Is India To Blame For The Jobless Recovery?
from the missing-the-point dept
It's becoming increasingly popular among techies to bash Indian outsourcing. We've discussed this before, but two articles were submitted this morning by different people, and you can sense that the rhetoric is getting worse. The anger is misdirected and if it continues, it will end up costing the American economy more jobs than it saves. First, we have John who submitted a story out of Australia saying that India is to blame for the so-called "jobless recovery" of the American economy. Then, Kevin K aka EMC Guy submitted the story about how techie jobs are "booming" in India, which reads like an article talking about engineers in Silicon Valley four years ago (ah... how quickly things change). Both were submitted suggesting that this is bad and that somehow these jobs were being "stolen" from American workers. First, this is clearly a problem for American techies. Too often, they find themselves in the position of competing against someone who takes only 1/6 their salary. However, blaming India or the US government doesn't help. It makes the problem worse. If the US started focusing on protectionist policies that forced American companies to keep the jobs here, we would, in many cases, become uncompetitive. The American companies would end up failing - and all of those people would be out of work anyways. That does not help solve the problem of helping to find new jobs for American techies. I think the rush towards outsourcing is overhyped. Many companies are going to realize that there are serious additional costs in offshoring such a large percentage of their workforce in certain cases. Already you hear stories of slower production cycles as coordination between US and offshore offices creates a "we can only make one decision a day due to the time difference" situation. However, many jobs are going to keep going to India (and China and elsewhere). This should be looked on, in some ways, as a good thing. Newer products are being produced that are being sold at a lower cost to a recovering business sector. The trick then, for American techies is to position themselves for jobs that require a local presence - such as customer facing jobs. I don't deny that it's annoying if you're a techie right now, but two trends are likely to emerge: (1) companies will find that they went too far in outsourcing certain jobs and (2) new jobs will begin to open up in the US as well. What techies need to do is figure out where those jobs are going to be, and prepare themselves for them. Complaining and blaming India does nothing to solve the problem.
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Mike is still employed
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Re: Mike is still employed
Can you explain how this sort of attitude stops the jobs from going away?
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Re: Mike is still employed
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Re: Mike is still employed
Can you explain how this sort of attitude stops the jobs from going away?
Simple. The slashdot crowd showed up.
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No Subject Given
None of which helps if you are an out of work programmer.
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Re: No Subject Given
Programming is not "grunt work," it is the principal creative act of software development. I'm sick of hearing people make your claim, and say that software developers should all become architects and leave the lowly programming to others. (After all, programming is mere secretarial work, right? MBA types don't understand it and it involves lots of typing, just like Word, so it must be secretarial!)
If you believe that a priesthood can do requirements analysis and design/architecture for a complete system then "throw it over the wall" to some low-paid "grunts" for implementation, and get a good product as a result, I don't think you've spent much time in software development. That's almost always a recipe for utter disaster. Even when it's the same people doing everything in phases, the waterfall methodology doesn't work very well for producing high-quality software on time, on budget, and that actually meets the real business needs of its customers.
Take a look at Extreme Programming for a better way to develop software. One that does work very well for producing high-quality software on time, on budget, and which actually meets the real business needs of its customers. And one that, coincidentally, is hard to do off-site much less off-shore.
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I submitted earlier this week
Mike - you raise the point in your story that if a company doesn't outsource the work to people willing to work at 1/6 the salary then that company can't be competetive and will go out of business. That's only true if the competetion can also outsource to people with 1/6 salaries as well. If NOONE can outsource the work to foreign countries and all the work has to be done locally, then everyone is on the same footing and the competition boils down to who's willing to work on the slimmest margin.
There are a *lot* of IT people out there who make way too much money for what they're doing (I'm one of them) and there are a lot of unemployed IT people who would gladly take less money than they are accustomed to in order to go back to work, but right now all the employers would much rather send their work to a place like India where they can get the work done for 1/6 the price and too bad about all those poor unemployed people.
When you look at other countries, especially Europe, that have all sorts of laws concerning employment of foreigners over locals, the idea of U.S. laws promoting the hiring of locals isn't too far-fetched.
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Re: I submitted earlier this week
Thanks, first of all, for making a good point and explaining your position fully, rather than just taking a potshot, like some others seem to be doing.
I understand what you're saying, but I disagree. Your argument, I believe, is that by blocking the ability to outsource, then all American companies remain competitive. The problem is they only remain competitive with each other. Suddenly, those Indian techies won't be working for an American company, but a foreign one and will be building the same software.
This is an even worse situation. Suddenly, the American companies can no longer compete at all. Non-American companies that hired their old Indian programmers will now be competing with much cheaper software.
We are facing a global market, and forcing American companies to be less competitive hurts the economy in the long run (and even in the not-very-long-run).
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Re: I submitted earlier this week
Why does MS need to outsource to a bunch of towelheads? Surely Billy's got enough dough already.
Let's level the playing field. If the European nations already have stuff in place to limit hiring foreigners over locals, let's follow pace.
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Re: I submitted earlier this week
Riiiiiiiight. And we all know how competitive European nations have been lately.
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Multiculturalism BITES !
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Pay my school loans
Fuck you Mike.
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Re: Pay my school loans
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Re: Pay my school loans
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Re: Pay my school loans
You mentioned taking customer facing jobs. I would gather your referring to Burger king or the like? Hmmm, MSCE based positions tend to be customer facing, but those are going too aren't they?
Either way, it all points to highly paid and highly skilled positions leaving this country. What could be next Doctors? Why even bother going to school then and taking on loans in the thousands all for nothing. If the average indian can live very well with say $11,000/annum then what do you think their tuition would be?
This is not competition. This is saturation of the market by cheap workers.
just my two cents.
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Re: Pay my school loans
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Re: Pay my school loans
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Re: Pay my school loans
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Re: Pay my school loans
You've not paid my school loan and I fail to see a correlation between school loans and social security.
You don't deserve SS because your not an American.
Got it ?
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Re: Pay my school loans
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Re: Pay my school loans
Visa restrictions will only accelerate the migration of jobs to India. Once your pricing structure includes cheap labor, and you figured out your margins, it's really hard to reverse it.
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Re: Pay my school loans
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Re: Pay my school loans
Moreover,typically an Indian speaks reads&writes at least two Indian languages plus English. So boys wake up. Get your basic facts right before u suffer anguish.
The problem in IT field in US/EUis that Top FIVE audit/ consulting companies in USA have IT consulting arms. They would use their influence to secure highly lucrative contracts in IT/ hardware/software upgrades from their clients & farmed it to Indian companies in Y2K era. Corporate USA spent $200 Bn on Y2K. Most later realised that the Y2K was just hype.Wasted money .
ALl know all corporate companies have skeletons to hide in their audits & B/L sheets.Hence such contracting created IT jobs at 4-10 times salary in other industries at typically $100/hr was minimum upto $500/hr.Most TOP exec have also their fabulous salaries promoted by these firms . Hence naturally such firms had to be paid off . This has created artificial islands of high salaried category in the world.
IT is hyped as high tech.Really speaking it is hardly high tech. A mason job is equally skilled
& high tech.But that skill has no hype around it.So also skilled contruction workers.Something similar is happening in India. Software companies pay 5-10 times industrial salaries in India creating huge gap in incomes.
Further average age in top 5 software companies in India is below 30 years . Those above 30 years get weeded out unless they are smart to make it top or start out on your own.In India now there is no retirement age while in USA 25 Mn merican will retire at 65 years while in India retirement is at 58 years.Only govt employees now do achieve that.In private sector those above 35 /40 are now in firing line in any industry as massive educated manpower is surging into job markets . So this globalisation in IT has destabilised millions in above 40 years bracketin India.Over 2mn jobs have been lost in organised sector. So yr problem of 2 Mn job loss in US IT sector is simulated in India too.
The solution is that companies should officially allow people to have two jobs & working hours are reduced to 6 hrs/day universally& salaries scaled down in all high salried sector in USA.Imagine an airline MD/CEO in USA drawing $35 mn /year because he has turned around the loss making airline in 3 years, only to bust it 2 years later. So USA is suffering from overdose of hype -- resulting in massive money making by few with titbits to others. Just reflect Keanu Reeves gets paid $75 mn for 3 Matrix movies.Or Jack Welch retirement plans includes cost of toilet paper
USA is just illusion. At same time over 40 mn American line elow poverty line, barely surving. Typically only 1 in 5 American kids reach to PhD level education. Why ??? Think. All these issues are inter-related.
Again those US companies that outsource IT jobs have their stock values soaring. Such companies also fuel political machine in USA.So IT techies are cannon fodder.So American public themselves are to blame. Money actually grows on trees - in stock markets.So buy some stock & u might be able to pay back ur loans.That is only way. For that beg,borrow or steal.But then that is how it has been all over the world. That is why US has world largest prisoner population too - 1 mn & expected to go up to 2 mn soon. Bye
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Re: Pay my school loans
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Bad trends in the economy
As for grunt work shipping out and design work remaining, well, thats true to an extent. For now. But look a few years down the road. How is the next generation of designers/architects/etc going to learn their jobs? How are you going to be able to design anything if you don't have an indepth knowledge of the basics? Where is the future corps of designers/architects going to come from?
Probably not from school. Most of our colleges do a poor job of preparing students for the realworld of work.
Your top people must have a hands-on education based on working up from the low level jobs. That means doing the grunt jobs. Oh sure, perhaps you can get some hands-on thru open source projects or some such, but that will only work for a small percentage of techies.
There is a fundamental difference of viewpoint going on here. The globalist, freemarket, competition-is-good side, and the nationalist, protectionist, anti-competitive side. Both sides have strong positives and strong negatives. Neither side is "better" or more "right" than the other. Which side will prevail is uncertain.
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Re: Bad trends in the economy
Economically, free trade is an absolute good. What that means is that, for everyone but the person losing his job free trade benefits both sides. Yes, that means you benefit when you lower your trade barriers even if "the other side" doesn't. (refs and further discussion in a followup, if comments want it).
However that's cold comfort to those who do lose their jobs. The best fix for them is to help them directly, not indirectly. Unemployment and retraining benefits are far better than forcing everyone to pay a "tax" via trade barriers. The trade barriers not only cost everyone, but they slow economic growth going forward.
The right fix is to dismantle these barriers (e.g. all that price support to farmers -- pay them welfare instead) and take the money you save and give it to those who are directly affected.
In short, I'd rather pay someone unemployment than erect a trade barrier in the hope of giving them a make-work job.
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Re: Bad trends in the economy
Look at the bright side here. At least you know who is reading the site...unemployed programmers :)
It's a joke people, a joke.
I wasn't arguing above that doing all the creative, architectuaral work here and throwing the design specs over the wall for translation into Java or C is a good thing, just pointing out that that is how it is being done. Personally, I think you need more of a feedback loop in the software development process than is attainable via the outsourcing methodology.
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What about areas with shortages
Getting "retreaded" as a pharmacist or whatever isn't a possibility for a lot of IT workers - it takes time, money, loans, etc. For those people I don't know what the solution is, but as a practical matter you can't make it illegal for Dell to hire people in India. You can't make internet connections and long distance calls illegal. You can try to influence people to not buy from companies who do this practice, but history has shown that doesn't work either. Since this is the case, you have do adopt somehow - crying to the government or blastic people who point out economic realities won't change things. There is no physical movement of goods involved so "trade barriers" won't work.
Sadly, the outsourcing trend in IT and phone service is probably going to continue and those U.S. workers are going to continue to get hit hard. This happends to industries from time to time and the economy moves on. I don't remember anyone crying when literally hundreds of thousands of oil workers lost their livelihood in the 80s (including my father). Steel produciton is a fraction of its former self (and recent steel quotas did nada to help domestic hiring). Ditto textiles. These people had to find another trade. I considered this myself during my own stint of unemployment, but did manage to find something before I had to, so I am one of the lucky ones. I still have to keep an eye on the future, but some government guarantee to help my industry isn't the solution - it won't work.
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Hypocracy again
So Indiana is outsourcing to India. Hands up Indiana taxpayers willing to pay 6x the project costs just so local rednecks can keep their jobs?
Didn't think so.
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Re: Hypocracy again
They specifically say that they are paying the employees US market salaries as opposed to the 1/6 figure.
Also, go back and double check the article because no where does it say that the other bids were anywhere near 6x the Indian's bid.
And you must not be from around here if you consider IT workers rednecks. I work in IT development and validation right smack in the middle of Indiana and have yet to meet one redneck.
Hands up if you're ignorant and too lazy too read the article(s)?
Huh, I just see one and it looks like your's xdroop...
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Cant stop it!
They only thing you can do it train your self in areas that cant be or wont be out sourced at least too much
At the same tine not every job is being out sourced.. its still very small right now, but it will grow as other countries begin to developed and get the same skilled work force as India and then charge 1/2 of what an Indian workers get.
Sure the government could put a Tax on software that was out sourced or something. But I do not think it will help..
I got canned, and instead of getting mad, I started my own company that does something that cant be out sourced. Sure I make less money, but I'm the boss and I'm happy!
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Re: Cant stop it!
Just go along with the status quo.
Wait till you have retrained, gone into debt, mortgaged your home and your children's future and your job is outsourced. I bet your attitude goes sour too.
I'm glad your happy making less money. Get used to it because corporations are growing a global economy only because they have glutted the American market and need to find new sources of buyers.
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No Subject Given
My plan for your consideration and freely admitting that I have some benefits I'm sure others don't. -- My wife was an IT professional who saw the writing on the wall a while back and dumped her job and is presently going through a nursing program. She's happier and while I have my job I can pay for her school. Once she's done and employed it becomes my turn to look at turning my career over to 'something' that has a bit more future than IT professional. I'm doubly cursed ... an IT worker and one who's rapidly approaching 50 so if I'm jettisoned, I stand a lesser chance of finding a job, particularly at my current salary, than some of the younger IT folks. Someone mentioned a 20% pay cut to be able to work.... I'd be happy with that if it kept me stably employed in the IT world. Unfortunately, I doubt it will.
As Mike said, it's reality folks, deal with it or spending your time venting until the unemployment checks run out. This has got to really blow for people who have just entered the work force within the last 4 to 5 years as they are probably still repaying loans and looking at a dying profession.
And just so I can stoke the fires a bit ... a lot of this out sourcing is the fault of our own greed. (our being the american worker). Because the state and federal government mandate so many mandatory programs for health and retirement, our employers are forced to provide and therefore pay for these programs (think 401k, health insurance, medical coverage, etc). Every employer passes these costs along to the customer/consumer and generally in the form of overhead which is often directly related to your salary. The countries where all of our jobs are being outsourced to do not have these government mandates for benefits therefore the dirt cheap salaries by comparison.
So in a lot of ways, we only have ourselves to blame. Hell, we can't even be allowed to work without these mandatory benefits and coverages.
BOHICA !!!!!!
--RJD--
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Re: No Subject Given
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Re: No Subject Given
I hope your wife likes her new job as a glorified ass wiper!
--
billy
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Thia is just the begining...
Is outsourcing bad? No efficiency is good, but I contend this outsourcing will face a backlash- executives are cutting US jobs for one reason- to increase their personal compensation I believe a lot of this cost cutting/profit maximizing is a short term solution. I have run into companies producing as little as 500- 1,000 product units a year moving manufacturing to China. Will they save money- I doubt it- good luck making a running product change and getting it right. This is the thing to do right now so everyone will do it, the problem is we start to lose our knowledge base, and then the incentive for people to become engineers lessens, and then you wake up and realize we can't compete anymore. Manufacturing, software engineers, network admins, what's next? Why can't we outsource CEO jobs to India for $1,000 a month? Each CEO is worth what 1,000 regular employees based on compensation- look at the money we could save...
I'm tired of these " The US doesn't produce enough engineering/technology workers " Yeah let me spend a very hard five years in school so I can earn $600 a month. This has implications, and eventually the inability to actually produce something other than doughnuts and coffee will affect everyone living here in the US..
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Re: Thia is just the begining...
I think we're pretty much in agreement. I think the companies that are rushing headlong towards outsourcing without thinking through the longer term impacts are going to regret it.
That said, many people who are against outsourcing are focusing on protectionist policies, which are even more damaging.
However, I also remember it was just a few years ago that companies really COULDN'T find enough qualified techies to fill the jobs they needed.
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Re: This is just the begining...
Walmart will employee you for slightly over minimum wage.
Of course you won't get any health benefits and you won't be able to purchase the Chinese/Korean/Indian imported products from your employer, but you can always apply for WIC, food stamps & child care credits.
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No Subject Given
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Refuse Foreign Customer Service
It is not your responsibility to attempt to figure out what they are saying.
You are the customer.
They are they employee.
When it become painfully aware that American companies are losing American dollars as a result of outsourcing, outsourcing won't seem quite so appealing.
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U R blaiming the wrong people
The US government is encourging the depression of working wages, while housing prices have jumped. How on a $40K a year pay rate, how can you 'afford' a $150K+ a year home? And a car? And the insurance for both? Plus 2.3 kids and a dog?
Face it ..... you are screwed.
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Re: U R blaiming the wrong people
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Low margin jobs leave. It's not so bad.
For some jobs, such as manufacturing, cost is the dominant factor and companies get ahead by cutting costs. In other areas the business is driven by "execution", baically getting the right thing done and getting it done quickly. This is why the jobs in high-cost New York City didn't all move to low-cost Buffalo, NY, despite a lack of trade barriers.
Of course it will take a while before tech grows to fill jobs for all of the newly available workforce, and during that time employment here might be a little scarce. It's also likely that companies will no longer be desperate enough to pay high wages to people with low ability.
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No Subject Given
Oh, and free markets are a dreadful idea that don't work as been demonstrated repeatedly throught out history. You know this becasue the minute a US company is threatened with competitiion it runs to the government moaning about it and asking for protection from the ansty foreigners.
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It's all about Government lobbying
BUT look at the farming industry . Nobody complains about them. The sugar industry is run by criminal robber barons , not one word of needing to buy foreign sugur.
The farming industry has blocked all reforms for open trade with foreign countries. There are quotas and price controls on goods.
The IT industry never unionized like the farming industry so BUSH didn't give a FLYING SHIT.
Whats learned here is that if you don't lobby and threaten politicians with their jobs then you may be out of work .
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No Subject Given
Besides, American dream is all about inventing something great and making gazillions selling it to the rest of the world. Nowhere you can see the story of American dream being achieved after working Y hours per year for X amount of dollars and receiving X*Y dollar paycheck.
If I am able to pay $200 for all my computer software from India-affectionate Microsoft, able to pay $50 to Bangalore-based H&R Block for doing my taxes, and drive a $35000 Japanese car, why not? The rest can pretty much screw themselves, or go find another job and do something else.
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Re: No Subject Given
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Is India to Blame for the Jobless Recovery?
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Simple Math
I make 61k a year programming. My employer kicks in benefits, vacation, etc bringing my employers cost to ~75k a year.
Someone in India will work for 5k or less a year w/ no benefits.
75k - 5k = 70k / yearly savings. Multiply this yearly savings by X # of programmers and company ABC has saved oodles of cash. If I run a company my goal is to make oodles of cash. This is really my only goal....
BUT the problem I have is that company ABC used the USA as a springboard into the global economy. All corporations get tax breaks (paid by Americans), qualified workers (education is typically subsidized w/ tax dollars paid by Americans) and loans, such as SBA loans (again paid by American taxpayers).
I don't consider it protectionism when we tell American companies not to bite the hand that fed them when they were young.
I feel the US gov't (democrats, republicans, etc) can't be relied on nor trusted to look out for our interests as American workers.
Americans in generations past fought and died for living wages, a 40hr. work week and quality of life.
Free trade is such as misleading term. If a programmer in India or any other part of the world received roughly the same pay, benefits etc. then we would have free trade. Apples to apples.
I remember when my grandfather lost his job at John Deere. He blamed it on Reagan. I know see that it is simply cheaper labor that is not protected by any laws which causes companies to jump ship. I do agree gov't regulation pushes up the cost of business.
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No Subject Given
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Re: No Subject Given
You people dont even have facts. H1B workers do pay taxes (fed, state, med, ss). So dont type and reveal you dont know jackshit.
Indians are getting these jobs through proper recruiting/consulting channels your companies/INS have set forth.
YOUR politicians (in power) are supporting outsourcing. YOUR CEOs are choosing outsourcing. YOUR laws allow outsourcing. YOUR managers are giving you the slip.
So dont bark at the WRONG tree. Go whine at your representative
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