you can speak Chinese or possibly an Eastern European language, you've got maybe 10~15 years left...

Re:Summary of the Corporate Attitudes

[Bill Dog]

...how is it that Toyota and Honda have profitable factories in America when Detroit is having a tough time...

Simple:

For U.S. workers, the prospect of a smaller Big Three and a bigger Toyota means continuing pressure on high-wage jobs with health and retirement benefits, according to Lichtenstein and Chaison. GM, Ford and Chrysler are unionized, but the United Auto Workers has been unable to organize workers at Toyota, Honda and other so-called transplants, which operate mostly in Southern states where there is little union tradition.

The foreign companies pay comparable if slightly lower wages than the U.S. companies, but they do not have the expensive retiree health and pension benefits that General Motors says add $1,500 to the cost of each U.S.-made car. As the unionized sector of the industry shrinks, labor specialists said, the transplants will be under less pressure to pay wages comparable to those earned by union members.

Detroit has a labor union legacy of decades of astonishing pay and bennies, Toyota and Honda do not.

I'd consider a long look at boneheaded moves in the executive suite.

Well, historically Detroit could afford to give in to pretty much all the union demands, no matter how opulent. But since serious foreign competition arrived, in retrospect it looks boneheaded indeed.

Re:Summary of the Corporate Attitudes

[NoMaster]

He's not missing the point - you are.

The point is not that the quality of outsourced work is less that in-house or local work. It doesn't even matter if it is better. The point is that it is cheaper ! Like it or not, we've created for ourselves a self-perpetuating system where that's all that matters.

Yeah, you can vote with your wallet. But you won't (nobody does); those that do are labelled 'cranks', or 'anti-globalisation', or whatever the current kook-epithet of the month is. And see how long you can keep it up when you've been outsourced...

We've all lain in Procrustes' bed. Where's a modern-day Theseus when you need one?

Re:Summary of the Corporate Attitudes

[pipingguy]

Go back BEFORE we had access to modern forms of energy. We managed to INVENT these forms of energy starting with NOTHING. Think about the steam engine. Where do you think that came from in the first place? Someone invented it. And steel has been in use since the Roman Empire, so don't use that as an example. All you need to make steel is iron ore, a form of carbon to work into it, a hammer to work the metal, and a forge to heat it in. It's VERY ancient technology that predates the use of coal or steam.

Nice post, I enjoyed it. Of course, it being posted at slashdot, many think that "technology" equals computers or software.

Re:Summary of the Corporate Attitudes

[NoMaster]

Of all the cultures in the world, OURS is the culture that split the atom.

And abused it by using it in an unashamed and unnecessary show of force, accelerating the world into 40 years of fear - and, yes, terror - of nuclear destruction.

OURS is the culture that put a man on the moon.

And used (uses!) the technology gained to build ever-more deadly weapons.

OURS is the culture that determined the root causes of illness and learned how to treat it -- not with magic, but with science.

And now holds that science like a sword of Damocles over the heads of your own citizens, as well as both your friends and your enemies, in the form of expensive medical care, rolling patents on long-expired drugs, medical aid tied to cultural imperialism, etc. Not to mention feeding its ever-increasing thirst for profit by inventing new and terrifying "illnesses" to be treated by new and ineffective "miracle" drugs (whilst ignoring many true illnesses - mental and physical - caused by your society itself).

HOWEVER, everyone living here is living within a European-derived culture. Everyone whose family has been here for more than a generation or two has fully absorbed it and is effectively native to it.

So you're basically saying "everybody who lives in my European culture lives in my European culture"? Funny - the same thing happens to Europeans living in China, India, Africa, the Middle East, etc. It's not something unique to European - or even American, great cultural melting-pot it undoubtedly once was - culture.

I understand this is a matter of pride with you, but I'm actually correct.

Pardon me if I don't find your arguments terribly persuasive...

Re:Summary of the Corporate Attitudes

[sethstorm]

But since Reagan got involved with PATCO, in retrospect it looks boneheaded indeed.
Fixed it for you. While it was on a legal technicality, it is known well to be the signal that eroded worker rights ever since the workers were fired. How's that for "government non-interference"?

Well, historically Detroit could afford to give in to pretty much all the union demands, no matter how opulent.
And is that a problem? It's been the other way around since ~1980, and then some. The same reversal of fortunes have even stretched to other industries as well given the green light from Reagan.

Detroit has a labor union legacy of decades of astonishing pay and bennies, Toyota and Honda do not.
Union or not, treating workers with highest respect does make things better in terms of quality over all. It's hard to complain if work can be focused in the fullest by removing the issues in front of it.

Not everyone can to being $DEITY by being a business owner, or remove their ethics along the way. Those who have tried to maintain humanity have been mostly driven into the ground. See (post AT&T GIS)NCR, IBM, Unions, and The (True, Domestic) Big Three to name a few.

Re:Summary of the Corporate Attitudes

[janrinok]

While I can agree with much of what you say, I have to disagree on the matter of software. It is not free software that is killing the 'commercial' OS, but the enforced tie in to one company's standards which change frequently thus necessitating another expensive upgrade. Open standards coupled with reasonable pricing and Microsoft will still be providing thousands of jobs in the USA for many years to come however, without such a change, then I fear that commonsense and costs will drive everyone other than Americans to look elsewhere. The world does not owe you a job.

Re:Summary of the Corporate Attitudes

[dpilot]

Gee, most people seem to practically worship Reagan.
IMHO, Reagan "Loosed the hounds of greed" in the US.

(What's a "freak"? I generally don't bother to pay too much attention to those little circles to the right of names, though "friend" and "foe" I can understand.)

Re:Summary of the Corporate Attitudes

[maxume]

My point about steel was that before coal, it was very, very difficult to obtain...industrial quantities. The energy from coal increased the supply of steel to the point that even crackpot tinkerers could make their wildest imaginings real. Energy utilization enabled technological advancement which enabled further energy utilization which enabled further...it's a virtuous cycle, you can't have one without the other.

So the key point about energy is not about looking to the past and saying look what it did for us, it is looking to the future and saying look how little we have. That I disagree with your view about the supreme efficacy of western culture could be a sign I don't get it, but as far as I can tell, the entrepreneurial spirit is extra strong in the US, but strong everywhere else none the less.

(that our physical isolation and political framework tend to encourage investment is no doubt responsible for a large measure of our success, but it wouldn't have done us nearly the good it did if we did not have extensive resources to draw upon)

Re:Summary of the Corporate Attitudes

[superbus1929]

A freak is someone that has officially listed you as a "foe". :(

Re:Summary of the Corporate Attitudes

[mike27112]

You've got to look at the big picture. Agreed. Indeed, the big picture is what compels me to point out the fact that many great American innovations have been made by non-European Americans as well as European Americans. In case my point isn't obvious, let me spell it out: people of different races have come to this country, become a part of its culture, and contributed to the trend of American ingenuity. If you think about it, this fact actually supports the idea that "there is something special about Western culture that results naturally in innovation and rapid progress." The people I mentioned in my earlier post aren't Asians or Africans. They are Asian Americans and African Americans. To reiterate my point: American culture is comprised of individuals claiming European heritage as well as those who do not, and both groups have participated in and perpetuated American progress in science, technology, medicine, etc.

Note that I am talking culture, not race. I live in New York, and MY culture is comprised not only of Europeans, but of people from every race on the planet. Great! Mine too. =)

HOWEVER, everyone living here is living within a European-derived culture. To the extent that American culture is derived from European culture, I can see your point. But let's take this analysis a step further: although American culture is based on European culture, American culture is now its own creature. I was born and raised here in the states, and I feel comfortable living here. I don't think I could say the same about living in France, Germany, England, etc. I'm sure there are many Americans who would agree with me here. For one, I care a lot more about Peyton Manning and the NFL than I do about David Beckham and soccer! :-p

I understand this is a matter of pride with you, but I'm actually correct. Given that we don't know each other, I'm not so sure that you understand anything about me (or I about you), but there's really no need to be so defensive and antagonistic. Again, I'm agreeing with you that American culture is something special; I'm merely asserting that people of many races have been and are involved in it.

Re:Summary of the Corporate Attitudes

[Maxo-Texas]

It's not that simple.

There is a limited supply of cheap, educated, useful labor.

They are experiencing VERY high inflation rates.
Their currencies are appreciating against our currency.

At the current 14% inflation + 4% appreciation (18%), indian rates will *DOUBLE* in only four years. So from a burn rate of 35 to a burn rate of 70 vs an american burn rate of 90. And they don't even have the social benefits we do wrapped into their paychecks. Combine that with americans wisely leaving these fields in droves- I see an incredible opportunity for americans who can weather the next 4-6 years.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

Well, first of all, "industrial quantities" are not required for innovation or progress. Thomas Edison did all his work by hand, with the hand tools of the time. And he gave us DC electrical power, the light bulb, and hundreds of other inventions. His entire laboratory probably used less energy than a single modern house in the suburbs, and yet he managed to change an entire culture with it.

By the way, ANYONE can make steel in their back yard. Ok? It's ancient technology, and not particularly hard to implement. Stop pretending it's rocket science, because it's not. You're desperately trying to prove a theorem that doesn't work. Free your mind!

Since you brought it up, we have an unlimited supply of energy available to us, and once the oil runs out we'll be forced to actually tap into it. The thing holding us back currently is "Big Oil" which puts out propaganda that tries to equate energy with oil reserves, mostly in hopes of convincing Americans that oil is so important that it justifies war. You've obviously bought into this already, but you really ought to try and reconsider it.

First of all, there are many alternative energy sources that are maturing rapidly. They should be able to replace oil within the next hundred years, at which point your entire argument will collapse in a puff of logic.

Some of the processes currently being researched include improved solar power (getting cheaper every year!), wave power, geothermal, wind, hydroelectric, mining methane hydrate from coastal areas off the SouthEastern United States, and (eventually) fusion. Currently we can generate power from natural gas, coal, shale oil, and methane produced from waste decomposition.

The idea that Big Oil is the only energy source in the world is pure propaganda and should be roundly mocked.

Some things people RIGHT HERE in upstate New York have done include:

* Setting up a small heat exchanger on an artesian well to cool a house in summer and avoid air conditioning bills;

* Setting up a water wheel to generate DC current for a house near a stream;

* Rigging an entire house to use solar panels and marine batteries;

* Using wind generators, which only cost a few thousand bucks when you buy the small, individual-house models.

So, DO try and relax. The crisis you imagine is all in your head, planted there by Big Oil to make you fear and loathe foreigners competing with you for a supply of a soon to be obsolete fuel source. It's a dirty trick, don't fall for it.

Do me a favor before you reply with more info about your theory. Google the things I've talked about. See for yourself. Keep an open mind and actually THINK about the POSSIBILITIES.

You'll feel better! Honest. :)

Re:Summary of the Corporate Attitudes

[maxume]

Your tone is more or less unnecessary.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

Ok; that's absolutely fair and I wouldn't disagree with you. Maybe I wasn't clear on this point: I don't think it's people of European DESCENT that are the special something that we have; it's the European-derived CULTURE, which has grown into American culture, that does the trick. Since the dark ages, about 500 years of incubation have gone into creating the unique mixture of characteristics that make up this culture. I don't believe any other culture has achieved the same mix. So my thesis, here, is that there's something very special about American and European culture that makes us important to the world at large.

Now, you are absolutely right in saying that asians, africans, and other races have come here and become a part of the U.S, contributing to progress and being a part of what we've achieved. But notice that when they came here, they adopted this culture and merged with it. They didn't remain in their own cultures -- their innovations happened within ours, while they were operating according to our mindset and values.

One strength of American culture in particular is that we have a strange capacity for cherry-picking and absorbing the most productive habits and approaches from other cultures, modifying them somewhat and making them our own. When people come in, we pick and choose from them what we want to adopt and we merge it into our society as a whole; you could think of this as a sort of open-source culture in a way. We're one of the only cultures that does this so readily, by the way -- many other cultures are very hostile to foreign influences and they complain bitterly about "westernization".

I believe part of this comes from the English language itself. One of its weirder characteristics is that it can adopt and absorb virtually any foreign concept or word effortlessly. It's a pure stroke of luck that our language is entirely phonetic, composed of 26 multipurpose glyphs. Any sound a human throat can make can be represented in English in one way or another (except maybe for some clicks used in certain African languages, but that's not that big a limitation overall). Perhaps the fact that English can suck in any expressible thought influences our culture's ability to suck in and absorb concepts. Then the language kind of becomes a framework for the society itself. They say people think in their own languages; perhaps this flexibility forces itself on the mind that is using the language as well. So you think in English, which is flexible, and as a result you become more flexible, like catching a virus... ?

Just thinking out loud.

Not that I think other European languages don't have the same facility, they do. So does Japanese; they have tons of what they call "loan words" (did I get that right? I think they created a whole alphabet for them, Hiragana, right?).

This is pretty interesting to me, anyway. I love playing around with this stuff. It's so similar to software. Heh, I think language as software isn't a bad analogy!

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

Wow, SOMEBODY woke up on the wrong side of the bed. Are you always this negative? Talk about the glass being half empty... Yours is half empty with cigarette butts floating in it and lipstick on the rim.

I don't buy into your view of everything as being a big downer. I don't focus on the negative results of our progress, because those negative results pale in comparison with the positive things we've done.

By the way, since you decided to drag out the old "Boo, hoo, America nuked Japan" argument, let me remind you about the atrocities Japan committed during that war such as the rape of Nanking, the Bataan Death March, the wide-scale slaughter of American POW's, and the brutal and evil medical experiments they carried out on American POWs without anasthesia. We weren't feeling too charitable towards them at the time, for many good reasons. Everything that happened back then happened and can't be altered now. Let it go.

Anyway, you can't think about WWII without considering the context. You can't consider the validity of an action without remembering the framework within which it took place. The nuclear bombs that were dropped on Hiroshima and Nagasaki were comparable in destructive power to the firebombing and heavy bombing campaigns that were already taking place; the destruction just happened all at once instead of over a period of hours. They had more psychological effect because the explosion was something nobody had ever seen before; the actual level of destruction and loss of life, however, was nothing new in that war.

Bottom line: Relax, man. All that negativity isn't good for you.

Re:Summary of the Corporate Attitudes

[SadGeekHermit]

Ha! That's funny. My "tone". Am I a tenor or a baritone? I always thought I was a bass...

Do relax. And do some googling.

Re:Summary of the Corporate Attitudes

[maxume]

If you want me to listen to you, stuff like 'Do relax' isn't going to help. That's what I mean. I'm surprisingly relaxed. Really. Since you have no idea, maybe you shouldn't comment on it(stating which is no doubt a sign of how high strung I am and so on, all the way down, as it were).

I may not have expressed my position about energy very well, I don't know; I'm not that worried about the future of energy(meeting portable energy needs in the mid term is at least interesting). I have a tendency to flip back and forth in my mind about it. It certainly seems to be an immediate political concern.

I do think that humans are nearly universally willing not to do work if they think there is a way to avoid it. This is often what we call innovation, and often requires energy. Humans sitting around avoiding work(because someone else is growing their food and providing the energy to heat their house, helping them meet their 'basic needs'), has opportunity to apply their time to being clever. Edison may have brought about many innovations without actually consuming massive amounts of energy, but he was able to run a lab because his needs were being met, as far as I know, by consuming energy.

I'm not denying the importance of an innovative spirit, but a cold, hungry man tends to be very focused on his immediate needs. Once he can meet those needs with his mind instead of his body(which very few people have done historically, at least until very recently), he is able to accomplish much much more. Yes, energy is useless if you don't have a mind to utilize it, but once one man figures out how to do the work of ten or one hundred men(or some number of horses, etc.), you have that many more people with the time and comfort/security to do something other than find food and shelter. The explosion of western culture in the last 500 years may not have been caused by increasing energy utilization, but it would not have been possible without it.

(re steel: I read "Collapse: How Societies Choose to Succeed of Fail" recently and found it rather fascinating that the Vikings of Greenland made trips to Newfoundland largely because they were unable to make steel in their backyard, as they no longer had any trees to make charcoal with. They had limited access to a very valuable resource because they were unable to gather enough energy locally to make steel. So maybe I am a little hung up.)

Re:Summary of the Corporate Attitudes

[Geminii]

I wonder - what would happen to markets around the world if someone invented cheap mass teleportation?

Duh.

[cyphercell]

Well it's official I'm smart enough for a job, but it's not going to happen.

Re:Duh.

[Paracelcus]

Yeah, 5 years and thousands of resumes later, I gave up, screw it! I really feel for the younger American workers, I'm not optimistic at all! Whats holding the economy together? It's based on shuffling paper, MBA chuzpa and equitys fraud.

Re:Duh.

[cyphercell]

Funny, I'm working on my resume right now. ;)

Re:Duh.

[Wiener]

Funny, I'm working on my resume right now. ;) So am I...because my PROFESSION was offshored...

Wasting money proving the obvious

[Marxist Hacker 42]

Gee, American corporations put profit above every other consideration- call the evening news.

The sad part is it took an actual university study to reveal the lie.

Re:Wasting money proving the obvious

[Seumas]

For the longest time, we were all force fed the myth that money had nothing to do with outsourcing and that it was simply due to some non-existent lack of skilled American employees.

And really, even if that were the case, doesn't capitalism demand that you pay those employees what the demand is worth rather than stabbing them in the back and going elsewhere or importing tens of thousands?

Re:Wasting money proving the obvious

[Marxist Hacker 42]

Yep- it was so obvious that this was a myth and a lie to begin with. It's very sad that resarch dollars had to be wasted on this.

Re:Wasting money proving the obvious

[Anonymous Coward]

There is another name for this. It's called the "Demise of the Middle Class". Today's corporate profit taking and outsourcing for the sake of lower costs, will translate into lowered salaries, fewer high skilled jobs, and a dumbing down of Americans. This will translate into lower consumer spending power tomorrow, which will hurt these same businesses tomorrow. America will be the India of tomorrow. A few rich people, and a large number or majority of poor people. There will, however, be one major difference. We will continue to worship our celebrities and athletes, and will continue to pay ridiculous compensation packages to our CEOs regardless of their performance. Ah, the power of big business, their lobbyists, and a congress that only cares about election contributions and the quest for power.

Re:Wasting money proving the obvious

[qwijibo]

Capitalism demands that the employer try to screw the employee by giving them as little as possible. What an employee is worth is set as an agreement between the employer and employee. If an employer isn't willing to pay what an employee wants, one side has to give in. Finding an employee somewhere with dirt floors who will take less is pretty easy in a global economy.

Re:Wasting money proving the obvious

[Marxist Hacker 42]

A potential loophole in the system has been found- at least for those who are still middle class. Globalization or automation, either way basing life on the scarcity of labor is a doomed concept, so it's time to start preparing for the next stage, by pooling our resources now to buy up resources to live on when labor cost descends to zero.

Re:Wasting money proving the obvious

[Esion Modnar]

to reveal the lie.

It's the lie that's right up there with "I'm resigning to spend more time with my family" not "...because I got caught with my pecker in the snack machine."

Re:Wasting money proving the obvious

[Ihlosi]

Capitalism demands that the employer try to screw the employee by giving them as little as possible.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible. " - Henry Ford.

However, blind greed is much more in style nowadays.

Re:Wasting money proving the obvious

[qwijibo]

Sure, that's a business model that might work if you want to have long term, loyal customers and employees who work for you until they retire, keeping the cost of training new people down. However, Henry would not make it past middle management in any decent sized company these days without being about to demonstrate how his plans will save money this quarter, while increasing productivity and cutting costs next quarter. The current theme is infinite production at zero cost, and if you don't have a story that leads to that goal, you're going nowhere. Us technical people have it the worst, blathering some nonsense (from an MBA's perspective) of that being impossible.

Re:Wasting money proving the obvious

[Anonymous Coward]

And yet, it's Mr. Ford who is the namesake of the company that basically changed day-to-day life today, (He may've not invented the automobile, but he DID invent the assembly line, which is essential for mass production) and it's these middle management types that killed HIS company!

Re:Wasting money proving the obvious

[Marxist Hacker 42]

Henry Ford was considered an evil communist by his fellow indusrialists- after all, he paid $5 a day (5x the going wage!) for his factory workers in 1921.

Re:Wasting money proving the obvious

[PhxBlue]

The news is that we as a nation are throwing away our next generation of technical expertise for three more months of dividends and meeting earnings expectations.

Re:Wasting money proving the obvious

[Marxist Hacker 42]

That's not news. That's what we've been doing, slowly, for 40 years now.

Re:Wasting money proving the obvious

[aadvancedGIR]

I've seen first hand a total waste in the name of cost saving.

I worked in a development team split across several sites in USA, Europa and India. Due to the relative costs of Labor, only the indian site was allowed to recruit (and did a lot), but they chosed to rely on their famous name to offer only dirt cheap salaries, so we ended up getting dozens of young indian engineers who stayed there only long enough to make it look like a good first experience then left for greener pastures (usually at the time they more or less ended their rampup and would have been fully productive) and a large proportion of work of the seasoned engineers (from both indian and western sites) wasted to continually train those passers-by (I personally spent up to 50% of my workload helping one of them because I needed the part he was reponsible for and had to took a little blame for my low productivity).

I have nothing against those people (after all, they were smart enough to see how to get the best from that situation and usualy worked seriously), but the joke no one dared to tell the big boss was that the indian site produced more CV than code.

Anbd as a sidenote, cultural difference can cause a few troubles. Depending of who you are talking to, "OK" may not mean he agrees with what you say, only that he understood it.

Re:Wasting money proving the obvious

[qwijibo]

"OK" doesn't even mean that it is understood in all cases. I'm not sure if it's a cultural issue or something else, but I've found a desire to please when confronted with a direct question.

For example, people respond to questions like "Will this be done by Friday?" with "Yes" when the answer I would prefer is the more accurate one - "No, we have no intention of even starting that. To ensure your continued happiness this week, we will not tell you the bad news until next week(after it's supposed to be done)."

This is in stark contrast with more confrontational Americans who will respond to "You'll be able to put 80 hours into each of these 12 projects today, right?" with "Put the crack pipe down. 80*12=960, which is 4000% of the 24 hours that are available in one day. If you wanted any progress on any of them today, you should have said something before 5:30PM."

Cost of living

[geek]

Until we reduce the cost of living in this country companies will continue to outsource. It's all about money. I can't possibly earn less than 4k a month due to bills, rent, etc. Less than that and I am in serious doo doo (I live in California where prices do nothing but sky rocket every year).

Maybe it's me being paranoid but how in the world are jobs leaving this country they way they are and yet the cost of living goes up every single year? Housing prices are seemingly out of reach to everyone yet they keep selling. A recent report on the news here in CA was that fewer than 9% of the CA population can afford to buy a house in CA.

Until we can make it affordable to live here we'll never be able to hold on to the jobs.

Re:Cost of living

[Anonymous Coward]

Maybe it's me being paranoid but how in the world are jobs leaving this country they way they are and yet the cost of living goes up every single year? Housing prices are seemingly out of reach to everyone yet they keep selling. A recent report on the news here in CA was that fewer than 9% of the CA population can afford to buy a house in CA.

Psst.. hey bud.. here's a hint: it's called "The Midwest".. and.. keep this under your hat.. you can get jobs there.

Re:Cost of living

[99BottlesOfBeerInMyF]

Until we reduce the cost of living in this country companies will continue to outsource. It's all about money.

Actually more and more companies are looking not to outsourced Indian developers and support staff, but to outsourced and even satellite office US developers and supports staff. The problem is not that housing and cost of living is too high in the US. The problem is the housing and cost of living is too high in expensive areas of California and that is what most Slashdot readers pay attention to.

This is interesting because I was in a meeting this morning with our director of engineering where this exact issue was discussed. Some places in San Francisco a medium sized house costs you 5 million and 60K in taxes a year. My medium sized house in a normal part of the US cost about 120K and I pay a few grand in taxes on it a year. There are places in the midwest where amidst the corn fields you'll come upon an island formed by a university, a small town, and support facilities for a dozen major international corporations.

My advice to you, if you live in CA, move somewhere affordable. If you are looking to hire talent, look to a satellite office somewhere that is not crazily expensive. If you're looking to outsource development or support, there are cost competitive American companies with a lot smaller risk and cheaper travel expenses that Indian companies.

Re:Cost of living

[stevesliva]

Maybe it's me being paranoid but how in the world are jobs leaving this country they way they are and yet the cost of living goes up every single year?

You mean, how is it that we're spending more every year while wages are going up? Excess liquidity and a credit bubble and a negative savings rate...

Re:Cost of living

[king-manic]

A lot of companies are also looking north to Canada, virtually the same country but with slightly better educated colledge grads and slightly lower cost.

Re:Cost of living

[Maxo-Texas]

Partially subprime loans.

If people with no credit are given 700,000 to buy a house- then that house goes to 700,000 even if it realistically should be 400,000.

That's a hard correction that's coming.

Next- what you allude to. Prevailing wages. As our wages drop, prices should drop.

Finally scarcity. Sorry but california is very pretty/popular so the people who do have money are going to bid the place up.

Re:Cost of living

[krcat1]

That is the part of outsourcing that most do not consider. The reason outsourcing is cheaper is that the small business people that provide services to the technical people in the developing areas are living on far less than small business owners in the US do. The only way for US techs to compete is for the US small business people to accept only a third or half of the money they make now. If local businesses in the US ever truly understood this, most outsourcing would be stopped. This might not be good for any economy, but it would happen.

Re:Cost of living

[mh1997]

I moved to a rural Midwestern town for a $90K year engineering job. Cost of living is half what it was for me in Virginia Beach, VA. If everyone else figures this out, my new rural home will be part of the suburban sprawl that I escaped from.

Re:Cost of living

[Hoi Polloi]

Here in Massachusetts they've been finding subprime lenders that received a W2 from an applicant for a loan that showed one monthly income amount then submitted a loan application with a higher amount on it so the creditor would ok the bigger loan. Now they can't pay their growing mortgage payments.

Re:Cost of living

[daigu]

You should read Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence. The bottom line is that you can, today, make your lifestyle more affordable and make better choices about how you spend your money (or earn if for that matter). Even if you have made poor ones up to this point, you can make changes for the better. The goal is getting to the point where the income from your investments is more than your expenses - then you won't need to work at all.

Don't get me wrong, it's hard - and I'm not there yet either. But I too feel the same frustration you are expressing in your post, and reading this book was the first time I understood that it did not have to be that way and to some degree, I was responsible for creating the conditions in the first place. Hopefully, you will find it as comforting as I did.

Re:Cost of living

[Richard Steiner]

It's not just the midwest US, either. Housing in the Atlanta area is considerably less expensive than it was in the Minneapolis/St. Paul area, for example.

Re:Cost of living

[QuantumRiff]

Screw CA. I live in southern OR. I have watched home prices double here in the last 2 years, cause people sold their 2 bedroom, 1 bath home for $750k and moved up north, where it was cheaper (they could buy a ranch with acreage for that amount here). California caused all their own problems, from massive amounts of interest only loans (the attitude of: I can afford a more expensive place, cause I'm not paying anything towards its balance, i'll just cross my fingers, and hope that interest rates don't go up to where I can't afford the payments anymore, or that I'll sell my home for insane money, cause its always going to increase this much) and the fact that while people were selling homes like crazy, they were buying other homes as "investments" or taking out huge home equity loans to buy nice cars, boats, etc.

Here is the sad part to think about, if your landlord is smart, and bought the place your living in a while ago, and didn't borrow heavily against it, they're making mad money. IE, they borrowed 100k for the house, with a mortgage of $600/month, and the house next door was bought last year for 400k, with a mortgage of $2400/month. They rent the house next door for $2600/month, so your landlord goes with a similar amount, pocketing $2200 a month!

Re:Cost of living

[Maxo-Texas]

It's a good idea until you get a chronic illness.

We need national health care for the common stuff like blood pressure and broken legs. Not for stuff like cancer. (as a cancer survivor i know one of us eats up enough to fix 200 broken legs in only five months).

Re:Cost of living

[Darlantan]

I wouldn't worry too much about that. There's a whole lot of people that don't want to live in the midwest simply because it is the midwest.

Re:Cost of living

[Anonymous Coward]

If you buy a pet bed from China it comes with less than $2 of tax. If you make one here yoursef then you'll pay at least twice that much tax. Unless the US levels import tarriffs with income taxes and other nefarious business taxes then the US government is knowingly and willingly punishing Americans and rewardng expatriates and offshorers. Why? The same rich men than run the government own these companies. It's feudalism all over except this time we are controlled by laws and finances rather than a sherrif that collects tax coins and punishes us if we try to escape from the landowner who owns us.

The only solution for us in tech is to use Free and Open Source software. By doing so we remove the cost advantage of offshoring. Integration has by its nature to be done onsite. Otherwise it is a losing investment.

Thanks to Duke for this story. Even more terrible is the L1. I worked at one place where an individual contributor had been on an L1 there for 2 years and in the USA for years. I called the immigration hotline and they basically said "who cares". I emailed the regional rep and he never even responded. The rich men in Congress (and women such as Hillary who's tight with Tata) believe the laws of this nation apply to the peons but not to them or their backers in India. In the long run, a fair immigration plan would benefit Indian workers far more than subjugation under L1 and H1; but, of course the goal of the government is to reward the wealthy and establish a Corporate Aristocracy (well along the way) and return us to the European 1600's.

Re:Cost of living

[daigu]

I agree that the U.S. needs better infrastructure for health care, with an emphasis on preventative care. A national health care system is one way to go about it.

Still, getting a handle on your financial life also means getting the right insurance for catastrophic events such as becoming disabled or developing a chronic illiness. It's just another layer that needs to be considered as you move toward a better relationship with money.

Re:Cost of living

[Tablizer]

My advice to you, if you live in CA, move somewhere affordable.

I've heard about outsourcing going on to the backwoods of Kentucky, but .... um .... who the hell wants to live in the backwoods of kentucky? You may never see a pizza joint or Burger King again!

Re:Cost of living

[misanthrope101]

Real estate is indeed cheaper in many places, but the problem is that the places real estate is cheap are also places that are less interesting to live in. Manhattan, San Francisco, Seattle, etc have culture, like theaters, bookstores, good and varied restaurants, libraries, symphonies, and so on. Small town USA has church and Wal-Mart. Well, there's the corn festival, but you get the idea. I grew up in a small TX town where you can still buy a livable house for $25K or not much more. Considerably less, if your needs are modest. I once looked at a livable, decent 5-bedroom house in a small Oklahoma town for $15K. The town was basically a deceased oil town. If you don't farm, what do you do? I'd rather be broke in an interesting place than rich in a boring place.

Yes, the internet softens some of this. When I was a kid I had no bookstores other than Waldenbooks in the mall (notice I said "the" mall, not "a" mall) and now I have Amazon.com, addall.com, half.com/ebay, and so on. I can buy anything. But there still isn't that much to do in small town USA, and the mindset can be stifling if you're from a blue state way of thinking. And even if the adults like small town USA and want to raise their kids there because of low crime/affordable living/etc, the kids often hate it because there is so little to do. I grew up wanting nothing more than to get out. Small towns are famous for sucking you in.

Re:Cost of living

[Capt James McCarthy]

"Until we can make it affordable to live here we'll never be able to hold on to the jobs." Bzzzz. Potentially Wrong answer. It's about double-digit quarterly gains on Wall Street. The companies answer only to the share holders who are living in the past. Wall Street is as much to blame as anyone. During the tech boom of the 90's, Wall Street sold _everyone_ that stocks were the way to go for income. Then that failed with the dot bomb, yet Wall Street/share holders still demands double-digit quarterly gains. And according to that small, loud, bald coke-head on TV, "Buy, buy, buy." (and employees are 'overhead')

Re:Cost of living

[99BottlesOfBeerInMyF]

Real estate is indeed cheaper in many places, but the problem is that the places real estate is cheap are also places that are less interesting to live in. Manhattan, San Francisco, Seattle, etc have culture, like theaters, bookstores, good and varied restaurants, libraries, symphonies, and so on.

I currently live just outside of Ann Arbor, MI. I'm between a large university and a huge one. My commute to work is 20 minutes. Ann Arbor has more bookstores per person than any other place in the eastern half of the US. There are literally dozens of small book stores within walking distance of me right now as well as the original Borders. There are probably 50-100 restaurants within walking distance of work. There is a huge county library with an amazing collection of historical documents and rare books and a university run library within walking distance. There is another library a few blocks from my house and yet another massive library a few minutes drive from my house. There is live theater in several places every weekend, a couple of improve comedy places, lots of live music everywhere. I might mention Google just started up their business here this last year and are committed to hiring on 5000 people in the next few years. We're always hiring experienced coders.

Well, there's the corn festival, but you get the idea.

This weekend is the "hash bash" festival where everyone goes downtown and smokes pot and people set up sales of artwork and bongs and things. I think it is a $50 fine for possession here. There are art exhibitions and festivals all the time. In the giant park a short walk from my home there are a dozen different festivals every summer including one of the largest beer tasting festivals in the country, an annual elvis impersonator event, and a antique car show devoted to cars from companies that no longer exist.

I'd rather be broke in an interesting place than rich in a boring place.

That is, of course, your choice. My point is people whining about the high cost of living driving work away should either quite their bitching or solve the problem. There is plently of middle ground in the US where things are happening and it is a fun place to live, but the housing prices are not crazy. (As I mentioned before, my medium sized house in the downtown of an outlying area cost ~$120K.)

But there still isn't that much to do in small town USA, and the mindset can be stifling if you're from a blue state way of thinking.

The only thing I think you might need pointed out to you, is your choice is not the middle of nowhere in Iowa or San Francisco. There is plenty of middle ground. Every state has a few college towns with some night life and interesting things happening and they are relatively inexpensive to live. You don't have to choose between poor and bored. You can be moderately amused and with cash in your pocket.

Re:Cost of living

[misanthrope101]

Your area sounds great. I was just one of those kids growing up in somewhere that is practically nowhere. There are worse places--I drove from TX to CA and there were little burgs where the only radio stations were religious AM broadcasts, and otherwise you hit "seek" on the radio and it just goes in a loop. Little places like someone eventually makes a "Children of the Corn" or "Jeepers Creepers" story out of. There is a lot of nowhere in the USA. I'm glad that there are places like yours that are affordable and culturally decent. If I had grown up in a college town (Austin, for example) my opinion of Texas might not be so horrible. As it is, the best I can say about it is that it isn't as bad as, say, the creepy hitchhiker in Texas Chainsaw Massacre.

Re:Cost of living

[Maxo-Texas]

You cannot get and keep enough insurance to cover a chronic condition.

Period. So once you develop a chronic condition you have to have a job or qualify for medicare.

I thought everyone knew that by now.

I find that..

[C_Kode]

I find that it's outsourcing the reason I don't buy support contracts anymore...

So....

[cyphercell]

Bill Gates was lying?
http://politics.slashdot.org/article.pl?sid=05/04/ 27/2232244

Couldn't be?

Re:So....

[DigitAl56K]

No, it couldn't be. Gates was talking about bringing talented people into the country, not outsourcing.

Re:So....

[Fulcrum of Evil]

Teehee, no. He's about bringing H1Bs into the country, which is another thing entirely. H1B workers are in a much weaker position when it comes to job hopping, so they don't get paid as much, on average.

Simple solution

[Anonymous Coward]

Illegalize outsourcing beyond borders. Unfortunately, some of the money saved in outsourcing likely pads the pockets of politicians, so the average American worker might as well just bend over and get it done with.

Re:Simple solution

[GoneSouth]

How bout we form a central committee to set wages and prices while we're at it?

Re:Simple solution

[Anonymous Coward]

What a clever solution. So, companies, instead of outsourcing, will completely move operations outside USA (or are you going to outlaw that too??), will make stuff for much less, and will put the companies staying back in US out of business. Will you be barring import of cheap software too? While at it, why not bar import of cheap shoes, clothes, cars from outside? Heck, let's stop trade!!

Re:Simple solution

[rocketman768]

outsourcing will continue to be a problem for US workers in coming decades

Uh, do you not realize that unemployment is twice as low as it was in 1975? You people who think outsourcing is a problem just don't get it. First-semester economics will teach you that the global economy is best when each country produces the products it is best at producing. Apparently, China provides really cheap engineers. THEREFORE, it will help the global economy.

Basically, the US is just in a period of transition. Transition to what? Transition to a society of intelligent, non-hard-labor workers. My goodness...whenever houses are being built or painted or roofed, Mexicans and other hispanics who live here are doing the work (at least in my area). Why? Because hardly any American wants to work like that for such little money. Everybody is going to college to get a nice cushy job. Why do you think college tuition is going through the roof (believe me, I should know)? Because high demand for college entry is driving the prices that high.

Please, ask yourself _why_ you think outsourcing is so bad. Is it because some news station said so?

where's the "Duh!" tag?

[night_flyer]

well?

Sad.

[Rob T Firefly]

Rob T Firefly wants me to tell you, as I type on his behalf from my firm's office in a dark corner of a cramped and humid barn on the outskirts of the Duchy of Grand Fenwick for pennies a week, that he is shocked and saddened by this news.

where is original data

[cinnamon colbert]

here we have a comment about a press release about a study
why on earth are people so lazy they can't provide a citation to the exact original study, so you can actually see what the authors found out - not what they said, or the press release said, or the/. editor or submittor said, but what was found
sloppy, lazy , stupid - no wonder people off shore

Wow!

[Anonymous Coward]

Wow, what a discovery! This is as significant as the discovery of the electron itself! Why did it took this long to figure this out??? I guess some one had to get a PHD before they could figure out this well known fact, eh?

Re:Wow!

[Anonymous Coward]

Well, they have the funding to do the research. Most of us peons who suspected this the whole time don't have the ability to stop working to look up facts and figures long enough to make a report like this. Plus we don't have any free time.

And this is a suprise, how?

[insanemime]

Was this article anything but a big "duh!" for anyone else but me? If you have ever had to deal with a support rep from any major computer maker (when they require to troubleshoot with one of their "techs" before you can send someting in for warranty repair/replacement) you know that these people have no clue and are following a troubleshooting flowchart. There are no engineers or tech experts on that phone line. My favorite thing is when they answer with their barely understandable english and say "Tank eu for cauling (name of place) my naam iz Steve".

Additionally...

[Anonymous Coward]

Those who work, learn how things work. Bad news for Americans who won't lower their salary to compete.

Thats a problem with the winner of a job position. Not only did they beat you getting the job but now they're going to get more experience then you now having the job.

I like to call this the cascading winner effect.

Counter strike makes a perfect example. The winners of each match get more money and thus can buy better equipment ( better rifles, grenades etc.) Thus the losers lose even more. As far as I can tell, the best way out if you're a loser is to not have children. Phase yourself out if you're a loser, teams are going to be stacked against your kids.

Re:Additionally...

[voice_of_all_reason]

As far as I can tell, the best way out if you're a loser is to not have children. Phase yourself out if you're a loser, teams are going to be stacked against your kids.

I've always wondered why no one ever tried this in the numerous examples of slavery in history. I mean, it's not like the plantation owner was holding a gun to your head demanding heirs. At what point did it occur that the kid was going to end up enthralled just like you for the rest of his life?

Re:Additionally...

[cyphercell]

Bad news for Americans who won't lower their salary to compete.

Lower your salary enough and people will think you're incompetant, when asked why your willing to work for so little all you can really say is that you need the experience, because to get a job you really have to be twice as qualified as you should be. So, if you have an AAS and want a job you're qualified for, you need to have 2yrs experience too, because the guy (B.S.) that you're competing with just lost his job to some guy (B.S.) recently graduating in India.

Re:Additionally...

[Anonymous Coward]

Actually slave owners did force breed their slaves.

Re:Additionally...

[Anonymous Coward]

At what point did it occur that the kid was going to end up enthralled just like you for the rest of his life?

Obviously it occurred well after "I'm a slave and everything about my life sucks but at least I can have some sex" occurred. Kinda hard to worry about how it'll be for your kids when you're just hoping to get through the day without being lashed.

Re:work ethic my eye

[Marxist Hacker 42]

Perhaps this is true in China, but I just found out that my India developers are refusing to work tomorrow because of the Good Friday holiday. Turns out that just about every Christian, Hindu, and Muslim holiday is nationally considered a day off. This bones me supremely, because I've got stuff due at the end of the week, and my developers are on vacation starting this morning (thursday) until monday.

Did you remind them that Good Friday, by ancient Christian tradition, does not start until 3pm?

Have I been living in a cave?

[Zadaz]

Um... The only reason I've ever heard given for outsourcing was money. When the hell did they invent this other bullshit, spread it and have people buy into it, and then do a study debunking it?

Was I too busy working?

Re:work ethic my eye

[geek]

And as a result we're over worked, under paid and have a greater than 50% divorce rate while our kids are left with a TV screen as a babysitter and our family structure is collapsing in favor of a nation of single people too self absorbed to take time off to form some basic social connections.

I'm sorry but "work work work" isn't what I would call a great existence. If you want it fine, but don't call me lazy for actually wanting to live a life I only get once chance to live.

Re:work ethic my eye

[cyphercell]

And here I was wondering why these countries let us hire off their entire work force, effectively undermining their chance at building a place in industry.

Re:work ethic my eye

[Raistlin77]

What I find funny though is that all the Hindu/Muslin owned/operated gas stations and convenience stores in the US remain open every day of the year, including Christmas, Thanksgiving, and New Years Day.

The obligatory car analogy

[blindd0t]

Here it is. Sometimes you'll see some really cheap "car mods" on ebay that advertise they could give you an additional 20hp while only costing you $5.00. Let's be real here - we all know that's a load of crap, and that you get what you pay for 99.9% of the time.

Recently, we had one of our customers outsource the implementation of our SDK to another company (this happened to be outsourced to an Indian company, though we've seen this same type of thing happen with domestic companies as well, of course). Our customer contacted us complaining his software was behaving quite strangely. Of course, our reply was that we didn't do the implementation, and we had never heard of that kind of behavior before (and the software has been in the market for about 15 years now and we have thousands of customers). So we offered to look at his source code, and of course, we found some horribly atrocious code which was the root of the problem - not our SDK, of course. The point is; any time you outsource a project to anybody, you need to be extraordinarily careful that the job is done correctly, and that you have everything you need to pick up where the company you outsourced to left off (coughs Mack-Truck syndrome under breath). That's just my $0.02, and it seems like common sense to me...

Re:The obligatory car analogy

[Anonymous Coward]

Here it is. Sometimes you'll see some really cheap "car mods" on ebay that advertise they could give you an additional 20hp while only costing you $5.00. Let's be real here - we all know that's a load of crap, and that you get what you pay for 99.9% of the time.

I don't claim to know a much about cars, but I have heard that you can increase your horsepower (at the cost of fuel efficiency) by tweaking with the computer that regulates the fuel injectors. I would hazard a guess that's what those eBay auctions are advertising.

Re:The obligatory car analogy

[blindd0t]

Good guess, but playing cheap with the ECU is flat out asking for it! Here's an example of a cheap modification that is quite vague about what signals being sent to the ECU are being changed: http://cgi.ebay.com/ebaymotors/NISSAN-ALTIMA-1993- 2007-2006-2005-2004-GAS-SAVER-HP_W0QQitemZ29010018 8833QQihZ019QQcategoryZ33597QQrdZ1QQcmdZViewItem. Here is an example of something that actually adjusts your ECU's programming slightly: http://www.focussport.com/chips.htm

The truth of this is that the ebay mod sends garbage data to your ECU to try to trick it in some way (i.e. the infamous "resistor" mod on the MAF). 99 times out of 100. sending crap data to your car's computer either has no effect (because it may be smart enough to compensate for that error elsewhere), or has a negative effect (making your car run like crap). Re-tuning your car using the example of something like the SCT chip tuner mentioned above means the computer reacts differently to accurate data. This can and will make your car perform better. The difference is $9.00 for the quack solution, and about $300.00 for the solution that works well.

Cost of living will freeze soon

[ObiWonKanblomi]

I was hearing a report on the parent's topic yesterday on NPR. It turns out homes are not selling as much as before due to a couple factors. First is the number of people who were purchasing via insane ARMs are drying up. This is why we now see a number of lenders filing for bankruptcy. Secondly, there is still a large insane population of people who are selling their homes but will not lower the prices, hoping they will be able to sell at a price that would have worked a year ago.

Despite the comment about 9% qualifying for home ownership, a number of people have applied in the past few years for insane ARMs to buy a home and purchase that dream SUV. However, it's because they truly can't afford a home the number foreclosures are starting to drastically increase. It's only a matter of time before all those homes are sold at much lower prices.

On the way to work today, I was hearing another NPR report (yeah I listen to it a lot) stating that the apartment market is about to boom....

Re:Cost of living will freeze soon

[CyberSnyder]

| On the way to work today, I was hearing another NPR report (yeah I listen to it a lot)
| stating that the apartment market is about to boom....

Which is going to put a big hurt on lower income people.

I'm glad I bought my house 10 years ago. I can't imagine being just out of college and trying to buy your first home today.

Re:Cost of living will freeze soon

[Anonymous Coward]

The apartment market isnt going to boom around here (Tampa, Florida) due to insurance prices skyrockting, and taxes going up because land and building values are going up, alot of the apartment owners are getting out of the game and reselling apartments as condos, putting all the tax and insurance burden on the condo owners.

If i had to make a guess, aproximately 25% of the apartments in this area have probably gone condo. There are even apartments advertising that they will not be going condo, because people are afraid to get into a lease, and then the owners decide to sell the units off as condos, giving you no option to renew your lease, you either have to buy it or get out.

Re:Cost of living will freeze soon

[ObiWonKanblomi]

I forgot to also mention that in Orange and Los Angeles counties, the apartment occupancy is at 97%.

Cost would be my guess

[starseeker]

Cost is the direct driver for most businesses, because it always yields a short term benefit. Most companies do not have either the resources, interest, or patience to work for long term benefits.

That said, I would think R&D would be the LAST thing we would want to outsource, simply because if we do that the next generation of companies will develop not in the US but everywhere else. We cannot become a nation of businessmen/women and lawyers, because the world will quickly wake up to the fact that they already have all the smarts and physical resources to make whatever they need and can provide their own businessfolk and legal team. If the US makes too much trouble, we can be safely ignored because we won't be producing anything any more except hot air.

When it comes down to bare knuckles, US labor costs too much. Period. We don't have some "magical" quality that makes us better, we just happen to have a large number of well educated people in the US at the moment. The rest of the world can also be educated, and for cheaper than it costs to hire US labor. Businesses are finding that out - train the folks overseas, and guess what - they can do it too! Today, that lines the pocketbooks of those with control of the companies. What they aren't thinking about or don't care about is that tomorrow those folks will be making their own companies and coming right back at us, and we will no longer have the technological chops to keep up because the only money to be had in the US was by going into business or law.

Hopefully, we will retain our education and knowledge edge. We need to keep investing in education and keep ahead of the pack, however - the game is getting rougher and it will mean either a lower standard of living or harder work for us. There is no magic here, and in the end all competitive edges not based on natural resource advantage are short term.

Re:Cost would be my guess

[Anonymous Coward]

Actually, natural resource advantages are also short term. The Saudi oil situation comes to mind...

Re:Cost would be my guess

[maxume]

The US economy is still growing, so if what you are talking about is happening, the effects haven't showed up yet.

Re:Cost would be my guess

[Code Master]

Perhaps many of these people who 'control the companies' don't really care if the US is doing well in a fwe years. They can probably live quite happily in any other nation where everything is cheaper (and perhaps the laws can be boughten).

I'm not convinced America's national pride really matters to these people. If another country becomes the next world power and they're in on that, what's it to them?

Disclaimer: I'm Canadian

Re:Cost would be my guess

[stewbee]

We cannot become a nation of businessmen/women and lawyers, because the world will quickly wake up to the fact that they already have all the smarts and physical resources to make whatever they need and can provide their own businessfolk and legal team.

I couldn't agree with you more. It is actually pretty close to some of the things that I am pondering now. I currently hold an MSEE and am pondering going back to school for either my PhD or an MBA. The hardest part is deciding whether to follow my true desires (the PhD) and potentially have diminished future prospects in employment due to the trend in outsourcing of engineering/R&D, or do I sell out and get my MBA to 'be closer to the money' and try to be higher in the production chain?

The company that I work for has already said that they are trying to remove themselves from circuit design engineering (my current job) and would like to become a more systems oriented. This follows about 2 years after we outsourced our PWB manufacturing. Seeing this trend continue in all hardware companies is a little disconcerting. 'Being closer to the money' sounds like a way to ensure future employment in today's culture of outsourcing.

Re:Cost would be my guess

[king-manic]

The unique factor that made americans so productive was the willingness to work 40-80 hours a week and keep it up as part of the "american dream." The reason that special something is not there anymore is people who have been working 60+h long enough will output only about 20h of real work. The US is just burning out. Also the Nazi tech loot that was stolen in WWII has also run it's course and most of the looted scientists are dead. Greed and short term thinking is slowly eroding anything else you have left. The anti-academic bent of the culture also diminishes you over all capabilities.

Re:Cost would be my guess

[Tablizer]

We cannot become a nation of businessmen/women and lawyers, because the world will quickly wake up to the fact that they already have all the smarts and physical resources to make whatever they need and can provide their own businessfolk and legal team. If the US makes too much trouble, we can be safely ignored because we won't be producing anything any more except hot air.

Yes, but we'll out lawyer them because most countries don't tolerate the existence of such slimey people and thus they won't be ready. The Ugly American is also the rich American. Similarly, people dispise jews for their "creative" business habits, but they still end up with the money.

Re:work ethic my eye

[Archangel Michael]

And it wasn't really a Friday either.

Conflicting reports.

[Rotten168]

Half of all news reports say that companies are becoming disillusioned with outsourcing and the other half say it's going to increase, I wish we could get a clear, honest, rational assessment of the situation so we can find out what to do about it.

Re:Conflicting reports.

[plasmacutter]

ok.. in laymans terms..

offshore workers suck compared to american workers and give managment more headaches, but because theyre so much cheaper theyll continue outsourcing and giving americans with degrees the bird.

i think i made that brutal and smarmy enough : )

Outsourcing is great for empire building

[qwijibo]

This has always been the lure of outsourcing. Costs are increased, which increases the size of the manager's empire, while being able to point to someone and show how much money is being saved.

For example, instead of paying one programmer $80k, they have:
2 programmers offshore - $20k each
system architect - $130k
technical writer - $60k
project manager - $70k
team manager - $100k

Instead of spending $80k/year, they are spending $400k/year. However, they claim a savings of $120k using management-math by multiplying the number of programmers they have times the salary of one programmer if hired locally, minus the actual cost of the offshore programmers. You can claim a 75% cost savings on the programmers, even though you're spending 500% of what you need to. It's a great way to fluff out budgets and org charts.

Re:Outsourcing is great for empire building

[mandelbr0t]

Yes, but it's also a great way for one guy to gain all the "Intellectual Property" of the company he worked for. This is an old argument, but it's worth considering. There are hidden costs associated with a Single Point of Failure. How long and how much when someone offers the one-man show a better deal? Can you salvage anything once your star programmer has left? How about security? Is $80k/yr. enough to prevent the one guy who has access to the code base from doing anything malicious, like leaving a back-door or selling the code to a competitor? Does your business stop running when he calls in sick?

Likewise, the population of people trained to be a one-man Project-Manager-Kickass-Developer-CSR-Tech-Writer all rolled into one is dwindling; it's a profession that emerged when business computing emerged. Now universities and technical colleges concentrate on a team approach. I've witnessed first-hand how this approach is better for business, even though it's easily the 500% more expensive than you mention.

The CHAOS Report, though rapidly falling out-of-date, shows the height of the star developer, and look at how many software projects failed. Many of the reasons are not directly related to the developer's effort or talent, but overall this method of developing software has a terrible tendency to avoid showing it's work (sort of like a math test where you don't show your work and get no partial credit because you just put down the wrong answer). What I've experienced with the team approach is that a software project is much more robust. A developer who wants to negotiate a higher salary by withholding his talent has much less leverage, since the technical writer and architect have been working in a parallel stream producing UML diagrams of use cases, packaging, flowcharts, etc. What this means is that you can wave goodbye to the opportunistic developer, because he is no longer the sole source of knowledge about how the software works. Another developer will read and understand the supporting documenation and will be trained on the new project in days instead of weeks or months.

This approach definitely pays off on the larger projects, where it is (or at least was) common for a company to go through 5 or more consultants to do the same project. Usually those consultants would duplicate his predecessor's work to no small extent due to the lack of any documentation or diagrams which would show the new developer what part of the old project was useful. Most importantly, at least to an executive, no one person on your team can turn around and deliver your corporate secrets in their entirety to another company.

Finally, the elitism that comes from being the guy is impossible to deal with. Business people have almost no recourse to an unethical developer who consistently holds a project hostage or bills for hours he didn't work. It is to the overall advantage to the business community to remove themselves from under that guy's thumb, as it will set an example that other businesses will follow. There's nothing wrong with working in a software team. If you were the guy (I was until I burned out), then you'll find your job is a lot easier once you figure out how to get along with everyone else. If you weren't, then the field of software development is now open to you as more roles appear that require more creative thinking and less ubertechie skills. You as the developer shouldn't worry about it; the business community is clearly willing to pay for the extra resources. In your example, there actually is a cost savings: about $40k/yr. by my reckoning (the difference between a 40k/yr and 20k/yr) provided the off-shore developers can earn their keep. And, I'd wager that there's a good 90% chance that the project will be completed in the first pass as opposed to numbers that resemble the CHAOS report.

Re:Outsourcing is great for empire building

[qwijibo]

I didn't mean to suggest that an organization should only have one person who does everything, but rather hiring one programmer for a programmer-worth of work as opposed to a team to do the exact same thing. Having good teams or cross training in related parts of the organization is critical to the long term viability of the group. A single point of failure is bad, but there are some problems that need to be solved by more experienced people. One person with 20 years of experience can be much more productive in some types of projects than 20 people with 1 year of experience. Depending on the size of the organization, groups of 3-8 of these types of people can be just as productive as a much larger group of cheaper people, while avoiding the single point of failure problem.

A lot of businesses are so cost centric these days that they are consciously deciding to dramatically increase their future costs and run extremely high risks for the perception of saving some money in the short term. For small businesses, this makes sense. Getting something out at any level of risk means the company survives that much longer and gets to plan for the next phase. Large companies take this same philosophy, but are far more likely to put themselves in a position where they have to go back and do all of the deferred work at a substantially higher cost in the future.

I agree with most of what you're saying, and I am the guy who does everything. System administration, programming, security, business logic, production support, project management, and whatever else they can come up with. We had a whole team of good people and the business people fired them because they didn't see the value of a sustainable organization. Our 2007 motto is "More With Less", which is humorous in a business group where our management has been aiming to commit no more than 30% of the resources needed for any project for years. This is how we achieve such lofty goals as "4th straight year of not backing up our production servers". This is a bank and I'm not kidding about the backups. Business people can't tell the difference between a robust system and a horrible kludge, so they will push for the kludge every single time because it's cheaper in the short term.

The one point where I disagree is having someone come in and get up to speed in days. To me, that suggests a superficial understanding of what's going on. That may be fine for a coder who needs to fill in the blanks between an already well defined set of interfaces, but that's not the majority of what happens in software projects. There is a big gap between business people giving vague ideas of what they want and a team of developers trying to implement it. There is no way you're going to get documentation that will help you understand how serious management is about deadlines, or whether they value glitz over functionality, or any number of quasi-technical problems. There are always parts of any project that cannot be put into writing because they would require people to be far more introspective than they will be. For example, putting together a functional, bare bones web interface would make some people happy, whereas others would be happy with screen shots made in photoshop without a line of code to back it up.

Re:work ethic my eye

[Anonymous Coward]

Whew, and I was afraid that I was being let go because I was on slashdot all day.

Re:work ethic my eye

[tsm_sf]

The 'work ethic' smokescreen has always baffled me. Americans work more days and longer hours than workers in any other developed nation. I guess if you're going to compare us to conscripted "employees" in third-world labor camps then, yes, our "work ethic" might be a little lower.

This strategy is stupid, eventuallyEVERYONE LOSES.

[plasmacutter]

this is typpical supply side strategy, the problem is when you attack wages rather than other inputs as cost, it also attacks the biggest contributor to both profits and GDP, consumption!

2 basic economic equations are in play here:

gdp = C+I+G+NX = (income - savings)+I+G+NX

profits = costs - revenue = (wages + other costs) - (wages + other income such as capital gains)

when you kill wages/income, you kill your own profits as well as us gdp.
there is a time lag involved in this, but it comes back to bite you pretty quickly.
this is reflected whenever Reagan style policies (not exclusive to the republican party) are put into effect... there is always a recession a short time later, which is alleviated once the policies are countered/rolled back.

right now congress is STILL operating on the myth that there are short supplies of labor in "X" sector, which is bull, what there is is a shortage of cheap labor who dont care about long term benefits or retirement in sector "X"

plenty of on the ground info on this here

DOH! (miswrote an equation!)

[plasmacutter]

oops!

it's profit = revenue - costs!

DOH!

Re:work ethic my eye

[Anonymous Coward]

What are you paying your Indian developers? I'll bet 1/10 of what you pay for a US worker. You can't have your cake and eat it too. If you pay them the US salary, I'll bet you they will be willing to work everyday, including the Christmas day!

Ironic

[Anonymous Coward]

Every real-world instance of outsourcing that I've seen has always increased total costs.

Either the real goal is to simplify management and reduce responsibility or a lot of people are bad at accounting.

Re:Ironic

[Lockejaw]

Yeah, but costs went down so much this quarter!

That's the real goal -- look good this quarter. Who needs sustainability? It's the short term that matters!

Re:Have I been living in a cave?

[99BottlesOfBeerInMyF]

Um... The only reason I've ever heard given for outsourcing was money. When the hell did they invent this other bullshit, spread it and have people buy into it, and then do a study debunking it?

In business, it's always about money. This study was debunking the fact that some businesses were claiming it was not about lower salaries, which is somewhat different. In truth, I've worked on a few projects that involved outsourcing both in the US and overseas and while it was always about money, relative salaries was a pretty small concern. We outsourced because we had trouble finding enough local talent and because we had short term needs that required expertise we did not have in house, but which would have cost a lot unnecessarily to do ourselves.

In contrast, I know of several cases where companies outsourced core parts of their business, resulting in a short term benefit on paper, but a long term loss. Once an outsourced company has expertise in what you do (on your dime) they will raise prices or they will stop working for you and start competing with you. Of course by then the executive who made the decision already took his big bonus home and moved on to another company to repeat the process.

Labeling laws and taxes

[goombah99]

Many products in the US must be marked "made in china" or where ever and some even have to give percentage breakdown of the parts by country of origin. If this is valuable for components and assembly perhaps it should also be valuable to other costs of producing a product. E.g. total up the pro-rated cost of back-office, R&D, and tech support, that is outsourced and report that too.

Next consider policy based taxes. If country X is competing on wages well perhaps that's okay as long as he playing field is level. For example, if Country X, has no social security or OSHA laws that drive up the cost of doing business then a tariff should be applied to level the playing field. If they have child labor or lack family leave or have no environmental compliance costs then a tariff should be applied.

Otherwise any time we try to upgrade our social standards in the US, it costs jobs.

Wage competition on a level playing field is fine. If an CS graduate in India can do your job for less, then you are paid too much apparently. But if he's doing if for less because there's no OSHA laws then that undermines the OSHA laws. Need to fix that.

THe converse of this happens all the time. Some counties put tarriffs on wheat from countries that subsidize their farmers or their steel producers.

It's not "protectionist". Protectionist would be raising the tarrif's above the unpaid social costs to protect wages and jobs.

More, from Booz-Allen and Duke News

[ebusinessmedia1]

http://dukenews.duke.edu/2006/10/outsourcing.html here's the study http://www.boozallen.com/media/file/Globalization_ White_Collar_Work_v3.pdf This new information should be a wakeup call for policy-makers. The irony is that corporate profits no longer know national boundaries. Solutions are going to take political leadership, and real committment. If no solutions are forthcoming, we will continue to see significant employment displacement here, with all the social problems that that implies.

Re:More, from Booz-Allen and Duke News

[TheSync]

If no solutions are forthcoming, we will continue to see significant employment displacement here, with all the social problems that that implies.

Or the whole world may just grow richer.

Which is what has been happening for the last 200 years. Except in places where there are low levels of economic freedom, like today's Africa or pre-1980 China & India.

No Shit Cost is a (the) Factor

[alcmaeon]

In other news: water runs downhill, the air is full of colorless gasses, and the sun is a big ball of fire.

Re:work ethic my eye

[slmdmd]

The indians in cities like mumbai work for 13 hours a day on an average, also in the south indian cities like Chennai & Hyderabad the bosses like you are worshipped as God. So there are about 2000 small companies who give jobs but instead of paying salary they ask money from the candidate. The candidate doesn't mind because that will give him a head start into IT industry where every one wants to hire an experienced developer.
The next goal(dream) for every Indian developer is to get h1b visa into usa.

Bosses like you make them report status on a project at unearthly hours like 2:00 am(4:30 pm EST, yeah you just wanted to check the status before going home, don't you). Imagine doing that with Tim here.

If a job vacancy ad mentions the word "fresh" then there will be 6000 applications with at least Master's degree in Computer Application.(10+2+3+3 yrs education).

Duh

[Anonymous Coward]

Was this article anything but a big "duh!" for anyone else but me?

Yes. In fact that was more-or-less everyone's response.

CORPORATE EXECUTIVES ARE BRAINLESS FUCKWADS

[Anonymous Coward]

Yes, no brains, engineers do all the work, they sit back playing solitare all day long. fire 10000 people to get a 10 million dollar bonus.. get millions of dollars of subsidies from the government, and lay off 10000 workers. America is nothing to be patriotic about anymore. We are no longer "America". We are a notion that outsources all of "americas" jobs. leaving only buger king and mcdonalds. Oh wait, we gave all those jobs to the Illegals! We are a nation that welcomes millions of illegal residents. Its like adding water to a fire, we are slowing becoming so saturated with water that we will soon be extinguished. There is no middle class anymore. middle class is 40,000 a year? come on now, thats the low end of the spectrum and you cannot even think about buying a house without making an income of at least 80,000 a year. (unless you want the financial mess we have now in the housing market...)

That's wrong.

[raehl]

Your first problem is your focusing on the number of dollars spent. The number of dollars spent is only partially relevant. The other part is HOW MUCH CAN YOU BUY WITH A DOLLAR.

If a company reduces the amount of money paid in wages, one of three things (or a combination) happens:

1) The make a larger profit, and the people who earn that profit spend it on other things.
2) They invest that saved money in more production or more production efficiency (buy technology, spend on research, build another factory)
3) They lower the price of the product, so the consumer then spends their money on something else.

The important thing here is that previously idle people in India or China are now no longer idle. They're making things. And when they make things, *WE* in the US get a cut of it.

Outsourcing turns a guy in India who wasn't doing shit into a guy in India who makes, say, $100 worth of stuff, and keeps $80 of it and we get $20 'for free'. That's good for him and good for us.

That does eliminate a job in the US that may have paid $200 for the same stuff. But that's OK, because the stuff costs $100 less, and the person who would have had that job can now work on something else.

Also keep in mind that depressed wages are the only way that the free market can move around workers. Just because we all want high paid jobs in a certain field doesn't mean the economy can support allocating workers that way.

But in the end, we want to export as many jobs as we can and replace as many workers as possible with machines. If we do this to perfection, none of us will have to work anymore, because machines and people in India will be doing all our work for us, and we'll still have the same amount of stuff.

Or at least, we'll have freed up enough of our labor force to provide the universal healthcare everyone seems to want.

Re:That's wrong.

[plasmacutter]

If a company reduces the amount of money paid in wages, one of three things (or a combination) happens:

1) The make a larger profit, and the people who earn that profit spend it on other things.
2) They invest that saved money in more production or more production efficiency (buy technology, spend on research, build another factory)
3) They lower the price of the product, so the consumer then spends their money on something else

you ignore the concept of moral hazard, which gives rise to option 4.

4) greedy ceo's absorb it into their already inflated incomes and expense accounts, and give much less than the company's profit gains to the rest of the workers.

option 4 is what is going on, you can see it in the news and store shelves yourself in rampant inflation and rampantly out of control upper managment wages.

Also keep in mind that depressed wages are the only way that the free market can move around workers.

moving them to lower paying jobs which wont support their cost of living or families, and have inadequate medical benefits.

Just because we all want high paid jobs in a certain field doesn't mean the economy can support allocating workers that way.

yes it can, otherwise they'd be decreasing the overall workforce in that sector rather than offshoring them.

Re:That's wrong.

[Rakishi]

If we do this to perfection, none of us will have to work anymore, because machines and people in India will be doing all our work for us, and we'll still have the same amount of stuff.

Until the people in India make their own companies which out compete the US in quality and cost (lower costs of management, etc.) Then the US economy ceases to exist, the dollar is dropped by the world's banks and thus tanks, and there isn't anyone left in the US who has the now needed skills. Aka "how to go from first to third world in 20 years."

Re:That's wrong.

[Maxo-Texas]

While I agree,
A dollar paid to india is a dollar that doesn't go around the local economy seven times.
It goes around india's economy seven times.

We are hemoraging our wealth.

If they paid me $80,000 a year- I will spend 99% of that money in the same state I received it in.
That means, that money can be spent on their products.

If they send the same money over seas for two replacements. That's it. Not a dime of the money comes back to their company (unless they are selling to india).

It's a race to the bottom. We know it. I just hope to god we get national health care in so I don't have to have a job. The current health care setup basically makes us slaves.

Re:That's wrong.

[Some Pig!]

1) The make a larger profit, and the people who earn that profit spend it on other things.
2) They invest that saved money in more production or more production efficiency (buy technology, spend on research, build another factory)
3) They lower the price of the product, so the consumer then spends their money on something else.

The important thing here is that previously idle people in India or China are now no longer idle. They're making things. And when they make things, *WE* in the US get a cut of it.

Outsourcing turns a guy in India who wasn't doing shit into a guy in India who makes, say, $100 worth of stuff, and keeps $80 of it and we get $20 'for free'. That's good for him and good for us.

That does eliminate a job in the US that may have paid $200 for the same stuff. But that's OK, because the stuff costs $100 less, and the person who would have had that job can now work on something else.


I think I see the problem. You're relying on classical, diminishing-returns-to-scale economic theory,
originally inspired by agricultural production circa 1800. Wool, wine. Doubling the land under
cultivation can do no more than double the output. And of course, you can't slice off pieces of land
and attach them to other countries, so the issues with "outsourcing production" were assumed away, or
never thought of.


But in the end, we want to export as many jobs as we can and replace as many workers as possible with machines. If we do this to perfection, none of us will have to work anymore, because machines and people in India will be doing all our work for us, and we'll still have the same amount of stuff.

Or at least, we'll have freed up enough of our labor force to provide the universal healthcare everyone seems to want.


The "Insightful" tag is certainly going cheap on Slashdot these days.

In the presence of increasing returns to scale (essentially the definition of industrial production)
and innovation, the predictions of classical diminishing-returns economics fail completely. And that
includes classical trade theory. Rigorously. And it's a good thing, otherwise our standard of living
would have been drastically lower.

Well, refutations of classical theory are out there in abundance, they don't need to be summarized here.
Suffice it to say that it does matter very much what industries a country has.

The wonder is not that a government can be induced to craft trade policy that benefits a few at the
expense of many. The wonder is that apparently intelligent people who stand to lose can go along with
it for, I guess, some kind of intellectual satisfaction. This is the power of (obsolete) ideas!

What's truly weird is that it happens here on Slashdot. If somebody came in claiming that "RISC is
the ultimate in CPU architecture, always has been, always will be!" or something like that, everyone
would be all over him. But economic theory is eternal, unchanging dogma in Slashdot land.

Re:That's wrong.

[plasmacutter]

But economic theory is eternal, unchanging dogma in Slashdot land.

most people don't know what theyre talking about when they spew forth on economic theory, but everyone seems to allow it.

you never see this happen with neurosurgery or anesthesiology.

The problem isn't the theory though, it's the complete lack of proper education in the theory. It's only partially presented in high school texts, but at the same time presented as if "that's it".

They should either delve deeper or incorporate heavy disclaimers in high school economics classes, because you don't really learn the full picture until at least the intermediate collegiate level.

Additionally, there are fallacies and dynamics even people who go through the degree programs fail to take into account.
Politicians for instance, most of whom focused on law degrees, will spew forth about "trickle down" without incorporating the necessary caveat on moral hazard.

Others will have this mistaken idea that economics has a "goal" of maximizing efficiency, and they'll craft policies with no consideration for maintaining a compassionate minimum (first world) standard of living, embracing gatt treaties which lower real wages. Economics is a science, a tool to use to better our society, It is no more oriented to "maximizing efficiency" than chemistry is to "maximizing lipid synthesis"

Re:That's wrong.

[Harry Coin]

1) The make a larger profit, and the people who earn that profit spend it on other things.

The executives only, not the workers.

2) They invest that saved money in more production or more production efficiency (buy technology, spend on research, build another factory)

Long-term thinking like this is passe'. The stockholders would not approve.

3) They lower the price of the product, so the consumer then spends their money on something else.

Only once too few people can afford their product becuase they've lost their jobs.

Outsourcing turns a guy in India who wasn't doing shit into a guy in India who makes, say, $100 worth of stuff, and keeps $80 of it and we get $20 'for free'. That's good for him and good for us.

Good for him. So now 80% of that money is going into the Indian local economies, instead of our own. The other 20% will become executive bonuses for such visionary thinking.

That does eliminate a job in the US that may have paid $200 for the same stuff. But that's OK, because the stuff costs $100 less, and the person who would have had that job can now work on something else.

Even $100 is a lot to afford when your previously high-paying job is now a low-paying unskilled job.

Also keep in mind that depressed wages are the only way that the free market can move around workers. Just because we all want high paid jobs in a certain field doesn't mean the economy can support allocating workers that way.

Of course, your workers are also your customers, who suddenly can't afford what you're selling. And are you saying that workers shouldn't have any leverage against management? It used to be a negoation between labor and management, where management tries to keep wages low, and workers try to make as much as possible. Now, you're competing against workers around the globe, many of whom have a rock-bottom cost of living. It's a very efficient way to reduce the standard of living in this country. Who is going to invest in a decent education if you have to move overseas to see any benefit?

But in the end, we want to export as many jobs as we can and replace as many workers as possible with machines. If we do this to perfection, none of us will have to work anymore, because machines and people in India will be doing all our work for us, and we'll still have the same amount of stuff.

This is, of course, utopian bullshit. You think that the Indians won't take advantage of the fact that our entire economy and way of life is supported by machines that they're the only ones qualified to maintain? Maybe they'll send us some unskilled manufacturing jobs, and the cycle will be complete.

Re:That's wrong.

[maxume]

Better that just health care workers be slaves?

(which you are sort of implying when you talk about hoping it is in place before you are out of a job...)

Re:That's wrong.

[Maxo-Texas]

No more than police, judges, senators, and all other government employees are slaves.

There is no restriction against private police (i.e. security) so you can still have a private practice.

The problem is the way the pools are formed. Insurance companies are getting very vicious about cutting out anyone with anything.

A pool formed of the entire population would have predictable risks.

You can cover things like blood pressure, broken legs, and babies. You can't cover things like cancer. You'd need private care for that.

Right now if you don't have insurance you are forced to pay five (to ten!) times as much "retail" rate.

If "everyone" had insurance then everyone would at least qualify for the "negotiated" rate.

Re:That's wrong.

[maxume]

I was mostly being snarky because of the slight implication that health care workers will have to keep working after the economy has collapsed entirely.

But yes, a single pool system for at least baseline care would almost certainly be an improvement over the current regulatory situation. The details of what exactly baseline care is is a bit of a pickle.

(you don't cover babies because they are a predictable risk, you cover them because you can and it is so horrible not to)

Re:That's wrong.

[Maxo-Texas]

Lol.

Some days I feel like this place is more Snarkdot than Slashdot.

Re:That's wrong.

[Anonymous Coward]

China's currency is artificially undervalued. And the dollar has been falling for years now. Damn armchair economists...stick to what you know or learn of what you're talking about.

Re:Have I been living in a cave?

[nine-times]

Was I too busy working?

Yes, apparently you were. You missed various people trying to make various arguments about what "outsourcing" was really about. Often, the arguments were from someone with an agenda, and sometimes arguing, essentially, that there just weren't enough Americans who needed jobs.

Inflating/devaluing

[Colin Smith]

OK. Your problem is oil. That's what's causing you to be expensive compared to the rest of the world.

In 1971 the US government managed to make the US dollar the sole currency for oil transactions. This resulted in every other oil consuming country in the world buying lots of dollars to hold in their strategic reserves. The result is that the dollar became very expensive and gained huge buying power, imports began flooding into the US and Americans became expensive to employ.

If you want to stop the flood of jobs out of the country and the flood of imports in to the country you're going to have to break the oil/dollar link. Unfortunately that would prevent the US government from printing and spending money with abandon on it's pet projects so I don't see it happening until there's some kind of a crisis. It would also cause the dollar to devalue significantly and generate large amounts of inflation in the US, it would however make Americans much cheaper to employ and given a few years the import/export balance would be restored.

Re:Inflating/devaluing

[FooAtWFU]

OK. Your problem is oil. That's what's causing you to be expensive compared to the rest of the world.

Actually, in California (which the OP cites), and particularly in the Bay Area (where I'm moving soonish, so I've been researching), the primary primary primary component of your cost of living is going to be HOUSING oh my god $2300/mo for a 1-bedroom apartment? Okay, so that was a high-end apartment in a pretty nice spot, but my parents have a 4-bedroom 3-bathroom house on about a quarter-acre or so for less than half that. If I dig deeper and look at some cost of living figures in depth, San Francisco appears to be cheaper across the board in all the other categories listed (average household consumer expenditures, education, entertainment, transportation, retail, and non-retail)... either that or people are more frugal (perhaps they have to be)...

And why is housing in California so expensive? Many reasons, but oil isn't really a big one. First of all, there's a lot of people who want to live out there for one reason or another. Another major thing is that California has a lot of regulations on land use which limit development, further driving up the price of developable land. Issues with traffic and congestion further shape the development of the area, cramming more people into less physical space; and while the traffic problem isn't the fault of the government, local authorities typically view congestion as a good thing because it means more people using public transport, a major part of the environmental agenda:

In the words of David Solow, head of the Metrolink commuter rail in Southern California, congestion is "actually good" because "it drives people out of their cars."

(Okay, so that's not the Bay Area, but it is California).

Then there are building codes - while the earthquake reinforcements make sense, California's insistence on all that environmental eco-friendliness has shaped development codes and raised the price of construction considerably. And then there are taxes and taxes and taxes. (Including things like the gas tax, 44.7 cents/gallon - only Connecticut is higher). And energy prices are higher for a variety of reasons, including but not limited to, you guessed it, environmental regulations...

California prides itself on being an environmental leader, and I am sure that they are leading the way in weaning the country off oil... but this has made it more expensive, not less. People use oil because it is cheap and makes sense, not because they enjoy being ripped off somehow.

Unfortunately that would prevent the US government from printing and spending money with abandon on it's pet projects so I don't see it happening until there's some kind of a crisis.

Dude, inflation is holding steady around ~2-or-3ish% (2.42% for February, I saw; 3.24% last year). A little inflation like this is widely considered a good thing by those who study economies; in fact, it's just about as close to ideal as you can reasonably expect. I'll take your point about too-much-spending and pet-projects, though. (Hey, the Republicans were at least SUPPOSED to do something about THAT when they took over the government, and, well, look at what they... oh... never mind.)

Re:Inflating/devaluing

[Colin Smith]

Dude, inflation is holding steady around ~2-or-3ish% (2.42% for February, I saw; 3.24% last year). Yes. Of course it is.

Re:Inflating/devaluing

[plasmacutter]

inflation is only good if pay scales move with it, they are not.

inflation without cost of living adjustment means we're getting poorer with each passing day, and offshoring is partially responsible, h1b is also responsible, and finally simple corporate greed is responsible.

they refuse to raise wages, they increase their prices, then either import h1b's or offshore their labor force to quash any thought of requiring a respectable salary.

at this point you have to be upper middle class to simply maintain what used to be lower middle class standards of living, and people who were considered wealthy are finding themselves firmly in the middle class, meanwhile corporate salaries are 8 figures and climbing, and the price of current video game consoles makes anyone without a money tree do a doubletake.

at the same time politicians just look at the soaring profit margins and proclaim everything is "ok" while the nation slowly sinks below the first world marker in the deep end.

Re:Inflating/devaluing

[bnenning]

they refuse to raise wages, they increase their prices, then either import h1b's or offshore their labor force to quash any thought of requiring a respectable salary.

And yet, employee compensation continues to increase. Sure, companies would like us to work for 42 cents an hour. On the other hand, I'd like to be paid $17 million a year for 20 hours of work. Somewhere in the middle an equilibrium is reached. You are not a helpless slave to the all-powerful corporate overlords.

at this point you have to be upper middle class to simply maintain what used to be lower middle class standards of living

Sorry, that's just silly. How many "lower middle class" people 15 years ago had DVD players or cell phones or any form of Internet access? It's easy to take for granted the many ways our lives have improved, and then invent specious reasons why things are so terrible today.

the price of current video game consoles makes anyone without a money tree do a doubletake.

Case in point; if that's your major complaint, we can't be doing that bad. (And compare the price of the Wii to the original NES).

Re:Inflating/devaluing

[plasmacutter]

Sorry, that's just silly. How many "lower middle class" people 15 years ago had DVD players or cell phones or any form of Internet access?

you dont get it.. thats old technology, not current, the middle class 15 years ago could buy "current" technology, not dusty relics from a decade ago.

btw.. its not silly, my mother is making california salary, but living in freaking georgia and trying to make ends meet. no we dont live in a mansion, we dont have a car under 5 years old, and we dont shop at saks...
coke has risen 33%, gas has exploded so fast that when i ran the economic models for it for a course i thought i got the model wrong.. until 6 months later it was still consistent with it!
then there's housing.. in 94 we bought a house in the burbs in the early 100's.. theres now a neighborhood going up right next to us with only slightly larger homes.. starting in the freaking 600's.
I could go on and on, about the news of companies cutting benefits left and right, about the forums full of people with 20+ years experience unable to get arrested, let alone a job, but at this point i don't think it's necessary.

(And compare the price of the Wii to the original NES).

compare the price of the xbox 360 (a true leap in graphics vs the wii) to the original xbox.. its twice as much! so is the sony ps3 vs sony ps2!

MOD up

[Anonymous Coward]

Insight mixed with controversy is unusual for slashdot

What I never understood

[night_flyer]

why go overseas? middle america has THOUSANDS of unemployed people that would gladly do the work and a wage that is far less that the coasts thanks to the cost of living.

Granted this has to do more with call centers and the like. But I would much rather talk to Bubba Anne than Apu

Re:What I never understood

[orielbean]

Don't you worry, there are companies doing exactly that. However, even rural / poor Middle / Southern Americans still get paid more than the developing worlders. It is not low enough to stem the tide.

What we are seeing is this new concept of true global economies made possible by the very tech that we invented to get ahead of other countries.

The paradigm shifted, and there is no way to return to the old model. Our innovations, inventions, and new ideas have not yet propelled us out of this Sargasso sea of low wages and low growth.

But for all that, more people are still living better than most of us were 50 years ago. Do you know any Okies starving to death like the old Dust Bowl style? Can you get (expensive) health care to live longer than your parents? I will not ever defend the amorality of business and the endless desire for profit over all else, but despite the greed, we are still doing better overall.

Re:What I never understood

[TheSync]

The US economy added 180,000 jobs in March. US unemployment has dropped to 4.4%.

US hourly wages have risen 4% over the past year.

Toyota is going to open a new plant in Blue Springs, Mississippi this year.

So where can I...

[jbarr]

...get a job that does nothing more than publish studies that point out the obvious? I really can't believe money was spent to determine this.

Re:So where can I...

[Anonymous Coward]

Business schools, management consultancies, LibArt research depts...

Anecdotal evidence

[ObiWanStevobi]

My anecdotal evidence suggests that offshoring adds alot of costs that don't really show up without further analysis. In other words, it looks like you are saving money, but you are not. Luckily, we haven't tried to offshore our R&D (which includes software development), but based on our experiences with offshoring production, I don't think we would try.

From what I have seen, offshoring does save alot of money that shows up directly on the bottom line. You are paying much less for employees and benefits, so your overhead costs look much lower. However, we have seen quality suffer. The costs from that don't get reported as labor costs, and often don't show up until some time later, so it is hard to see a real correlation between these costs and offshore labor. So upper management, who are often somewhat removed from what actually occurs within the company do not notice the problem.

One of the biggest problems with offshoring is communication. When all the people in charge speak english, and the people doing the work can only speak marginal engrish, problems occur. Specs are not relayed properly or take much more time to communicate than they normally would. The problem is that even seemingly trivial specs are important, and they can mean a costly product return. We have seen one product return that costs as much as the employee saving for an entire year.

There are also overhead costs involved in setting up the offshore operation. I'd imaginge even moreso with engineering or R&D. Files and data must be able to relayed quickly and securely. With an oufit overseas you have little control over, this is can be very difficult. And if something goes wrong and important information doesn't make it, or doesn't make it in time, that can also mean costly losses.

The whole point is that while offshoring saves on employee costs, those savings can be quickly erased by communications or quality errors. In my experience, the cost savings just aren't all they are cracked up to be, although you wouldn't notice by looking at the accounting reports.

Re:work ethic my eye

[cyphercell]

You think Americans would watch less tv without work or that unemployment would reduce divorce rates? I don't get it. Personally, I prefer work a bit more than just having a bunch of free time, if I had the time I would just go to school more.

Not really "News"

[airhed13]

This isn't really news. My company reported near record profits in the fourth quarter last year. How did that affect R&D (where I work)? It resulted in layoffs, cancelled projects, and further outsourcing of development efforts to India in early March.

I would propose that the primary source of this outsourcing is businesses who don't recognize software development as a core business, and so don't care so much about quality engineering practices or products that work. There are exceptions, of course, but I know that my company doesn't consider software to be essential to their profit model. As long as the software isn't losing money, they really don't care. They sure aren't willing to make the investment to really generate money with quality software.

Re:Not really "News"

[Anonymous Coward]

Seems that Slashdot reading is common at Euclid and Worden (if that's where you are).

It appears that every year, a department gets shipped to India or at least consolidated (CRC). It's a common belief that all development will be in India in the next few years.

Go PPA! (or PPB if you prefer)

Re:Not really "News"

[Anonymous Coward]

I worked for a company that had recently been acquired by ABB while I was in college. They had record-setting profit projections every quarter. They accomplished this by waiting until the end of the quarter and laying off several employees -- then projected the next quarter's profits based on the last quarter's revenues and the expenses with fewer employees. Morale was horrifically bad -- everyone knew when the next round of layoffs was coming, and everyone hoped it wouldn't happen to them.

And it doesn't save any money at all

[a1mint]

You end up with a bunch of gobblegook crap code, I've seen it happen. Communication is key. Video conferencing doesn't work. Very low quality at a low price. Not worth it, waste of time, money.

The economic shortage of engineers

[sean_ex_machina]

There really is a shortage of engineers, but it's only because companies are too cheap to offer decent salaries. Offer better salaries and you can hire more/better people. It's not at all complicated, but good luck explaining that to the drones in HR.

Re:work ethic my eye

[siufish]

Perhaps because all of these are not Hindu/Islamic holidays? They do not celebrate Gregorian new years because they have different calendars.

It's all cost of course

[sholden]

The key advantage of hiring Chinese entry-level engineers was cost savings, whereas a few respondents cited strong education or training and a willingness to work long hours. Similarly, cost savings were cited as a major advantage of hiring Indian entry-level engineers, whereas other advantages were technical knowledge, English language skills, strong education or training, ability to learn quickly, and a strong work ethic.

Surely "strong education or training" really means "stronger education or training than a similarly paid American worker", I really doubt you can't find anyone in the US with the required education/training.

"work long hours" realy means "we need fewer and hence the cost is lower".

"English language skills" I really doubt the average Indian engineer has better English than the average American engineer.

"learn quickly and work ethic" maybe those count, but again I suspect it's just a price point difference.

Hence it's all about cost.

But when the US dollar devalues to a more reasonable level Indian and Chinese labour won't be cheaper anymore so the problem will go away - to be replaced by a few other more serious ones...

Re:It's all cost of course

[Maxo-Texas]

We do have a two fold movement.

First.

The current inflation rate in rupees is 14+% ( 72/14 =~ 5) so indian programmers will be 100% more expensive in 5 years. They currently are about 1/3 the cost (with very low benefits compared to american workers).

The indian peasants are beginning to get pissed off by the inflation so increased taxes are likely.

Second-- the dollar lost 3.5% against the rupee in the last year alone. So the net inflation rate is roughly 18% (72/18 = 4!). So that mean costs for indian programers will double in only 4 years at the current rate.

Now- infosys reports that *many* companies are bidding for their workers. You might be getting the workers for 1/3 the cost, but if another company bids 50% of the cost, then you lose the workers.

Likewise, there are limits to growth.

http://edgeperspectives.typepad.com/edge_perspecti ves/2006/07/innovation_and_.html
"Leading firms like Infosys report turnover rates in the range of 10 - 15%, much more equivalent to what we experience in Silicon Valley."

10-15% ... Last year they had to HIRE 13,000 new employees just to stay at the same number of people.

http://www.eweek.com/article2/0,1759,1991783,00.as p
Some companies report 15% per year. Quality issues. Very high job hopping rates.

OTH, rumors run rampant where I am of the entire IT staff being replaced by indians. Which opens another can of worms. This company only sells products in the US. Will popular press about them dumping hundreds of americans for indian workers affect their ability to sell product here? It's unclear- folks frequently SAY it matters but then sneak in and buy the bargain anyway.

outsourcing R&D

[krakround]

It's one thing, in the software industry say, to outsource the grindhouse work like installers, black box testing and the nth maintenance release of Boring Software 2007, but when creative, innovative jobs like R&D go overseas, then local workers are truly screwed. Even if you've kept yourself up to date, flexible and on the leading edge you still won't find work!

Even Medical Billing is going that way!

[Anonymous Coward]

American Benefit Plan Administrators is planing on outsourcing 90%+ of their jobs just to save a few dollars. This worries me, not only for those who are losing their jobs, but for the fact that such sensitive data (SSN's and personal medical data) is being put into outside hands. This alone will increase the risk of identity theft, blackmail, and loss of privacy.

My experiences

[DaveV1.0]

I am a contractor at a major telecom company. As it happens, my contracting company is an Indian company. Over half the people I work with are Indian.

One of my co-workers is Indian and in India. But, he does nothing because of legal restrictions. He is hardly ever around because he gets so many vacations, holidays, and training days. He can only work a 40 hour week and can not work on the weekends, which is when he is actually needed.

He gets paid a salary to do nothing, my team is down a member, and we three on-shore people are doing the work of 4 ( actually more as we are understaffed ).

I am looking for a new career.

Re:My experiences

[Anonymous Coward]

Even Indians tell me you don't want to work for Indians. There is a certain company that starts with a V which was squarely at the bottom of my list when I was recently looking for a job. VZW is fine, a normal ratio of Indians.

That said alot of Indians are great people. I just don't want to work in a company dominated by them.

Re:work ethic my eye

[Duhavid]

You are assuming that there is no middle ground between
"work work work" and unemployment.

Labor in the US

[cdrguru]

Labor in the US is certainly one of the most expensive in the world. As a direct result of this it should be obvious that any technique that will move the work elsewhere where labor is cheaper is going to be done. Any technique.

Outsourcing will continue because it is at least on the surface cost effective. It will displace higher paid American labor in favor of lower paid labor elsewhere. It does not seem reasonable to assume that at some point all foreign labor will become as expensive as American labor is today. At least not for a long, long time.

Many people in the US are under some kind of illusion that we can be a country of "knowledge workers" where everyone is above average and college educated. We can simply export work or import labor for anything that is not covered by this. There is a false assumption here that everyone in the US is capable of being trained as a "knowledge worker". We are reforming the economy such that there are no jobs in the US which someone of more modest intelligence and capabilities can perform. This is a mistake on several levels.

Obviously, we can move work offshore to cheaper labor but we will then be dependent on a longer supply chain and whatever occurs in these foreign locations. This means that an earthquake in India can wipe out a company in the US. Does not sound like a good plan.

It also means that it is possible to seriously damage the US ability to compete in the world by attacking non-US facilities. If a majority of consumer electronics devices are made in Indonesia, burning down a factory there may prevent a US competitor from entering the market and preserve the market dominance of other countries.

Certainly when all our military equipment is made overseas, as will soon be the case, it will be nearly impossible to use the military against foreign enemies in league with producing countries. We can also expect complex military hardware to be dependent on foreign powers continued good will to keep it operating. Logic bombs in such equipment can be expected.

Re:Labor in the US

[einar2]

The problem is not that the labor cost in the US is one of the highest. The problem is that the labor cost is not justified.
There is nothing a US developer can do better compared to an Indian developer. So, why pay more for the same work?

Funny is the subtle racism of your post. Where you assume that the US would provide "knowledge workers", as if other countries could not do this. Or where you associate "higher paid American labor" as something positive in itself.

BTW, the risk that an American company burns down is the same like the risk of a company abroad to burn down. (I was actually once in negotiation with a US company when 9/11 occurred and the company was literally wiped out. Since the US has the tendency to get involved in wars the risk is obviously higher there.)

Re:Labor in the US

[Calculust]

Have you ever done an engineering job for a military project? I would guess not, because you're making some pretty false assumptions without any facts or experience to back it up. Everyone that works on the development of military hardware has to be a US citizen. If a business/lab/etc has military projects they are prohibited from even hiring anyone that is not a US citizen. Furthermore, all of the development on those projects are done in the States, as there are very, very strict regulations on the development of those projects. I work at a lab that does such development, and we are constantly reminded of these very important restrictions (like not talking to anyone outside of work about what you work on). In my experience (which, to be fair, is limited), it seems the the DoD and the whole military industrial complex has things very well thought out.

Re:Labor in the US

[zoftie]

Japanese usually never outsource products for inner consumption, while in america people don't have culture of quality. There are many stories of outsourcing gone wrong. It is tough to work remotely, even in your own country. Consider a different culture, timezones and climates.
In general it works. But how fast can india churn out "quality" software developers? Often quality developers do take a jump and come over to north america, europe. In the end it is all about the family. Conditions in india and not family friendly in many ways.

All I am saying picture is more complex, then: 1. Look greedy corporations are robbing middle class joe. 2. Most indians if briliant programmers, are idiotic.
Only time will tell. Yes now it is scary, but say if european countries will do the work at home, quality work and indian shops will churn out mediocre stuff, americans might face just another "GM" like situation. Large corporations, that are unable to control quality and build process. Toyota is coming up to be the largest car manufacturer. And it is all in quality. Again I don't think cars and software relate, after all analogy is poor mans argument. I would rather point out situation is more or less volatile and beyond comprehension of many.

Many have fears about the situation, but it is not from in depth understanding of the situation.
cheers

The Step After Outsourcing R&D

[Anonymous Coward]

The step after outsourcing R&D won't be taken by US companies. It will be taken by the folks that we have outsourced our R&D and support to. The folks that are doing those jobs will think to themselves:

"You know, we research, develop, and support this product. Why don't we just market it ourselves and cut out the American middle-men?"

The step after that, for the US at least, will be more like a long fall.

Re:The Step After Outsourcing R&D

[Anonymous Coward]

There are MBAs at my site right now who are pressuring the corporate overlords to "bring more development work to the US." When you press them, though, you find out that it's nothing of the sort. Their real goal is to manage the development from the states, but leave all the developers in India. I just remind myself how incompetent these dev managers are, though, and I feel much better. At least when their projects fail, it won't be because of "expensive" US developers. [Anonymous Coward b/c I know some of those MBAs' cronies read slashdot, too.]

For SPECIFIC tasks

[gelfling]

Like console admin, ID admin, help desk, etc. If you have 50,000 ID's to manage why not send that job to South America. It's not a high skill job and doesn't require any personal interaction.

Re:For SPECIFIC tasks

[Anonymous Coward]

help desk, etc. If you have 50,000 ID's to manage why not send that job to South America. It's not a high skill job and doesn't require any personal interaction You keep using that word. I don't think it means what you think it means. More on point, I have direct experience with a South American help desk. It's fucking awful. I'd rather pound my dick wafer thin with a meat tenderizer and staple it to the ground with a croquet hoop than call the damn help desk. The accent is bad, the phone connection quality is bad, their connection speed to production systems is bad. They can't understand me when I spell things out using either the military or police standard phonetic alphabet.

Re:For SPECIFIC tasks

[gelfling]

Nah, Injya's much worse. Argentina's pretty good, they try. Cut some tickets keep everything up to date. No problem-o.

H1B vs outsourcing ?

[sas-dot]

some highlights from the original article mentioned

Our research shows that companies are not moving abroad because of a deficiency in U.S. education or the quality of U.S. workers. Rather, they are doing what gives them economic and competitive advantage. It is cheaper for them to move certain engineering jobs overseas and to locate their R&D operations closer to growth markets. There are serious deficiencies in engineering graduates from Indian and Chinese schools.

........

The bottom line is that China is racing ahead of the United States and India in its production of engineering and technology PhD's and in its ability to perform basic research. India is in particularly bad shape, as it does not appear to be producing the numbers of PhD's needed even to staff its growing universities.

......

Back in silicon valley... Indians have founded more engineering and technology companies during that past decade than immigrants from Britain, China, Taiwan, and Japan combined. Of all immigrant-founded companies, 26% have Indian founders.

.....

Overall, the results show that immigrants are increasingly fueling the growth of U.S. engineering and technology businesses. Of these immigrants groups, Indians are leading the charge in starting new businesses, and Chinese create the most intellectual property

.......

We have been researching this issue further. Preliminary results show that it is the education level of the individuals who make it to the United States that differentiates them. The vast majority of immigrant founders have master's and PhD degrees in math- and science-related fields.

......

some conclusions.....

It is clear that skilled immigrants bring a lot to the United States: They contribute to the economy, create jobs, and lead innovation. H1B's are temporary visas and come with many restrictions. If the nation truly needs workers with special skills, it should make them welcome by providing them with permanent resident status. Temporary workers cannot start businesses, and the nation currently is not giving them the opportunity to integrate into society and help the United States compete globally. We must also make it easier for foreign students to stay after they graduate

Higher Education?

[darthaya]

I know for a fact that 95% of the Chinese/Indian workers here have at least a graduate degree. And a large number of them also have a doctorate degree. Because it is exceedingly hard to apply for a H1B visa without an advanced degree obtained in States. And a lot of them got it from the top tier universities in States.

Re:Higher Education?

[_.- thimk! -._]

You know for a fact...

I suppose while you're making such grandiose statements that you're also suggesting that includes every H1B, student work visa, immigrant, and illegal worker, whether working in a technical area, in education, driving a cab, working the food or retail industries, doing manual labor, or working in some sweatshop or another...

That has every earmark of a knee jerk random statistic that is complete and utter crap.

If you know this for a fact, how about some actual data to support that outrageous claim?

I'm perfectly willing to entertain statements regarding relative levels of education that are supportable, but there are no free passes (especially here...).

If You Code For "Free", Why Do You Care?

[quakeaddict]

It always amazes me that the same folks who so willingly give away source code are the ones who complain that their jobs are going overseas.

If you code for free....it really doesn't matter what the overseas programmers/engineers are getting DOES IT.

Why don't corporations just drop the BS?

[walterbyrd]

Of course outsourcing and offshoring saves money. And that is a real bitch to people, like me, who have invested in a lot in our IT careers. But, I must admit, it's understandable. If msft, or orcl, were to say: "look, there's just no way our company can remain competitive if we pay developers 5X more than the competition pays. And besides, how do you expect the CEO to get by on less $10 billion?"

So okay, it's time to get out of IT, I can live with that. What I hate is the Bullsh!t: "offshoring will actually create more IT jobs in the USA" - "there just are not enough USA developers to fill the growing need" - "college students are staying away from comp sci so we need more H1Bs. - "developers! developers! developers! developers!" Please, give me a friggin' break.

Bad enough that I spent all that time and money getting a degree that's not worth sh!t. Not to mention the time and effort I spent working crap jobs just to pay the bills and get some experience. Do they have to rub it in, and insult me with their bullsh!t?

Re:work ethic my eye

[davek]

Guess I deserved the "-1 Flamebait." Emotion and /. don't mix :)

First, I moved the hours for this India office to be banker's hours, 9-5. I'm the one who stays up until midnight making sure they have work for the day. Asking professionals to work 3pm to midnight is disrespectful and counter-productive.

Second, I'm a F/OSS evangelist. Part of that philosophy is the belief that on the global scale, there is several magnitudes more work than there are engineers. Once the technological economy comes back into balance (hopefully within a generation or so), works in emerging economies won't have to work slave labor just to get a foot in the door.

Hate the game, not the player.

I used to work for a major avionics company

[HungWeiLo]

and they've decided to movie the manufacturing and R&D of their most profitable product overseas (this is a crucial safety device used on pretty much any aircraft flying with more than 2 engines). My neighbor was in manufacturing QA, and was slated to be laid off, but his entire group was forced to stick around since last summer to train their replacements. Their pensions were being effectively held hostage, so they all obeyed dutifully. They were supposed to be done and all laid off by last October, but they are still working right now due to "difficulties with the transition of labor." I know they're not purposefully delaying or sabotaging the transition, because they know the company's a sinking ship and would just as quickly look for another job if they didn't hold their pensions hostage. Meanwhile, wages at the to-be-outsourced destination has thus far risen 5-8% plus increased transport costs across the Pacific.

Re:This strategy is stupid, eventuallyEVERYONE LOS

[owlnation]

Yes, that's all correct. At he microeconomics level there's also the fact that the drive to reduce short run costs by outsourcing invariably produces a decrease in customer satisfaction due to the increased difficulty for the firm in maintaining quality and training over longer communication lines. There may also be language and cultural issues too.

So long run at the micro level, brand quality and profits can be affected. I'm fairly sure if you did an in-depth cost benefit analysis projected over time of any outsourcing operation there would be more resulting net costs than benefits.

the $

[edis]

everything is destined to experience the terror of absolutism of THE BUCK

Switzerland, Singapore, London, New Jersey

[einar2]

I work for a company having IT locations all around the world. Recently I learnt that comparing the city of London (!), Singapore, Zurich (Switzerland) and New Jersey, the IT cost is highest in New Jersey due to the salary cost.

Now for the US readers: each of the places named is an economical center of its region. IMHO, each of the non-US places has higher quality and work standards than the US.
Maybe you have got a problem in the US...

Re:Switzerland, Singapore, London, New Jersey

[plasmacutter]

we do.. cost of living is being jacked up higher than wages, particularly housing and energy, but i've recently seen the price of a coke 12 pack increase by 33% in my area, so others are beginning their climb too.

in the NYC/NJ area it's particularly bad, and my brother, who lived in the area for a considerable amount of time, is reporting people commuting in from as far as central pennsylvania (4+ hours away) in order to gain affordable housing.

Re:Switzerland, Singapore, London, New Jersey

[einar2]

Well, I am not looking for trouble :-) but everybody has the feeling that prices climb extremely in his neighborhood.
However, if you look at ratings about the most expensive places to live, US cities normally do not make it in the top ten. London or Zurich do. Yet, IT people in the US have the feeling that they have a god-given right on high salaries.

And it gets worse. A lot of our IT people think that they do not have to know our business. They do IT. They do not care if we are a company selling shoes or if we are a bank. Well, people knowing Java/.NET/perl/YouNameIt I can get in India much cheaper. IT people in India speak at least two languages. Most IT people in Switzerland speak at least three languages. IT people in the US speak only English.
What do you think is justifying the salary demands of US IT people?

Re:Switzerland, Singapore, London, New Jersey

[plasmacutter]

well.. there is a huge difference between the US and EU workers.

i've heard a long time that in europe university is free.

in america you have to pay for your education, and this can range from 10 grand a year for noncompetitive schools that wont get you even decent pay to 30 grand a year for upper echelon. these figures are after all federal aid.

people HAVE to pay them back, if they default on student loans they can literally be cast out of their homes and into the street. This complete lack of bankruptcy protection was provided to assure the participating banks that they would have minimalized defaults to compensate for the government mandated caps on interest rates.

Then there is the lack of socialized healthcare. Health insurance has climbed some 300% in the past few years, and insurance providers are not required to even accept you, adding to the cost of living vs many EU nations and Britain.

Finally, certain powerful interests suppress the development of adequate public transportation (NYC is ok, but the rest of the nation is far from comprehensively covered), probably because they dont want to look at the faces of the working class they screw, but the point is a car is not an option or priviledge here, it's a necessity, adding vehicle, fuel, and maintainance charges to the living expenses of anyone who wants to hold a job.

Thus the wages must be higher for equivalent living standards.

I don't agree with how things are set up in the US, but i have to live here and deal with them for the time being, and as a student ending his studies I am absolutely disgusted and petrified by the job market i'm looking at, even with two degrees.

Re:Switzerland, Singapore, London, New Jersey

[Anonymous Coward]

> And it gets worse. A lot of our IT people think that they do not have
> to know our business. They do IT. They do not care if we are a company
> selling shoes or if we are a bank.

This is something that annoys me quite a bit.

If your IT person knows your business, good for you. However, if you start
insisting that your IT person know all the ins and outs of your business--and
I know I'm not the only one who's had a boss say I should know the business
as well as (or better than) all the users of the internal support software I
maintain--let's talk parity.

You want me to understand exactly what the workflow is for our entire customer
support organization--even though it changes monthly--fine. When can I expect
users to understand their computers well enough that my department doesn't
have to spend (another) ten person-hours explaining to a user that behavior X
isn't a bug and he's the only one who's ever experienced it, because it's just
how a web browser *works* and we have no control over it unless you're willing
to listen when we tell you you're only supposed to access the tool with Firefox
version X+, IE version Y+, or Safari version Z+.

Re:Switzerland, Singapore, London, New Jersey

[raehl]

What do you think is justifying the salary demands of US IT people?

Most IT people in Switzerland only have one gun. Most Americans have three.

Re:Switzerland, Singapore, London, New Jersey

[Anonymous Coward]

but the point is a car is not an option or priviledge here, it's a necessity, adding vehicle, fuel, and maintainance charges to the living expenses of anyone who wants to hold a job.

Bingo! Don't forget car insurance, tag and taxes, much longer average commute times; (how many Eurpoeans drive 100km to work every morning, and then back again?) you can see where that extra few $10k a year is going.

I don't agree with how things are set up in the US, but i have to live here and deal with them for the time being, and as a student ending his studies I am absolutely disgusted and petrified by the job market i'm looking at, even with two degrees.

At least you can get out. As a born citizen, my chances of scoring citizenship and a job in any other country is very low.

Re:Switzerland, Singapore, London, New Jersey

[einar2]

I humbly beg your pardon that this next sentence might maybe sound offensive. It is really not meant to be and would not qualify for one in my country:

You sound like a socialist.

The fact that your eduction was so expensive and that you living costs are so high are supposed to justify your high salary? You are joking, are you?
As a company, for the salary I pay I would like to get something in return. And for higher salary I would like to get more in return. That you think your lot is harder than the one of others does not impress me. Most companies do not care enough about your life to take these facts into consideration. The same work can be done cheaper by an European or even much cheaper by an Indian. So, guess who gets the job?

Re:Switzerland, Singapore, London, New Jersey

[einar2]

Well, I am sorry it annoys you.

However, we are speaking about how you want to justify that your salary is higher than the one of a European or an Indian. And believe me, the only differentiation you can make is knowing your business. This is because plain vanilla IT is the same all around the world. IT knowledge became a commodity. I can buy it cheap and I can buy it everywhere.

Part of the problem...

[Anik315]

Part of the problem with American IT competitiveness has to do with the pace at which the sector is developing. Much of what students learn in class is obsolete by the time they actually enter the work force which means that CS may not be the best major if that's what you want to do for a living. Mathematics with a minor in CS is probably the best way to go right now.

Re:Part of the problem...

[Supercooldude]

And the main reason there's a shortage of "skilled workers" is because the HR people think the way you do. They don't realize that a CS degree isn't supposed to teach the latest software technologies (which you rightly pointed out become obsolete quickly), but rather to teach the fundamental concepts of computer science, which NEVER become obsolete, and once someone masters them he can pick up any new software technology like that *snaps fingers*. Since the technology changes so rapidly, it will ALWAYS be the case that the vast majority of people in the field don't have the latest skills. When the HR people realize that a competent CS graduate who knows Java can learn C# and become productive in it in no time, that's when the US's desperate labor shortage will end. Sadly I don't think it'll happen any time soon, because HR people are morons.

Re:Part of the problem...

[Fulcrum of Evil]

Name one thing in CS that goes obsolete in 4 years. You can't because there isn't anything.

Re:work ethic my eye

[Marxist Hacker 42]

Funny, could have sworn that the reason they took him off the cross was because it was the eve of the Sabbath (Saturday).

If you are that smart, then start a company!

[WindBourne]

Look, assuming that you are in the USA, we have it about the easiest to start companies. But even in the EU, it is fairly easy. So, start one and hire others. In addition, you will make MORE than if you are working for a company who will lay you off sometime down the road.

Re:If you are that smart, then start a company!

[Anonymous Coward]

Sure, you can start a company. You can also work it every waking minute, including weekends, never get a vacation (you're indispensible to your own company) and just generally be a slave to it. Then, asssuming you do make some bucks, your kids can start spending them at age 22 because that's how old they'll be when you die from your overwork, and they inherit.

Oh, wait - you don't _have_ any kids, 'cuz U either never had time to get married, or you did and she left after feeling abandoned while you worked 'til 10 PM every night, trying to keep ahead of that team of Indians down the road that are doing the same thing, for 2/3rds your salary.

Owning your own company is just about the equivalent of economic slavery. Don't even think about it if you want to have any sort of life.

Re:If you are that smart, then start a company!

[MadHatter2005]

What kind of bullshit is this? I own my own company (actually my business partner and I own it) and I'm hardly an economic slave. I make a great living and I rarely work over 30 hours per week. The rest of time I do what I love (guitar, friends, golf, beer, etc). I'd say my life is much more enjoyable now versus when I was a C++ programmer working 40-50 hour weeks for 'the man'.

Everyone should start their own company just to see what it's like and to gain an appreciation of what managers actually do. You never know when your business idea might be a hit, thereby saving yourself years of economic slavery working for someone else.

Re:work ethic my eye

[Daishiman]

Buddy, I'm sorry to say so, and I've only been in the business for a couple of years, but if you want to "live", IT or any corporate office job is not for you. I've accepted that reality and I'm in it for for the time being because I love it, but that's the very same reason I'm planning ahead a looking at a future exit point from this.

Wow, they really needed study

[jackhitrov]

to figure it out? Haha, was it not obvious? How much did they spend on that "Study"? Looks like money laundering for me.

Re:work ethic my eye

[Anonymous Coward]

I think the original poster's point was that they also staid open during the Muslim/Hindu holidays as well.

Double duh.

[treeves]

How it could be any more obvious I have no idea. But I guess they had to do a study to make sure.

mod this guy up, he gets it : )

[plasmacutter]

i wish i had points for you pal.

Re:mod this guy up, he gets it : )

[SadGeekHermit]

Thank you kindly!

In Soviet America...

[drewzhrodague]

In Soviet America, Corporations outsource YOU!

Seriously. As an experienced sysadmin (10+ years w/ Solaris, Linux, & BSD), I am having a terrible time securing even a simple tech-support job. I get calls from all across the country for positions, but none of them actually materialize. Most times, I can't even get a confirmation that my resume was received by a potential employer, and don't get me started on those job-application web-forms. What a tarpit those are (fill out the form, never hear from anyone).

Then again, I live in Pittsburgh, which is seemingly hostile to small businesses. Instead, I dig holes in my yard, and I have vegetable seedlings started. I don't think anything has given me so much satisfaction since I started my first couple of jobs at ISPs. Sure wish I could become a pot-farmer -- I'd be pretty good at it!

Race to the bottom

[Snufu]

Isn't this just the inevitable next step in our race to the bottom? Walmart quality R&D.

You want cost savings? Let's offshore the six-figure salaried genius executives who perpetuate this shortsighted lunacy.

Re:work ethic my eye

[Anonymous Coward]

When you work in a global scale, try to plan for it. If you are managing the projects, it's YOUR responsibility to know what are different holiday/vacation schedules of your team members. Don't you plan on a reduced workload/reduced productivity around Christmas timeframe?

It's easy to blame your incompetence on others. Did you ask why it has come to it that a head being not available for 3 days is threatening your project? Why is it threatening anyway if , as you claim, he was not doing any work anyway?

Upfront costs are prohibitive.

[drewzhrodague]

It isn't so easy to just 'start a business'. You need capital. You need capital to do the paperwork, capital to pay bills. You need some employees, which costs more capital. It is not easy for some of us nerds that don't have the Joe Salesman presentation ability.

Ever try to hire a salesman?

Re:Upfront costs are prohibitive.

[cyphercell]

Ever try to hire a salesman?

That's an awesome quote!

Since it's working so well for corporations

[Anonymous Coward]

Let's outsource their political buddies!

Re:work ethic my eye

[cyphercell]

define work work work :)

Too bad it doesn't really cost less

[SCHecklerX]

By the time you deal with implementing infrastructure, re-designing systems so that they can be supported remotely, training your replacements (I ran a 250 man-hour project to transition some tasks to India...tasks we normally spent maybe 30 hours a YEAR performing), not to mention the longer amount of time it will take to get anything done, along with the fact that your remaining employees are no longer productive because they have to spend all of their time assigning work and making sure it was actually completed (loop 5 times per simple task assigned) using some inefficient system like HP Service Desk.... how much cost has been saved?

So, if you really want to save money, why not still redesign systems to be supported remotely and then just let your existing employees work from home? Or if you must outsource tasks, effectively making the remaining workers managers...get rid of the managers who no longer have a staff to manage.

Other jobs? Not happening anymore, bub

[Travoltus]

The permanent structural unemployment and underemployment that is resulting from offshoring, will eventually bring the US economy to a halt.

The flaw in your logic is that you assume becaus previous industries left or evolved away into newer industries, that this will happen repeatedly. As in, from the horse and cart design to the SUV sales/repair, and from telephone switch operators to internet jobs.

That is not the case any more.

There are no new job booms beyond tech now, because of offshoring. Biotech is already going overseas. Nanotech will result in a major net loss of jobs. What's left to grow now is the service sector - the cashiers and what not - and even that is slowly being automated.

The new job types coming out now are small fry at best, and are going to be oversaturated or out dated in 5 years. That means whatever you're in college for right now, will be worth dramatically less in wages in 5 years, or few people will be hiring for someone with that degree. Say hello to just-in-time employment.

There is nothing big that will ever come up any more as far as jobs are concerned. We've reached the end game, and I openly invite you to show me what's coming up that open up the jobs spigot again in America.

Now, watch out for the fallout from this subprime boom. People have not been spending more because of rising wages, people have been spending more because of massive amounts of refinancing. The subprime correction is spreading into the rest of the market because of the number of homes increasing due to foreclosures. That means you who have a fixed rate re-fi will still inevitably see your house drop in value. You'll be upside-down on that bugger in 2 years. Mark my words on that.

What this means is, with the explosion in low paying service sector jobs, the collapse of refinancing-supported consumer activity will not be reversed by a boom in higher personal job-based incomes. Also, people will dig into their IRA's and investments to make ends meet as the water level rises; I work in the financial sector and I am watching the slow rise in that activity right now. And people working at Wal Mart don't get IRAs or stock options unless they're managers, but they'll be selling that, too, to make ends meet as Wal Mart slashes wages to go along with their always low prices pledge.

You have the triple threat of early divestments to make ends meet, downward wage pressures exerted by offshoring, and an imminent dead halt in refinance-based purchases, all about to descent upon this economy.

Offshoring fanatics, feel free to keep your head in the sand about this... just like all the housing investors did when they said the current housing boom would never end.

Re:Other jobs? Not happening anymore, bub

[Cafe Alpha]

In the Bay Area (San Fran, down to silicon valley) people have been trying to adapt by working longer and longer hours.

I tried to escape the treadmill by starting an appliance repair business. Not sure if that will succeed since I was underfunded... anyway I ask all of my clients about their jobs in order to get a handle on the local market, and NO one works less than 60 hour a week anymore. A surprising number of middle class clients in professional jobs work 100 hours per week or more.

Lots of people in this area have become consultants just so that they have the ability to take a vacation or have some say over their hours. It's not a step up in pay overall I would guess, but just trading risk for not being a slave.

But overall no one has a solution! There's never going to be unions in the forseeable future. The only hope that an American has to have a life is to move to one of the cheapest spots in the country or move out of the US entirely. Our corporate culture is entirely expoitive, our job market forces a race to the bottom because you can't be the only person demanding good treatment and still have a job, and our social culture allows no cooperation or class consciousness so we are simply doomed.

Working for the government may, in the short run let people work 40 hours like actual humans, but that won't last. The government has noticed that it's the only good employer left in the country and started to outsource.

We're completely doomed. And the public is so stupid that they're signing up for Donald Trump wealth-building courses in desperation. That's all we have as a solution, hucksters.

Oh and MOD PARENT UP!

Re:Other jobs? Not happening anymore, bub

[sustik]

[I am late to respond, maybe the parent poster will read this...]

> There are no new job booms beyond tech now, because of offshoring.

You mean in the US, since you mentioned bio- and nanotech.

I think I understand what you are saying, but consider my view for a second. In recent history (20th century) the US population was very lucky: consumed more, enjoyed more luxury than what they worked for. Ye, ye I heard that they were more efficient yadda-yadda, it is just not so. The US started to ride a lot on (exploit unfairly) it being the strongest world power. Now that other contenders are coming up the inevitable sobering happens. The US population put in less than what they took out (whole Earth) etc. Outsorcing and globalization will bring the US down and bring others up.

I came to the US from Europe. Some of my peers from my home country work more (and less enjoyable jobs) for less money. (Meanwhile I make less than some who are doing less than me here in the US.) My sister is a CRA (clinical research assistant), she makes about 60% of what the same position pays in the US. And get this: the prices are the same for food, clothes, utilities, movies if not higher for her. To be fair, education is free (till the first masters degree) and there is universal healtcare so that health expenses do not bankrupt people, but taxes are about the double (or more) of what I pay in the US. (And by the way, my syster has just changed jobs for a 40% increase in salary: she was hired by an American company, so she earned very much below US standards. Note that it is not outsourcing, since her work could not be done by somebody living in the US, she must be located near the patients/doctors.)

I look around: people still drive enormous cars. I just bought a new vehicle and noticed that most of the cars have at least an 1.8L engine. No new houses built with less than 4 bedrooms in my area. WHY? Maybe, the US economy is based on unsustainable consumption. A correction is needed in habits regarding money management and buying habits.

And yes, it bothers me that CEO-s , high management get insanely large compensation (they take out more than what they put in); basketball coach making 1 million, Seinfeld 1 million per episode (I love Seinfeld!). I am not too bothered though. I just wish that the guy who will discover the cure for AIDS or malaria or Alzheimers etc will make that much money, however I fear that the CEO of the drug company and its(!) ilk will make all the profit. And then I did not even mention that the high school biology teacher of said researcher should deserve some more compensation too... We are rewarding the wrong people...

The process will be gradual, to protect your interests you need to be politically active: do not let corporations rule the country. Fight for decent treatment of workers all around the world: the reason outsorced labor is cheap is because they do not have the same level of public services and/or they are "slaves" to some extent. You see, if we do not fight for this global justice, then it will hurt us via the outsorcing.

I hope that I can still prove that I am very good at what I do, that I will be able to adapt as needed. I want to put in more than what I take out, but not much more.

Good luck to you, and I hope you will be able to look at these issues with some optimism in the future.

Re:Other jobs? Not happening anymore, bub

[pipingguy]

People have not been spending more because of rising wages, people have been spending more because of massive amounts of refinancing.

Let me simplify and ask if I'm correct: those that "own" over-inflated real estate (so over-inflated that non-wealthy people simply cannot afford to get into the home-ownership market) are leveraging the inflated value of their possessions so that they can buy expensive toys? Or worse, more real estate?

Re:Other jobs? Not happening anymore, bub

[Anonymous Coward]

There are people who have been buying everything using their HELOC (home equity line of credit) aka "housing ATM", relying on appreciation to bail them out.

It's simple, folks

[Ogemaniac]

If someone in India, China, or Timbuktu can do your job for less, one of three things will happen.

1: You will be canned, and your company will bring him here to do your work

2: You will be canned, and your company will hire him and open shop in his country

3: Some other company (foreign or domestic) will hire him, beat your company in the marketplace, and put you out of business.

Any way you cut it, you are toast. Quit whining and learn to compete.

Btw, of the three best options, which is best for the USA?

Number one, by a longshot.

Re:It's simple, folks

[plasmacutter]

or we could pass regulations which prevent that..

I can think of one strategy right now.

make it a labor law.. if there is a direct relationship between number of americans fired and number of people abroad hired, you will be forced to pay yearly wages to those fired workers until such time as they are earning equivalent real income.

if you attempt to subvert this law by moving abroad, you will be subjected to trade barriers which effectively remove you from the american marketplace.

oh.. and fsck the wto rules, they were designed by huge coporate power in order to facilitate what's going on now.

Re:It's simple, folks

[Anonymous Coward]

Are you serious?
So, do you bar Nike from making their shoes overseas? Or are you okay if you have to pay 300$ for a Nike shoe made in USA?

Gone are the days of regulations. Such regulations work at China, not USA. That's the difference between Open and Closed Economy. Open economy kept the US ahead, even it costs a few jobs here. Look at the scenario when the manufacturing moved overseas. Same thing is happening, and you can do squat about it.

What you need to do is, learn new skills and keep ahead of the game. Learn things that people in outsourceable countries haven't developed expertise in.... yet!!

Also, I do not understand about this hoopla about american jobs lost!! Where is the data to show that?

Just review the latest unemployment data at the DOL's Bureau of Labor Statistics at ftp://ftp.bls.gov/pub/suppl/empsit.cpseea30.txt . The unemployment rate for professionals is just 1.7% (!).

The unemployment rates for professionals when broken down by industry are equally dramatic:
Computer and math occupations - 2.0%
Architecture and engineering occupations - 1.7%

Only that much?? That's probably just due to incompetence!!

Re:It's simple, folks

[bnenning]

Also, I do not understand about this hoopla about american jobs lost!! Where is the data to show that?

Just review the latest unemployment data at the DOL's Bureau of Labor Statistics at ftp://ftp.bls.gov/pub/suppl/empsit.cpseea30.txt . The unemployment rate for professionals is just 1.7% (!).

The unemployment rates for professionals when broken down by industry are equally dramatic:
Computer and math occupations - 2.0%
Architecture and engineering occupations - 1.7%

Just quoting at +2 so others can see some actual numbers instead of the rantings of Chicken Littles, who 100 years ago would be predicting imminent doom because farming jobs were disappearing.

Re:It's simple, folks

[plasmacutter]

he unemployment rates for professionals when broken down by industry are equally dramatic:
Computer and math occupations - 2.0%
Architecture and engineering occupations - 1.7%

Just quoting at +2 so others can see some actual numbers instead of the rantings of Chicken Littles

the important thing youre ignoring about unemployment statistics is those who are discouraged to the point they stopped trying don't show up, only people still active in job searches show up.
many people have been unable to "get arrested" so to speak, and have given up their job searches, others are not necessarily unemployed, but are suffering under wages they can't realistically sustain given real estate and other price hikes, and so are running up their homes like atm cards on second mortgages.

additionally, it doesn't speak to the number of jobs today vs several years ago (hint, when i last checked it was still negative compared with '99 stats), or the median wages paid, paid vs unpaid hours worked, and benefits or not given in those jobs (also a fun little exercise in how inflation is used by companies for the purpose of forced pay cuts).

yeah.. the economy is doing really really well! corporate profits are at a record high, and thousands of jobs were created..... for h1b workers and in offshored operations... but apparently to these corrupt bastards the profits are all that matter, no matter how many holes they blow in the sinking ship of the middle class.

Clue time

[WindBourne]

This is /.. Software has a minimal upfront costs. Pick an idea and run with it. Do not get me wrong. I have tried 6 times. It is a BITCH to get a company off the ground. But, I get closer all the time. In fact, I am now working on a none-technical company with something that I can patent easily. I have already done a number of samples and am trying to bring it to market. Point being that you do not need millions to start a small start-up. A lot of work, but so what. Do it now, or do it later. Take your pick.

Re:Clue time

[zCyl]

... No offense, but you claim you tried six times, and you haven't succeeded once. I think that makes the point that it's not as easy as "just do it".

Good luck in your continued efforts, of course.

But of course...

[NerveGas]

      Our company outsourced a bunch of work to India. In a private conversation, I asked the V.P. why he did it...he was to-the-point, and said "It costs us $7 per hour out the door." Finding employees in the US with the skills would have cost more in salary alone, then factor in unemployment, health benefits, setting up a workstation for them... it's a huge difference.

      Now, our company is the single largest player in our market. We're the 800-pound gorilla. We drove several competitors completely out of business. There's money there, we're not hurting. But when the guys in charge think "We could hire Indians instead, and split an extra $200,000 this year between ourselves...", then you know what the decision is going to be.

Contradiction!!!

[Nom du Keyboard]

there's more to outsourcing than cheap labor,

I only have to go a couple Slashdot articles newer to read that cost is the single largest factor in deciding to outsource. Usually Slashdot manages to keep its outright contradictions further apart -- or incorporate them in the same article.

If I made the laws...

[J.R. Random]

I would still allow outsourcing, but just subject it to the following condition:

Before you can outsource any other job, you must first

1. Outsource the CEO.

2. Outsource the CFO.

3. Outsource the CTO.

4. Outsource the company president.

5. Outsource all vice presidents.

Because these tend to be the most overpaid people, this law would have the advantage of creating maximum value for share holders.

Re:If I made the laws...

[DoofusOfDeath]

Before you can outsource any other job, you must first...

The depressing consequence of the current practice is that in 20 years we'll have outsourced the stockholders.

Re:If I made the laws...

[TheSync]

Outsource the CEO.

OK, let's look at a Fortune 500 CEO:

F. Duane Ackerman is CEO of BellSouth, holds a B.S. in physics and an M.S. from Rollins College, and earned an MBA from the Sloan Fellows program of the MIT Sloan School of Management. Prior to becoming CEO in 1997, he spent 3 years as COO of BellSouth (a company with $20 billion in revenue).

How many people in India have been COOs of a tech company with $20 billion in revenue?

The largest company in India by revenue is probably Reliance Industries (petrochemicals), which does about $20 billion. So there are probably one or two people in India who have experience operating companies of the size of BellSouth, but those aren't tech companies.

So let's look at the largest tech company in India, Tata Consultancy Services (TCS) with revenues of about $4 billion. The CEO of TCS, Ramadorai has a BS in Physics from Delhi University, a Bachelor of Engineering in Electronics and Telecommunications from Indian Institute of Science, Bangalore and MS Computer Science from the University of California. Ramadorai, now gets Rs 2.44 crore, or $561,000. It is unclear to me if this includes all possible non-salary compensation or not. I suspect he may hold a lot of stock.

James Q. Crowe is CEO of Level 3 Communications, which has $3.6 billion in revenue. His salary is $375,000, but his stock option profits are $3,750,000.

The CEO pay for top Indian CEOs is going up rapidly though...S Ramadorai' pay went up 100% from 2005 to 2006.

http://www.financialexpress.com/fe_full_story.php? content_id=129698

Last year, PepsiCo ($32 billion revenue) hired Indian-born and -educated Indra Nooyi for CEO. Nooyi was born in Madras and attended business school in Calcutta before completing her studies at Yale. Her salary is $964,413 but total compensation is $9,377,119.

http://www.informationweek.com/blog/main/archives/ 2006/08/pepsi_outsource.html

On the other hand, Indian CEOs may soon need to pay a 35% tax on stock options, so maybe we will see more Indian CEO talent coming to the US:

http://www.fenwick.com/docstore/Publications/Corpo rate/Execu_Comp_03-12-07.pdf

Actual Industry Numbers:

[purduephotog]

A PhD Chemist in Rochester, NY (guess the company) contracting- 200K
A PhD Chemist in China, contracting- 30K

And yes, you don't have to worry what happens if they have an accident...

China: Where your dollar goes 7x further.

You are ignoring one things

[aepervius]

Company do not run a vaccuum. The bottom line is that they need people to buy their goods and services. If you race to bottom the wages, then you cannot sell anymore your goods and services locally. Bear with me, Taking the situation to an hypothetical extrem, you could outsource 100% of the workforce and spare 90% of your cost. What happens ? Witrhin a few weeks or month, you better have market openned oversea, because there won't be anybody locally able to buy your stuff. Thus you follow in the collapse unless you are a pure exporting company. It does not matter on your 3 points if a company can make a larger profit on all goods or service they sell if nobody is here to buy. Finally most of the "cost" saving anyway are passed up on C*O and shareholder, which are NOT the one to sustain the economy. The one to sustain it are the worker for what they buy. Your economy would not live long if all the people which could buy were the top 1% richest.

Well, a lot of companies are already regretting

[guruevi]

I work for a multinational company in the higher IT structure. Currently I am developing documentation systems among other things, we have multiple offices in the US and Europe but also in South America and recently... China. Extra cheap, let's outsource.

Recent complaint: the engineers (R&D) in China take designs, start a new company and sell them for much lower prices to customers. The patents won't work (it's not software, it's heavy duty industrial non-computer hardware) because Chinese courts don't need to respect them. The most you can do is fire them.

Re:Well, a lot of companies are already regretting

[Todd Knarr]

And this surprised your company's management? After all, the Chinese aren't dumb. How much of a jump is it from seeing the American part out-source everything but upper management to China to the Chinese part deciding to in-source upper management and lose that huge drag on their profitability that resides on the eastern side of the Pacific?

Re:This strategy is stupid, eventuallyEVERYONE LOS

[jappleseed]

> right now congress is STILL operating on the myth that there are short supplies of
> labor in "X" sector, which is bull, what there is is a shortage of cheap labor who
> dont care about long term benefits or retirement in sector "X"

Right. There's no "shortage" of skilled programmers here. I've seen this around me, and experienced it personally. I was one of a dozen software engineers in a small SoCal biz. The biz did the ultimate in outsourcing - it just up and relocated to Taiwan. Laid off the twelve of us to be able to hire a few dozen Taiwanese programmers. The biz isn't doing to well now, which of course doesn't bother me ;-) But, still, it's upsetting to see this taking place and then hear about how employers just can't find skilled workers.

Re:This strategy is stupid, eventuallyEVERYONE LOS

[king-manic]

Your idea is great for the world as a whole. As a whole someone is benifitiing. However as a American/Canadian/Brit you lose out. So it's simply do you prioritize the idea of a free market of yoru own best interest.

If you can't beat them...

[zorkmid]

About a year ago a group of friends (coders all) abandoned Northern California and went in together on a farm in Okalahoma and built a couple of extra houses on it. They've been able to drop their billable rate down to where it's still competitive without the whole third world lifestyle (but hey, it's still Okalahoma, dudes).

I'm kind of conflicted about this. Good on them for finding a way to be competitive but it's just more downward pressure on rates.

As a side note they're also ramping up to produce wind power and biodiesel (Canola - the thought of any of these four driving a tractor scares me). First stop self-sufficiency and then on to selling the surplus.

Cooperative living may be the only way to beat Corporate goons.

Dangerous Times

[OceanWave]

It seems that the only jobs that will remain available are those that require work on site. Most of these are low paying service related jobs, which don't even pay enough for basic survival. Couple that with the daunting increase in cost of living since 1999. (This is still going up.)

I think we need to look at reform, again:

If a company wants to be based in the US (and sell within the US) they should be required to maintain a quota of American workers in various positions. This should be audited by the Department of Labor. If not, they lose their charter or license.

Our economy was good before. I was able to pay my bills, and still have a good quality of life, with companies employing higher paid American workers, before the outsourcing craze. It can happen again...

I know there are pro's and cons to "protectionism", but that's my opinion. It may be one way of saving our economy.

Re:work ethic my eye

[Duhavid]

#define WORK_WORK_WORK ( while ( 1 ) { work( ); } )

You're fear mongering.

[raehl]

So what you're suggesting will happen is Indians will all be gainfully employed and Americans will all be starving?

It can't get that far - long before it did, Indians would start outsourcing to US.

People have been whining about jobs getting lost to immigrants, and jobs being lost to automation, and now jobs being lost to outsourcing, for at least two centuries. And just like it's been a good thing the past 200 years, it's a good thing now. Because what people want isn't really jobs, it's stuff. And immigration, automation, and outsourcing all get us MORE STUFF.

Our prosperity does not depend on the rest of the world being in poverty.

Re:You're fear mongering.

[khallow]

It can't get that far - long before it did, Indians would start outsourcing to US.

The US would have to clean up its act first. Control government spending, reduce the cost of employees and regulation, etc.

Re:You're fear mongering.

[plasmacutter]

People have been whining about jobs getting lost to immigrants, and jobs being lost to automation, and now jobs being lost to outsourcing, for at least two centuries. And just like it's been a good thing the past 200 years, it's a good thing now. Because what people want isn't really jobs, it's stuff. And immigration, automation, and outsourcing all get us MORE STUFF.

this only works if nominal prices are brought down by the same amount as the cost savings through outsourcing.

that is not happening.

instead we're looking at the same living expenses while wages plummet, already financial reporters are commenting on the median housing rates are at their highest in over 60 years.

unfortunately for your perspective, the cost savings from outsourcing are not "trickling down". CEO's are keeping it.

wake up to reality.

Re:You're fear mongering.

[Rakishi]

It can't get that far - long before it did, Indians would start outsourcing to US.

Outsourcing only works if the country in question has a stable economy, trained workers and people who will work for low wages. After your scenario none of these would be true. No trained worked would have been educated due to lack of need for them thus creating few people to be used for outsourcing, heck the whole education system would likely have collapsed given how things are heading. No one would be willing to work either due to the social and cultural system that would form as no one would have needed to work for a while.

I doubt that even the US government would survive a total destruction of the economy, in the sense that almost everyone is employed and the great depression looks pleasant. We're dependent on imports and one our main export is money right now (thats how we maintain a trade deficit for so long, banks use dollars as reserves but that need not stay that way), can't buy much when your currency is in 1000% inflation. Your scenario would simply make it even worse. Sure after maybe 30 years they might come true but like I said the US would then be a third world nation.

Our prosperity does not depend on the rest of the world being in poverty.

I never said that, I simply said that if we outsource too much (ie: do what your original post said) it may very well kill the US economy in the long run (combined with other factor). All your scenario would do is mean that everyone else's prosperity would be partially due to the poverty of the US.

those equations don't make sense

[wordsthatendinq]

Sorry, I can't help myself here...

gdp = C+I+G+NX = (income - savings)+I+G+NX

profits = costs - revenue = (wages + other costs) - (wages + other income such as capital gains)

when you kill wages/income, you kill your own profits as well as us gdp.
Doesn't investment equal savings? Then your first equation says that

gdp = income + G + NX

which... I guess you could put it that way, but it doesn't really advance your point. One of the three definitions of GDP is total income, so by reducing income you mechanically reduce GDP. There's no need to show this with macro.

The second equation, even after you reverse it, you still get wages to cancel out with each other, leaving

profits = other income such as capital gains - other costs

So you've just made profit independent of wages by killing wages mathematically. At first I thought you meant to say

profit = revenue - (wages + other costs)

but this shows a reduction in wages actually increases profits, which seems to be the opposite of your argument. You might (or might not - I don't know) have the right conclusion, but you'll need to show it through some other means.

Re:those equations don't make sense

[plasmacutter]

youre right.. let me revise the profit equation.

profit = (average income + capital gains, etc) - (wages + other costs).

you lower wages, you decrease the average income. The more you lower your wages (say, exporting above average pay jobs such as the IT sector), the more damage you do to average income in the long term.
in the short term you do well. your ex employees are unable to afford your products though.

do this in aggregate and you get the GDP equation (either yours or mine).. nobody has a job that pays enough to buy your expensive goods.
because theyve been paying more to offshore employees, theyll be consuming in that market along with US consumers, this means greater resource scarcity...
the price will not adjust downward by the same amount as the real income has plummetted, the consumers/workers lose, the standard of living goes down.
the producers lose.. their real price is higher than it was before, their consumer/workers's real income has fallen, and their infrastructure costs are higher.

finally, the government loses.. they have less tax revenue from both sides (as if they really taxed corporations that much in the first place)

is that more satisfactory?
i find it much sounder a conclusion, but its also more complex, you succumb to attention deficit from many readers : )

Re:work ethic my eye

[Archangel Michael]

It was the eve of first day of Unleavened bread, a Sabbath, just not the weekly one. He was in the grave three days, three nights, Friday Evening to Sunday morning cannot be "Three days and Three nights" by any measure.

Mat 12:40 For as Jonas was three days and three nights in the whale's belly; so shall the Son of man be three days and three nights in the heart of the earth.

For a detailed versions that doesn't conform to nominal churchianity version see ...

http://ad2004.com/prophecytruths/Articles/Prophecy /3days3nights.html

http://focusonjerusalem.com/thedayJesusdied.html

http://www.geocities.com/bc1in2k/Death_Res_JC.html

I didn't ignore anything.

[raehl]

4) is just a special case of 3). If the shareholders want to let their CEOs make off with all their money, that's the shareholders problem.

No matter how you cut it, spending $200 making something that could be made for $100 is stupid. It's stupid when you could spend $100 on a robot to do it, it's stupid when you can spend $100 on an immigrant to do it. If it wasn't stupid, life would have been better in 1780 when everything was done manually, by hand. Everybody had jobs, but nobody could buy much more than clothes and food and they worked 80 hours a week because everything was EXPENSIVE.

Worrying about whether something is made by someone here or someone abroad is just ethnocentrism. Our prosperity does not depend on NOT hiring people in India, or Pakistan, or China to do work.

The fact of the matter is, we have been decimating jobs for 200 years. We've brought in machines to do them, we've brought in immigrants to do them, and we've shipped them overseas. Our unemployment rates have not skyrocketed. Just as many people own homes. People now have more and better stuff than they did in 1800, or 1850, or 1900, or 1950, or 1975. People have better health care than they did in 1800, 1850, 1900, 1975.

Your 'defense' is that the rich have gotten richer. Who cares? What's more important, making sure the rich don't get richer, or making sure the everybody else gets a better standard of living?

Re:I didn't ignore anything.

[plasmacutter]

If the shareholders want to let their CEOs make off with all their money, that's the shareholders problem.

and here you ignore the principal agent problem

Shareholders have absolutely no power to enforce their interests due to share dispersion and the system of proxy voting, and corporates are only bound to the shareholder's interest by stock ownership, which is the only practical means of solving the principal agent problem.
Stock goes up with profits regardless of who it goes to, so only regulations, or the threat of regulations, to protect labor and the middle class will prevent them from pocketing as much as they can.
The american people have been clear they want wage increases and corporate accountability, the government still has not acted.

Re:I didn't ignore anything.

[plasmacutter]

Your 'defense' is that the rich have gotten richer. Who cares? What's more important, making sure the rich don't get richer, or making sure the everybody else gets a better standard of living?

because the amount of resources remains constant no matter what, so in order to have greater real income (be richer) they have to make the poor poorer.

the current generation of modern "things" that make our lifestyle first world is now much more expensive for the average person than it was 10 years ago in real dollars. Already quality is falling, a car which would have a soft and stitched interior 8 years ago now has hard abs plastic. A console at premiere today costs twice as much as its predecessor did a decade ago, and there have been no real wage adjustments to compensate for inflation in that time.
even soda here has risen 33%, and i'm now forced to buy store brand.

in any reasonably metropolitan area housing now costs roughly 175% of what it did a decade ago per square foot, and people's wages have not been adjusted.

right now most people are compensating for this by getting a second mortgage or line of credit.. essentially running up their homes like atm cards. If wages do not ajdust soon we will see mass defaults approaching depression levels, and even if it doesnt crash all at once the destruction of the middle class will mean profits will dry up, prompting companies to move to richer markets overseas.

the other "compensation" people have been doing is working to the point they no longer have leisure time to see their families.

a labor force which is unable to own their own land is the definition of a serf.

once you reach that point, which we are at the very least halfway to already, you are officially no different than what we call third world now.

we will be reduced again to what we were in the gilded age, wage slaves who have to rent everything we own, and if we dare to demand enough time to consort with our families or enough wages to afford more than a 20 year old used car and some particle board furntiture.. theyll just toss us out and replace us.

Re:I didn't ignore anything.

[maxume]

You can hitch yourself to someone like Buffett, so 'absolutely no power' isn't quite true(unless the ability to choose what shares you own somehow isn't power over your interests).

Re:I didn't ignore anything.

[plasmacutter]

the vast majority of shareholders don't stand to gain enough from an increase in their meager dividends to vote themselves, thus it's done by equally huge securities firms through proxy voting.

even if shareholders decide to vote themselves, the fact that they are dispersed and organization is completely impractical means their tiny bundles of 3, 10, or possibly 100 votes will do nothing against the organized power of those securities firms.

any idea that shareholders have collective power is utopian BS... collective but unorganized is not sigificantly different than individual.

while i'm on this subject, i find it hyppocritical how politicians, especially republicans, will scream bloody murder about organized labor, but it's perfectly "ok" for organized employers. if they really want to preserve a "free" market they would establish organized labor, and require unions for every profession, otherwise individuals looking for work are at a disadvantage that is beyond considerable and approaching hopelessly outgunned.

Re:I didn't ignore anything.

[maxume]

Absolutely. I vote my shares approximately never. Worse, I tend to index invest(because it is clear that over time it is in the interests of the big market participants to make them go up).

I'm not clear on what that has to do with the fact that you can in fact choose to buy companies where there is a clear controlling interest, and 'participate' in that interest. Companies like Berkshire Hathaway, Microsoft(less so recently), Google, etc. If those companies exist, you can't speak in, har, absolutes.

Re:I didn't ignore anything.

[plasmacutter]

well, keep in mind that if you own enough shares in a corporation of that size youre unbelievably wealthy, arguably permanently so.

because you feed off their profits and effectively "own" a huge corporation, you're not all that interested in the standard of living in a given nation as long as those profits continue. After all, youre not subject to the job market, you earn money in your sleep from the dividends of your hundreds of thousands/millions of shares.

of course you need demand for your goods, but it makes no difference to you where that demand resides, and if the jobs go to india and destroy the middle class here, you'll be able to keep your prices high and simply ignore the fact that you left americans who paid 5 figures for their education for dead.

Re:I didn't ignore anything.

[maxume]

Ok, but Warren Buffett in no way behaves like that. He even thinks he ought to pay more taxes. He certainly could behave like that, but he doesn't. He is a good corporate citizen, is giving the vast majority of his accumulated wealth to charity, seems like a decent guy, and he seems to encourage his employees(many, many, many of whom are Americans that are well paid) to be decent people. I don't think he's the only one, so there still at least seems to be some choice out there.

Re:I didn't ignore anything.

[plasmacutter]

indeed, but i think there should be regulations to enforce a minimum level of compassion for labor/the working class.

specifically, i think there should be a cap on how much salary you can get over median wage at your company as a CEO.. i'd say half of the percentage they earn today is more than enough.

as an owner you should be subject to a considerable tax margin, more than is currently deducted from pay.. were talking about enough money a year for owners/majority shareholders to set whole small cities for life, they can certainly afford it out of their personal incomes, but they'll still make more money if they expand their operations.

the point though is to FORCE that reinvestment into the company and the labor rather than horde it all at the upper management level without removing competitive incentive.

Hookers and golf not a factor?

[Drunkulus]

According to my independent study, 95% of executives in charge of outsourcing efforts wind up spending quite a lot of time in the offshore country. Improving their communication skills, and recruiting. You know.

Re:Hookers and golf not a factor?

[Cafe Alpha]

You're so cynical.

There are golf courses here too.

Re:work ethic my eye

[Anonymous Coward]

our kids are left with a TV screen as a babysitter

Yeah, but the TV is bigger than ever before and has HTVD resolution and surround sound. That got to be progress and your kid will be much happier than the poor african child who will have to play with his friends every day. Poor bastards.

That's not what happens.

[raehl]

If we outsources 100% of the current workforce, other countries would start outsourcing their work to us.

Jobs get outsourced to India because there is an untapped labor market there. As more of that market gets used, there will be less of an incentive to move jobs there and eventually an equilibrium will be reached where moving jobs overseas won't make sense because the people over there are paid just as well as the people here.e

Masters and Doctorate Rubbish!

[Anonymous Coward]

And we just let go a Chinese programmer with a Masters degree in Computer Science who claimed to be a database expert with a resume chock full of all the right buzzwords and interviewed really well, but who could not write a simple SQL script to retreive data from and update a couple tables using a left outer join. Also this person was a certified Oracle DBA, yet who was clueless as how to tune basic parms in the init.ora file to tweak performance of the database engine. The best this person could do was write some Crystal Reports because the visual data browser in it allows you to picture the tables and what's in them.

Communism doesn't work.

[raehl]

The american people have been clear they want wage increases and corporate accountability, the government still has not acted.

The government has certainly acted in terms of corporate accountability. Whether that yielded a net benefit to the economy or just caused lots of money to be spent on compliance is debatable.

As for wanting wage increases, it is not the government's responsibility to set wages. And the government should avoid doing so. See: USSR. See: China. See: Cuba. Hell, see: California. Highest minimum wages in the country. Also, most expensive place to live. Making twice as much money doesn't do you any good when you can't afford a place to live.

And the American people DO get wage increases. The 'buying power' of Americans continues to go up. Everybody has more and better stuff than they would have in the same job 20 years ago.

What we have may not be the best system, but it's already been proven that governments setting wages doesn't work.

But socialism does.

[plasmacutter]

As for wanting wage increases, it is not the government's responsibility to set wages. And the government should avoid doing so.

yes it is, otherwise you end up with the great depression, See: USA, 1930's, dust bowl, or the gilded age, See: USA, 1850-1910, people living in plank shacks, laborers being killed for demanding time to rest between shifts.

setting a minimum standard of living is not "communism".

california is an expensive place to live, but it's not significantly more expensive than its east coast equivalents where the minimum wage is not substantially higher than the national average.

a single family home in NYC runs in the 700's, unless you want to live in the slums.

Atlanta has the most anti-labor laws in the nation, and a house hours outside the city will set you back half a million, but the median income is also far less than the rest of the US, so the relative cost is still the same as in the northeast.

Re:But socialism does.

[Anonymous Coward]

a single family home in NYC runs in the 700's, unless you want to live in the slums. In New York City? Please show some evidence. Thanks.

That's not a downward pressure on rates...

[raehl]

...Thats a downward pressure on living in Northern California.

Short term benefit on paper...

[Anonymous Coward]

In contrast, I know of several cases where companies outsourced core parts of their business, resulting in a short term benefit on paper, but a long term loss. Once an outsourced company has expertise in what you do (on your dime) they will raise prices or they will stop working for you and start competing with you. Of course by then the executive who made the decision already took his big bonus home and moved on to another company to repeat the process. Outsourcing benefits can be very real but you really have to be careful about what you outsource. I used to think that the .com boom days were over. Back then you could walk into a random company X, make a cool PowerPoint presentation on a completely imbecilic business venture, shake hands, sign contracts and then make a fortune at the expense of company X mostly just doing nothing. I was wrong, the .com boom has simply morphed into the outsourcing boom where you can walk into a random company X, give a cool PowerPoint presentation about how they can save million by handing you core parts of their business and giving you unrestricted access to IP they previously guarded closely as a trade secret (and there by giving you the opportunity to rip it off). A company I used to work for decided to give up doing system integration work (as in SOA/SOAP etc). They fired the entire development department that did this work and outsourced the work. The foreign contractor got handed the code-base the resident developers had created and was told to continue the work. As part of this agreement the outsourcing outfit sent over a ferret who was supposed to take a look at our systems. When I and some colleagues I talked to this ferret one evening after treating him to a few beers to many he told us that his company considered this to be a huge coup because they were gaining knowledge and experience they would later resell to other customers and they were doing it completely at our expense. Basically he thought our management weasels were a bunch of complete f*cking morons for handing his company IP it would have taken his company years to develop on their own and they got it practically for free. Of course our own management weasels didn't think that far, they were perfectly happy as long as the next fiscal quarter looked good. The sad part is that if they had spun off their internal development department into a subsidiary that specialized in this kind of integration work and put it under the management of a seasoned technical-director/manager team they could have recouped the development costs by selling the resulting products to other companies thus making a profit developing integration software while eliminating reliance on outside contractors and covering their own software development needs a the same time. A few other local companies actually followed this model successfully.

that equilibrium will be third world, gilded age.

[plasmacutter]

Jobs get outsourced to India because there is an untapped labor market there. As more of that market gets used, there will be less of an incentive to move jobs there and eventually an equilibrium will be reached where moving jobs overseas won't make sense because the people over there are paid just as well as the people here.

they are offshoring to drive wages down here, do you honestly think they will raise wages out of the goodness of their hearts?

no, the equilibrium will be reached when we are living at third world standards, with third world income.

this dreamworld equilibrium you're speaking of could only be reached if resources were unlimited. since they are not, the sudden increase in labor competition combined with static prices will mean inflation here until our real income is back down to where it was circa 1900.

then there will not be enough disposable income to adequately dig yourself out of perpetual poverty unless youre part of the intrenched upperclass.

I say...

[Mr. Bad Example]

...has anyone seen my monocle? The shock of reading this article seems to have popped it out of my eye and dropped it into my cognac.

Re:work ethic my eye

[cyphercell]

lol, ok I hate that kind of work, that's why computers are so cool, I'm thinking about 35-45 hours a week.

Cultural differences create misunderstandings

[hey!]

I used to work with a company that hired a lot of Indian H1Bs. I've worked with a number of Indian engineers; some were good, some were bad; a few were really good, a few were really bad.

The Indians I know like to say that you can't generalize about India, a country with a billion people and something like forty distinct cultures. There's a great deal of truth in this. But at the same time, you can't help but notice that they have a lot of things in common with each other. Just being engineers they have certain things in common with most engineers, such as a desire to be valued for their skills and knowledge.

Uniformly the Indian engineers I've worked with are hard working, ambitious, and eager to please. I sometimes think the eager to please part is something of a problem. Often unpleasing information is extremely valuable. Not wanting to bear bad news is by no means a trait that is unique to Indian culture, but I can't help but think growing up in an educational system with intense competition to tell the teacher what he wants to hear shapes people's work styles. I've found the best Indian engineers I've worked with have an intense, fiery streak in them that is sometimes hard to contain but is good to do creative work with. I've sometimes had cultural misunderstandings with Indians who work for me because I have assumed that, despite my place on the org chart above them, that we were equal in status, while they assumed that any time I had an opinion, no matter how casual, offhand, or just plain dumb, that that was Law. From my culturally biased perspective I saw this as frustrating passivity.

I'm the kind of manager who thinks that if some wet behind the ears intern thinks he has read something useful in a textbook somewhere, he should speak up and if its not relevant I'll thank him and tell him so. A lot of Indian guys working for me weren't comfortable with this at first, until they found out that I didn't try to pin blame for mistakes to them. A few never adjusted, and were always insecure and unhappy until I learned how to act like an old fashioned boss.

One thing that seems very common: the Indian engineers I've worked with try really really hard to put their best face forward. I don't think this is being a "yes man", its just a difference you have to factor in so you scale what you think you are seeing appropriately. Nowhere is this more evident than in the way Indian engineers seem to collect advanced degrees. Every guy I worked with had an masters, a few had PhDs. I have nothing against advanced degrees, but it seems to me that if you are going for an advanced degree, you ought to have some kind of specialized research interest, but it seems to be almost de rigeur. A lot of 'em went straight from BS to MS with no work experience. To tell you the truth I don't think they got a lot out of graduate education, other than to prove to the world they could.

This may be why the study found that there were quality problems with Indian BSCS grads. Anybody who's got anything on the ball gets a MSCS or PhD.

In any case, India is an incredibly dynamic place. It's got a billion people, and it has its fair percentage share of really, really smart people. It probably has more than its share of people with entrepreneurial hustle. But anybody playing the outsourcing game has to be prepared to lose a few rounds to the fact that things aren't always as they appear to the outsider's eye. I've never been to India, but I have no doubt it has not reached its full creative potential by any means; nor is this something it will be able to do overnight. So I don't think all of technology will simply slosh over there leaving the US a technology backwater in a few years. When India reaches its full potential, that will be a good thing. We'll be getting jobs here working with Indian technologies; it sounds to some like a nightmare, but I don't see it that way because technology is a plus-sum game. It's only a nightmare if we've given up on creating new technologies here.

Re:Cultural differences create misunderstandings

[antonyb]

An intelligent comment in a Slashdot discussion on outsourcing? Now I've seen everything :)

I'm a westerner living in India, and my opinion of the place & the people pretty much exactly matches what you've written. I've had to spend a lot of time building a really good team, but now that team is at least as good as any team I've worked with at home, twice as hard-working, and, yes, hugely cheaper.

And no, India hasn't reached its full potential yet. The two main issues that are likely to prevent it are the politicization of the education system as commented on in TFA (Karnataka, the state Bangalore is in has moved to prevent English being the primary language taught in schools in order to win votes with the the rural majority who have been opposed to the enormous growth in the cities as it has stretched even further the gap between rich & poor), and the hyperinflation of salaries. There's a good chance that India will become too expensive to operate in before it reaches that potential.

ant.

Re:Cultural differences create misunderstandings

[enmane]

I'm the kind of manager who thinks that if some wet behind the ears intern thinks he has read something useful in a textbook somewhere, he should speak up and if its not relevant I'll thank him and tell him so. A lot of Indian guys working for me weren't comfortable with this at first, until they found out that I didn't try to pin blame for mistakes to them. A few never adjusted, and were always insecure and unhappy until I learned how to act like an old fashioned boss.

You mean there IS a manager like that? I've found that open-mindedness is humility is deemed a weakness when I firmly believe it is a sign of strength and wisdom but heck, I'm the OTHER one. So now there are 2 of us. Can I come work for you?

What is with this 'CEO's are keeping it' BS?

[raehl]

Like the story today about the Ford guy getting 25 million.

Let's say they didn't pay him a thing. Ford has, what, 200,000 employees? So they don't pay the CEO anything and then the workers get another $125/year each.

I'm not saying the CEO's aren't making more money. But that's not where the money is going, and to suggest it is is just ignorance.

Re:What is with this 'CEO's are keeping it' BS?

[plasmacutter]

ike the story today about the Ford guy getting 25 million.

Let's say they didn't pay him a thing. Ford has, what, 200,000 employees? So they don't pay the CEO anything and then the workers get another $125/year each.

I'm not saying the CEO's aren't making more money. But that's not where the money is going, and to suggest it is is just ignorance

youre assuming even distribution among employees and youre talking about unskilled labor.

the money would be distributed in raises skequed toward skilled labor, or used to hire more workers and expand.

instead of doing that theyre firing those skilled workers, offshoring their jobs, and keeping the cash instead of lowering their prices back in america.

the argument is always "the price will go down bc of this to even it out", thats not the case, its going into ceo pockets.

Re:Have I been living in a cave?

[paulm]

I've been through several successful startup companies, and each and every time we considered outsourcing it had nothing to do with money. It's always been about how quickly you can hire good folks. In a venture funded startup the budgets are usually built with the assumption that you will be hiring folks here. The money is in the bank and ready to pay the salaries. The problem is this - it's impossible to find people who know how to write systems software anymore. By that, I mean folks who understand networking, filesystems, databases, operating systems, and just basic algorithms and datastructures.

    We're in the middle of this right now. We'd do just about anybody to hire people with a hint of these skills, and still we're always scrambling to find good people to hire.

    So from my point of view, at least in my world, it's not about the money, and it's not bullshit.

They *do* claim we are dumb

[Tablizer]

Um... The only reason I've ever heard given for outsourcing was money. When the hell did they invent this other bullshit, spread it and have people buy into it, and then do a study debunking it?

I've read a lot of such implications by corporate representatives and corporate lobbyists. Hell, even Bill Gates has claimed there is a skill shortage in the US. It makes for a great excuse because it is difficult to refute it. The best lies are complex lies.

400 hrs?

[Anonymous Coward]

I switched jobs and went to work for a company that is heavily outsourced. The first project I was assigned to was allocated 400hrs to complete. I looked at it and finished in about 8. I went back to the manager and talked to him about the job and asked about the 400 hrs, I was afraid I missed something. He said the original thought was to have one of the outsourced resources do the job, that's why they gave it 400hrs.

WoW!!!11 So that's it!

[Anonymous Coward]

Because of the cost? What about the high quality of service, commitment to excellence, and excellent skills? I'm SO disillusioned.

Re:Have I been living in a cave?

[Cafe Alpha]

You've been living in a cave if you ever expected business people to say, "We're screwing America to make a few percent more profit. All your kids will be 100 hour a week slaves for no money if they can find a job at all bwa ha ha !!!"

No business is like war, it's built on lying.

Uhh .. You missed the point

[Anonymous Coward]

Outsourcing "Started" with cost savings. However, now it is not the driving factor. Skill is damm relative term. US / Europe don't have enough people. One organization can produce more results and can work on more projects by employing more engineers. Once one is in such race , other follow to compete.
Anyways, since most of the guys here don't even know head and tail of outsourcing , I will point out a few reasons for its existence now. I have worked for about 8 years in outsourcing environment, and this is what I can tell :
1) Flexibility
I can shut down my outsourced Project anytime I want. Yes, it is possible. I need not layoff anybody local. I just pull the plug , no big deal, no questions asked. I go back again after 15 days, and tell I need 200 more people for this project, get them in 2 weeks. Yes, it is possible. So, Enormous flexibility in project executions.
2) Numbers
Where are the people in US/Europe ?? Damm. I need to put an adds in newspapers and wait for 2 months, to get a single qualified person. Who gives a shit. I would rather go to India, and get the 10 times the people in half the day.
3) Quality
Not all portions of the project need same skilled people. I know what to outsource and what not. Critical things I keep with myself. I can still manage and get my stuff with outsourcing.

Hmm.. Steam off. Grow up, always whining doesnt help anybody.

About that correction you speak of

[Travoltus]

If it happens, and if Americans are forced to lose their 4 bedroom houses and gi-normous SUVs, guess what? That means we'll buy less. And that means plants overseas will start closing, too.

A correction back to "sustainable consumption" in America (whatever arbitrary standard defines that) will crush the economies of every developing country around the world that hosts offshoring.

If we stumble, they fall. That "bring others up" won't last long if America really gets brought down... when consumer spending drops even another 5%, it's all over. Global great depression city.

I say we block off the Sweatshop bloc in Asia and stop trade with them, completely, and end all trade barriers - all trade barriers - between the US, Canada and Europe. No more trade with undemocratic, caste-based nations that treat their workers like crap. Want to trade with the Western bloc? Raise up your human rights standards.

It is absolutely not wrong to say that trading with China is worse than trading with Nazi Germany. We're shooting democracy and human rights in the foot with that. 100%.

Re:About that correction you speak of

[NoMaster]

If we stumble, they fall.

No - if you stumble, many will fall, but the rest will keep going on. History and common sense tells us that the West will not fall all at once; America may fall but Europe / Asia / somewhere else will stumble on for a while, with even more incentive (due to a depressed economy) to lean on the outsourcing hosts.

And, in the meantime, someone will rise to take your place. Parts of Eastern Europe, maybe - until the outsourcing hosts develop their own demand on the back of the experience and money you gave to them, and start employing you to produce their cheap knick-knacks and cookie-cutter code...

Re:About that correction you speak of

[Maxo-Texas]

Actually... pretty much no one rose from the great depression until WWII.
It was global in scope.

Cost savings

[Cromac]

it is purely cost savings, and not the education of Indian and Chinese workers, or a shortage of American engineers that has caused offshore outsourcing.

No kidding. And in other news, water is wet.

Age of the working force....

[Anonymous Coward]

This is the main problem across the board for many of the R&D workplaces. I find that the age group is very skewed towards the retirement age crowd (~55+). I am still in my 30's (gen x) and I know that I have at least another 25-30 years before I can even think about a golden handshake. The complaints about not finding talent is somewhat two fold: 1) due to the cost/benefit ratio for high tech degrees (Masters and Ph.D.) in the USA, and 2) Not enough of us (experienced 30 somethings) in the work force. Our population (as is for all first world countries) are somewhat bimodal (baby boomers and the Gen Y - younger). There will be an "equalization" in the next few years, due to the shortage of money needed to pay for the high standard of living that everyone seems that they "deserve". I don't know if the US government will be able to make the changes necessary, because we certainly haven't been saving for a "rainy day". I have to face that the US standard of living will have to "level" to rest of the world, even though there are many in the US that refuse to believe that it is true.

No offense taken

[WindBourne]

Start-ups are not easy. But the issues being described are nonsense in the high-tech world. We have our own set of issues.

The one that I do agree with is the salesman issue. OTH, if you are doing a good website you can bypass that issue. But most salesman wants the company if you are first starting up, and routinely only about 1 in 10 are worth more than a penny.

While it is not easy, It is still the right idea. Working for companies who are slowing shipping jobs elsewhere will guarantee that a young persons future is in the same place as an American Iron workers during the 70's or an American 90's seamstress.

English Skills? WTF

[JumperCable]

Yeah, all the Indians with good English skills were taken a long time ago.  For those who need help understanding them I have put together a helpful English vs. Indian Alphabet:

English = A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Indian  = A E E E E F E H I J K L M N O E Q R S E U E W X Y E

And corporate interference of govt is better?

[sethstorm]

I honestly don't know what can be done but I'm willing to entertain the idea of the government taking a hand in this.

It didn't with the "buy American" campaign as it pertained to cars and it won't work now.

Something about the design of the law leaving a nice hole come to mind? Maybe it is time to amend this for more accurate labeling and penalties.

First, blindside the foreign trade groups and various business lobbies on this one as best as possible. Next, amend the law to reclassify "local factory, foreign multinational(or acting for one)" as non-US. Then assign a penalty depending on true country of origin to account for CKD/brand relabeling type practices. In short, take all the known dirty tricks played out against the law, account for new ones, and push it through before the various trade groups can buy up votes.


You can. But when they go to make a purchase, most people make price the priority--just like companies. Boycotting will never get the momentum necessary to change corporate behavior.

Fine. Displaced Economic Region Recovery Fee (which would be a tariff/subsidy of sorts) amounting to 200% of the parts+labor value of selected imports, and entire makes that use the practice of "Factory CKD"(bringing the factory here and taking locals in to "look domestic").

If you want to play the game of cost, there are ways to make the loopholes expensive.

Re:This strategy is stupid, eventuallyEVERYONE LOS

[pipingguy]

gdp = C+I+G+NX = (income - savings)+I+G+NX

Fuck you and your bullshit math formulae - I want a Mercedes S class (make it two), a waterfront house and all that other expensive stuff. I deserve it.

Don't kill me! The above was a parody!

Re:work ethic my eye

[Anonymous Coward]

Says a guy with nickname "geek" and a 4-digit Slashdot ID... :-)

Distasteful but Necessary

[KudyardRipling]

What is the sound of Brandenberg v. Ohio perishing in the woodchipper? Here's an idea as what may be heard in future criminal trials of those disaffected by outsourcing:

Defendant (acting pro-se by reason of indigence and consequent incompetent represetntation): You have a JOB? You own a HOME? Yo have an IRA? These mean that YOU have a STAKE in the SYSTEM. Therefore, YOU have ABSOULUTELY NO PLACE on THIS JURY!

uhm

[Anonymous Coward]

Which part of the world did the Great Depression not bring down?

Re:uhm

[Anonymous Coward]

20th century Great Depression?

It really was mostly felt in the United States alone, whereas many nearby places like Argentina and Cuba actually prospered.

1930s were also a good time for Germany, and Japan.

Some Americans even emigrated to the Soviet Union whose economy was doing better than the American economy at that time.

Well, he knew ...

[Ihlosi]

... that cars don't buy cars.

Re:Well, he knew ...

[Marxist Hacker 42]

Exactly what all of the modern industrialists seem to have forgotten.

A quick story

[Slashdot Parent]

Several years back, I was in the first scheduling meeting for project managers on a project I was working on. Most of the other PMs were Indian.

We went around the room talking about what our teams were doing and by when it could be done. The project lead asked Indian PM after Indian PM, "Can you do X by date Y?" and the answer was always, "Oh, of course! No problem! We'll have it done by then!"

Well, the project lead left the meeting, and Indian PM after Indian PM said, "There is no vay ve are going to get done by date Y" "Oh, no vay. Newer going to happen."

I asked them why they promised more than they felt that they could deliver, but none could give me much of an answer. I guess it must be just some cultural thing.

Re:A quick story

[hey!]

Well, I'll point out two things. First engineers everywhere are prone to bullshit when it comes to schedules. It comes in two forms, malignant bullshit and benign bullshit. Malignant bullshit is when you promise more than you can deliver. Benign bullshit is when you tell your buddies you're busier than you are so you'll look hard core.

The other thing is that in many organizations what the engineers say can or cannot be done doesn't really matter. They just have to try or lose their jobs. This happened to a civil engineer I know who worked on the section of the Big Dig that collapsed (although he did not work on the air plenum). This was one of the last pieces to be done with dregs of the Federal funding. The managers came in and told them when it would be done and for how much, and they had zero say on cost or schedule.

Re:A quick story

[Slashdot Parent]

The other thing is that in many organizations what the engineers say can or cannot be done doesn't really matter. They just have to try or lose their jobs.

Well, that's a fun hypothetical, but since I was close to the situation, please let me assure you that it did not apply here.

On the other hand, they did risk getting fired for consistently failing to estimate properly. I could ask around and see if they wound up getting canned or not.

Re:A quick story

[hey!]

I was making a point about cultural expectations, not the specific situation. As you point out, the PMs were behaving against their best interests. My point is that they probably thought they were behaving in their best interests.

How you ask the question may matter more than you think. An American might expect to get the same kind of information if he asks "How soon can you do X?" as when he asks "Can you do X in Y?". To people in other cultures, "Can you do X in Y?" might not be taken about how long X takes, but your willingness to try to do X in Y.

Every American takes it for granted he has a right to speak up if he doesn't agree with a decision. In other cultures you'd be expected to suck up the pain or leave. In fact, that's the very thing we admire about people raised in cultures where prosperity and liberty are not take for granted: their ability to work like hell in the face of grim prospects.

It doesn't make people dishonest when they misunderstand the subtext of a question.

no worry in US due to looming worker shortage

[Anonymous Coward]

In less than 5 years (2012), there will be 4 workers retireing/leaving the US workforce for every new one entering. Those leaving will be the most knowlegeable/experienced and those entering will be the novices.

That experienced labor shortage bodes well for USA based workers.

Outsourcing or importing H1B won't fix that shortage.

Re:no worry in US due to looming worker shortage

[thePowerOfGrayskull]

In less than 5 years (2012), there will be 4 workers retireing/leaving the US workforce for every new one entering. Those leaving will be the most knowlegeable/experienced and those entering will be the novices.

That experienced labor shortage bodes well for USA based workers.

Outsourcing or importing H1B won't fix that shortage. Which has precisely what to do with my question?

Re:This strategy is stupid, eventuallyEVERYONE LOS

[TheSync]

If you outsource and are able to pass on the savings (like Walmart), you can actually increase the standard of living for people at the same dollar-valued income.

But let's face it, Indian and Chinese engineers are experiencing massive salary increases right now. They will be contributing right back to the global economy through their increased consumption.

Re:work ethic my eye

[superbus1929]

Yes, but you're forgetting one important thing:

At companies that do this type of hiring - hiring to save money and keep the bottom line happy, no matter what - they have HR staffs that have to make sure every hire either works out, or doesn't hurt the company. They simply cannot afford to take a chance on anything, because if someone doesn't pan out, they have people that they have to answer to.

So what happens when someone doesn't pan out? Depends. If they take some guy that doesn't have a degree, then it's because of their hiring practises; why didn't they take the person with the degree? He has a degree! But if the guy with the degree didn't pan out? Well, that's on the guy with the degree now. HE'S the moron.

It's all about accountability. And HR types are there for two things: filling holes, and keeping their asses covered. Even if too many people with large titles next to their names are idiots everywhere else, it doesn't matter to people doing the hiring (who oftentimes don't know the first thing about what they're interviewing for).

Outsourcing upper-level mgmt???

[enmane]

I just want to know when upper level management is going to be outsourced. Who better to know the new frontiers than people from those areas? Let's get rid of our $10 million/year CEOs w/private jets and hire a well-educated and knowledgeable Indian for $200k.

THAT would make the shareholders happy ;-)

Send our jobs to low IQ Indian???!!!

[A Scholar]

My co outsourced a few jobs to India. It turned out to be a disaster! Indian developers in India are simply stupid, totally contrary to the bragging the Indian folks here in US. The truth can be found in the landmark revelation book "IQ and Wealth of Nations". India's average IQ is at 81. Thousands of years inbreed and the stupid caste generated hundreds of millions of low IQ Indians. No doubt about it, India has some high IQ folks with her billion+ people. They are fucking here, leaving their stupid folks back home. It DOES NOT make any sense to outsource to India! http://en.wikipedia.org/wiki/IQ_and_the_Wealth_of_ Nations