Giant Sucking Noise

bsharma writes "The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?" News.com has a related story about outsourcing.

Uh...

[Em Emalb]

"Who wins? Who loses?"

The American People do. The American Corporations win. Just as they always do.

Good professionals will always find work

[Giro d'Italia]

Not to suggest that everyone is employed all the time, but even though there are some talented people having trouble finding a job, overall, even with globalization, all developers aren't going to be out of work.

You can farm out your projects to India or China, but the reality is the time zone, cultural and geographical issues, coupled with the fact that few pieces of software are truly shrink wrapped means that there will always be ample work for some people locally. Keep your skills up to date and you'll be fine.

Cycles

[j_kenpo]

As always, we screw ourselves, as long as we continue to support companies that outsource to other countries for jobs that should go to us. It's amazing how prices of products aren't cheaper despite outsourcing to foreign countries. If people continue to buy products front countries that outsource, then badly needed jobs are going to continue to slip away. If enough people could be rallied, an organized boycott against those companies should be implemented, after all, if they are going to cost the American people money, then they in turn should start costing the companies money. It could be like a union, but of consumers instead of employees.

The choice

[teetam]

This issue has been debated many times on /. (Like every other popular issue).

The bottomline: If we don't send jobs abroad and reduce our costs, we'll end up sending customers to other countries!

Wouldn't that be worse? Let us say there is a law against American companies having their work done by foreign workers. Let us also assume that we stop all immigration, since most people who want the former want the latter too. That would make American products much more costlier.

So, foreign companies will develop the same products with lower costs and end up hijacking the marketshare. Is that really better for American prosperity?

This makes sense

[sawilson]

In an economy where being able to constantly pull
the wool over the eyes of the 99 percent of the
populace that's doing all the work for the 1 percent
that own everything, it's a liability to have
smart folk around. If they can outsource as many of
the smart people (more likely to question authority)
or at least crush the spirits of the smart people
that are here by giving their jobs away, there will
be a higher contingent of the nascar loving,
reality tv watching, wrestling, Jerry Springer fans
that we need in this society to watch the
the commercials and buy the crap necessary to
fuel our economic model.

Yes, they do. Asswipe.

[Anonymous Coward]

Kaverner (Norwegian) now runs the shipyard formerly known as the Philadelphia Naval shipyard. Toyota Camrys are built in Kentucky. Honda Accords are built in Ohio. Nissan pickup trucks are built in Tennessee. Mercedes Benzes and BMWs are built in the South. Okidata printer ribbons are manufactured in New Jersey.

Economics: win/lose or win/win?

[Synn]

Whether jobs going offshore is bad or not for the economy depends on whether economics is a win/win game or win/lose game.

If it's a win/lose game, then yes, jobs out means nothing coming back in.

But in a win/win game it may very well mean lower prices for everyone, with the added benefit of more exports out to those who now have more money and wish to consume American goods.

The key to the later is to keep producing solid American goods that people outside the country want. I think we've done a pretty good job so far and it'll probably continue.

we're screwed

[tacocat]

It should be no big surprise. As we keep pushing things out of the US we have less and less real value.

We, as a nation, actually build very little on our own shores.

• Heavy Manufacturing is no longer done here.
• Assembly is not done here.
• Hi Tech Manufacturing is long gone.
• Material processing is not done here.
• Software design is on it's way out
• General Services are on their way out
• Research is parting ways with use too.

Besides the Natural Resources for Farming and Mining there is nothing here that needs to stay here. As we look for ever cheaper methods of production and higher profit margins, we will move the work to other nations.

We don't actually make anything of any value anymore. We are a nation of lawyers and marketing types. All we need now is an army of telephone sanitizers and we'll be all set.

Why would getting things cheaper be a bad thing?

[iion_tichy]

Isn't it always good to be able to produce something for less money? Since the country that does the outsourcing is obviously still able to pay the money, it can't be such a bad thing. If the country couldn't afford it anymore, it would go back to producing the things itself. It's just a balancing out, but it seems to me that the standards of living can't sink below a certain threshold that way. Ie the US won't fall back into the stoneage because of IT outsourcing.
The only people who are perhaps in danger are the people in the country that is being outsourced to - if they can produce cheaply because their living conditions are poor. Like child labour etc.

Heh -I posted about this a while ago

[teamhasnoi]

Here it is again - more ontopic than in the original story...

• The U.S. no longer knows how to make shovels, but they know how to buy them from 3rd world countries. The U.S then uses these shovels to overwhelm these same countries with the one thing that makes America 'great' - culture. When the U.S. is reduced to its last surviving companies, it will be the producers of media that have spent trillions of dollars in the pursuit of an unstoppable monopoly on 'content' and the profit that follows.

• Will there be U.S. Steel plants? Refineries? Agriculture? No. Will any durable good be manufactured in the U.S. No.

  The only thing that other countries can't compete with the U.S.: the creation(in the loosest sense), distribution, and consumption of U.S. made MassMedia.

  The war on terrorism is already a poor excuse for a reality-TV show, the war on drugs is an effort to direct your 'escapes' to more profitable, advertising-rich video and movies; the war on piracy is nothing more than a giant squeezing blood from a stone.

  When all that is real has been lost to a soft, dehumanized, videodrone people - that is when the countries who have made the shovels, dug the ditches, grown the food, built the roads and cities in the U.S. - that is when those countries will walk in and quietly pick up the fallen reins of America, and sense may return.

  I think I just choked on a pretzel.

I posted a dupe! I'm ready to be an editor!

Tech Unions

[zbuffered]

We need a tech union. I don't know why there isn't one, Safeway has a workers' union, auto workers have unions, hollywood types have unions, even dock workers have unions. Doesn't it seem like we might be getting the long, hard one here?

So stop voting for higher taxes.

[Picass0]

If you don't like seeing companies leave to US, why do you not spend more time considering the role of higher taxes in forcing companies to make the exodus? On a smaller scale, we are seeing people leave California due to high taxes and the cost of living.

The US govt. needs to get spending under control so it can stabilize it's tax base. Also, implimenting a "Flat Tax" would eliminate the 100,000 pages of our broken tax laws and take the politics out of paying taxes. Much of the power in Washington is directly tied to the trading of tax favors for campaign contributions.

And why not!

[Camel Pilot]

This is probably good for humanity in general. As lesser fortunate countries economically and technically advance they will tend toward democratic processes, equalizing rights to women and children, lesser corruption, etc. Tribalism seems to hold sway with some but I look for the day when the whole world is roughly equal in terms of freedom, economic opportunities, educational access, and medical care for all not just my country, ethnic group, class, etc.

Circling the wagons won't work.

[nomadicGeek]

If there is someone out there who can do exactly what I do only cheaper, who am I to complain if a customer or employer chooses them?

My job is to insure that I can provide more value than the competition. This means that I have to do something that they cannot or I have to do something that they can do only better, meaning that I have to do it faster, cheaper, or with better quality.

That's just how it works folks. Deal with it and get cracking.

Tech Unions - Bad idea

[Picass0]

Unionizing the IT sector is the FASTEST way to make companies send these jobs overseas.

Also, I didn't go to school for four years to join a union. I do some private web development. I would be considered a scab worker if unions took hold. Why should I give n% of my income to a union if I work for myself and have no employees?

Re:Just Like City to Suburb, Only International

[erf]

I think those who are threatened have to either get more competetive (i.e. work cheaper) or move overseas

Two problems with your two solutions: 1) everyone trying to work cheaper destroys our standard of living and causes a global race to the bottom. 2) you cannot move overseas easily - corporations can, you can't. The lack of mobility of labor is one of the major flaws in theories of global trade as it is practiced today.

Painful? Yes. Helps long term? I don't see it.

[Marc2k]

What? From what I've read, most of the outsourced jobs, however white collar they may be in the 'States, are passed so that they can lower costs buy exploiting the workers in cheaper markets. Trust me, this was never about economic stimulation in third-world countries. Corporations are certainly more interested in the bottom line, and do you really think for one minute that their motivation is actually triggered by some huminitarian spark in their hearts? Hardly.

Think about all of the jobs in the steel industry and raw goods refining that used to be housed in the US. I was born in a region that housed booming towns that thrived on the steel, zinc, coal and cement in Pennsylvania. I can tell you firsthand that when refining was able to be done for 87 cents in Asia, the companies left town, the towns dwindled, and the equipment sat under 30 feet of water at the bottom of the quarrys. Was this good for us? The people that live there are just simple folk scrounging as best they can in small, dilapidated houses. Yeah, I guess they're only a mile from the nearest McDonald's, maybe they are better off than Hong Kong.

Oh, and guess what? A major factory and headquarters of Lucent (now Agere) used to be housed there, they even built a state-of-the-art Optoelectronics factory a few years ago. What happened when the bottom dropped out of optoelectronics? It was cheaper to manufacture in Asian countries, so tens of thousands lost their jobs. The new plant was sold for $40 Million in a fire sale, the grounds and any one of the many buildings were easily worth that much.

It's happening all over again now. Tell me how that's good for my town, Waterton Man.

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Leninism

[McDiesel]

People worry about jobs being shipped overseas. I work for a company where half the development staff is in Bangalore (I've even been to Bangalore) and many of the people I work with used to work for Infosys, which is one of the leading software development firms.

Outsourcing can hurt- people in the US do lose jobs here when jobs go overseas. But for every car, shoe, or software program which goes overseas, some person their gets a job. Their earnings go up. They spend money.

A software developer in India earning $20,000 a year might even have enough money to buy something from the US (OK, maybe they might buy a Daewoo instead of a Chrysler- there are models of Korean cars which are popular in India which are not even sold in the US...)

Do people here who worry about jobs going overseas not want to see the level of prosperity go up in India? In China? In the Phillipines? In Africa?

These considerations don't even begin to take account the benefit that people in America realize when goods and services become cheaper here. Sure you might argue that when living standards go up in Mexico, standards in our country go down towards that of Mexico- but remember that in the 19th century people like Marxists predicted that this would happen, that the world would constantly develop towards the edges. Of course, they predicted that when the edges are exhausted, the revolution begins...

immigration vs offshore outsourcing?

[axxackall]

The next round of globalization is sending upscale jobs offshore.

I think that this is a reaction of smart corps on a stupid INS strategy. INS doesn't approve many of H1B application (no need to mention profGC applications) based on the logic: "it's a tough job market for americans and we should protect them".

But it doesn't count the fact that many H1B applcations are for positions which most of americans cannot fit due to limited education and skills. On the other side, smart corps doesn't care about americans - they have a job and they need it done.

So, no wonder they outsource the job offshore, where, by the way, the price for job is even lower. But now a big chunk of taxes is also gone from american budget.

Now I want to aks, who are those people that INS is trying to protect?

puh-lease

[eunos94]

As always, I'm amazed at how a website full of intelligent people misses some of the basic concepts of economics and the modern world. Take the time to learn comparitive advantage. It holds true so often that it's almost as reliable as gravity. If it's cheaper to do it elsewhere, they'll do it there. When it gets cheap to do it here, they'll do it here. It doesn't necessarily have to be cheaper in real dollars, but in a comparitive sense. Workers can make more money doing other things in the US, so they do.

If you actually look at the numbers for the economy, it is not doom and gloom, we're in a decent position. America is great at some things and not at others. Fine, let others do those things and we'll do our thing. So we lose a couple jobs here and there to foreign markets. Bonus for them, it helps out their under-priveledged populace. We add jobs in America at a rate that most nations in the world can only dream about.

I doubt that anytime soon we'll all be sitting in cardboard boxes, penniless, with no avaiable jobs and wondering why every job in America is overseas. It's just not going to happen.

Re:This makes sense

[Disoculated]

Take off the tinfoil hat my friend. I don't know if you've been exposed to much government, but let me tell you, they don't have the desire, motivation, or courage to be part of any grand design like that. Government workers are, by and large, very poor, unmotivated, and won't do anything to jepoardize their meager existence. Grand designs like these are right the hell out.

Maybe you'll then say that it's not the goverment but the wealthy fueling your conspiracy. Well, considering that of that 1% you're talking about, only 10% of their children will manage to do anything but piss that wealth away, I don't see a successful continuation there either. And what you're talking about implies generations of development.

Money flows downhill. It goes where things are cheap, and moves them where they are expensive. You'll never track it by looking for master manipulators, you'll find it by looking for people blatantly trying to make a buck.

Oh, what's that in your url? Subgenius? Aha, I see. Nevermind, you're a lost cause :)

Irony

[jmv]

That way, american corporations can reduce costs and make more profits so that the US can remain a rich country. In a couple years, the US will be the richest country and 99% of its population will be below the poverty threshold.

Re:Cycles

[gmack]

As it sits now most of the wealth is in the hands of a few countries in while the rest of the world gets to be dirt poor.

Why shouldn't the wealth get spread out a bit? I mean God forbid someone in India gets a well paying job and gets to look forward to their children actually having a future.

Re:The predicted chain of events according to me

[NineNine]

What you so glibly term "Lowest Bidder" is called competition. It drives the country's economy. It's why the US is so successful. Pick up an Econ 101 book, maybe you'll learn something.

Re:How's it feel to be a middle man?

[jandrese]

The thing is, as more of those jobs move to overseas they bring the standard of living in those countries up. As the standard of living goes up, so does the salary those overseas workers start to command. After awhile they become almost as expensive as the native labor, and have other disadvantages that will make them unattractive to companies (don't speak the language, time zone issues, etc...). I don't see the doomsday scenerio you suggest, rather I see everybody competing on a more even basis and the worldwide standard of living improving.

Offshoring is a Paradox

[DonWallace]

"Face to face communication matters and is the only thing we're interested in!" saith most clients. Or at least that's been the case for me.

Here's what I really don't understand about the current move to offshoring, in context. The message I've gotten from virtually EVERY contracting prospect I've had in the last 10 years has been: LOCATION MATTERS and NOBODY TRUSTS YOU OFFSITE. Also, WE DON'T TRUST YOU TO COMMUNICATE UNLESS YOU'RE UNDER OUR THUMB. (caps deliberate.) Email and fax are generally (not always) disdained by most clients as a means to keep in contact on projects. This has been true in my marketing since I've done IC work and it's been the case even if the client doesn't have the onstaff brainpower or management skill to oversee the work. *Appearance* of oversight has seemingly been the main priority.

I tend to work most productively on solo projects when and where I do not have to deal with office disruptions and politics. In the majority of situations in which I've offered to do the work offsite on my generally better equipment, and even when I've offered very high granularity of reporting on my work, the response from prospects has been: DON'T CARE... DOESN'T MATTER... OUR POLICY IS ONSITE ONLY.

But companies today seem to view offshoring as "best practices" and necessary if they are to compete. The need to *appear* to save money seems to greatly outweigh the existing compulsion to "enforce" face to face contact. Things have thus been turned on their head from earlier office-political posturings.

As near as I can tell, offshoring seems to be the current management fad, and managers jump on these bandwagons like lemmings in order to appease their boards of directors and stockholders.

Re:Painful? Yes. Helps long term? I don't see it.

[Eccles]

Trust me, this was never about economic stimulation in third-world countries.

That is not the motivation doing the outsourcing, but that still may be the practical effect. They can't hire the third-worlders without paying them more than what others would hire them for, so that does end up putting money in that economy.

The thing is, though, even if U.S. companies don't outsource (skipping the question of what exactly is a U.S. company), wouldn't someone else simply hire those same people to do that job for cheaper, and destroy the U.S. company? You talk about steel, but Bethlehem Steel didn't outsource, it went bankrupt. So stopping outsourcing doesn't eliminate the problem.

Let's leave.

[cybermace5]

If the jobs are going out of the country, and The Country as a concept does nothing about it, then it's time to go where the jobs are.

I'm as patriotic as the next guy, but if all the U.S. companies are content with the economic sabotage currently going on, I'll move to India.

This is all backwards. You want raw materials in >> refined products out, to keep wealth in the country. Not the other way around.

You're right, I don't see it.

[jkabbe]

"From what I've read, most of the outsourced jobs, however white collar they may be in the 'States, are passed so that they can lower costs buy exploiting the workers in cheaper markets."

How is offering a good job at a high wage (relative to the local economy) exploitation? Perhaps you ought to talk to some of the programmers who work in India and ask them what their other career options were like.

"It's happening all over again now. Tell me how that's good for my town, Waterton Man."

It may not be good for your specific town. And if that's all you can look at then you have a very narrow world view.

-- this post written by someone who lost their job to cheap Indian labor

It's no suprise to me......

[gilesjuk]

Why are we all so suprised?

The west sucks when it comes to reliable cheap engineering these days, why? I would put forward the cycle of redundancy and hiring as one cause.

Look at all the network giants, they get worried when the share prices dip, the shareholders complain and to stop the falling share price they "streamline" their operations. A year later they can't do the projects as they don't have enough engineers and then begin recruiting again. Trouble is useful knowledge of their products leaves when the redundancies are handed out. Yes, there's supposed to be documentation but is it always updated? rumours about the documents Microsoft have released as part of their more open stance have stated they're incomplete and inaccurate.

US and European companies need to average out the peaks and troughs. By not spending huge amounts of money on corperate trash when the money is rolling in fast you might be able to see yourself through the bad times. Being economical and efficient is a full time job IMHO.

the US is driving people away

[g4dget]

Why do you think there are so many foreign high-tech workers in the US? It's not because it's cost effective for US companies. It's not because there is any physical need for these people to be here. It's because they want to be here and the companies accomodate their wishes.

But is the US still such an attractive destination for high tech workers? They face an insane immigration system, the requirement to give up prior citizenships, xenophobia, hate crimes, etc. Add to that enormous housing costs, high crime rates, a failing health care system, failing retirement system, failing school system, and skyrocketing higher education costs.

It's not surprising if US high-tech jobs are moving overseas. Perhaps companies like it because they can save some money, but it's almost certainly driven to a large extent by what high-tech workers themselves want.

Re:puh-lease

[Anonymous Coward]

Comparitive advantage doesn't have much to do with this article; it's all about just plain advantage.

If a Mexican corn farmer can only raise four truckloads a year, and an Iowan can raise a trainload on a farm with robotic tractors, the Mexican may still stay in business -- because his alternatives are worse (i.e., eat dirt and die).

The Indian high-tech workers aren't charging only $10,000 a year because they have no other options. Hell, they are stunned and delighted to get that much, and probably would take less. It isn't that they hurt more to do the job but have no choice; it's that they live just as good middle class lives as the Americans they are replacing, but cost less.

It's a simple advantage. One look at Silicon Valley real estate prices should tell you all you need to know.

My prediction is that America will go through a long and painful recession or depression, as we adjust our society to the point where engineers here can live nicely on about $10,000 year. Don't laugh -- all that stuff from the hippies in the 70s on how to live on nearly nothing is going to come in real handy in the future. Prepare to learn to fix your own car, ride a bike, get rid of the cell phone and possibly the landline too, stop eating out and rent out the extra rooms.

the ebb and flow of economic cycles

[bonovoxpsu]

while the united states is not in the greatest economic position right now, i sincerely doubt all of this is straight talk, but actually a lot of FUD.

in one of the early paragraph, an indian worker says "the skys the limit"... didn't america as a company feel the same way a couple years ago? wasn't silicon valley bristling with life recently? weren't we talking about a "new businuss cycle"? weren't we worried japan would take over 30 years ago? do we forget that quickly?

people, people, this is a natural ebb and flow of economies and business. eventually, america will recover, companies will sprout and return... its just that right now, things look pretty bleak.

to quote joe paterno: "when you win, you're never as good as you think. and when you lose, you're never as bad as you think, either."

pale blue dot

[cicci0]

Like the rest of you here I look upon this with angst. But, then I think about the big picture. Maybe it's time we stopped thinking in such a selfish mindset. What I mean by this is that there are a couple billion other people on the planet who may benifit from this sort of economic globalization. I think it's time that the U.S. begins to "share the wealth", instead of cornering the many markets it does. Who knows, maybe improving global economy as a whole will create jobs where they are needed most - in volatile, education/food/medicine deprived third world countries. The sooner we begin to look upon this world as one big living space and not multi unit co-ops the sooner we'll have to live without much of the hostility in this world. Maybe this is idealistic baloney, but I don't see why I deserve to eat to my heart's content, buy DVD's, a brand new SUV, while 2/3's of the human population lives in relative squalar.

Painful but positive

[linuxwrangler]

Is it a scary time for a techie like me? Yes. But overall this is a good thing.

Because Japan (and now Korea, etc.) started making cars many US employees were initially displaced. But we now enjoy cars (from all countries including the US) which are far better and lower priced than we would have had without competition. (My 18 year old Tercel just crossed 200,000 miles but when I was a kid they didn't even bother with the sixth digit on the odometer.)

We have also enjoyed all sorts of inexpensive goodies like toys, home electronics and clothing that would have cost far more if all made here.

So the Indian programmer makes "only" $10,000 - that's still 20 times the average. His standard of living is probably pretty good. Outsourcing hurts our income but helps keep our costs down.

But there are bigger gains:

Peace - countries with close business ties almost never go to war.

Population - the wealthier a country gets, in general, the lower its birthrate.

Environment - of course the "first world" has a far from perfect environmental record but it is WAY ahead of the third world where fishing by pouring poison or tossing dynamite in the ocean is an accepted method, where "recycling" involves open fires to burn the plastics off of wire and electronics, and where the air is many times worse than in the worst US city. Something about not having to worry about the next meal allows one to consider the environment more seriously.

Re:Economics: win/lose or win/win?

[pcb]

Money and power are finite resources. Their values are inversely proportional to the number of people holding them. Economics will never and can never be a win/win game.

That's total and utter BS. Money is not the word you are looking for, it is wealth. Wealth is NOT finite. The world (and specifically the US) is far richer today on a per capita basis than at any point in her history. Her wealth was not taken from somewhere else (or stolen), it was generated. The second law does not apply to economics!!! As for natural resources, well, if you include sources outside the earth, then they are not finite either (for all practical proposes).

And yes, economics can be a win/win game.

-PCB

Class Warfare!

[Anonymous Coward]

It's about making the rich richer and the poor poorer.

Mod me troll if you wish, but the highest tax bracket before Reagan took office was almost 80%. That means the government taxed 80% of the income of the very richest people. Now it's down around 30%.

There are more rich and very rich people in the U.S. than in any time before in history, and they hold a much larger share of the wealth pie than the wealthiest few ever held before. NAFTA benefits the rich, and not the poor. The tax codes benefit the rich and not the poor. WIPO, Sales Taxes, "death" tax reductions -- it's all meant to guarantee that once the money is in the hands of the wealthy, it never leaves.

That giant sucking sound isn't the sound of jobs going overseas, it's the sound of money flyng out of your wallet.

Re:Cycles

[Anne_Nonymous]

There is no free lunch. One of the main reasons your standard of living is so high, is because you can buy imports at WalMart at 1/3rd the price they'd cost if produced in the U.S..

Re:we're screwed

[Anonymous Coward]

If it's cheaper for me to build a plant and make widgets in Iowa than it is New York City, am I a horrible person because I decide to locate my factory in Iowa? I'm taking jobs away from New Yorkers, but I'm creating jobs in Iowa, and I'm creating a product with lower cost without affecting quality.

If that's ok, what about if I move the jobs to India? The people there are deserving of the jobs, they can do the work and they can do it cheaper. The people in the US are either required to learn new skills to make themselves worthy of the large paychecks or drop their level of income.

If we as a country shut out the rest of the world, eventually India (or some other country) will develop their own software/financial, etc. companies that will be more efficient than those in the US and replace us as the world economic leader.

The only thing constant is change, and if the US doesn't embrace change it's going to be left behind.

Re:Uh...

[neocon]

Actually, the shareholders are the ones who win when a company does well , and that means anyone with investments stands to benefit (and as I mentioned above, that's seventy percent of Americans these days, including anyone with a pension, 401k, or other invested retirement plan.

Re:How's it feel to be a middle man?

[zizzo]

The thing is, as more of those jobs move to overseas they bring the standard of living in those countries up.

In case this isn't completely obvious: there is no guarantee this will happen, and even if it does it will take decades. I need to eat every day and I my blood sugar won't wait for the great wheels of economics to turn.

What really puzzles me is that Republican's aren't more on the protectionist agenda. Losing all this capacity means our military is rapidly becoming dependent on foreign suppliers for just about everything. To be paranoid, I think a day will come when we will find our military completely under the stranglehold of foreign nations just because they supply everything but the bodies.

There's a novel in that idea somewhere. Maybe I can hire a few Canadians to write it for me.

a podiatrist's opinion on the linux kernel...

[Alomex]

What would you think if you went to a podiatrist mailing list and one of the topics of discussion was a debate over some complex memory paging algorithm for the linux kernel?

The opinion surely come down as: either this is one bunch of smart podiatrists or, this is one bunch of cocky podiatrists who have no idea what they are talking about.

International trade is a difficult subject. Often situations that seem bad for one country are actually beneficial, as first pointed by the great economist David Ricardo two hundred years ago. This holds across the entire field of economics, starting from the fact that trade is a win/win scenario, while most people think its a win/lose scenario.

If you are concerned about the impact of jobs moving abroad, I suggest you read up on economics, so you come to understand, for example, why not all jobs when to Mexico after NAFTA got signed, as Ross Perot predicted.

Here are a few useful links:

http://www.systemics.com/docs/ricardo/david.html

David Friedman. Hidden Order: The Economics of Everyday Life, Harper-Collins, 1996.
http://www.daviddfriedman.com/Academic/Hidd en_Orde r/Hidden_Order_Chapter_20.html

The job category that'll never get outsourced...

[dpilot]

How about CxO's - CEO, CFO, CTO, etc?

They cut costs by outsourcing real workers' jobs, and that's how they earn the big bux.

IMHO, the real problem with CxOs isn't that the pay scale is too high. It's just that in general, today the jobs are being held by a bunch of bozos who are overpaid for their performance.
A 7 or 8 figure CEO ought to be able to see the relationship between laid-off workers and the economy that's prompting furthre layoffs.
A 7 or 8 figure CEO ought to see that health care is a difficult problem, and that at some point we need to just plain face it and begin taclking it. Maybe Clinton's attempt back in 1992 was a mess, but since all we've done is try to ignore the problem, raise premiums and co-pays, and apply too many managers to the problem, sucking up money that should be paying for health care. (Last I heard, 25%-33% of health care money is going toward "management" costs.)
A 7 or 8 figure CEO ought to understand more about the macroeconomic nature of the US, and bear partial responsibility for it.

My requirements for a CEO at 50X worker's pay are much lower than those for a CEO at 200X+ workers' pay. IMHO some of today's crop isn't even that good.

If these bozos were at pay-for-performance, the US economy wouldn't be in the toilet. Their primary talent appears to be obtaining money.

Re:You're right, I don't see it.

[deaddrunk]

Well you are a very generous person then. I am being edged out of the only career I ever wanted to be in, because greedy corporate types consider me, rather than themselves, as the expensive part of IT.

You may feel good about helping some Indian programmers while you're flipping burgers, but I actively resent it. Perhaps if the greedy scumbags didn't just throw people on the scrapheap I would feel differently.

Re:The predicted chain of events according to me

[dughat]

Interesting point about 1929. The way out of that depression was a war. Not a silly little war, but a huge war that resulted in huge technical advances in the US and Germany, and maybe a few other countries. Except the US bombed the crap out of Germany, so the tech advances continued here. And that drove the economy ahead of every other country for a long time. But why should that last forever?

The lowest bidder was inevitable. Even if we could force everyone in the US to buy American, eventually the same goods will be produced cheaper elsewhere, and no one else will buy our stuff. How many cars does the US export? I think it is simplistic to put the blame only on greedy companies. Its also greedy employees who would not consider working for a wage that would rivial and Indian's. Does every worker in America have an right to have a standard of living 10 times higher than your average Indian? I don't think so. It has been a nice ride, but I think it's coming to an end.

Re:Good to see...

[/dev/trash]

perhaps if the protests weren't so violent and destructive more people would see what they are protesting against. No one likes to property destruction.

Re:Uh...

[jazman_777]

The American People do. The American Corporations win. Just as they always do.

More trade promotes peace. How likely are we to bomb China, with Intel and everybody building there? We're better off trying to have a good relationship there and influencing them, instead of rattling the sabres.

So the American people win, because wars destroy wealth.

Re:It sounds like your job can't be oursourced

[bludstone]

Great! Your company now has an extra $105K to spend! Either you get a raise (not likely), or another team can be created, employing 8 programmers where four were employed before (and allowing your company to do more work). Of course, the real ratio is a little higher - you need slightly more support staff (management, office workers, etc) to support twice as many workers, on both sides of the ocean, so it's possible your company could jump from 4 workers to 10, for the same amount of money. Seems like a net good to me.

Wrong. The CEO gets a $105,000 raise.

Next.

The market at work, or, "duh"

[Logic Bomb]

Note: definitely a rant, but definitely not a troll

Anyone with even the most basic understanding of economics should dismiss this article as totally unsurprising and move on. The idea I'm already reading in comments that "jobs should stay in America" is idiotic. I want stuff to cost less, and if producing it elsewhere can do that then that's what globalization is all about! It's the same argument when it comes to trying to get rid of ridiculous farm subsidies. I don't want to pay more for corn just so people can continue to be farmers. Familiar Slashdot argument: if the business model of __________ (like being a programmer or a farmer) is untenable, then get out of it! The Constitution doesn't recognize a right to make money doing the activity of your choice.

Maybe someday, when smart use of technology has finally allowed us a balance between needs/wants and resource scarcity, large numbers of people will be able to say, "I feel like being a farmer" or "I feel like managing servers" and do it. But for now, that's just not how it works. Suck it up!

And by the way, this argument goes both ways. People living in the US just happened to have been born (or have been lucky enough to move to) one of the most resource-rich nations on the planet. How dare we even consider enacting policies that would deny these benefits to the rest of humanity? It's that kind of thinking -- or, at least, the perception by other that that's what we're thinking -- that has all these misguided, ignorant, and extremely poor Muslims trying to blow up our civilization

Lowest Bidder

[Idou]

I think another word for that is "capitalism." We are simply achieving it at a much more efficient level, thanks to technology. We can still invent new technology, you know.

Maybe the problem is not that "higher level jobs" are being displaced but that these jobs are no longer as important, thanks to technology. Penmanship used to be a CAREER until technology displaced it. Maybe it is not good enough to JUST be a programmer anymore. I program in PERL all the time (and admin my own LAMP), and I am a freak'n Financial Analyst (majored in Economics).
But I enhance my productivity by leveraging PERL to "Invent" new tools for financial analysis.

Instead of picking one career, maybe you would be safer picking two. That way it might be easier for you to invent ("you" not necessarily referring to the parent).

What d'ya expect?

[JahToasted]

I find it interesting how many people point to third world nations that have a closed economy, and say "Gee if they'd just open up their trade they'd be a lot better off". Now here we have a country that has opened up and now that they are benefitting you say they're stealing your jobs.

How many people here drive Japanese cars?

A lot of people here are saying the same things auto workers said in the 80's. They're taking our jobs. Its going to destroy the economy.

You know what's going to happen? Cheaper programmers -> lower costs -> more profit -> corporations expand -> more jobs for both Indians and Americans.

In the short term it kinda sucks, but in the long run things will be better for everyone. Of course in the long run we're all dead anyway (sorry Mr. Keynes).

This assumes that corporations aren't corupt colluding bastards, but that really is a separate issue and would be a problem with or without free trade.

Re:How's it feel to be a middle man?

[Colonel Panic]

the salary those overseas workers start to command. After awhile they become almost as expensive as the native labor

Yes, eventually the labor costs over in places like India are going to rise while at the same time labor costs here will fall... An equilibrium _will_ be reached eventually (pictures cities in India looking a lot more like American cities and cities in the US looking a lot more like Indian cities)...

The problem is that it will take a generation or two for this to happen and in the meantime we're going to have a lot of displaced workers here in the US trying to eke out a living at much lower salaries then they pervioulsy made.

Another (?) point of view

[gmuslera]

Buying work time/expertisement from a company outside USA can be seen as buying a product from outside. Denying it would be like deny imported products, and doing that is a call to others to not import goods/work time from USA. It's ok if you think that a closed country could survive or advance in a world like this.

And buying work from outside because is cheaper enables US companies to do more work/goods, or even exists, things that in fact are good for US citizens.

Frankly, sound a bit like hypocrisy to cry when someone from USA hires someone or buy something from outside but is ok or better it if someones from outside do the same from USA.

Re:How's it feel to be a middle man?

[God! Awful 2]

I don't see the doomsday scenerio you suggest, rather I see everybody competing on a more even basis and the worldwide standard of living improving.

Well sure, the worldwide standard of living goes up, but that means that the Western standard of living goes down. Take a look at how much the average American consumes (in terms of food, natural resources, etc) and pollutes. Can you imagine if every citizen of India and China did the same?

If you don't think it's us vs. them then you're being naive. No, the real winners will be the countries with oil. Mad Max, here we come!

-a

Good argument for working in defense sector

[Anonymous Coward]

Sounds like a good reason to try to find work in defense-related IT jobs. For security reasons those are much more difficult to move offshore. In fact, the DoD/CIA/etc aren't even excited about how many non-US citizens work for firms doing defense/intel projects, but they've come to realize there's no way they can go citizen-only and find enough staff.

Keeping an eye on a non-citizen in a secure US workplace is one thing; sending the work out to be done 100% by foreigners on foreign soil is another. National security work is staying here.

Add to this the huge amount of money going into it. Rumsfeld's budget projects DoD spending reaching $500 billion/year by 2009, and a lot of that is for high tech stuff. Then there are billions more from the CIA, FBI, and Homeland Security.

Some of us are almost old enough to remember when most of the geeks in the country had defense-related jobs, at least indirectly. Welcome back.

I'm a European and French work laws suck ass

[wackybrit]

I'm a European and I'm ready to tar you as a softy socialist already.

The American system is far superior to the European system. In Europe, the workers have an unjust amount of power over employers. That's not freedom.

Take France. As you probably know, it's almost impossible to fire someone! If someone can't control their own company, then you're heading into dangerous territory. What encouragement is that for someone to hire someone else?

With France giving parents of three-child families exemption from income tax and helping pay their rent, you are heading for skid row and a MASSIVE tax hike. With French income taxes already the highest in Europe, you really are going to be up shit's creek with a turd for a paddle soon.

I love France, and I'd like to go live there, but with your neo-socialist work policies, I'd have to skip it till I'm rich. The French attitude appears to be 'leech the money makers dry and then give all the money back to lazy assholes who can't keep their pants up'.

With mandatory 35-hour weeks, and unemployment at ridiculously high levels, France is really headed for an economic dead alley.

I'd rather be in a society where I'm based on my effort and work ethic, than one like France's which simply hands over power to the ignorant and lazy.

However, I'd imagine a socialist European can't really get a grasp on basic economic theory, so perhaps it's time to stop.

Re:The job category that'll never get outsourced..

[Cyno]

Their primary talent appears to be obtaining money.

Exactly. But isn't that the goal in capitalism? I don't see the problem as being ignorant masses, like most CEOs. I see the problem as being money, plain and simple. It doesn't matter how many jobs people have, it only matters if we get the work done, if we produce and distribute the products so we can cloth ourselves and eat. It only matters if we work to design the products, not if we take home a few pieces of paper that says we put in 8 hours @ $25/hour. That's the problem with our society. We waste way too much time worrying about insignificant details like a few extra pennies. In the end they don't matter. The only thing that does really matter is our experiences throughout our life. I, for one, would rather not have to deal with the experience of managing money, including interest, taxes, bills, etc. And I'm willing to say "Hey, go ahead and have a free meal, on me." I'll continue working in such an economy as long as we improve the work environment. That's all I ask.

But this is all philosophy and as of right now most people think our system works just fine the way it is. Philosophy is discouraged in the US.

Re:This scares the s*** out of me...

[jdebay]

So now that your job is being threatened we should stop the outsourcing rush? When we outsourced clothing, manufacturing, etc. was that ok? The world didn't end? The average American benefitted from this, the workers in those industries were retrained and now provide more economic output than before.

Wrong. The blue collar standard of living in this country is under considerable assault. People who once had good job security and whose job afforded them access to a middle class lifestyle have seen massive downward pressure on both their wages and their standard of living. Blue collar workers in the U.S. in the post-war decades lived better than white collar workers in Europe. Now they live worse than blue collar workers in Europe. While the wealthy have seen orders of magnitudes of increases in their income & wealth levels, the middle class have seen only marginal gains (10% for the average family in the last 30 or 40 years). That 10% has come at the expense of wives going to work, children being raised in day care, less job security, etc. The average blue collar worker (individual, not family just cited) has actually seen their wages decline or hold even over the same time period, depending on who you ask. It was high paying manufacturing jobs after World War II that gave this country a true middle class society in the first place. We are now at a crossroads where we must decide whether that society is the model for the future, or a historical anomoly of a few decades shortly to give way to a more stratisfied, less equal one.

Look at what has happened in Mexico. Immediately after Nafta, the northern border region of Mexico expierienced a boom as U.S. firms moved their manufacturing facilities there to take advantage of Mexico's third-world low wage, low regulation economy and corrupt political system. Shanty towns were erected around these factories where people lived in squander. But slowly wages rose slightly, living standards improved, but alas corporate profits fell. Those companies have begun relocating their Mexican factories to China, where labor is still cheaper and the authoritarian governmnet keeps the labor pool more docile. So much for globalization benefiting Mexico. It is a race to the bottom, pure and simple. Jack Welch once said his favorite kind of factory is one on a barge where he can move it from shore to shore, wherever labor costs are lowest. I expect no more from him than this; he is a businessman. But my government should not be his agent to accomplish this. Moreover, these companies get to be so massive in the first place because of the economic system, rule of law, and infrastructure my government provides and my tax dollars pay for. I am buying something with that money, and it is not the right for G.E. to fire me and replace me with three Mexican day laborers the first chance they get.

Now, if the current trends prove sustaining, the same will happen to white collar workers. Meanwhile, the rich have retired to gated communities and private schools while public schools and other infrastructure crumbles. They control the government through big money donations, thus the never ending flood of legislation favoring their goals.

One final point. The Scandinavian countries tend to have the highest standards of living in the world, and they are also the most "socialist" in Europe. Also, because of the way the U.S. calculates its unemployment rate, it leaves out key groups that Europe does not (for example, people who want a job but have stopped looking because they cannot find one - the number of these people in the U.S. has gone up rapidly in the last few years). If you take into account these groups, our unemployment rate is actually about the same as much of Europe's.

Remember, you do not have to sacrifice all on the alter of capitalism.

We won't be screwed forever.

[Apuleius]

One day, may it come soon, Indian customers will want tech support for their questions about MS Hindi Windows. And Philipino hell desk workers will decide that they went into the business because it was better than having to scavenge through the garbage dumps outside Manila for recyclables, but since then their country has turned around, and help desk work is boring, and they want better pay. And when Hungary, and India, and Costa Rica are finally able to provide demand for goods and services and not just supply, there will be few (hopefully none) reserves of cheap labor in the world. Till then, this techie is renewing his EMT license and looking for work in that field. Lord knows you can't outsource ambulance drivers...

But the general public doesn't give a damn

[Colonel Panic]

This subject of the outsourcing of tech jobs isn't on any politician's radar screen. The general public is unaware of what's happening so it'll be too late by the time this (might) become a political issue - the jobs will be gone by then.

Think about it: When the manufacturing jobs were being sent offshore in the 80's and 90's did you (as an engineer) really care? Some of us were a bit concerned, but not enough to even motivate us to write our congresscritter. Now that our engineering jobs are being outsourced we're getting upset, but who's going to come to our rescue? Nobody, the general public doesn't have a clue (and of course, it can be argued that nobody _can_ come to our rescue).

[as a footnote, it's interesting to note that a lot of those displaced manufacuring workers in the 80's and 90's were encouraged to retrain as software engineers - I've worked with a few of them.]

Re:Cycles

[e2d2]

Do you actually believe that all the worlds poor are poor because of bad choices? Wow. That is probably the most naive statement I have seen in a long long time.

I grew up dirt poor in a coal mining town in Western Maryland, I know what it's like to freeze my ass off because there was no heat. I know what it's like to have to shop at the goodwill and take hand outs from churches because we had no food at home. And It wasn't a choice brother.

If you were standing right here in front of me I'd give you an "eye opening education" you wouldn't forget. Your ignorance is only outdone by your disrespect for the world's suffering. Get a clue. Read a book. Do something you twit and do it fast before irony catches you and one of life's "choices" beats your ass.

Re:The predicted chain of events according to me

[dghcasp]

Bzzt. You can't argue truncate a globalization argument like that... Try

1. American corporations farm out more labor to other countries. That means local workers here are out of work.
2. Foreign worker has salary increase by a high percentage
3. Because fixed costs are lower in foreign country and marginal propensity to spend is approximately equal, foreign worker spends more money on goods & services than US worker would have
4. Many of which are provided by US corporations
5. Causing Net Exports to increase in USA
6. Causing GDP to increase in USA
7. Causing investment to increase in USA
8. Causing jobs to be created
9. Local worker gets new job with higher standard of living due to higher GDP above

And I'm really sure that you always pay the extra for the brand name over the generic groceries, buy the triple cost pharmaceudicals instead of the generics, pay premiums above MSRP when buying cars, washing machines & other durables instead of taking advantage of sales...

Spreading democracy == safer world

[Anonymous Coward]

/. readers may want to realize that spreading Democracry via increased economic oppourtunity will prevent dictatorial regeims, religious or not, to achieve power in the third world.

Many third world countries could learn a thing or two from actually practicing democracry with an enforceable set of laws (without bribes/corruption).

Some fundamental ideals:
1. you can't use the military for domestic law enforcement
2. a conflict of interest is illegal/immoral
3. corruption is bad/illegal at all levels and is actually punished
4. nepotism amongst kings, rulers, dictators, senators, and other high ranking officials is prohibited - see also conflict of interest
5. Humans receive their rights from a higher power than the king, president, or government.
6. Checks on government power are good
7. The people have the right to form a government and replace a corrupt one.
8. Rulers/politicians server for a limited time and there power does not pass down from father to son (i.e., no kings/princes).
9. Freedom of association
10. Freedom of religion (unlike places where Christianity is prohibited by law - e.g., Saudi Arabia, Egypt)
11. There is not state sanctioned religion
12. The church does not have legal standing to enforce laws

There are many many more but you should read up on English common law, the Magna Carta, the US constitution, and the Federalist papers

Bad for us, good for U.S.

[watchful.babbler]

At least, if you accept the Ricardian premises underlying trade theory; using cheaper foreign labor for engineering and software development is no different than buying inexpensive foreign steel. In most cases (ignoring price-setting monopolists like Microsoft), the result will be cheaper software and cheaper services for Americans. Of course, assuming that productivity rates aren't markedly higher here, the result will also be cheaper Americans, so the question is whether the loss in American tech jobs will be offset by savings gained by Americans in other sectors.

If you remember your Snow Crash, this is the sort of thing Neal Stephenson was talking about:

"When it gets down to it, talking trade balances here, once we've brain-drained all our technology into other countries once things have evened out, they're making cars in Bolivia and microwave ovens in Tajhikistan and selling them here, once our edge in natural resources has been made irrelevant, once the invisible hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakastani bricklayer would consider to be prosperity...You know what? There's only four things we do better than anyone else:

"music
"movies
"software
"and high-speed pizza delivery."

Is the use of inexpensive intellectual labor abroad a bad thing? Depends on who you talk to: to a telecom engineer in Dallas who's trying to make payments on a $500,000 house, it is. To someone who can buy cheaper software or services because developer rates went from $150,000/year to $5,000/year, it may not be. And to the population of India, of course, it's a different story entirely.

Really, this is the way the game has to be played for the developing world to proceed. After all, the manufacturing and commodity export sectors in the developing world are so competitive across nations that they can't serve as engines for fast growth. The most effective way to move from sweatshop to smartshop is to change the competitive balance and make the developed world compete for their own jobs: the same market forces that give us cheap steel, fossil fuel, and agricultural imports cane be turned back on the markets in which we've previously held both absolute and comparative advantages. Eventually -- and the key here is "eventually" -- this will result in increased prosperity for all, but it's not at all clear that the short-run result will be increased prosperity for us.

This isn't to say that I'm happy about this in terms of my own career (though it is why I'm moving from tech to law), but if the alternative is an ever-larger, increasingly impoverished, and restless population in the developing world -- just the sort of populations attracted to radical terrorist movements -- I'll take the salary hit.

Re:Uh...

[johnnyb]

I win. As a programmer for a small development company, we can easily benefit from this. Being close by we are better able to maintain relationships with the companies. Being an kick-butt programmer, I can outcode most competition. Being able to communicate directly with customers - well, it seems that the advantages to corporate layoffs tend to my direction. They may initially decide to go with foreign programmers, until they find out that the best value is right next door.

The programmer in India can't sit down with them and hash out the problems and potentials of different design solutions, and figure out which one works best. They have to hope that the people they communicated the designs to have a perfect understanding of their company, and hope that they can code to that.

Honestly, if computer professionals weren't overcharging already, we probably wouldn't be in this position anyway.

Re:The choice

[austus]

We will never be able to compete because we have labor laws. Do a mental experiment. Let's assume for a minute that the playing field is fairly equal due to years of jobs sucking away from richer countries like the United States. Group A has labor laws, Group B doesn't. Group A does equally quality work with precisely the same overhead, other than cost of labor, as Group B. Group B will always be able to underprice Group A because they don't have labor laws (i.e. minimum wage). Foreign countries would be insane to implement labor laws or they'd be in the same boat as the United States. Labor laws always make labor more expensive!

So IMHO, the answer is to discourage extreme outsourcing by doing the following:

1. End corporate welfare (because it's just plain stupid)

2. Raise import taxes (to offset blue collar outsourcing)

3. Levying taxes against corporations that excessively outsource white collar jobs (to offset white collar outsourcing).

4. Offer tax breaks for corporations that use mostly American Labor.

I know. I'm a bastard for suggesting we do what EVERY other friggin country does. So be it. Worry not, none of this will start happening until the United States has been gutted beyond all recognition. Just like the United States won't change major energy sources until we've gutted the world's oil supply. It will happen when, and only when, the alternative is our own destruction.

Serves those gold diggers right

[Dr. Spork]

Nobody here seems to mention a relevant fact: the people who flocked to the booming US tech industry are really nothing more than dweeby counterparts of 19th century gold diggers, trying to get rich quick. Now that the veins of gold are drying up, they fabricate something to whine about so that they can feel that their turn of fortune has been caused by some great injustice.

IT opportunists knew what the risks were going in. The US tech industry, by all accounts, shouldn't have taken you nearly as far as it did, so be thankful and start looking someone else who might be willing to lease your soul for $$$.

Re:You're right, I don't see it.

[letxa2000]

I think you underestimate alot of ANGRY individuals in this economy.

Angry != Rational. If they are angry, they are bitter. I could understand "frustrated."

I understand the posters feelings exactly. I know 100's of college students who graduated with degrees and cant find jobs in *any* field let along their own field ...

It's a tough economy right now. There are people with decades more experience than your 100's of college students that are also looking for jobs.

This is also due to the bubble that exploded a couple of years ago. Too much unneeded help was hired, too many students saw $$$ in the industry and started studying that. Now the bubble has popped, all the "extra" IT people that were unnecesarily hired during the bubble are being shed, and those that studied IT expecting a lot of high-paying jobs miscalculated.

They are delivering pizzas and living with their parents and they are *livid* that they paid their dues, played the game, did what they were supposed to, and are being shit on, disrespected, and told they are worthless by corporate america.

Oh come on... Some college students that have spent 4 years in college, probably having some amount of fun along the way, think they have paid their dues? They think they're being shit on because they happened to graduate in the middle of a recession? They think they for some reason *deserve* a job when they have 4 years of college and no experience when their resumes are being compared to professionals with decades of experience AND college? Come on...

They aren't worthless, but they aren't unique. Many others have their skills and if Corporate America needs exactly 100 of them, why should Corporate America hire 120? Even if we agree that the executives are earning too much, if you reduce their salary is there still any reason to hire 120 of them? They only NEED 100. Such is reality in a recession.

If this trend continues, there really will be a "revolution."

Sounds to me like spoiled college kids raised in sheltered homes listening to too much rap music and wanting to rebel against anything given the opportunity. Sounds like kids that truly don't know what "hard times" are. Luckily, I don't have any first-hand experience either. But the fear during the Cuban Missile Crisis... the rationing of goods during WWII... Surviving the Great Depression. THOSE were bad times. We aren't in bad times now, we just got used to an inflated bubble of fake growth--and that bubble burst. Sorry.

Tell your college friends to get a grip. Delivering pizzas and living with their parents IS part of their "dues."

Re:You're right, I don't see it.

[jkabbe]

I know 100s of people in IT that are paid $60k+ and couldn't code their way out of a paper bag. Why not hire some Indian guy for $5/hr that at least know what a paper bag LOOKS like? One of the other responders had it right - during the bubble a bunch of people got into IT who had no business being here and those people are being shed. Unfortunately some of the "good" people are out of work while the zoology majors are still working. It'll take a while to get that sorted out but it eventually will. (Yes, I was laid off after "saving" two projects - according to the team - and the zoology majors are still there).

And trust me, I know what it's like to come out of college in a crappy market. I graduated in 1994. Remember that recession? And that was before the IT boom. IBM told me that computer engineering wasn't a "real degree" and to come back when I had one. Lovely. I worked in a grocery store for 5 months.

So don't whine to me about being disrepsected as if you're the only one.

Outsourcing

[dubwai]

I was just thinking, is outsourcing really that great? The first thing that comes to mind when I think of outsourcing is ValueJet. They outsourced almost everything. It didn't work out too well. There is one group in the company I work for that is almost entirely populated with Indians. They also happen to be the group that got the company succesfully sued for over $250 million. Maybe you get what you pay for. In addition I wonder why there doesn't seem to be an even distribution of Indian IT workers in this country. Around here at least it seems a company has 75% Indian developers or 1%. Maybe I'm paranoid but is there maybe some sort of preference here. I noticed that one of the people in this article that was so high on outsourcing to Inida had a very Indian sounding name. Could it be possible he's exiticed about all the males in his family being exectives. "Don't believe the hype!" - Flavor Flav

Sucking sounds

[Anonymous Coward]

It seems America will soon be populated solely by burger flippers and super-rich CEO's. And the west thought the days of serfs and nobles was over....

Re:we're screwed

[Azog]

Heh. How did Neal Stephenson say it at the beginning of Snow Crash?

Something like: The United States ends up being good at only four things:

• Music,
  
• Movies,
  
• Microcode,
  
• High Speed Pizza Delivery.
  

That may turn out to be one of the famous predictions of Science Fiction, like Arthur C. Clarke's prediction of communications satellites.

Re:You're right, I don't see it.

[Cirvam]

Its called cost of living. Obviously the buger-flipper in Denver is making more money, however the college graduate has more buying power in mexico. Where the college graduate might be living a comforatable life (comparable to say, a person making 60K/year in the US), the buger-flipper is barly making rent or being able to buy food.

Just because when you convert their income into dollars, we are making 20x what they are doesn't mean that we are instantly richer then them. I'm sure you can find some countries where the richest people there have no more money then an average person here, however there they can live in huge expensive houses because their money goes farther there.

Ramblings on overpriced labor & ecology

[EvilAlien]

No, you outsource to where the skills are at the best price. Its called a free market economy. Its kinda the same concept that American became properous under. Bit of a two-edged sword, huh?

I think what Americans may not realize is that they are pricing themselves out of work and assuming that the rest of the world can't possibly develop the technology, skills and resources to do what America has. That is a shocking bit of arrogance, and likely the cause of the current "crisis". If there is an exec candidate from Bulgaria that will work for a third of what some American then guess which is a better business choice? All things being equal aside from salary demands makes the choice pretty simple.

The other nifty thing about a free market is that change isn't always to YOUR benefit, but it may be for the benefit of the system itself. Its like an ecosystem. You are selecting yourselves out of jobs. Its like a predator that can only eat a certain type of high-quality meat and only if it is fresh and only if variable A, B, C, and D are in place. Guess what? A predator that isn't so damn picky is going to flourish unless something else exists in that ecosystem to keep it in check. You could try to legislate the problem away while the rest of the world learns to adapt, resulting in isolation. The risks are obvious if you look at the issue from this perspective, so I won't try to lay them out further.

The answer could very well be in the CEO salaries, but somebody in charge deserves credit for success. Back to the ecosystem perspective, consider this: the biggest lion gets the most meat. Even if that meat is rotting and the rest of the pride can't survive. Eventually that big lion dies too. Basically what I'm saying here is that I don't entirely disagree with you specifically.

Re:Ramblings on overpriced labor & ecology

[ETEQ]

But the question is how much good the CEO actually does, and if that's justified in the salary. I'd say one of the biggest problems in American (and perhaps foreign) corporations is that the CEOs are all working for each others' benefit. A lot of companies function despite their CEOs instead of because of them, but because the CEOs are all on each others' board of directors, they've learned that if they pump up their fellows' salaries, their fellows will pump up theirs. In the end, there is only one position in the modern corporation that has no oversight: the CEO.

This isn't to say all CEOs are incompotent, there are certanly some that are exceptional and were the keys to a company's success or failure, but most of them aren't any better than anyone in middle management - they just have the right connections.

Re:Uh...

[composer777]

Exactly. Free trade is all about consolidation, not about helping 3rd world countries. Here's how consolidation works.

1. Move jobs overseas, and pay a mere fraction of what you are paying to American employees.
2. Don't pass the costs on to middle class Americans, thus causing money to move from the middle class, which is getting laid off, to the utlra-rich.
3. Encourage Americans to make up for loss of income by working longer hours and going into massive amounts of high-interest debt.
4. Lay off more American workers.
5. As US workers begin to default on home loans and auto loans, buy back their homes and their possesions for pennies on the dollar.
6. Use this massive amount of wealth to buy the capital of other countries(such as land and natural resources) for pennies on the dollar, since there is no way that an Indian worker making 11,000 a year will have the buying power of a multi-billion dollar company.
7. Now that Americans are as destitute as the the 3rd world, and the economy has slowed down, there is no longer a need for 3rd world workers, so fire 3rd world workers and grab all of the productive resources.
8. Smile, as you and the top 1% of the world's population own the majority of wealth of the world, and have a desperate, hungry population willing to do anything to serve you.

Here is the thing to keep in mind about the worker in India. There increase in wealth is only temporary! The majority of profits from their work is flowing into the hands of ultra-wealthy Western investors. While it is arguable that they can "live like kings" on $11,000 a year, this does not mean that they can buy capital. And this is the problem, since if they can't form their own business and make profits of their own, then they are getting used just as bad as the American middle class. Think about it, if someone in India wanted to compete head on with US software, they would have to market their products in countries that would buy these products for the most money, such as the US. But marketing and advertising, as well as buying capital such as computers, is expensive, and US companies have a distinct advantage in this area, since they have alot more capital. So, while it may appear that Indians are propsering, the majority of these profits are going to the ultra-rich. Once the leaching of wealth from the 1st world middle class is complete, there will no longer be a need for foreign workers, the economy will collapse in a very similar way to the 2001 "market correction". Only, it will be much worse.

So, let me repeat, this isn't about increasing profits, it's not about helping the 3rd world, it's about consolidation, pure and simple.

Re:Painful? Yes. Helps long term? I don't see it.

[electroniceric]

Your onto some excellent points here. Yes, it is patronize to tell people that they should value cultural purity (as defined by some starry-eyed outsider) over a better house and a car. The schizophrenia you mention cuts through a lot of the work of international development in general.

On the other hand, this makes me leery:

While there are many problems in globalism, the fact is that thinking globally is the most humanistic and charitable thing to do. The fact is that those programmers in India are not somehow less deserving than the programmers in your town or even the next town over.

Less developed countries still lack the legal framework to help their citizens avoid devastating exploitation - in labor, in environment, in transparent courts, for example (not that American institutions are in such great shape right now...). So yes, there are many potential benefits to well-managed globalism. The problem is that much of the free trade corner is heavily populated with people who want the benefits of free movement of capital, but without kicking down for corresponding assitance (in developing institutions), or making sacrifices on our side like opening markets. This limits the spread of true globalism, and doesn't help address the unacceptable levels of poverty in the world.

Not trying to presume your position on any of these things, just felt they should be elaborated on.

Re:silly question

[BluedemonX]

RE: XYZ will naturally tend to lower its prices (why? because to make more money, it has to sell more goods and the best way to sell more goods in this case is to lower prices).

No it won't. It'll give the CEO a fat raise. Prices come down? You jest. And by the way, it used to be a man could hold a decent job and raise a family. Now the wife has to work too. What do you suppose happens when both parents need to work two jobs to prevent creditors from taking everything, because strangely enough that McJob doesn't pay half as much as that good engineering job he paid a shitload of money to train for? How does XYZ sell more widgets to these people?

Economy not static

[enjo13]

Don't forget that the economy in India isn't going to be exactlty Stagnate. As their incomes rise (from Western money) their salaries will slowly rise to match their western counterparts. This is nothing like the Blue collar work that was outsourced to other countries. That required no education.. this type of work requires skill and will eventually build a strong economy in India....

Welcome to the Information age!

[Dolemite_the_Wiz]

Do you want to get a sacry glimpse of where this economy is heading in, say, 25 or more years?

Read this book. [barnesandnoble.com]

Buckle your seatbelts kids, it's going to be a gnarly ride!

P.S. I though the sucking sound was Anna Nicole Smith at an all you can eat restaraunt.

Dolemite

Re:Ramblings on overpriced labor & ecology

[phr2]

If there is an exec candidate from Bulgaria that will work for a third of what some American then guess which is a better business choice? All things being equal aside from salary demands makes the choice pretty simple.

Um, CEO candidate from Bulgaria? Do you have any idea what CEO's do for a living? CEO's are not hired for their brains or vision or technical ability. They're hired for their ability to make deals, which means using their political and business connections which they didn't get in Bulgaria. Do you really think Dick Cheney would have become CEO of Halliburton if he hadn't first been Secretary of Defense so he could sell Halliburton services to the military? That George W. Bush would have been on the board of Harken without first being the son of a Congressman? Of course there are exceptions, but for the most part these connections come from the boardrooms and the golf courses, and get started by being born into the right families and getting "legacy" admissions to the right universities so they can connect up with other such scions (think of GWB at Andover and Yale). The CEO business is not a meritocracy. It's much closer to a hereditary nobility. Our society is much closer to feudalism than we like to imagine. See the article How to become as rich as Bill Gates [greenspun.com] to learn how you can join in. Having connected parents is the one thing that can't be outsourced.

Re:Cycles

[e2d2]

You think that because you live good and are not poor that you have made the right choices. You give no weight to chance or luck in life and attribute all failings to bad decisions and all wealth to hard work and keen insight. But this could not be further from the truth. Look at the worlds most wealthiest people. Do you think they are all the wealthiest because they are special and have a gift? Are they rich because they made the right choices while others chose different paths? No. Don't throw aside the value of chance in the world.

By the way, my dad passed away when I was 4 you insensitive clod, leaving my mother to raise 3 on her own. I know, she should have made better "choices" and married someone who would not die. If only everyone was as smart as you.

Why don't you look into yourself and ask why you have no compassion for the poor in America? You think you have the special gift, seeing the correct path to take at every turn, when more likely you were simply dealt a better hand in the game of life.

Re:Uh...

[composer777]

Yes, it is disgusting, which is why I am trying to educate myself as much as I can about what is going on so that hopefully I can make a difference. You have to at least try, there isn't much choice, either that or you can watch your livelihood and freedom disappear. What's more disturbing than this is the complete control over information that the media here in the US has. I was talking about free trade with a co-worker of mine, and he is a bright guy, in his 40's and completed his undergrad and masters at MIT in 4 years. He had no understanding whatsoever of what free trade is doing. I told him that wages have dropped 60% for Mexicans workers since NAFTA was instated in 1992 and that it is destroying their economy as well as hurting ours and he didn't believe me. He honestly thought that it was helping Mexicans and that things would get better in America once things evened out. While Mexico's GDP has in fact risen, the majority of workers are making much less, while a very small percentage is profiting immensely. He honestly did not understand that if we only pay Mexican workers $2 a day that they won't have enough to spend on products that we produce, and that the money that is being made is flowing into the hands of the ultra-rich, with only a fraction going to 3rd world workers. Programmers in India are the exception, not the rule, and even they are grossly underpaid. Most foreign workers barely survive while working grueling days in sweatshop conditions. But people here in the US don't know about it. And, programmers in India are too short-sighted to realize that by only getting paid $11,000 a year for $60,000 worth of work, that they are getting screwed too.

Re: CEO salaries

[BroncoInCalifornia]

Two comments:
1) The highest paid executives usually run the less successfull companies.
2) Executive salaries are not set in a free market. The executive get together and vote each other raises in a sort of circle jerk.

Here's what I find amusing

[Anonymous Coward]

A) People who rather naively say "these aren't hard times". Uhm, excuse me - but even the folks I know who are working -- even in non-IT jobs -- are worried about losing their jobs, they haven't received a raise in a good while, etc. This has also been (in the past 2.5 years, or so) the worst period of "wealth destruction" in the stock market since the 1920's. The pain of "hard times" can be felt in an innumerable number of ways, not just for those (like me) who happen to be unemployed now for the longest period of time EVER in my professional life. If that's doesn't qualify as "hard times", then I'm not sure what does.

B) There's a lot of posturing by some folks who say "I'm going to find a way to add to my value other than tech", and yet in the next breath/sentennce they readily admit they don't have a clue as to what that might be. This is all well and good, but the fact is, most non-tech folks have a very unsophicated view of what a so-called "techie" can do. I really believe this is a kind of unspoken bias -- payback for the good times we had in this country, employers having felt techies didn't really "pay their dues" or were overpaid, so they selectively fail to acknowledge what other transferable skills a tech-oriented person might have. And personally, I find this to be strangely ironic, because in U.S. we seem to be constantly beating the drum of "more math and science education". Well, that's great -- but if you can't get an employer to acknowledge the value of such an education - if in fact, there's a certain kind of "intellectual prejudice" going on -- then what's the use?

I really do have my doubts that this all just about this being "the recession that wasn't quite a recession" or what have you. Granted, I'm glad to see many of the "gold-rushers" gone from the field -- but in some folks' minds at least, tech work can be awfully pigeonholing. Until we can get employers to let go of their narrow-minded, inflexible approach to hiring workers -- the job market is going to continue to stagnate, and probably the GDP along with it.

I wish I were more optimistic, but I think there are a lot of forces at work here that are serving to undermine American workers in general. "That's not the way it works for now", one person said, yet they don't dare to predict when things might, if ever, "even out" and the harangue of gloominess can be thrown off.

No Escape

[Baldrson]

The US Federal Government is imposing increasing restrictions on civil liberties in the name of national security while at the same time encouraging this internationalization of key business elements.

The climatic memetic prisoner's dilemma [clanarchy.com] showed it is highly dangerous to mix populations from all over the world but it didn't get into accounting relationships (e.g., 'tit-for-tat') as a way to mitigate disaster except to point out that with Enron, Global Crossing, etc. it is clear that accounting cannot be relied upon to avoid cheaters in the prisoner's dilemma. When all relationships become informational and global, all relationships devolve toward accounting.

As is repeatedly shown by the alterations of historic accounts as well as business accounts by cheaters, the system just can't work if you don't reserve your most severe punishments for the big cheaters. The problem is in the West we have come to honor the con artist as much as northern Europeans used to honor the victor of the fair contest by arms or quest. And the problem can't be avoided by going to civilizations that don't have such a fair contest history -- the honor accorded con artists is no less there.

W. D. Hamilton said it well in Innate Social Aptitudes of Man:

The incursions of barbaric pastoralists seem to do civilizations less harm in the long run than one might expect. Indeed, two dark ages and renaissances in Europe suggest a recurring pattern in which a renaissance follows an incursion by about 800 years. It may even be suggested that certain genes or traditions of pastoralists revitalize the conquered people with an ingredient of progress which tends to die out in a large panmictic population for the reasons already discussed. I have in mind altruism itself, or the part of the altruism which is perhaps better described as self-sacrificial daring. By the time of the renaissance it may be that the mixing of genes and cultures (or of cultures alone if these are the only vehicles, which I doubt) has continued long enough to bring the old mercantile thoughtfulness and the infused daring into conjunction in a few individuals who then find courage for all kinds of inventive innovation against the resistance of established thought and practice. Often, however, the cost in fitness of such altruism and sublimated pugnacity to the individuals concerned is by no means metaphorical, and the benefits to fitness, such as they are, go to a mass of individuals whose genetic correlation with the innovator must be slight indeed. Thus civilization probably slowly reduces its altruism of all kinds, including the kinds needed for cultural creativity (see also Eshel 1972).

What Hamilton doesn't address is what happens when you "civilize" the entire globe -- no frontiers to which the altruists can escape.