Cringely Argues Against Offshoring, Offers No Solution
from the thanks-for-playing dept
Robert Cringely's latest column spends a bunch of time criticizing offshoring - but seems to be terribly short sighted (though, he claims those supporting offshoring are the ones who are short sighted). There are plenty of reasons to be against offshoring. As I've said many times before, there's a lot of evidence that offshoring is a lot more expensive than companies seem to believe it is - and many are now regretting their decision to offshore. That said, there are other cases where it makes sense. That's not what Cringely says, though. He seems to buy into the argument that there simply aren't any jobs after we offshore programmers. There's an awful lot of evidence that that's not the case. There are many programming jobs that do require programmers to be near customers or to have a good understanding of the culture - and those are likely to increase. I'm also a bit confused in his logic. He admits that Silicon Valley (and, he should admit, the whole country) has reinvented itself time and time again - each time we outsource jobs to cheaper locations. However, he says that this time we won't be able to because "the labor is leaving". Does he mean the people? I don't think so, because earlier in the article he says all those programmers are "working down at Home Depot" because they can't find a job. So, it's just the jobs that are leaving. Of course, that's the definition of outsourcing - and it's the same thing that's always happened historically. This is no different. In fact, we're now in a situation where we have a lot of these programmers who are looking for work - so there's a huge resource there to help people reinvent our economy. Cringely claims he's not advocating protectionism, but if you read the article, he doesn't offer any other solution. How about this? The solution, which he ignores, seems obvious: we have an untapped resource in all of these smart un- or underemployed tech workers. That's an opportunity to get them involved in reinventing our economy and creating the next great thing.
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Offshoring is destroying America's future
When we give send our tech jobs overseas, we are losing the ability to raise our children to be better techies than we are. Our skills will vanish, and our children will simply become project managers. YIKES!
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No, we got to the top of the heap by standing on the carcasses of our less fortunate competition.
It's not a zero-sum game but it's also not a fair game where everyone succeeds and some succeed a little more.
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Really
Honestly costs aren't out of control because of the workers, they're out of control for other reasons: including executive compensation, perks, litigation, medical benefits, lobbying to protect outdated business models (do you know how much MS spends on lobbying?) and finally just bad decisions by those executives at the top, nevermind corruption by the same people.
Combine that with short term pressure to always meet or beat numbers from wall street then the easy and quick payoff is to find cheaper labor.
Ultimately, thats a losing proposition in the long term. In the macro sense those companies pushing their labor offshore are killing many of their own sources of revenue.
It's just going to spiral downward faster and further. What's the stopping point? Is it when America has the same cost of living as India?
I listen to Bush talk about retraining to make up for those jobs put offshore and I'm stunned. Research centers being opened in India are taking PHd level positions. What sort of retraining is he thinking of?
I guess the ironic part is that it doesn't matter since IT is considered a service and becuase of that IT workers who lose their jobs aren't eligible for federal retraining money.
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Re: Really
Second, you seem to assume that our economy can't change and grow. Throughout history, this has always happened. We've always outsourced labor to cheaper parts of the world, and it's always worked out for the best in the long run. You seem to think that there will never be any new opportunities and we've reached the peak of innovation and growth.
I disagree, and still believe that the American economy and the American worker is flexible enough to reinvent him or herself - as we've always done.
I disagree with your assessment of the "macro sense". There's no indication that these companies are killing off their own source of revenue at all. They're simply making things more productive.
Imagine that, instead of offshoring work to humans, someone had invented a robot that could do all of this work. Suddenly, you'd be sounding like quite a Luddite, afraid of robots taking away your job. Historically, this happens over and over again. Our tools of production advance - and it's upsetting and difficult for the workers affected by it - but it always opens up many more new possibilities and opportunities. Do you really think so little of yourself and others in the US that we can't continue to reinvent ourselves?
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Re: Really
"our country" is a lot less important than "our world" but too few people understand that.
It's funny; if I complained bitterly that businesses in my home town were harming me by hiring people from other towns, I doubt most folks would take me seriously. Yet USA protectionism is exactly the same thing.
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Re: Really
It's not the same thing. In fact it's quite different.
In the USA you're free to move to that other town.
Ever try to get a job in another country? Apart from the U.S. it's quite difficult or impossible. (Although that may have changed recently in the U.S)
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Re: Really
We need to bring the rest of the world up to us. Ignorance and poverty only create dislike and worse.
If we don't, sooner or later it's barbarians at the gates once again.
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Re: Really
I think protectionism is already considered negative force, and I agree that it is.
Patriotism however isn't yet. Maybe it will. Frankly I'd be disappointed if pride in ones country turns out to be a negative. It's only when it becomes an extreme or is used to further someones ambitions is when it should be a negative. The way it's bandied about now, we seem well on our way to Fascism in the US.
I agree with you're point though. In the end we need to bring the rest of the world up, I don't think anyone disagrees about that, it's the means to get there which we do disagree.
For example, if we were to limit trading to only those countries which provided an equivalent working environment, is that protectionism? For example, limit trading to those countries with environmental protection laws, or perhaps those with a minimum wage, maybe basic human rights, maybe only those democratic countries.
Right now we have no criteria to establish trading partnership other than it may potentially be a large market (I'll leave out the insider deals amongst certain politicians and their immediate family that seem to influence trade policy at times).
Consider that, everyone wants a piece of the american market, and we just give it away.
In the end the country will only use those things it values for leverage. We don't seem to care about any of those things, environmentalism, human rights, a fair wage and freedom, we only care about how much money we can make, how nice our house is, who wins the superbowl, will the Average Joe be chosen.
You can include me in that group most of the time, and frankly I think it's unfortunate. Consider what the country was founded on, and it's now been diminished to nothing more than who can make the most money or screw over their competitor.
What happend to the value in creating something, or doing a good deed, or bettering yourself and others? All anyone can say now in response to that is money enables one to do those things.
If it's time for the babarians at the gate sometimes I wonder if that is a better option than what is inside the gate.
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What, me worry?
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=29789
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Re: Really
Folks in IT who are MY age (50) will be fucked because the truth is, we don't have enough years left to go get re-educated AGAIN. I don't even think in terms of the next 20 years any more. You'll have a LOT of people trying to get jobs at Wal-Mart and living in broken-down travel trailers. Is that what you want for the country?
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Re: Really
No, you have, I just think your underestimating the conclusion if things continue on their current path.
Because I think this, doesn't make me think little of myself or others. I'm sure people can and will adapt to these changes, but by that time what will be left? Does adapting to those changes mean there are no or very few white collar jobs left?
I understand that historically we've moved labor to cheaper areas, but I don't think the scope has been potentially this large, and it's *never* been white collar or research jobs and it's *never* been easier. Comparing the movement of manufacturing oversears to what can be done now is like comparing a swimming pool to the ocean. (Ok, thats a bad simile, it's why I'm not an author)
Following the logical conclusion of outsourcing, there is very little that can't be moved offshore.
Financial,medical (excluding doctors and nurses) ,legal (excluding trial attorneys), architectural, anything it seems, except something which requires physical proximity.
I wonder what these companies are thinking when they move labor offshore. Sure the short - mid term profits will be good, but whats in the long term?
My guess is that's it's more competitors from overseas. You can bet that when it happens, these ccompanies moving so many people offshore, are going to be lobbying to close down the borders.
Frankly I just don't see the long term benefits of offshoring and I don't think anyone has mentioned them other than a vague promise of "lower prices" or better immediate returns in the stock market.
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Theory and Practice
In theory, however, outsourcing and other similar policies should have two affects in America: lowering both local salaries AND lowering the price of goods (since the goods are being made on lower salaries, whether at home or abroad). If this were the case in practice, and if both lowerings happened in synch (and happened everywhere in the world - i.e. no other countries having protectionist policies either), it might not matter much in the end. You'd have less money, but it would cost less to live. Is that deflation?
Unfortunately, theory and practice are two different things. What will really wind up happening is that instead of passing lower costs onto consumers, companies will take the extra profits for their shareholders (who are consumers also, certainly, but a smaller percentage of the population). Also, inequitable trade agreements around the world will interfere with the free-market's ability to equalize all this stuff out. Also, any lowering in prices may happen long after lowering in salaries... meaning big cost-of-living difficulties for a lot of people.
Communism doesn't work in practice... and neither does Libertarianism.
What's the answer? I have no idea.
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