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Obama Says Offshoring Fears Are Unwarranted
alphadogg writes "The perception that Indian call centers and back office operations cost US jobs is an old stereotype that ignores today's reality that two-way trade between the US and India is helping create jobs and raise the standard of living in both countries, US President Barack Obama told a gathering of business executives in Mumbai on Saturday. President Obama's remarks come after some moves in the US that had Indian outsourcers worried that the US may get protectionist in the wake of job losses in the country. The state of Ohio, for example, banned earlier this year the expenditure of public funds for offshore purposes. US exports to India have quadrupled in recent years, and currently support tens of thousands of manufacturing jobs in the US, he said in a speech that was also streamed live. In addition, there are jobs supported by exports to India of agriculture products, travel and education services. President Obama, who is in India on a three-day visit, said that more than 20 deals worth about $10 billion were announced on the first day of his visit."
Harley Davidson is building an assembly plant in India to assemble American parts. Why not ship the entire (pre-built) motorcycle to India? Well, because India has tariffs that essentially double the price
Do you even lift?
These aren't the 'roids you're looking for.
Obama should gather a little bit of data on the tech sector. IBM alone has hired 80,000 people in India in the last 8 years. Meanwhile, my colleagues and I have not had raises in the last 5 years. We aren't a group of chump manufacturing people putting tops on bottoms either. We develop a lot of the firmware in the high end systems, and do high level hardware design. We've been told no back fills in the US. The only new people are in cheaper regions.
I'm sure our friends at HP, Oracle, Dell, etc are up to the same nonsense.
The canonical article on this topic, by the founder of HowStuffWorks:
http://www.marshallbrain.com/robotic-nation.htm
I'm not a lawyer, but I play one on the Internet. Blog
That is $ 10 Billion coming in to the US - by exporting products (33 planes from Boeing, 414 Jet Engines from GE, etc.) to India. RTFA ... oh, wait, this is Slashdot.
It is getting to the point where outsourcing will start costing US companies money. In my current employment situation, we outsource the management of the network infrastructure to AT&T. They manage the firewalls, load balancers and switches. However everything is managed from Singapore. Whenever I need to discuss network design decisions or changes with a real Cisco certified engineer, I have to do it on Singapore time. They don't have any engineers in America anymore. All of their project managers seem to be in India. They must be a getting a great discount, because my PM doesn't know jack. Every time I need a question answered, he has to ask someone else.
Anyone who has dealt with AT&T knows that getting change orders processed is a complete PITA. When you add a 12 hour time difference on top of it, it is amazing that anything gets done at all.
Our solution is that we are going to hire a network engineer here in America. AT&T can bugger off. We are an American company. We are hosting our servers in an American data center on US soil. Our vendor should have people who can work with us during our regular business hours. I'm all for having people on the other side of the world who can do things during a midnight (local time) maintenance window. I'm not all for having to wait until 9pm to have a conference call to discuss things. I'm even more put off by dealing with people who barely speak my language and don't have the technical competence to keep up.
Yes, thats the actual US unemployment rate when you take into account those who gave up looking. And in return for outsourcing jobs he cites $10B in export deals. Really? That's 1/8 of AAPL's yearly revenue. That's 1/60 of what the Fed just printed to buy Treasury bonds.
Sure you can ask those questions. You'll just look stupid, because the answers are in the fucking article.
Because, while some jobs leave our country, goods made in their country are cheaper. If shipping a job to India lowers the average wage here by 10% but the price of goods goes down by 20%, that's a net gain.
The H1-b fraud is what kills it for most Americans that stumble upon offshoring's negative qualities.
You don't go to India for US jobs, especially when you're millions of US jobs in the hole.
Yeah, you might think that, but you'd be completely wrong.
The unemployment rate for college graduates is 4.7 percent this year. That essentially means that, for college graduates, there is no recession: 5 percent unemployment is the national rate you see during boom years.
What's more, three years ago the unemployment rate for college graduates was two percent, which is far too low to be sustainable. In other words, the lack of college graduates--people with the qualifications to work the jobs this country was producing--was stifling growth in those areas.
The conclusion is clear: we need more highly educated college graduates in this country, and we need them three years ago. Long term that means education reform, which the President got done by putting it on a rider on the healthcare bill, but short term what it means is importing qualified workers from overseas, until we can legitimately produce them here. The idea that H-1B is robbing Americans of jobs is a myth: the data-driven facts say that we don't have enough highly educated Americans to do the jobs our economy is currently producing, and until we can legitimately make up the gap the H-1B visa program is a barely passable stopgap.
There are annual limits on the number of H-1Bs that the US hands out. That number is 65k plus an additional 20k for people with masters degrees.
Let's not forget that number was 195K, not long ago, and those workers are still here. Also, that 85K number does not include the unlimited OPT visas. That number also does not include the dozens of other visas such as L-1 and J-1.
Anyway, H-1Bs are good for 3 years, extendable up to an additional 2. This means that the theoretical maximum number of legal H-1Bs in the US at any one time is 5 * 85k = 425k. That's less than 0.2% of the population and seems unlikely to me to significantly affect the unemployment rate.
I think that's 3 years + an additional 3 years. Also, the cap used to be much higher. Also, don't forget about all the other visas. Also, don't forget that the H1B is hugely disproportionately targeted to US STEM jobs, especially IT. And let's not forget that in 2009, US IT jobs were absolutely slaughtered. Practically every major US IT employer announced major layoffs - i.e. 10,000 layoffs from IBM, 6,000 layoffs from MS, etc.
Another point is that H-1B workers are required, by law, to be paid at least the "prevailing wage" based on their work and geographical location. While this is by no means perfect, it does provide some protection against wage depression.
"Less the perfect" hardly describes the situation. In some career fields, jobs are very well defined, in IT it is just the opposite, i.e. a sysadmin may also be the DBA and/or a developer; or a developer may work as an admin, or a network engineer. In IT, the phrase "prevailing wage" is completely meaningless.
And there are more undocumented workers than H-1B holders, too. Lots more.
It is a very different problem. Undocumented workers do hold jobs that US workers typically aspire to have. But, what happens to the US technological lead when Americans say themselves "why study for a STEM career, just to get replaced by an H1B worker?
Therefore, my point is that while the H-1B program is not perfect and is certainly abused, I am dubious of kneejerk claims that it is this fraud that in any way hurts "most Americans". With millions of jobs being lost every year due to the economy, there simply aren't enough H-1B workers to account for very much of it.
You are dead wrong. The number of H1Bs is extremely significant. In many IT departments, the H1Bs have completely taken over.
Because H1Bs can not easily quit. A US worker can go to his/her boss and say "I'm way over due for a raise, either increase my salary, or I will be forced to look for work elsewhere." If an H1B does that, he/she is on the next airplane back to India.
No. That's no longer true. In fact, it hasn't been that way for a while. The H1B program was amended around 2000 to enable people on an H1B visa to move from job to job without being forced out of the country.
What has not been changed is the green card process. If you want a green card, it can easily take 4+ years and the system requires you to stick with one employer during the application process. If you change employers, you have to start the entire process all over again. The thing is that the H1B visa is only good for 6 years - after which you gotta leave the country for an entire year and then start the green card process all over again.
So, if the H1B holder wants to become a permanent citizen, he generally can't go job shopping after the first year or so of employment. Which is really quite perverse since, presumably, these guys are highly skilled and there is a dearth of people like them in the US labor market. So we ought to be doing everything we can to make it easier for them to become citizens, not harder.
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