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The Almighty Buck

Giant Sucking Noise 1319

Posted by michael
from the ross-perot-was-ahead-of-his-time dept.
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.
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Giant Sucking Noise

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  • Uh... (Score:3, Insightful)

    by Em Emalb (452530) <ememalb@NoSpAM.gmail.com> on Friday January 31, 2003 @04:07PM (#5198455) Homepage Journal
    "Who wins? Who loses?"

    The American People do. The American Corporations win. Just as they always do.
    • Re:Uh... (Score:3, Insightful)

      by jazman_777 (44742)
      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:Uh... (Score:4, Insightful)

      by johnnyb (4816) <jonathan@bartlettpublishing.com> on Friday January 31, 2003 @06:17PM (#5199853) Homepage
      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.
  • by The Only Druid (587299) on Friday January 31, 2003 @04:08PM (#5198461)
    Outsourcing is a bad thing: Outsource Australia is a company I've worked with that dramatically increases the value and productivity of a company when they work to refine their procedures, structures.

    I think the fear that our [american] economy will collapse if jobs move out of the geographic country is naive, in that it doesn't properly examine whether or not the money actually flows in different directions: if the money still comes into the US eventually, it works.
    • by WatertonMan (550706) on Friday January 31, 2003 @04:15PM (#5198537)
      Not only is fear of outsourcing naive, but it is rather selfish. I never quite understood how most antiglobalism movements simultaneously felt the west wasn't helping poorer nations. The only way to improve the standard of living in other nations is to offer them jobs. If we want other nations to move beyond just farming and manufacturing we *must* make sure that we share the way we make wealth with them.

      Is this somewhat painful? Yes. Does it help in the long term? Most definitely.

      Do you really think that the mid east would be in the situation it is today if there was a wide diverse economy over there?

      • by Marc2k (221814) on Friday January 31, 2003 @04:31PM (#5198736) Homepage Journal
        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.
        • by jkabbe (631234) on Friday January 31, 2003 @04:41PM (#5198844)
          "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
        • by Zeinfeld (263942) on Friday January 31, 2003 @05:15PM (#5199208) Homepage
          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,

          Self serving baloney pumped out by the steel companies. If that fable was true the European steel industry would have gone as well.

          Asian steel producers costs are considerably greater than the 87 cents you quote. It costs them considerably more to ship their finished product than it costs the Us producers. They also have much longer lead times because of the transport time and so they are unable to address markets where quick turnarround is important.

          If you read 'the Innovator's dilema' you will find the real reason for the decline of the US integrated steel mills, they were made obsolete by the cheaper to build mini-mills. There are still successful and profitable steel producers in the US, they are the ones the use mini-mill.

          The integrated refiners have two major problems, the first is that they massively underfunded their pension plans for the past 20 odd years so they could claim to be profitable when in reality they were not. This allowed them to delay restructuring for 20 years past the time when the EU producers restructured.

          The second big problem is that the integrated steel plants are not earning their cost of capital. This is the same in every country regardless of labor costs. 30 years ago when mini-mill technology first appeared the product was only fit for the least demanding uses. Over time the mini-mills have gradually more efficient and produced higher quality output so that today they provduce steel for car body panels which is pretty much the most demanding mass application. About the only market that is not well served by mini-mill today is steel for hand-fashioning by blacksmiths.

          Of course the nationalist fable is a much easier sell, even though the message it sends is ultimately defeatist.

    • by Silverhammer (13644) on Friday January 31, 2003 @04:18PM (#5198576)

      Blockquoth the poster:

      I think the fear that our [american] economy will collapse if jobs move out of the geographic country is naive, in that it doesn't properly examine whether or not the money actually flows in different directions: if the money still comes into the US eventually, it works.

      America makes its money by being at the ultimate junction point of capital, intellectual property, communications, and business management. We're the deal-makers and the facilitators. We don't build anything ourselves because we're content to skim a little bit off the top of everything that passes through our hands.

      However, sooner or later, all those other countries to which we've outsourced our industrial base will realise that they really don't need us. When they get their acts together, they'll just start dealing directly with each other. And when that happens, watch this Pax Americana come to a screeching halt.

      I predict it will happen within the next 50 years, if all things continue as they are now...

      • by jandrese (485) <kensama@vt.edu> on Friday January 31, 2003 @04:40PM (#5198829) Homepage Journal
        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.
        • by Colonel Panic (15235) on Friday January 31, 2003 @05:26PM (#5199351)
          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.
        • by God! Awful 2 (631283) on Friday January 31, 2003 @05:37PM (#5199463) Journal

          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
      • by zogger (617870) on Friday January 31, 2003 @05:57PM (#5199657) Homepage Journal
        --You have it exactly, and that's why it will destroy the US middle class, and do it within this decade we are in. example-china. China does NOT generally speaking buy mass quantities of american goods EXCEPT for tool making machines and similar. They are buying tools to make tools to make-EVERYTHING. They buy the stuff needed to work at, to actually produce, to aquire wealth. Like we used to work, that was successful and bbuilt a diverse robusrt economy. We were sold "globalization" as the "two billion armpit" theory, that if helped china along they would continue to "buy all our stuff" in ever increasing amounts. This hasn't happened, all that's happened is a HUGE balance of trade and short term profits for *some* people and massive loss of jobs. Our balance of trade deficit is simply staggering, we have gone from the world's largest creditor nation the world's largest debtor nation in 20 years, with the bulk of that within the last ten years, and it's growing increasily worse. THAT's all the proof required.

        After (china primarily) have their full vertically integrated industries setup,(close now) they not only won't need to buy our stuff, there's no way any of our stuff would be cheap enough for them to bother with, because they will have a large enough internal market. all they will need to trade with then is for oil and other raw materials. And this goes from agricultural products all the way to high tech and everything in between, they won't need us, not a nickles worth. They will continue to export as much as possible, but only to places that have actual hard currency of value or have the materials they need. Our dollar is dropping in relative value. although till used widely, it is and will continue to be devalued, especially if gold backed currencies become required for international balance of trade payments. The current balance of trade numbers prove this with no shadow of a doubt. Other numbers I have seen have china as potentially surpassing the US around 2015 or so, although I personally believed that mass global warfare will occur before that time, basically over resources and who controls the planet. In fact I would maintain world war 3 is already in progress.

        The US is living on credit and inertia and a severe case of the denials right now, we are en-screwed. As will be pointed out around the thread, people take a cavalier attitude and say theoretically it's a 'good thing" - until they lose their jobs and start the cycle that millions are on now, lose job, hunt for job, get job paying less, lather rinse repeat until you hit a brick wall with NO job.

        The job loss stats are SO bad, they stopped reporting them, claiming they ran out of funding, which is a political dodge. this was a major story that didn't get much coverage, but is important for everyone to take a look at.

        url to my last statement

        http://www.bls.gov/bls/mlsdiscontinued.htm

        text, short and to the point and anyone should be able to read between the lines here

        What is the status of the Mass Layoff Statistics (MLS) program?

        The Mass Layoff Statistics (MLS) program has been discontinued. Since 1994, the Department of Labor's Employment and Training Administration funded the MLS program. That funding ended on December 31, 2002. The Bureau of Labor Statistics (BLS) has been unable to acquire funding from any alternative sources and had to discontinue the MLS program as of that date. Limited historical data and documentation will continue to be available on the BLS Internet, at http://www.bls.gov/mls/.

        Last Modified Date: January 2, 2003

        Jobs in the US are NOT being replaced by the numbers, nor are wages going up, speaking in general terms, we are dropping, and fast. It's being manipulated to appear like theyare going up slightly, and even that is a scam, theypulled food and fuel from the consumer price index for example. They are lying, avoiding real numbers, basically pulling an enron accounting modal on an across the board obfuscation to this system to not panic the herd. They are doing the same things with the major market indices, in particular they remove tanked corps as fast as possible to keep those numbers artificially inflated. If you were to do (now timeframe) an historical records match, and keep the tanked companies over the past few year period and reconfigure the indices those charts would look a lot worse than they are now.

        IMO

        This is an extremely involved subject but the gestalt is we got shafted by literal traitors. Internationalists who are loyal to no one beyond their own power and greed and to whichever global cartel constitutes their gang. This was done on purpose to further a heinous (ultimate) agenda of a global two class fascist society, which I term technofeudalism. It is akin to wolfpacks fighting themselves, but all united in staying wolves over the herds.

        I had these same arguments on forums years ago, I was saying the same thing then as I am now. I have personally since heard from people who vigorously disagreed with me then, conveniently when they were sitting fatcity on their dotbomb poker chip improbable beyond belief stock portfolios and a great paycheck. Now, a lot of them have changed their viewpoints 180 degrees, because they got bit, and bit hard. their stock profits turned out to be mostly vaporware and so were their jobs, and not even new jobs then, old jobs they had. Industry after industry has been destroyed or reduced to ridiculous levels. And not buggywheips, critical strategic infrastructure.

        That is almost the only way for some people to get from casual ho hum academic styled discussion to back down on the ground in the real world, to just have it shoved in their face up close and personal. THEN they understand better the full ramifications of what's going on..

    • 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.
  • by teamhasnoi (554944) <teamhasnoiNO@SPAMyahoo.com> on Friday January 31, 2003 @04:09PM (#5198474) Homepage Journal
    was coming from Slashdot...
  • Cycles (Score:3, Insightful)

    by j_kenpo (571930) on Friday January 31, 2003 @04:11PM (#5198498)
    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.
    • Re:Cycles (Score:5, Insightful)

      by gmack (197796) <gmack.innerfire@net> on Friday January 31, 2003 @04:37PM (#5198797) Homepage Journal
      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:Cycles (Score:3, Informative)

      by GlassHeart (579618)
      It's amazing how prices of products aren't cheaper despite outsourcing to foreign countries.

      Outsourcing is a technique used to cut costs and maximize profit, not lower prices. Competition is what lowers prices.

      an organized boycott against those companies should be implemented

      Your economics is oversimplified.

      Let's say Microsoft is required to hire only Americans. Because of their increased labor costs, their OS becomes more expensive. Now, an Indian software company finally perfects that Windows clone, and sells it for cheaper because their programmers cost less.

      It is now your (patriotic, whatever) duty to buy Microsoft, even though it's more expensive. Are you now happier? I doubt it. If Microsoft then lobbies to ban the importation of the Indian Windows, you'll probably be even less happy.

      However, if Microsoft is free to outsource, then you the consumer is certainly free to buy the cheaper clone, and actually save money. (Of course, you'll have a harder time finding a job, because you're competing with the whole world. I'm not saying it's easy.)

      The trouble with your logic is that it can be applied at any level to limit competition. You could certainly say that Microsoft is hurting California companies, because it's cheaper to live in Redmond than in San Jose and so they manage to get cheaper programmers.

    • Re:Cycles (Score:4, Insightful)

      by Anne_Nonymous (313852) on Friday January 31, 2003 @04:59PM (#5199017) Homepage Journal
      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:Cycles (Score:3, Interesting)

      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.

      But consumers get a direct vote on every market issue every day. Every time you spend a dollar, you are casting a vote on what products and services you like. Consumers seem to like low prices. I think that want you want is an ANTI-consumer union. Don't expect many consumers to _vote_ in favor of this.

      Economics is not a zero-sum game.
  • The choice (Score:5, Insightful)

    by teetam (584150) on Friday January 31, 2003 @04:12PM (#5198501) Homepage
    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?

    • Re:The choice (Score:3, Insightful)

      by austus (199520)
      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.

  • by Anonymous Coward on Friday January 31, 2003 @04:14PM (#5198528)
    ...because I see it first hand. We are doing a Java GUI project with 1 person in US and 3 in India. I'm the 1 still in the US. And it works, and it saves money (50% to 60% reduction in sw development costs). The engineers in India are pretty good, and with a good internet connection there is very little holding us back from sending more work over there.

    As you might expect, this worries me a lot. I'm fairly secure (I think), because they need at least one person here that knows English and Java and can understand the customers and do the face-to-face, but in the long run more and more places are going to look at the savings and ship the work overseas.

    I've got two kids, 9 and 12, and I'm at a loss for what direction to steer them in career-wise. I used to think Engineering was the answer, since I've really enjoyed my, what, 20-odd years of slinging code. But by the time my kids are college-age, god knows what will be left in the US besides burger flippers, doctors, and lawyers.

    -- ac at work

    • by JWhitlock (201845) <<gro.eeei> <ta> <kcoltihW-nhoJ>> on Friday January 31, 2003 @05:08PM (#5199110)
      ...because I see it first hand. We are doing a Java GUI project with 1 person in US and 3 in India. I'm the 1 still in the US. And it works, and it saves money (50% to 60% reduction in sw development costs). The engineers in India are pretty good, and with a good internet connection there is very little holding us back from sending more work over there.

      Wait, let me get this straight. I'm assuming that your four-man operation replaces a three-or-four man operation in the U.S. Let's say salary costs are $50,000 per U.S. programmer, $15,000 per Indian programmer. A four-man U.S. team is $200,000 a year, while a one US, three Indian team is $95,000, for a savings of 48%.

      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.

      Further, the U.S. is the top market for high technology products, because we have the extra cash to spend on them. Increased employment in other countries raises their GDP, which means they can better afford high-end toys, which means they get cheaper and better for us, etc. etc.

      Take a look at the numbers - globalization has been in full swing for a few decades now, and the U.S. has the lowest unemployment rate in years - lower than they thought possible a decade ago! Almost everyone wins when the people that can make a product the cheapest are allowed to do it. The only ones who lose, in the short run, are those who are displaced by the production move. The remedy for that is short-term government support, and the best way to get out is to acquire new skills.

      Tell your children to become engineers. The problem-solving skills you learn will help them easily jump from career to career, as needed. Encourage them to take some liberal arts classes, too, to make them think more flexibly and excercise that right brain a little. May I suggest an economics class?

      • by bludstone (103539) on Friday January 31, 2003 @05:18PM (#5199253)
        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.

    • People laugh, but a friend of mine has been saying for years that by the time his kids will be of college age we will be shipping them out to New Delhi to receive a solid college education.

      -AP
    • 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.
      • 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.
    • It is scary... (Score:3, Interesting)

      by metacosm (45796)
      The jobs moving overseas are the IT industries' own fault to a degree. The "hype", the overpaid incompetent IT workers, the billions of dollars lost by US companies during the "boom!" on moronic projects and badly thought out "concepts". Basically, the IT industry in the country "burned" the companies that depend on it.

      The forces driving fundamental change are several, including regional cost differentials, market power relations, and globalization of IT industry. Most importantly, however, the U.S. IT industry has become an amazingly capital-intensive economic sector that no longer has access to capital. The floodgates have been opened. I doubt they can be closed.

      This is nothing new, this happened to blue-collar workers years ago, and now it is moving up the chain.

      The only way I can see to compete is thru advancing the technology in the field you are in, and keeping those technological advancements as industry secrets. You will have to create BETTER products in LESS time if you want to compete with people who can be paid tremendously less than yourself. Sending work overseas has an inherent cost, and language barriers, and assorted other problems, but unless you can create something significantly better, you are going to watch the jobs go away.

      I am not claiming I have any solutions, just agreeing that it is a scary fact. I think if it becomes a huge issue, you will see the middle class rise up in anger and fight it tooth and nail.

      My name is Robert, and I am a software developer.
  • Vacation (Score:5, Funny)

    by mao che minh (611166) on Friday January 31, 2003 @04:16PM (#5198551) Journal
    Reminds of a past Spring break, a little foray into Tijuana for a weekend. Sucking noises. Loss of profits. Confusion and doubt. Foreign people. Uncertain financial future because of it. The similarities are remarkable.....

    You know, I feel as though I could use a few days off all of the sudden.

  • by Synn (6288) on Friday January 31, 2003 @04:18PM (#5198575)
    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 (Score:4, Insightful)

    by tacocat (527354) <tallison1&twmi,rr,com> on Friday January 31, 2003 @04:19PM (#5198582)

    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.

    • by ReelOddeeo (115880) on Friday January 31, 2003 @04:53PM (#5198964)
      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.
      [List of things deleted]


      Don't be so negative. Look at the profitable things we are good at, which we are keeping...
      • Marketing
      • Management
      • Litigation
      • Buzzwords
      • TLA's
      • Entertainment
      • Intellectual property licensing
      • Patents
      • Creative Accounting Practices
      • Monopoly building and maintenance
      Because of these strengths, I predict that the countries with strong economies that need some of these functions, are not good at them (or don't want to touch them), and don't have local talent in these areas will outsource these functions back to the US.
    • "When it gets down to it--talking trade balances here--once we've brain-drained all our technology into other countries... there's only four things we do better than anyone else: music, movies, microcode (software), high-speed pizza delivery." -- Neal Stephenson, Snow Crash.

      Unfortunately, Neal was wrong, and software is moving to India, movies are moving to Australia, and our music sucks right now. But thank god, at least we still have the high-speed pizza delivery, and we probably always will.

    • Re:we're screwed (Score:4, Informative)

      by NearlyHeadless (110901) on Friday January 31, 2003 @05:21PM (#5199288)
      We, as a nation, actually build very little on our own shores.
      This is 100% wrong. It's complete bullshit. The United States is the biggest manufacturer in the world. Real manufacturing output grew over 3% a year in the 1990s. Here are some statistics on top manufacturing in the US:

      Here are the top domestic manufacturing categories from 1999:
      2001 Statistical Abstract of the United States
      Table 974. Manufactures-Summary by Selected Industry: 1999
      Value of shipments (mil. dol.)

      675,122 Transportation Equipment
      458,485 Computer and electronic products
      The first two combined exceed the $883 billion in manufactured goods imported from all countries.

      429,053 (manufactured) Food products
      419,674 Chemical products
      (including, e.g., $108 billion pharmaceuticals/medicines)
      277,117 Machinery
      256,899 Fabricated metal products
      (architectural metals, screws, nuts, bolts, etc.)
      172,397 Plastics and rubber products
      168,096 Petroleum and coal products
      158,102 Primary metal
      157,491 Paper products
      119,792 Electrical equipment, appliance, and component
      108,238 Miscellaneous
      107,437 Beverage and tobacco products
      102,404 Printing

      According to the latest trade statistics
      (http://www.wto.org/english/res_e/statis_e/its2002 _e/section1_e/i05.xls)
      the United States is the largest exporter of merchandise, with $731 billion in
      exports; Germany is second with $571 billion. China comes in sixth with $266
      billion.
    • Re:we're screwed (Score:3, Insightful)

      by Azog (20907)
      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.

  • by teamhasnoi (554944) <teamhasnoiNO@SPAMyahoo.com> on Friday January 31, 2003 @04:20PM (#5198602) Homepage Journal
    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!

  • by Clay Mitchell (43630) on Friday January 31, 2003 @04:20PM (#5198603) Homepage
    The article is pretty much spot on. By decree of some department head somehwere, 1/3 of the people in each gruop have to be GDC employees (GDC is the termed used for the 2 companies we outsource work to - InfoSys and Tata) - which means if you have 30 people in your group, 10 must be contractors, and 2/3 of those must be off shore.

    What's really depressing is that these changes aren't being done to get BofA back in the black or because it's going down the drain. It's so that they can show 7% (or 4% or something, I can't remember) more profit than they did last year.

    This is absolutely *killing* morale. People worry about jobs. A lot. Our group has actually lucked out a bit - due to the closing of remote offices and a couple people leaving for their own reasons, we've been spared - Our manager is fantastic, he's doing everything possible to keep from laying any of us off. But other groups aren't so lucky. Quite a few people were laid off today, so the rumor mill says.

    It's tough. It's one thing to be laid off for poor performance - it's a whole other ballpark when you're simply getting replaced with somebody a little cheaper.
  • Tech Unions (Score:3, Insightful)

    by zbuffered (125292) on Friday January 31, 2003 @04:20PM (#5198608)
    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?
    • by Picass0 (147474)
      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?
  • by Picass0 (147474) on Friday January 31, 2003 @04:20PM (#5198611) Homepage Journal
    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! (Score:5, Insightful)

    by Camel Pilot (78781) on Friday January 31, 2003 @04:21PM (#5198630) Homepage Journal
    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.
  • by nomadicGeek (453231) on Friday January 31, 2003 @04:23PM (#5198643)
    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.

  • by dacarr (562277) on Friday January 31, 2003 @04:23PM (#5198646) Homepage Journal
    1) American corporations farm out more labor to other countries. That means local workers here are out of work.

    2) People who are out of work cannot buy things made by corps who are farming out their labor to other countries. Companies see a mysterious downturn in profit and are unable to attribute it to the fact that people don't make any money and accordingly can't pay for things they are making money by farming out labor to fourth world countries, whose major export is dirt. Corps who are farming out their labor fold like sheets at a Motel 6 or move to country where their production facilities are. Now more people are out of work locally.

    3) No profit! No company!

    4) Repeat ad nauseam

    Why do you think we are in the world of hurt we're in today? It's called Lowest Bidder. If you as Foocorp can save a buck manufacturing widgets, you'll save that buck because it means more money in your pocket. The downside is that in saving that buck you're going to put yourself out of business.

    Wait about ten years. The results will be one of two things: depression to rival 1929 or bounceback as a result of these companies fscking over the US economy. Forget your interest rates, they mean nothing - the lowest bidder is causing our downturn.

    • by NineNine (235196) on Friday January 31, 2003 @04:39PM (#5198822)
      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.
    • Lowest Bidder (Score:5, Insightful)

      by Idou (572394) on Friday January 31, 2003 @05:19PM (#5199272) Journal
      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).
    • by dghcasp (459766) on Friday January 31, 2003 @05:58PM (#5199675)
      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...

  • by smack_attack (171144) on Friday January 31, 2003 @04:28PM (#5198702) Homepage
    Any empire in history has subjugated the poor of other nations in order to sustain it's own wealth. The US is acting similar in this regard. Unfortunately for you and I, we do not get to reap the benefits alongside the corporations, we are merely discarded in the process. The term globalization does not mean that we will all live easier and everyone will have a job, it means that the empire will no longer have a home base, just as corporations have become a faceless entity to complain about, they are becoming a stateless entity that is no longer subject to the free market rules. These new global corporations may cut a large swath of productivity, but they move from third world country to third world country leaving devastation and ruin in their wake.

    Today the beneficial country may be India and Singapore, but as wages there begin to climb, those same companies will pack up and move elsewhere to start the whole process anew. There is no ethics in that, and there is no sense of responsibility in global corporations who continue in such endeavors.
  • Good to see... (Score:5, Interesting)

    by pVoid (607584) on Friday January 31, 2003 @04:33PM (#5198760)
    that the slashdot crowd is completely oblivious to all the marches and protests (often violent) against globablisation having *anything* to do with the topic at hand.

    Hmmm... yah. Can't be. Those inumerable people against globalisation must all be out of their minds.

    • Re:Good to see... (Score:3, Insightful)

      by /dev/trash (182850)
      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.
  • by fmaxwell (249001) on Friday January 31, 2003 @04:33PM (#5198767) Homepage Journal
    The submission asks who wins and who loses. That's an easy one:

    Winners
    Overcompensated CEOs
    Wealthy stockholders
    Non-U.S. workers

    Losers
    American workers

    Paying fair U.S. wages, while complying with U.S. regulations to protect the workers and the environment, costs money. So a company can gain a competitive edge by hiring workers in foreign countries where salaries are lower and where such rules do not exist. If some smoke-belching plant across a border can pay people $10/day and work them for 12 hour shifts, then the company using that workforce can realize lower operating costs and, hence, higher profits.

    Folks, this isn't rocket science. All other things being equal, businesses will go with the cheaper source every time. What we need to do, as a country, is to level the playing field. We need tariffs, laws, and fines to discourage firms from outsourcing desirable jobs.

    Screw pure capitalism. Unregulated capitalism doesn't work. That's why we have massive unemployment in the tech sector while desirable jobs are going to overseas workers in impoverished countries. And all the while, U.S. CEOs and other executives are receiving compensation packages that rival the net worth of some small countries. It's time we put our feet down and protected the vast majority of working Americans rather than pandering to the greed of multi-millionaire CEOs.
    • Paying fair U.S. wages, while complying with U.S. regulations to protect the workers and the environment, costs money. So a company can gain a competitive edge by hiring workers in foreign countries where salaries are lower and where such rules do not exist. If some smoke-belching plant across a border can pay people $10/day and work them for 12 hour shifts, then the company using that workforce can realize lower operating costs and, hence, higher profits.

      Folks, this isn't rocket science. All other things being equal, businesses will go with the cheaper source every time. What we need to do, as a country, is to level the playing field. We need tariffs, laws, and fines to discourage firms from outsourcing desirable jobs.

      No, it's not rocket science, it's economics. Let's test out your theory. There are three times as many people in Mexico as Canada, and their wages are a lot lower. Their pollution and safety regulations are probably a lot less stringent, too. So, your theory predicts that we import a lot more from Mexico.

      The truth is we import 68% more from Canada than from Mexico. What a spectacular failure for your theory.

      Hint: read in an economics textbook about wages and productivity. The reason wages are so high in the United States and that we can afford the niceties of pollution and safety regulations is that we are so much more productive. As productivity grows in other countries, their wages rise, too. Forty years ago Japan was a country with wages lower than China has now. But by 1990 wages there were on a par with the U.S. The same thing is happening in Korea, Taiwan, Singapore, Mexico, Malaysia, and so on.

  • Leninism (Score:3, Insightful)

    by McDiesel (447709) on Friday January 31, 2003 @04:33PM (#5198769)
    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...
  • by axxackall (579006) on Friday January 31, 2003 @04:35PM (#5198783) Homepage Journal
    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?

  • Irony (Score:4, Insightful)

    by jmv (93421) on Friday January 31, 2003 @04:36PM (#5198794) Homepage
    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.
  • Let's leave. (Score:4, Insightful)

    by cybermace5 (446439) <g.ryan@macetech.com> on Friday January 31, 2003 @04:41PM (#5198843) Homepage Journal
    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.
  • by g4dget (579145) on Friday January 31, 2003 @04:44PM (#5198872)
    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.

  • by SirSlud (67381) on Friday January 31, 2003 @04:48PM (#5198913) Homepage
    Lots of manufacturing was done in the States (India/China/Asia), because it was too expensive in the UK(US). Gilbert & Sullivan (RIAA) changed all the copyright laws in the US, from the UK, because cultural exports became the UK's (US's) primary source of revenue (unprotectable as they are not physical assets but .. intellectual *smirthy smirk* property) .. eventually the US (3rd world) becomes wealthy enough to revolt in the market against its imperialist economic leash-holders (US) ..

    See .. if us western folk wernt so busy trying to make money to be hedonists, we'd be studying history and realizing that North America is to the rest of the world, economically speaking, what the UK was to the US in the latter half of the 19th and beginnings of the 20th century. Pretty soon all those Americans that laugh at brits for their high cost of living and relative lack of innovation (not that I'm willing to substantiate that) are going to be the Brits .. and prosperous countries will soon be able to afford to enforce labour laws .. and the US won't have the might to push prices down again. And thus, the cycle completes and begins anew .. the US is going to be one hell of an expensive place to live, very soon. And the Land of the 'Free' will just become another ironic misnomer in the passage of time. ;)

    And no, I'm not baiting or making fun. I'm in Canada, and we're probably going down on the same ship .. fortunately we got the mad-on raw materials and cheap dollar, and we've managed to avoid the 75%-of-all-american-jobs-are-in-service-and-retail epidemic fairly well.
  • by linuxwrangler (582055) on Friday January 31, 2003 @04:53PM (#5198965)
    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.
  • by Alomex (148003) on Friday January 31, 2003 @05:07PM (#5199104) Homepage
    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

  • by Logic Bomb (122875) on Friday January 31, 2003 @05:19PM (#5199264)
    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

  • What d'ya expect? (Score:4, Insightful)

    by JahToasted (517101) <toastafari&yahoo,com> on Friday January 31, 2003 @05:20PM (#5199280) Homepage
    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.

  • by grundie (220908) on Friday January 31, 2003 @05:24PM (#5199333)
    I live in Derry in Northern Ireland. This is a part of the world which was a bit like India for a good few years. What I mean by that is a lot of American companies set up operations here as it was cheaper. Near me we have Prumerica (Prudential) and Northbrook (Allstate) doing software and up the street we have a massive DuPont plant. There is also a load of call centres, MSN used to have support for its American operation based here. These are fairly safe purely on the grounds of the geographical location which is good for Europe and America.

    Another sector that was established here was clothing and textiles. In the early 90's Fruit of the Loom set up several factories here, at considerable cost albeit offset by some government grants. So did Lee Aparell and a few other big names. Fruit of the Loom opened two plants near me and 3 over the Irish border a few miles away in Buncrana, Donegal. This was in the early 90s, only one plant is left and that is at risk of closing. Most of the plants that closed didn't last 5 years. The reason? management got uppity at staff joining unions and wanting better conditions and they were afraid of the upcomming minimum wage. So they shipped all the work off to Morocco, where the costs were 25% of the costs here. Even taking in to account the costs incurred building new factories here only a few years earlier it was still cheaper to move to Morocco.

    This is where the weird logic kicks in, what happens when the Morrocan workers decide they want better pay, which will inevitably happen? Pretty much the same thing which happened here, management will not like the unions causing trouble and they will move somewhere else.

    When will big business learn wages are not the only thing to think about when trying to make more money. A happy workforce with job security is a productive workforce, a productive workforce cuts manufacturing costs, lower manufacturing costs means more profits. Well at least I think thats how it works.

  • by pmz (462998) on Friday January 31, 2003 @05:25PM (#5199339) Homepage
    I think the optimistic viewpoint is that the world is heading for an equilibrium. Think European Union only world-wide (I guess the currency would be the Eartho?).

    The main problem in the world right now is unequality from place to place. Consider thermodynamics...where does the heat go? In chemistry, where does the higher concentration go? I know it sucks right now, but we really have to hope for the long term (as long as Gulf War II doesn't screw everything up). Once the Earth reaches equilibrium, then all we'll have to worry about is the cheap jobs going to Khronos or something (the real optimists hold out for universe-wide equilibrium).
  • by gmuslera (3436) on Friday January 31, 2003 @05:33PM (#5199429) Homepage Journal
    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.
  • by Vegan Pagan (251984) <deanas@@@earthlink...net> on Friday January 31, 2003 @05:36PM (#5199453)
    The book How Americans Can Buy American [buyamerican.com] by Roger Simmermaker explains this from a consumer/taxpayer perspective. The book's main idea is that manufacturing companies, regardless of where they manufacture, pay most of their taxes in their country of headquarter , so consumers should buy from companies owned domestically. Then it lists several thousand brands and corporations and their country of headquarter. It's a neat book to bring to the store, but it's also scary to see that companies like Universal Pictures, Stanley Tools and Chrysler are foreign owned. I suppose in the book's next edition we'll see more Indian brands in the IT section.
  • by Apuleius (6901) on Friday January 31, 2003 @05:47PM (#5199565) Journal
    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...
  • by Colonel Panic (15235) on Friday January 31, 2003 @05:52PM (#5199605)
    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.]
  • by watchful.babbler (621535) on Friday January 31, 2003 @06:03PM (#5199725) Homepage Journal
    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.

  • by X86Daddy (446356) on Friday January 31, 2003 @06:24PM (#5199914) Journal
    As many posters have pointed out, one of the results of this process is that other countries are increasing their standards of living. That's great!

    Wealth begets wealth.

    Yes, there's quite the imbalance between my salary and a Fortune 500 CEO's, and that's not changing much. What is changing is that people in other countries are ending up with more money to spend individually, and end up with their marketplace infrastructures being upgraded. India has Internet connections. FedEx delivers in India. The same countries getting the jobs are also becoming consumers and export markets. There is temporary pain like this for us, but there will eventually be ROI. It just sucks when you're the individual out of a job.

    And what happens to us Americans if and when the US faces disaster? I'm not loyal to the US so much as I am loyal to a country that provides:
    • secular government
    • individual liberty and freedom
    • infrastructure (plumbing, 'net connections, entertainment, roads, etc..)
    • livable weather

    If the US crumbles in this endeavor (which I doubt), it will do so while a few other countries outdo the US in the areas listed... some would argue that there are other countries that already far exceed it in the areas that matter to them.

    You too can play the globalism game.
  • by Snake (13761) on Friday January 31, 2003 @06:37PM (#5200012)
    Disclaimer:I'm French, I work in France and my employer is outsourcing about a third of our workforce in India.

    Frankly, I have been expecting this for about a year or two: if you can/could telecommute, what prevented your employer to outsource your job?

    The developed countries have been outsourcing blue-collar jobs to developing (really low-wage) countries, thanks to the development of international transportation for moving the goods all over the world. Those jobs go now wherever the workforce is the cheapest

    Every single part of computer hardware you have in front of you, has been made in Anywhere But US/Europe/Japan(TM). I hope you enjoyed playing/working with your computer, because karma is a b*tch.

    Today, the internet allows the transportation of knowledge, voice and data all around the world. Of course, your job will go elsewhere.

    Heck, if you think about it, you can see that no one is really safe from this:

    • lawyers (you just need some meat in the court house, everything else, including C&D :), is outsourcable paperwork)
    • doctors (the remote chirurgy we dreamed about with Internet2)
    • teachers (online schooling anyone?)
    • people in the movie/entertainment industry: Bollywood [rediff.com] could cripple Hollywood (Selling low-priced non-crippled CD and non-DRM DVD should be straigthforward for the Indian majors)
    Here is some food for thought:
    • On my desk, there is a book borrowed to a co-worker. Microsoft TCP/IP for Windows 2000 by Powell (ISBN: 0761529373)
    • This book is currently sold at Amazon for the low-low price [amazon.com] of $49.99
    • The indian version, really a reprint for sale only in India, sold at prakashbooks.com [prakashbooks.com] is offered at Rs. 276.50 (about $5.78) [yahoo.com]

    My predictions are:

    • Salaries won't increase much in the developed countries in the near future
    • Due to rising unemployement and stagnation of buying power, the price of most goods will most likely be decreasing.
    • in short, US and Europe will experience what has been plaguing Japan for years: Deflation.
    • yet, the outsourced jobs will allow the developing countries to develop more and possibly enable them to buy us goods we have yet to invent.
    • furthermore, I guess there is a limit to the number of jobs they can import: those jobs require education AND generate other paying jobs. Sooner or later, the sucking noise will peter off.

    So, what does it mean for me?

    • I am not going to deny anyone the opportunity to get a better job, even if it is mine: his race, his/her gender, his religion, his nationality or his living place are not important.
    • I believe this is a Good-Thing for the humankind, as a whole. So, I will have to cope with this, to the best of my abilities
    • I am currently evaluating my options. They include:
      • Making myself more productive by working smarter (not harder!)
      • Moving to a place with a low-cost of life. I can telecommute globally as well as anyone :)
      • Steer my career path towards high value-added jobs (which one, I don't know yet :)
      • Or a combination of the above
      • Or recycle myself in other fields (maybe a doctor? There is a growing shortage of surgeons in Europe and remote chirurgy won't allievate this. I am pretty positive that middle-aged people will be allowed to go to med schools within the next 5 years)
  • by Dr. Spork (142693) on Friday January 31, 2003 @06:40PM (#5200036)
    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 $$$.

  • by Alex Belits (437) on Friday January 31, 2003 @06:54PM (#5200130) Homepage
    After WWII US dollar became the only currency left standing -- every other country that had an economy good enough to support international trade in its own currency was devastated, US remained ok (because it was separated from a war by the oceans, and please shut up about what others "owe" to the worst military among allies in WWII).

    What followed was a horrible abuse of this "de-facto international currency" status, the (number of dollars abroad)/(amount of products traded abroad for dollars) was significantly lower than the (number of dollars in US)/(amount of products traded in US). In other words, everything was cheaper abroad and expensive in US, so US simply printed dollars (or, to be more precise, created them as Federal Reserve loans) and injected them in this system. The system worked through osmosis, it became easier to buy products abroad, sell them in US, pocket the profit and call yourself a rich company while producing nothing, and merely exploiting the slowness of trickling of dollars abroad by making it a bit faster.

    Of course, due to this difference in prices, and efficiency of non-export parts of foreign countries' economies, US citizens could hear blood-curdling stories about low salaries abroad, when they were counted against US dollars, however it was nothing but a propaganda trick -- the prices difference was not taken into account, and the lack of reliable currency conversion rates for countries and products not involved in trade with US allowed for absolutely ridiculous numbers. Just look at GNP figures and think, how is it possible to have such a disparity, yet people don't starve everywhere abroad. So for US citizen there was no visible difference between indeed starving people in Cambodia and rather prosperous people of India.

    However everything comes to an end. "Osmosis economy" can't run forever, and just buying stuff while racking up trade deficit becomes more dangerous, and other currencies (mostly Euro) issued beyond the US control are becoming used in international trade. However US companies can't expand the production within the country -- educational system and media prepared only consumers for them, there aren't enough people that can and are willing to produce something, they would rather accept sliding quality of life for themselves. So US proclaims itself to have "service economy" (aka doing each other's laundry) and "high technology" (aka having a lot of engineers). The problem is, "service economy" is big fat zero unless it supports production of something, and engineers in US meet just as much competition from foreign engineers as US workers did before, therefore all the outsourcing you can see.

    So US as a whole became an arrogant, unskilled and incapable of supporting itself nation by abusing currency machinations -- something that often happened to individuals and now happened to the country as a whole. And here is the sucky part -- crook that lost his money does not harm millions of people that ARE capable of productive work yet happened to live in a country where the macroeconomic processes deny them this work.

    If US wants to restore its currency system to something usable, sooner or later it must significantly devalue dollar, and possibly tie it to valuable commodities (say, gold) and stop the "osmosis" forever. If US wants to restore its production capability it must rebuild its educational system. And if US wants to get people capable of doing productive work now and not in 20 years, it must reduce barriers to immigration. All of those measures will without any doubt decrease "quality of life" -- at leasr temporarily, and at least for some parts of the population. However the only alternative to them is accelerating slide into poverty, and turning the country's economy into an equivalent of giant failed dotcom, like flooz.com x 1e6.
  • by Proudrooster (580120) on Friday January 31, 2003 @07:02PM (#5200193) Homepage
    One of these days, Chairman Mao [art-bin.com] is going to call the President of the United States and tell him to surrender.

    Chairmain Mao will explain that Chinese Corporations are the subcontactors to the subcontractors to the subcontractors of the Department of Defense Subcontractors and furthermore; China now makes ALL the key components for ALL of America's military weapons and machines.

    Then he will let out an evil sounding Chineese Laugh! (The kind you hear in James Bond movies.)

    How can the US maintain it's power if all it's strategic manufacturing capability is located offshore? Recently, we nearly lost the US Steel Industry and it's not over yet.

    Sure we have rules and laws which on paper prevent this sort of problem, however as the FDA recently found out in the "Tainted Strawberry Harvest" [fda.gov], these rules are not always followed. In this specific case the FDA had rules that all food used in school lunch programs must be grown in the United States. The subcontractors decided to ignore the rule and subcontract from Mexico and imported 1.7 million pounds of Hepatitis laced frozen Strawberries. The good news is that the fraudulent company was the lowest bidder and we saved tax dollars.

    I won't even comment on the strategic technology which has been leaked [thenewamerican.com] to other countries by defense subcontractors.

    Greed will destroy us!
  • Economy not static (Score:3, Insightful)

    by enjo13 (444114) on Friday January 31, 2003 @11:06PM (#5201539) Homepage
    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....
  • by Colonel Panic (15235) on Friday January 31, 2003 @11:56PM (#5201766)
    And Asok has an intern named Dilbert.

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