Globalization Decimating US I.T. Jobs 1102
mrraven writes, "According to Ronald Reagan's former deputy secretary of the treasury in this
article in Counterpunch, globalization is destroying US I.T. jobs. From the article: 'During the past five years (January 01 – January 06), the information sector of the US economy lost 644,000 jobs, or 17.4 per cent of its work force. Computer systems design and related work lost 105,000 jobs, or 8.5 per cent of its work force. Clearly, jobs offshoring is not creating jobs in computers and information technology.'" Paul Craig Roberts quotes a number of formerly pro-globalization economists who are now seeing the light of the harrowing of the US middle class. It's not limited to I.T. Roberts quotes one recanting economist, Alan Blinder, as saying that 42–56 million American service-sector jobs are susceptible to offshoring.
Re:Not decimating (Score:3, Informative)
Re:Not "decimating" (Score:3, Informative)
17.5% would be like decimating... and then decimating the survivors.
Re:In more trouble than most realize... (Score:5, Informative)
Re:Speak for yourself I never liked globalization (Score:5, Informative)
See: http://democracynow.org/article.pl?sid=05/11/08/1
followed by: http://www.democracynow.org/article.pl?sid=05/11/
As for Noam Chomsky he has been documenting U.S. war crimes in places from Nicaragua to Vietnam for 40 years now. He is an American hero and if the MSM dared to give him a voice and people were made aware of the level of violence the U.S.government has committed against the world we might see new leadership in the U.S. and live in a much more ethical country. Of course we will never see that because it would threaten the corporate bottom line.
If you were to listen to Democracy Now and read a Chomsky book you might actually learn something. Of course it's much easier to not to read or listen and just smear with a cheap ad hominem attack, right?
Re:Boo Freaking Hoo (Score:3, Informative)
Daimler Chrysler are in dire straits, and a lot of their manufacturing has gone off-shore (the commodity Mercs are mostly made in South Africa, for example). They have a terrible repuation for quality, costs are through the roof and they are losing money.
Nokia I'll give you, but Finland's economy is not to be confused with Sweden.
Porsche are in a small niche where they can basically charge what they want, but still rely on VW for a lot of basic work (the Cayenne floorpan is a Touran floorpan, and VW picked up the bills).
BMW make money, but again quite a lot of their manufacturing is off-shore. They got a bloody nose a mile from here when they had to bail out of Longbridge, though, so their touch is not perfect.
ian
Re:It's not the globalization. (Score:4, Informative)
Here are some of the costs:
Housing: The cost of a house in Delhi or Bangalore can range from $100K to $2 million.
As a practical example the flat I live in on the outskirts of Delhi costs, $120K and its
quality is nowhere near that of the two bedroom flat I use to live in on the outskirts
of Seattle. For example, running water is not available for more than an 45 mins a day.
The absolute quantity I am able to use is about 25 gallons per day. Compare this with my
usage of 120 gallons per day in Seattle. Electricity is only available for about 18
hours a day and typically not available when most needed (5-8 am, and 7-9 pm) BTW the
local electric utility charges me at least 2 times more per kWh.
Car: My car (a Honda) costs about $18,000. I pay an interest rate of 15% on the car loan.
It is also less safe. A better model sold in the US costs a little less. The US
model comes with a more poweful engine and is equipped with airbag. Auto insurance
will rarely cover the cost of hospitalization in the event of a serious accident. Delhi
is amongst the most dangerous cities in the world to drive in.
Internet
Connectivity:
Internet connectivity costs about the same per month as it does in the US ($20 pm for
a DSL connection), but the speeds are between 256 and 512Kbps, significantly
slower than that available in the US for a comparable price.
Several other things that relate to quality of life are poorer. But most people already know that.
My income is lower though, by a factor of about 4 to 5. (I earn about 30K a year, ).
So in sum, I'm simply poorer than I was in the US.
I am also less productive than I was in the US.
It is true that compared to the average Indian, with an income of $450 a year, I am fabulously wealthy, but that is an unfair comparison. A more appropriate comparison would be with folks similarly qualified: I am an engineer, with an undergraduate degree from a good Indian school, masters in CS from a reasonably good,(top 20) US program, and an MBA from an Ivy league school.
Nothing specatacular, but probably above average. My peers with such a background would earn significantly more.
Don't get the idea though, that I'm whining here. Indian IT is a bit like the Wild west. The
potential opportunity, for creating new businesses is enormous, and this was one of the reasons
I returned to the country. There was never better time to be a capitalist in India.
Those who oppose the H1-B program on the grounds that it takes away American jobs, and
lowers the wages for American workers, seem to be overlooking a very significant issue. The
You can't really trust that website (Score:2, Informative)
Here are some reputable sources:
http://www.usnews.com/usnews/biztech/articles/060
http://www.usnews.com/usnews/biztech/articles/010
http://money.cnn.com/popups/2006/moneymag/bestjob
Especially check out that last website. Top Job: Software Engineer.
"Software engineers are needed in virtually every part of the economy, making this one of the fastest-growing job titles in the U.S"
Re:Speak for yourself I never liked globalization (Score:2, Informative)
Professor Chomsky was busy documenting American war crimes while writing books glossing over the butchery of two million cambodian civilians: http://www.amazon.com/After-Cataclysm-Indo-China-N oam-Chomsky/dp/0896081001 [amazon.com]
Professor Chomsky used the following argument to discount testimony by refugees that a slaughter was in progress, saying we should be wary of "the extreme unreliability of refugee reports": "Refugees are frightened and defenseless, at the mercy of alien forces. They naturally tend to report what they believe their interlocutors wish to hear. While these reports must be considered seriously, care and caution are necessary. Specifically, refugees questioned by Westerners or Thais have a vested interest in reporting atrocities on the part of Cambodian revolutionaries, an obvious fact that no serious reporter will fail to take into account"
He has never apologised for his stance on Cambodia.
Re:We're all guilty of this. (Score:3, Informative)
I'm not really an economist, but I play one on the internet. No really, I've never had formal education, but I've spent the last several years studying global trade and economics on my own time. So I guess you could say I say the following as a somewhat informed laymen(and many people will no doubt disagree)
Tariffs are a not a good idea, given where we are now. We are actually at a very worrisome point that most are blissfully unaware of. Inflation has been picking up and economic growth has been slowing down. The way the Fed fights inflation is to raise interest rates, but if we raise interest rates now, barring some unforeseen good fortune, we would most likely end up in a recession, with some very real reasons to fear a depression. One of those real reasons to fear, is that higher interest rates, translated into a stronger currency, could accelerate the offshoring of jobs even further. All the globalist cheerleading bullshit on here aside, the world better give a shit if the US economy goes down, because it will be felt around the world.
The answer IMHO, is that our currency needs to devalue further. A devaluation of our currency would lead to higher prices for our goods, BUT, it would also make our labor more cost competitive. I'm all for higher prices if it means the good of our country's economy. But unfortunately, as greed got us to where we are now, I fear that our individual greed will cause us to go the route of protectionism, rather than take our licks like men, so to speak, and accept higher prices for the greater good.
Of course, China needs to float their currency in order for this to really work, and they seem to be dragging their heels on this. This is a good short term strategy on their part, they are essentially expanding at the expense of our economy, but the long term repercussions for them could be bad.
Re:Who is this "you all"? (Score:3, Informative)
About the gold that came from South America mines, at least what my History teacher told us that the most of it was spent by Charles V (I of Germany) in the wars He had in Belgium (Flemish part). Most of the gold that was arriving in Seville, was sent to suppport the armies that were sent around Europe and in other parts of the world. Do not forget that Filippus II, Charles son had the biggest empire ever known in the world. To maintain this, you needed lot of gold, loads of it.
Enough about old Spanish history (which I am not very proud of, actually). Our recent history after the 70s was different. We took profit of globalization, and main manufacturer industries landed in Spain because of the cheap and valuable labour, mainly automotive industries. Of course, this helped in improving our economy but in the end this cheap labour turned into a more and more expensive labour and companies started to think to move to eastern countries, Slovakia and other ones. In the end, some companies moved and other stayed, to get a qualified and productive group takes lot of time and resources and it is not just a matter of moving one factory to a different country. Some companies that moved to eastern europe countries, they changed their mind and went back, since they realized those factories were no so productive, as someone mentioned, the percentage of errors were very big and it was not worth the cut of costs...Anyway, former comunist easter countries had very well educated people and they are becoming European Union countries, so this situation could change...
Recently I was asked by an English colleague if our company was outsourcing. It is not the case in my company, since normally the client was always in Spain and you needed to sit next to fullfil the requirements made by the client. He told me that in their case was not so good, people from India were very talented, but they did not share their views and reach agreement was not always easy.
I have recently read that wages in India are increasing (which I think is good) and companies are starting to look to China. As someone has mentioned, people are not free there, unions are controlled by the Goverment so they assure the companies that nobody would complain. Some friends that travelled to China, they told me that in some companies the employees even sleep in their companies!
And finally, myself I am trying to find a job in the US, since my girlfriend was one of the thousands of Europeans (and other countries as well) that moved to the US for a post-doctoral fellowship for two years, and I wanted to learn how the Americans do. I was assuming that in America things are different that in Spain or in Europe, where interns are doing the job and when after two or three years hacking any code, you are kept away from keyboards and start coordinating other interns...My assumption is that in IT, in the US, you have a longer career from Junior, to mid or senior employee and talent is well seen (and paid). I just want to point out what I have seen so far in the US wages. The average Spaniard Junior programmer in IT earns 18-20K Euros (which could be around 26K USD). A senior administrator or programmer could not earn more than 36-40 K Euros which is less than 50K USD and although in the rest of Europe the situation could be a bit better, nothing compared to the US wages and most of this difference is because of the strength of the Euro. At least in Spain the standard of living is not very far from the US standards, at least what I have seen from my girlfriend living in Baltimore. Renting an appartment i
Re:In more trouble than most realize... (Score:5, Informative)
IIRC, they were regulated under a CAPM regime. Under the Capital Asset Pricing Model, regulators allow for a "fair" rate of return on invested capital. (The definition of "fair" might or might not include a reduction or negative premium to account for the near-zero risk, but that's not relevant to my point.) So, regulated monopolies such as AT&T had a very strong incentive to boost their fixed assets. Any "investment" (i.e., spending) they could capitalize would go into their rate base, which would allow them to earn more profit. (They also had an equally strong incentive to use the slowest depreciation accounting methods, thereby extending the allowed earnings on those "investments".) It doesn't completely explain their investments in R&D, but it does help explain the very posh nature of the physical plant at the old Bell Labs, for example.
But it goes to show if you're going to waste money, at least you should waste it on something useful.
Not really. The lesson was, "if you're going to waste money, at least convince the regulators that it was 'investment' and not 'spending'".
Re:In more trouble than most realize... (Score:1, Informative)
http://en.wikipedia.org/wiki/Paradigm_shift [wikipedia.org]
http://en.wikipedia.org/wiki/Core_competency [wikipedia.org]
Re:Speak for yourself I never liked globalization (Score:4, Informative)
Not correct. White Phosphorus, although a chemical, is not a chemical weapon within the meaning the the Chemical Weapons Convention [bbc.co.uk]:
White phosphorous is no more of a "chemical weapon", as normally understood, than napalm. Or course, flame weapons have been subject to controversy of their own.
As for Noam Chomsky he has been documenting U.S. war crimes in places from Nicaragua to Vietnam for 40 years now. He is an American hero and if the MSM dared to give him a voice and people were made aware of the level of violence the U.S.government has committed against the world we might see new leadership in the U.S. and live in a much more ethical country. Of course we will never see that because it would threaten the corporate bottom line.
There are other [opinionjournal.com] views [frontpagemag.com] about Chomsky. And it isn't the corporate bottom line I would worry so much about....
Left-Wing Monster: Pol Pot [frontpagemag.com]
Re:In more trouble than most realize... (Score:4, Informative)
Actually, the real problem is that IT management is so impressed by the initial dollar savings that they are completely oblivious to the utter lack of quality in the work coming back from offshore. Our organization has outsourced about 2/3rds of its internal development to one of the largest companies in India (InfoSys). The product we receive back from them is consistently of poor quality, bug-ridden, and unmaintainable.
Unfortunately, upper management is still so pleased with the low hourly rates that they're not realizing that in the long term, they're paying for three times as many hours than would be necessary if the software were written correctly in the first place. I don't have much hope that they will come to their senses -- this has been going on for four years here now.
Re:In more trouble than most realize... (Score:4, Informative)
Outsourcing without offshoring is usually a positive strategic choice, and a result of businesses moving non-core activities to firms more focussed on that activity and likely to be more efficient/effective at that activity. For instance, most large firms outsource their catering to an external provider. It may have some effect on the overall job market, but usually just means that your role gets moved to a more specialist employer. As this is a move based largely on specialist people being able to do the job better, costs should stay cheaper.
Offshoring, on the other hand, is almost always negative and tactical and little more than a race to the bottom on simple employee cost (usually as a result of poor employment regulation/health and safety/general standard of living etc in the target country). Eventually, however, increased demand for jobs in that country will force wages up, and the only option is to move on to the next cheap economy.
Re:RD Offsored Too. Everyone SOL. (Score:5, Informative)
If someone hoards a huge amount of money and keeps it out of circulation, then the market adjusts and starts to behave as if the money no longer exists, causing deflation, which is an increase in an individual dollar's purchasing power. Now, inflation and deflation are the opposite of each other, and both have their pros and cons.
Inflation is good at fighting unemployment, as the continual decrease in purchasing power is an effective way of circumventing minimum wage laws. E.g. if the minimum wage is 5 dollars per hour, and there was an inflation of 5% during the following year, then the real wage, i.e. the purchasing power of the 5 dollars have decreased by 5%. Thus employers are now effectively paying 5% less to their employees, even though the amount of dollars paid is the same, and this means that it now becomes profitable to employ people for less productive work, resulting in an decrease of unemployment.
The downside of inflation is the reduction in PP, and the higher demands on ROI. If inflation is 5% a particular year, and a company's profits grow only 3% that year, then the real profit of the company has decreased. This also works on a individual level, i.e. I have 5000$ today, wait a year, and then I have lost 5% of my wealth, even though the amount of dollars I have is unchanged. What this results in is that any investment that has a ROI that is less than inflation, is actually making you poorer. No need to wonder why stockholders/owners/investors demand ever-increasing profits from corporations, inflation is the culprit.
Deflation is pretty much the exact opposite. If there's a deflation of 5%, then even investments with a negative ROI are profitable as long as deflation is higher. This makes having money lying on a bank account a good investment, as you'll be able to buy more stuff with that money after a year.
Of course this also increases unemployment, at least unless the minimum wages are decreased at the same rate as deflation.
Another bad/good side of inflation/deflation (depending on if you have debt or have borrowed money to others) is that as the PP of a dollar increases, the real size of a debt also increases, which is bad for those who have debt. Again the opposite is true.
IANA(K)E, which could be seen as a good thing, depending on which school you follow.
I smell bullshit... (Score:3, Informative)
"IT employment in the United States has reached a record high of 3.472 million in the 12 months ended March 31,
surpassing the 3.455 million IT workers employed the previous quarter and at the end of the third quarter of 2001, the height
of the dot-com employment boom, according to InformationWeek's analysis of Bureau of Labor Statistics data."
This also jibes with what I heard when I had lunch with my recruiter last week; he says the market is very strong at the
moment. The automated query emails I get from dice.com and monster.com also show a decent job market, at least in the
RTP area of NC.
Has globalisation affected jobs in the US? Possibly, but is the sky falling like these people are making out? No, not even close.
And if it was, the answer isn't more protectionistic polices and government meddling, it's making the "free market" more free
so more people have a chance to try and create wealth for themselves.
Re:Boo Freaking Hoo (Score:3, Informative)
Garmant makers (in some cases very young girls) are paid very low wages and work in abysmal conditions outlawed in the US in the 1920's. See the recent movie, "The Corporation" for examples.
IT workers- last I heard- made about $12 to $15k- or about 1/6 of american wages for the same skill set. However- they are experiencing as high as 40% inflation per year. Their work quality has risen a lot, they are sharp, and *highly* motivated (like the japanese were). Currently several thousand commit suicide every year when they fail to get into the desired schools. Their children will not be most likely (like the japanese again).
Despite being extremely inexpensive, many outsourced projects result in no net savings and are late. The main difficulty is cultural, and a loss of a work day everytime there is a significant question- not worker quality. Turnover in india is pretty incredible right now as well which can make stable staffing difficult (but we've had no problem with our off shore guys who work for a very large offshore co).
Bottom line tho- I agree that there is no basis for stopping IT offshoring. Multi-national corporations will relentlessly push this as long as their is an extreme wage difference. And *consumers* of all nations will relentlessly push it every time they pay $19.99 instead of $26.99 for similar products.
Likely result in the US will be that people will stop entering the bloody field, supply will dry up, and if you have the right skill sets, wages for boots on the ground will go up. I've been in IT since 1985 and make a very good wage supervising a mixture of onshore and offshore guys and gals. We have a pretty severe labor crunch coming in the US starting in 2012. Given the loyalty shown to the american worker by business, I'm really looking forward to that time. Payback is a bitch.
Re:In more trouble than most realize... (Score:4, Informative)
If excessive taxation caused the middle class to shrink, Europe would have a small, rich, wealthy class, and throngs of poor people, and relatively unregulated, untaxed places like Africa and South America should have a burgeoning middle class.
But in fact the exact opposite is true. Places without regulation like South America have a wealthy, ruling class of a few, well-connected families. The other 95% of the population are living on the edge. It wasn't until I lived in South America that I saw homeless families -- mom, dad, and kids -- living on the streets. Until then, I had thought that a homeless person was just a crazy guy who heard voices and couldn't hold down a job.
So then in Europe, with high taxes, extensive regulation, and strong unions, we see the largest middle classes and the highest standards of living. So, the reality is the opposite of what your theory predicts. The states with the most regulation, highest taxes, and stongest unions are those with most highest per capita income and the highest standard of living.
Without government regulation, greedy wealthy people will exploit the average joe to maintain their wealth. There are good, honest rich people who want to treat people humanely and compete fairly in the marketplace. However, they are quickly outcompeted by rich people with no ethics, who have no problem bribing officials and having people killed to get what they want. You can't compete with a cheater when you are playing fairly. So what happens is that a kleptocracy arises -- the best cheaters rise to the top.
What government regulation does is keep the game fair, so that honest players have a chance at winning. It's not a perfect solution, but it is far better than the alternative.
Again, I with you would think more critically about these issues. As the slashdot sig goes, the plural of 'anecdote' is not 'data'. I am glad you and your friends are having a good experience with work, but your situation is not representative of reality for most Americans. You can't just look at what is immediately in front of you and think, "Things are going well for me; therefore, things are going well for all Americans."