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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."
I am a software developer and I was hired for my current job to bring back all development from India. I was tasked with bringing all development back in-house because the offshore projects were behind schedule and suspect quality, not to mention the communication issues.
What we do now is do a combination of in-house development and rural sourcing, which is hiring U.S. developers in the midwest and midsouth in areas of lower cost of living. They are more expensive than offshore developers, but much cheaper than developers in major cities and these rural developers are in the same timezone.
I think you will see more and more rural sourcing cutting in to the offshoring of jobs. I don't think there will ever be a full reversal of offshoring jobs, just that rural sourcing will become more and more viable and desirable.
"Create job abd raise the standard of living in both countries".
This statement is only true if you count the rich getting richer in the US. I fail to see how losing your middle class income job to outsourcing raises your stadard of living.
If I live in a more developed country, why the fuck should I tolerate this? Being a sovereign nation means having the ability to regulate trade up to and including stopping it completely. Since, as you freely admit, foreign trade is utterly screwing us over, that sounds like a pretty good idea right now.
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.
The US trade deficit with India is already over $7B this year through August; heading to top $10B this year. That will be among the highest annual deficits, though Bush/Cheney got deficits as high as $12B+. August 2009 saw the only monthly trade surplus with India in well over 20 years, $34 million; the rest of the months total to something like a quarter $TRILLION more spent on India than India spent on the US. It's obvious that the parallel growth in the US and India leaves the US with less money from our jobs and more money in India for its jobs.
Of course, the corporate profits on all those jobs are not counted in trade stats. The real competition isn't between US labor vs Indian labor. It's between labor in either country, and the corporate owners who run the system, keeping the profits among themselves and their banker partners.
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make install -not war
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.
You know, Arafat would say one thing in English, and then
another in Arabic.
The linked article quotes him speaking against outsourcing,
and then he goes to India and speaks favorably of it. He's not
using a different language; but it's the same idea.
I believe we have a word for this in English: it's called 'lying'.
The rest of the world is evolving rapidly into highly educated, highly industrialized, highly technological countries that resemble the west - in certain parts and certain ways, anyway. The more similar their productivity is, the more similar standards of living they can demand but for a long time a series of favorable conditions and network effects have kept the US in a solid lead. The balance is shifting, but to say that it actually flows from one country to the other is fairly misleading. You could halt trade but it wouldn't halt these countries from modernizing, and they would also retaliate.
The US currently has a very negative trade balance, meaning it imports far more than it exports. If it were to close the borders, the US would hurt the most. Medium to long term that could mean opportunity for domestic industry, but the short term would be a substantial drop in the standard of living as many goods become expensive or even unavailable. There was a time when a trade boycott with the US would be dire but today if you can maintain trade with the EU, Japan, China, India, Taiwan, Russia and so on most countries would do fine. Alternate suppliers of almost everything now exist outside the US.
In short, the US is no longer in a position where they would have anything to gain from going protectionist. They'd be their own little isolated market of 300 million people while the world market - even subtracting the billions that are too poor to really participate - is much larger and would simply outpace the US. That's the nastier parts of the free market, once you've let it loose you might in the end become the victim of it, having to adjust your wages and standard of living to fight for jobs just like everyone else. But if there's one country that has no right to complain, it would be the US...
Live today, because you never know what tomorrow brings
Why do companies think they deserve to sell the same product to Americans for 10 times the price it sells for in the third world? Once you start talking about products rather than jobs, suddenly all the bullshit rhetoric about "free trade" disappears. It's obvious that the purpose of "free trade" is to screw over the average American for the benefit of the few rich - we're forced to compete with third-world wages, but don't have the option of paying third-world prices.
Besides, the whole concept of "deserving" a certain standard of living is bogus. A medieval peasant had a shitty standard of living. How do we "deserve" a standard of living so much higher, just for being born a few centuries later? We don't "deserve" it, but we take it anyway, because we can. The rich are already taking this line of thinking to its logical conclusion... the working class would do well to do the same.
That was not clear. Here's a description. It's pretty despicable how corporations bend-over backwards to disqualify Americans, just so they hire cheaper imported workers:
"Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers. Microsoft, Oracle, Hewlett-Packard, and thousands of other companies are running fake ads in Sunday newspapers across the country each week."
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Explain to me the effective differences in terms of actual fiscal policy between modern Democrats and Republicans.
When the GOP demonizes "tax and spend" as the other party's problem, they mean "spend on domestic social programs" and deliberately exclude US military spending. I think that's a pretty accurate summary, actually.
When you include US military spending as part of "spend", you will find that the GOP is worse on "tax and spend" than the Dems. They started a war that costs the US $1B a day, that has lasted 8 years, and provided no way to pay for it. That is a more egregious "tax and spend" program than any social program the Dems have initiated, "Obamacare" included.
If the GOP proposes a balanced budget that included the military budget and preserving Social Security, they'd be worth listening too. I expect that if they fail to produce an actual budget like that, they will again be voted out in 2012.
OTOH, if they do produce such a budget, Christ, I'll vote for them myself.
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Just where in India, China or Russia are you finding folks who can do Fourier-domain image processing on hardware microarchitecture? I could use a few, and don't much care if they're American, Chinese, Indian, Russian, or beings from Aldebaran IV with green and purple feathers. Incidentally, I don't think that people like that are getting any rarer: we've always been few and far between. But the code monkeys are getting commoner, and the slushpile of CV's gets bigger and bigger with only the same few really promising candidates buried under all the others. (Summary: I'm an American, MSEE/PhDCS, and *can* do all the things you mention. I'm also, uhm, on the high side of fifty, quite expensive, and not in the market at the moment because I've had no trouble finding customers.