However, uncompressed HD is normally transmitted as HD-SDI, which is subsampled Y'CbCr instead of RGB. Thus, chroma is sampled once every two pixels, not every pixel. And luma is sampled at 10-bit, while chroma is sampled at 8-bit. So it works out to 18 bits per pixel in the bitstream.
MPEG-4 Part 2 yes. That's the Simple and Advanced Simple used in Divx, xvid, QuickTime, etcetera. However, almost all HD MPEG-4 development is targeting the H.264/AVC/MPEG-4 Part 10 codec, which is a lot better than MPEG-2 at high definition and in compression efficiency.
Also, broadcasters care very much about bandwidth. Getting double the channels out of a satellite is a lot cheaper than building and launching a second satellite.
There really isn't much fat in the Oregon budget - we've had a lousy economy for a long time now. The Oregon Health Plan was radically slashed, leaving many more people without health insurance.
There seems to be this constant refrain of "government just needs to be more efficient" that isn't grounded in budgetary reality. The budget shortfalls in most states is larger than the total value of programs there is a consensus is unnecessary.
There's a lot more fat in the Federal budget. Agricultural subsidies and missile defense are two big budget items that are clearly of no functional use.
Well, there is certainly a large strain of right-wingers (I don't know if I'm willing to call them "conservatives" anymore) who definitely think that tax cuts are more important than public education, and that providing good comprehensive public education to every child isn't a social goal worth funding. They might think it'd be nice all things being equal, but aren't willing to have the taxes to pay for it.
This is happening here in Oregon, certainly. Portland voted to raise taxes to preserve school funding, but the rest of the state voted it down. And the arguments against the tax raise were basically just snarling about how "taxes are bad." Complete lack of nuance. I can certainly imagine there is a point at which the economic cost of higher taxes is greater than the economic value of increased school funding. But I never heard that kind of nuanced argument. It was all a knee-jerk reaction that all taxes must only ever go down, never up. And raising one tax to lower another tax isn't allowed either. It's just weird, and completely cripples any kind of discussion as to what proper tax policy is about.
It's odd about how the extreme right and extreme left wind both wind up in some kind of romantic anarchism.
Re:Handed out free at last year's WWDC
on
Cocoa in a Nutshell
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· Score: 4, Informative
And you have to fill out a card with your contact info to get the book, and O'Reilly catalogs start showing up at your address a few weeks later.
Oh, c'mon. Like all the skilled programmers in the USA are going to die off overnight? This is what'll happen:
Salaries in India will rise. There's a lot of demand there, but they actually put out fewer new IT graduates a year than the US does.
Salaries in the USA will drop for lower-level IT staff. This will be more due to the end of the dot.com bubble than outsourcing. I think we can all agree that salaries got just silly there for a while.
The issue of what happens in war when other countries build parts used in your weapons? Yeah, that's a concern. But there's a big upside to it as well. There's a lot lower chance of a military confrontation between the USA and China now than 10 years ago. Both sides have far more to lose than to gain.
One great effect of outsourcing is that, in the world's two largest nations (and nuclear powers to boot), power is increasingly going away from the nationalist/militaristic/religious types and towards western-oriented commercial interests with a strong desire for stability and good international relations. Both India and China are going through massive change, and outsourcing is empowering our friends in both nations, which substantially aids our long term interests.
We really, really want people who would be economically ruined by war with us to be a powerful influence in nations with ballistic missiles!
Well the marginal cost per unit in labor for W2003 Server is tiny. But the capital cost in labor to code the thing up in the first place was enormous. Certainly the cost of the first copy is far more than the marginal cost of all additional copies. So looking at marginal unit costs isn't particularly informative in that example.
Anyway, what you describe is exactly how we want things to develop. It's a great thing to turn 10 bad jobs into 1 good job! Because that frees up labor. A generation later, the people who would have had 10 bad jobs will now have 10 good jobs, and with 1000 units produced per worker instead of 10, we're all a heck of a lot richer.
My perspective comes from Oregon, where we're in effect ending a 20-year experiment in equalizing per-pupil funding across the state, and reverting towards the Portland area maintaining school funding with local taxes while school funding is cut elsewhere in the state. Good for my kids, but bad public policy.
I think teacher's unions are overstated as both a cause of and a solution to education problems.
Money doesn't solve everything, but money can make things easier, and is better to handle from a policy perspective. I also think that school choice, charter schools, vouchers, etcetera are also good things to explore. This is the stuff the teacher's unions are largely wrong about in my opinion.
But, in the end, students in a poor area need more funding than in rich areas, since they need more enrichment, after school programs, teacher to student ratio, hot meals, etcetera. I want to both public schools in marginal areas and prep school, and I can say that for kids from troubled socioeconomic backgrounds, robust school programs can do a world of good. Kids with engaged, non-stressed, economically stable parents do pretty well either way.
I agree with teachers that higher teacher pay will make the profession more enticing. I disagree with them about seniority v. merit pay - paying better teachers more helps encourage development. And certainly it is too difficult to get rid of a poor teacher in most places. I think paying teachers in poor districts a substantial "hardship bonus" is a good idea, since those kids can be a lot more challenging to teach.
Eh? No real economic value to the stuff coming out of China?
If people pay for it, then it has economic value, by definition. Just because you don't like it (and you actually do, you're just not keeping track of the stuff you have that came from China), is irrelevant. When was the last time you bought a laptop that didn't have a substantial portion of it built in China? Sure, it was assembled in Taiwan, but where do you think Taiwanese companies are putting their factories lately?
You've got this whole thing backwards - the reason why US wages are high enough to produce a wage gradient that makes outsourcing viable is because we're productive, not in spite of it! We're not rich because we're great consumers - we're great consumers because we're rich in the first place. And we can get rich via outsourcing as well.
Think of it in another way. Do you think we'd be richer if every US citizen had three people in other countries making stuff for us, or not? We'd be richer. And that's outsourcing - getting more labor input into our system, without having to spread the value it produces across a larger population.
You sure can export services. Movies and software are two big obvious US exports. And there are "soft" exports like Coke and Pepsi. Even though the drinks are actually manufactured overseas, profits from them flow back to the USA. Patent licensing is significant and growing.
Even though we make less and less, knowing what to make and how to make it has a ton of value.
You just need to sell as much stuff to the rest of the world as you buy from it. The US does fine in that regard*.
* as for the trade deficit, that's more demonstrative of the value of US investments to foreigners than any lack of exporting from the US. We have a robust export economy.
Well, obviously most professional jobs WON'T go overseas. And those that do will get replaced by other jobs in new sectors. Really, what's happening today isn't any more disruptive than say, the transition from a farming to industrial economy, or from industrial to services.
The classic example is buggy-whip makers. Big industry before cars. Went away fast and hard. Sucked for most whip-making companies, but the workers found new jobs.
What's happening right now is companies are taking advantage of a wage differential caused by some formerly closed economies that are opening up, which is suppressing wages relative to education/talent in those countries.
But wages are going up in India faster than they're going down in the USA. Since people don't actually refuse to work for decades instead of taking jobs at a lower rate of pay, we'll see some downward pressure on IT salaries in some sectors. This is appropriate - salaries were getting way too high relative to education required in some sectors. There isn't any good reason why average programmers a few years out of school should make more than doctors a few years out of medical school, which had been happening.
So, every year, Indian programmers will make more and US programmers less, in relative terms, until some kind of equilibrium is hit where productivity per dollar is the same. I expect that US programmers will still get paid more, due to greater productivity. And while wages in some sectors might go down, this will be more than balanced out by a lower cost of goods and services across the economy.
So we won't be poorer in any meaningful sense. Sure, the USA won't be making 20x per capita as India and China do anymore, but that's fine. We'll still be richer than we are today, even if others are even richer than they used to be on a percentage basis.
I suppose the USA will feel less relatively rich compared to the rest of the world, but that's a good thing, right?
There has never been long-term unemployment of skilled workers in this country since the Depression, even though past rounds of outsourcing involved more jobs than are going away today. A dynamic economy makes jobs for everyone who can do good work, even if it isn't in the field they imagined. I don't think outsourcing is the major factor in any decline in IT employment - the total number of foreign workers doing outsourced IT work isn't high enough. Bear in mind there are far more many trained ID professionals in the USA than in India, even though their population is much higher.
I don't see anything about our current economy that suggests that something has fundamentally changed to cause this to be different.
I know lots of engineers, and while not all of them are working their dream jobs, all of them are working in positions where they're applying their technical skills.
Productivity measured in value added per hour is going up as well. It isn't all about overtime (and hours worked are actually going down a bit in the long term).
If you work in IT, you KNOW you get a lot more done than 10 years ago. Sure, you might not feel relatively more productive since everyone around you is also having the same gains. But think of your current big project. How would you have done it a decade ago?
People who can't do highly skilled jobs will do unskilled jobs. Pump gas, work on a farm, sort recycling. Or train them. Life as an unskilled laborer in a 21st century first world nation isn't great, but it's a lot better than as an unskilled laborer in the 3rd world.
Now, as a society, we need to be working hard at reducing the number of people we have who can't do skilled jobs. And that's working to some degree - how many US Citizens are doing migrant farm labor these days? Probably our biggest failure as a nation is not fully funding schools and enrichment programs in poor areas. Even if conservatives want to blame the poor for being poor, it certainly isn't their kids fault.
But anyway, unskilled labor has been around forever, and most of the jobs they did a long time ago have gone away, and new jobs always show up. Most unskilled workers were farm labor a century ago.
I'm feeding the troll, aren't I? Given your analysis, why are cars better today than they were in 1923?
Sure, there is a car at the Ford Focus price point because people want to buy a car for that price. But there are limits. There aren't $5M cars because there really isn't much extra one can do for a car beyond a high-end Bentley. And you can't buy a new car for $500, even though there would be a market for that.
So, given that Ford decides they're going to make a car for the Focus price point, they know they are competing against other cars at the same price. So they're going to innovate on quality, style, performance, ecetera. Their goal is to make a car for that price that is worth more to buyers than other cars at that same price point. By reducing labor costs, they can add value in other places.
You can think of it as "how do I build a more compelling $12K car" or "how do I make this compelling car cost less so I can beat competitors at that price?" Either way works, and either adds value for customers.
And they're definitely opening up a new consumer base for Ford, since for every Focus sold, they're probably taking more sales from other companies than from other Ford models.
Well, a convergence between salaries is definitely to be expected. Given the advantages of not outsourcing, they won't converge to the same value, but to the same relative value - Indian programming won't be such a deal in the long term.
As far as feeding the local economy, it's hard to say. Right now, all those Indian companies are using Dell computers running Windows XP. From our perspective, we'd probably rather have them working on US products that we can then sell back to them:).
Software is becoming less and less country-specific anyway, other than that with very specific local requirements like tax software.
The employees of the company the laid-off folks worked for? At least 90% of US workers work in jobs that didn't exist a century ago (when more than half of labor was on farms!). People form new companies and find new ways to use labor all the time.
In the history of humanity, give a single example where a nation had a persistent rise in unemployment or drop in living standards due to more trade. Hasn't happened, EVER, and it isn't happening now.
The same argument you're making here has been often made about automation, like industrial robots. The implicit assumption seems to be that consumption is a constant, so reducing the amount of work it requires to make something will reduce employment. Which is an obvious fallacy - improved productivity leads to increased consumption of good and services, which is a good thing.
Outsourcing, like automation, is locally painful, but broadly beneficial, and the benefits outweigh the losses.
Er, why do you think that outsourcing is the main blame there? It's lot like we're importing tons of rockets and APCs from India!
As for San Jose, maybe downtown isn't hopping, but Adobe just put up a third high-rise office building a few blocks away. And the freeways around San Jose are plenty busy at rush hour (although less so than in 2000).
Don't blame outsourcing for EVERYTHING that has gone wrong with the IT sector. The bubble popping was at least 10x a bigger deal.
Well, it's not like one can't have a lousy customer support experience with someone based in the USA!
This isn't an argument against outsourcing in general, but against outsourcing badly. No one would argue that a job should be outsourced to someone that doesn't do it well.
Okay, I've got some personal experience on this one.
I spent a fair amount of the last couple years working as a consultant on a product that was being handles by the Indian division of a US software company.
A few interesting points:
This project wouldn't have happened without outsourcing. The product is useful but complex to code and test, and the parent company simply wouldn't have bothered to do it as US wages.
Product management was done from the USA, but project management was done locally. This worked well.
All the Indian workers I dealt with were smart and really cared about making a good product. We developed a good mutual appreciation for our relative strengths. It was a good experience.
The customers like the product that came out. I've worked on similar projects, and having a lot more engineers for the budget made a big difference in refinement. There were a few useful features that aren't available in any other tools today because they required a dedicated engineer for a year, which would have been too expensive in the USA.
I got paid a bunch of money to add value to the product, by applying my subject matter expertise for the industry in question. There isn't anyone in India with that kind of background. My part couldn't have been usefully outsourced, at least not until India has a big video production sector which people with my kind of background can come out of.
Also, as a contractor, I can tell you you're complete wrong about my only goal being to screw more money out of the client. Every project I do for a client is the best argument I have for doing the next project from them. For the client I'm talking about, I busted my hump, and then they put me on retainer after I finished the first deliverables. Everyone's happy, and everyone did good work. Even though I don't get health insurance or a full-time salary from the company, I enjoy the work I do for them, and am very motivated. And I actually appreciate not having to look busy on days where I don't have anything to do. Since I'm not an employee, I can be judged entirely on the quality of my work, which is how I want it.
Well, in many senses, especially the Marxist, the working class is largely vanishing as a class in the USA. The grandchildren of post-WWII auto workers go to college now, and work in service industries. Really, if you did a poll, how many people in the US call themselves "Working Class?" And how many of those are really college graduates slumming for a couple of years? Social mobility really keeps traditional class boundaries from being one of the major divides in US politics today. In US history racial and cultural issues have been much more divisive and persistent.
Unionized workers think of themselves as working people, but middle class. Poverty is a different issue. But the poor mainly hope to not be poor, and don't have a lot of personal allegiance to the class of the poverty-stricken.
Also, I don't think it is a widely held view that the concentration of capital is good for all of us. This is why most honest economists like high inheritance taxes, to prevent multiple generation accumulation of wealth.
In fact, capital is pretty widely distributed these days, with 401(k)'s, pension plans, and home equity.
No. What will happen is that both prices and wages will drop. Over time, expect Indian IT salaries to be something like US salaries * productivity difference - productivity loss from cross-Pacific management. So US salaries will drop and Indian ones will go up until they are in reasonable equilibrium.
A big part of what's happening in outsourcing is that India and China have finally rejoined the global economy after decades of misguided economic nationalism for India and Communism on the other. Those societies are finally starting to catch up with their potential. Which is disruptive in the short term, but good in the long term. Had both countries stayed on a more conventional development path after WWII, they'd be much bigger economies now.
This might sound depressing, but bear in mind that as the cost of good and services drop, so does cost of living. I'd be happy to take a 50% pay cut if everything I bought cost 66% less.
MILLIONS? Where did you get that number? Millions of IT workers no longer in the industry, due to jobs that got shipped overseas.
I'd say most IT jobs lost are due to the dot-com boom crash. There are far less than a million IT professionals in India doing outsourced work.
It seems like everyone doesn't have their ideal job in IT says that their job went to India. That'd require probably 10x more IT workers in India than there are.
Slashdot Mirror
Yes, there are only 29.97 fps with 60i.
However, uncompressed HD is normally transmitted as HD-SDI, which is subsampled Y'CbCr instead of RGB. Thus, chroma is sampled once every two pixels, not every pixel. And luma is sampled at 10-bit, while chroma is sampled at 8-bit. So it works out to 18 bits per pixel in the bitstream.
Oh, modern codecs scale quite nicely. Both H.264 (aka AVC) and Microsoft's VC-9 (aka WMV9) operate well from 32 Kbps up to at least 10 Mbps.
MPEG-4 Part 2 yes. That's the Simple and Advanced Simple used in Divx, xvid, QuickTime, etcetera. However, almost all HD MPEG-4 development is targeting the H.264/AVC/MPEG-4 Part 10 codec, which is a lot better than MPEG-2 at high definition and in compression efficiency.
Also, broadcasters care very much about bandwidth. Getting double the channels out of a satellite is a lot cheaper than building and launching a second satellite.
There really isn't much fat in the Oregon budget - we've had a lousy economy for a long time now. The Oregon Health Plan was radically slashed, leaving many more people without health insurance.
There seems to be this constant refrain of "government just needs to be more efficient" that isn't grounded in budgetary reality. The budget shortfalls in most states is larger than the total value of programs there is a consensus is unnecessary.
There's a lot more fat in the Federal budget. Agricultural subsidies and missile defense are two big budget items that are clearly of no functional use.
Well, there is certainly a large strain of right-wingers (I don't know if I'm willing to call them "conservatives" anymore) who definitely think that tax cuts are more important than public education, and that providing good comprehensive public education to every child isn't a social goal worth funding. They might think it'd be nice all things being equal, but aren't willing to have the taxes to pay for it.
This is happening here in Oregon, certainly. Portland voted to raise taxes to preserve school funding, but the rest of the state voted it down. And the arguments against the tax raise were basically just snarling about how "taxes are bad." Complete lack of nuance. I can certainly imagine there is a point at which the economic cost of higher taxes is greater than the economic value of increased school funding. But I never heard that kind of nuanced argument. It was all a knee-jerk reaction that all taxes must only ever go down, never up. And raising one tax to lower another tax isn't allowed either. It's just weird, and completely cripples any kind of discussion as to what proper tax policy is about.
It's odd about how the extreme right and extreme left wind both wind up in some kind of romantic anarchism.
And you have to fill out a card with your contact info to get the book, and O'Reilly catalogs start showing up at your address a few weeks later.
They're good catalogs - I don't mind.
Oh, c'mon. Like all the skilled programmers in the USA are going to die off overnight? This is what'll happen:
Salaries in India will rise. There's a lot of demand there, but they actually put out fewer new IT graduates a year than the US does.
Salaries in the USA will drop for lower-level IT staff. This will be more due to the end of the dot.com bubble than outsourcing. I think we can all agree that salaries got just silly there for a while.
The issue of what happens in war when other countries build parts used in your weapons? Yeah, that's a concern. But there's a big upside to it as well. There's a lot lower chance of a military confrontation between the USA and China now than 10 years ago. Both sides have far more to lose than to gain.
One great effect of outsourcing is that, in the world's two largest nations (and nuclear powers to boot), power is increasingly going away from the nationalist/militaristic/religious types and towards western-oriented commercial interests with a strong desire for stability and good international relations. Both India and China are going through massive change, and outsourcing is empowering our friends in both nations, which substantially aids our long term interests.
We really, really want people who would be economically ruined by war with us to be a powerful influence in nations with ballistic missiles!
Well the marginal cost per unit in labor for W2003 Server is tiny. But the capital cost in labor to code the thing up in the first place was enormous. Certainly the cost of the first copy is far more than the marginal cost of all additional copies. So looking at marginal unit costs isn't particularly informative in that example.
Anyway, what you describe is exactly how we want things to develop. It's a great thing to turn 10 bad jobs into 1 good job! Because that frees up labor. A generation later, the people who would have had 10 bad jobs will now have 10 good jobs, and with 1000 units produced per worker instead of 10, we're all a heck of a lot richer.
My perspective comes from Oregon, where we're in effect ending a 20-year experiment in equalizing per-pupil funding across the state, and reverting towards the Portland area maintaining school funding with local taxes while school funding is cut elsewhere in the state. Good for my kids, but bad public policy.
I think teacher's unions are overstated as both a cause of and a solution to education problems.
Money doesn't solve everything, but money can make things easier, and is better to handle from a policy perspective. I also think that school choice, charter schools, vouchers, etcetera are also good things to explore. This is the stuff the teacher's unions are largely wrong about in my opinion.
But, in the end, students in a poor area need more funding than in rich areas, since they need more enrichment, after school programs, teacher to student ratio, hot meals, etcetera. I want to both public schools in marginal areas and prep school, and I can say that for kids from troubled socioeconomic backgrounds, robust school programs can do a world of good. Kids with engaged, non-stressed, economically stable parents do pretty well either way.
I agree with teachers that higher teacher pay will make the profession more enticing. I disagree with them about seniority v. merit pay - paying better teachers more helps encourage development. And certainly it is too difficult to get rid of a poor teacher in most places. I think paying teachers in poor districts a substantial "hardship bonus" is a good idea, since those kids can be a lot more challenging to teach.
Eh? No real economic value to the stuff coming out of China?
If people pay for it, then it has economic value, by definition. Just because you don't like it (and you actually do, you're just not keeping track of the stuff you have that came from China), is irrelevant. When was the last time you bought a laptop that didn't have a substantial portion of it built in China? Sure, it was assembled in Taiwan, but where do you think Taiwanese companies are putting their factories lately?
You've got this whole thing backwards - the reason why US wages are high enough to produce a wage gradient that makes outsourcing viable is because we're productive, not in spite of it! We're not rich because we're great consumers - we're great consumers because we're rich in the first place. And we can get rich via outsourcing as well.
Think of it in another way. Do you think we'd be richer if every US citizen had three people in other countries making stuff for us, or not? We'd be richer. And that's outsourcing - getting more labor input into our system, without having to spread the value it produces across a larger population.
You sure can export services. Movies and software are two big obvious US exports. And there are "soft" exports like Coke and Pepsi. Even though the drinks are actually manufactured overseas, profits from them flow back to the USA. Patent licensing is significant and growing.
Even though we make less and less, knowing what to make and how to make it has a ton of value.
You just need to sell as much stuff to the rest of the world as you buy from it. The US does fine in that regard*.
* as for the trade deficit, that's more demonstrative of the value of US investments to foreigners than any lack of exporting from the US. We have a robust export economy.
Well, obviously most professional jobs WON'T go overseas. And those that do will get replaced by other jobs in new sectors. Really, what's happening today isn't any more disruptive than say, the transition from a farming to industrial economy, or from industrial to services.
The classic example is buggy-whip makers. Big industry before cars. Went away fast and hard. Sucked for most whip-making companies, but the workers found new jobs.
What's happening right now is companies are taking advantage of a wage differential caused by some formerly closed economies that are opening up, which is suppressing wages relative to education/talent in those countries.
But wages are going up in India faster than they're going down in the USA. Since people don't actually refuse to work for decades instead of taking jobs at a lower rate of pay, we'll see some downward pressure on IT salaries in some sectors. This is appropriate - salaries were getting way too high relative to education required in some sectors. There isn't any good reason why average programmers a few years out of school should make more than doctors a few years out of medical school, which had been happening.
So, every year, Indian programmers will make more and US programmers less, in relative terms, until some kind of equilibrium is hit where productivity per dollar is the same. I expect that US programmers will still get paid more, due to greater productivity. And while wages in some sectors might go down, this will be more than balanced out by a lower cost of goods and services across the economy.
So we won't be poorer in any meaningful sense. Sure, the USA won't be making 20x per capita as India and China do anymore, but that's fine. We'll still be richer than we are today, even if others are even richer than they used to be on a percentage basis.
I suppose the USA will feel less relatively rich compared to the rest of the world, but that's a good thing, right?
There has never been long-term unemployment of skilled workers in this country since the Depression, even though past rounds of outsourcing involved more jobs than are going away today. A dynamic economy makes jobs for everyone who can do good work, even if it isn't in the field they imagined. I don't think outsourcing is the major factor in any decline in IT employment - the total number of foreign workers doing outsourced IT work isn't high enough. Bear in mind there are far more many trained ID professionals in the USA than in India, even though their population is much higher.
I don't see anything about our current economy that suggests that something has fundamentally changed to cause this to be different.
I know lots of engineers, and while not all of them are working their dream jobs, all of them are working in positions where they're applying their technical skills.
Productivity measured in value added per hour is going up as well. It isn't all about overtime (and hours worked are actually going down a bit in the long term).
If you work in IT, you KNOW you get a lot more done than 10 years ago. Sure, you might not feel relatively more productive since everyone around you is also having the same gains. But think of your current big project. How would you have done it a decade ago?
Has no one at Slashdot read David Ricardo?
Well, probably not.
People who can't do highly skilled jobs will do unskilled jobs. Pump gas, work on a farm, sort recycling. Or train them. Life as an unskilled laborer in a 21st century first world nation isn't great, but it's a lot better than as an unskilled laborer in the 3rd world.
Now, as a society, we need to be working hard at reducing the number of people we have who can't do skilled jobs. And that's working to some degree - how many US Citizens are doing migrant farm labor these days? Probably our biggest failure as a nation is not fully funding schools and enrichment programs in poor areas. Even if conservatives want to blame the poor for being poor, it certainly isn't their kids fault.
But anyway, unskilled labor has been around forever, and most of the jobs they did a long time ago have gone away, and new jobs always show up. Most unskilled workers were farm labor a century ago.
I'm feeding the troll, aren't I? Given your analysis, why are cars better today than they were in 1923?
Sure, there is a car at the Ford Focus price point because people want to buy a car for that price. But there are limits. There aren't $5M cars because there really isn't much extra one can do for a car beyond a high-end Bentley. And you can't buy a new car for $500, even though there would be a market for that.
So, given that Ford decides they're going to make a car for the Focus price point, they know they are competing against other cars at the same price. So they're going to innovate on quality, style, performance, ecetera. Their goal is to make a car for that price that is worth more to buyers than other cars at that same price point. By reducing labor costs, they can add value in other places.
You can think of it as "how do I build a more compelling $12K car" or "how do I make this compelling car cost less so I can beat competitors at that price?" Either way works, and either adds value for customers.
And they're definitely opening up a new consumer base for Ford, since for every Focus sold, they're probably taking more sales from other companies than from other Ford models.
How's that?
Well, a convergence between salaries is definitely to be expected. Given the advantages of not outsourcing, they won't converge to the same value, but to the same relative value - Indian programming won't be such a deal in the long term.
:).
As far as feeding the local economy, it's hard to say. Right now, all those Indian companies are using Dell computers running Windows XP. From our perspective, we'd probably rather have them working on US products that we can then sell back to them
Software is becoming less and less country-specific anyway, other than that with very specific local requirements like tax software.
The employees of the company the laid-off folks worked for? At least 90% of US workers work in jobs that didn't exist a century ago (when more than half of labor was on farms!). People form new companies and find new ways to use labor all the time.
In the history of humanity, give a single example where a nation had a persistent rise in unemployment or drop in living standards due to more trade. Hasn't happened, EVER, and it isn't happening now.
The same argument you're making here has been often made about automation, like industrial robots. The implicit assumption seems to be that consumption is a constant, so reducing the amount of work it requires to make something will reduce employment. Which is an obvious fallacy - improved productivity leads to increased consumption of good and services, which is a good thing.
Outsourcing, like automation, is locally painful, but broadly beneficial, and the benefits outweigh the losses.
Er, why do you think that outsourcing is the main blame there? It's lot like we're importing tons of rockets and APCs from India!
As for San Jose, maybe downtown isn't hopping, but Adobe just put up a third high-rise office building a few blocks away. And the freeways around San Jose are plenty busy at rush hour (although less so than in 2000).
Don't blame outsourcing for EVERYTHING that has gone wrong with the IT sector. The bubble popping was at least 10x a bigger deal.
Well, it's not like one can't have a lousy customer support experience with someone based in the USA!
This isn't an argument against outsourcing in general, but against outsourcing badly. No one would argue that a job should be outsourced to someone that doesn't do it well.
Okay, I've got some personal experience on this one.
I spent a fair amount of the last couple years working as a consultant on a product that was being handles by the Indian division of a US software company.
A few interesting points:
This project wouldn't have happened without outsourcing. The product is useful but complex to code and test, and the parent company simply wouldn't have bothered to do it as US wages.
Product management was done from the USA, but project management was done locally. This worked well.
All the Indian workers I dealt with were smart and really cared about making a good product. We developed a good mutual appreciation for our relative strengths. It was a good experience.
The customers like the product that came out. I've worked on similar projects, and having a lot more engineers for the budget made a big difference in refinement. There were a few useful features that aren't available in any other tools today because they required a dedicated engineer for a year, which would have been too expensive in the USA.
I got paid a bunch of money to add value to the product, by applying my subject matter expertise for the industry in question. There isn't anyone in India with that kind of background. My part couldn't have been usefully outsourced, at least not until India has a big video production sector which people with my kind of background can come out of.
Also, as a contractor, I can tell you you're complete wrong about my only goal being to screw more money out of the client. Every project I do for a client is the best argument I have for doing the next project from them. For the client I'm talking about, I busted my hump, and then they put me on retainer after I finished the first deliverables. Everyone's happy, and everyone did good work. Even though I don't get health insurance or a full-time salary from the company, I enjoy the work I do for them, and am very motivated. And I actually appreciate not having to look busy on days where I don't have anything to do. Since I'm not an employee, I can be judged entirely on the quality of my work, which is how I want it.
Well, in many senses, especially the Marxist, the working class is largely vanishing as a class in the USA. The grandchildren of post-WWII auto workers go to college now, and work in service industries. Really, if you did a poll, how many people in the US call themselves "Working Class?" And how many of those are really college graduates slumming for a couple of years? Social mobility really keeps traditional class boundaries from being one of the major divides in US politics today. In US history racial and cultural issues have been much more divisive and persistent.
Unionized workers think of themselves as working people, but middle class. Poverty is a different issue. But the poor mainly hope to not be poor, and don't have a lot of personal allegiance to the class of the poverty-stricken.
Also, I don't think it is a widely held view that the concentration of capital is good for all of us. This is why most honest economists like high inheritance taxes, to prevent multiple generation accumulation of wealth.
In fact, capital is pretty widely distributed these days, with 401(k)'s, pension plans, and home equity.
No. What will happen is that both prices and wages will drop. Over time, expect Indian IT salaries to be something like US salaries * productivity difference - productivity loss from cross-Pacific management. So US salaries will drop and Indian ones will go up until they are in reasonable equilibrium.
A big part of what's happening in outsourcing is that India and China have finally rejoined the global economy after decades of misguided economic nationalism for India and Communism on the other. Those societies are finally starting to catch up with their potential. Which is disruptive in the short term, but good in the long term. Had both countries stayed on a more conventional development path after WWII, they'd be much bigger economies now.
This might sound depressing, but bear in mind that as the cost of good and services drop, so does cost of living. I'd be happy to take a 50% pay cut if everything I bought cost 66% less.
MILLIONS? Where did you get that number? Millions of IT workers no longer in the industry, due to jobs that got shipped overseas.
I'd say most IT jobs lost are due to the dot-com boom crash. There are far less than a million IT professionals in India doing outsourced work.
It seems like everyone doesn't have their ideal job in IT says that their job went to India. That'd require probably 10x more IT workers in India than there are.