Hold onto your butts white collar tech workers. Your jobs are going, going ...

[system]

*Originally posted by Sam Stone *
In addition, let’s look at the effect of ‘protecting’ these jobs through tariffs or other interventions in the market.

Indeed, it is important to recall that “protecting” a set of jobs has costs. While I am not going to claim that cost is always higher than the gain, although empirically it often is, the distribution of gain and cost is skewed as well.

If companies are forced to hire high priced workers in the U.S., the result will be capital flight out of the country. These companies will set up shop elsewhere. Then the wages won’t just go down, they’ll just GO.

Two items:
(a) The US is already facing a very challenging environment in attracting necessary capital to fund its miniscule savings rate. Further decreasing attractivness through further rigidities will not be helpful. but
(b) I suspect capital flight for American protectionist measures will be of a marginal but potentially important nature.

Protectionism didn’t even work in the auto industry. Remember what happened there? When the Japanese started producing better cars, the auto industry cried foul and had the government step in. Tarifffs were placed on foreign cars. What was the result? American cars stayed crappy while the rest of the world improved in quality. Eventually even the tariffs couldn’t stop the inflow of better cars, and the domestic auto industry was devastated. Now they have to learn to compete on an even playing field.

Indeed, while one can make a partial argument for temporary protection, the reality is that such protection usually is counter productive.

And the only reason protectionism worked at all in the auto industry (‘worked’ in the sense of preventing capital flight), it was only because the auto makers had huge capital investments in domestic factories. Try that stunt with Microsoft, and it could pull up stakes and relocate.

Well, I suspect MS has more sunk costs than one might initially think. I honestly do not think even IT production is as mobile as all that. However, it would be damaging.

[msmith537]

*Originally posted by gobear *
Because the idea of using the image of our president as a shooting target, no matter how much we may detest his policies, is disgusting. **

Disgusting or not, it would certainly bring a visit from large men in sunglasses and earpieces.

Originally posted by Collounsbury
Come now, you know better than this.

Certainly you should know that I don’t advocate protectionism. The only points I was trying to make were:

1. A .75% per year loss of jobs in a particular industry where there was an overpriced glut anyway is hardly a “giant sucking sound” of exported jobs.

2. If a person is in an industry that is in decline (and they all decline at some point) it’s a good idea to start training for your next career instead of being the best buggie-whip maker in the last buggie-whip factory.

[system]

*Originally posted by msmith537 *
Certainly you should know that I don’t advocate protectionism. The only points I was trying to make were:

I know, that’s why I was surprised, this is clearer however:

1. A .75% per year loss of jobs in a particular industry where there was an overpriced glut anyway is hardly a “giant sucking sound” of exported jobs.

Exactly.

2. If a person is in an industry that is in decline (and they all decline at some point) it’s a good idea to start training for your next career instead of being the best buggie-whip maker in the last buggie-whip factory.

True, although I doubt the IT sector is in decline per se, versus restructuring into a slightly different form.

The fat melting away is going to hurt, however, those who got used to it.

[An_Arky]

Funny how wanting to wait on other countries’ consensus before going to war is deemed unpatriotic yet big companies who yank jobs out from under Americans’ feet isn’t. I’m against protectionism in terms of trade, but there should be a tax on businesses that ship jobs overseas, since they’re affecting our tax base by eliminating the jobs here. And those companies who have PO box HQs in tax-haven countries should be required to make up for the lost tax revenue that ensues if they wish to do a major portion of their business here. The government ends up taking the hit for these things (in form of higher taxes, or in the current administration’s case, higher deficits), a result which would seem to fly in the face of what tax-hating, business-loving right-wingers rhetorically espouse.

[Eva_Luna]

No time right now for a comprehensive reply, but it’s, ummmm, interesting how astro has re-framed another recent thread of his. Some interesting comments were made there on outsourcing and related topics (immigration, U.S. domestic economy, globalization), so readers might want to refer back to it:

http://boards.straightdope.com/sdmb/showthread.php?threadid=195383&highlight=outsourcing

And here’s another recent thread on the subject of outsourcing of white-collar work to India:

http://boards.straightdope.com/sdmb/showthread.php?threadid=191418&highlight=India

Some other semi-random thoughts:

Please stop slamming, across the board, Indian-trained programmers. Tens of thousands of them are doing just fine working in the U.S., on H-1B and L-1 visas, as permanent residents, etc. If you want to complain about how a particular subcontractor has handled your project, of course, who am I to criticize? But to say that Indian programmers are inferior is not only ridiculously inaccurate, it smacks of racism.

Note that even the U.S.-based programmers participating in these threads who have lost their jobs (to outsourcing, or to the tech bust, however you want to look at it) are mostly sympathetic to the Indian programmers, who, after all, are just trying to earn a decent living like anyone else. Even among the people most directly affected, there seems to be a certain level of comprehension that the Indian programmers are just educated people who are taking advantage of transcontinental economic disparities in order to support their families. What do you expect them to do, refuse honest work?

If U.S. workers want to maintain their (I guess I should say our) way of life, we should concentrate on maximizing our own competitive advantage, because globalization ain’t gonna stop. And it’s much more difficult logistically to restrict the movement of computer code than it is to restrict the movement of tangible goods. So stop kvetching and start brainstorming.

[bcflyer]

*Originally posted by Collounsbury *
**Wonderful, knee jerkism

So, the Indian IT industry is made up of “semi-English speaking” professionals. Odd that was never my experience in interacting with Indian professionals.

But I suppose it is just simply understood. **

I should qualify. I was very tired last night when I wrote this. I have worked with many Indian IT professionals that work well. They have all found their own training and then a job, much like you or I. These people also generally knew a lot of English as they persued a job in North America and knew that English would be a requirement.

The outsourcing company that I dealt with operated differently. They would choose thousands of Indian citizens, train them for 6 months and bill them out at $45 US/hour. These people were not properly trained and did not speak much English. They did not persue a career in IT, they persued anything that would make them enough money to feed their families. This is the type of outsourcing company that North American companies are looking at.

The kicker is that $45 US per hour isn’t much different than paying a staff member $30 CDN per hour plus benefits. Considering we were paying the North American guys overtime to clean up the work coming from India, it was a costly mistake.

I hardly call it a knee jerk reaction when I have had actual experience in the exact matter. Fool me once, shame on you, fool me twice, shame on me.

One more relevent point is that the position I am in now could have serious ramifications if it was found we were hiring outside of North America. Even if this was through a North American company such as IBM. Sometimes we have an obligation to the people and people don’t like seeing their neighbours jobs shipped overseas.

[bcflyer]

*Originally posted by Eva Luna *
Please stop slamming, across the board, Indian-trained programmers. Tens of thousands of them are doing just fine working in the U.S., on H-1B and L-1 visas, as permanent residents, etc. If you want to complain about how a particular subcontractor has handled your project, of course, who am I to criticize? But to say that Indian programmers are inferior is not only ridiculously inaccurate, it smacks of racism. **

I agree and I’m afraid my first couple of posts came across that way. I hope I clarified in my last post. It’s not a matter of Indian vs. NA programmer. It’s a difference between the training and motivation of the programmer.

Equate it to a North American programmer who got a college or university education to persue a computer science job vs. someone who has been on unemployment or welfare and gets a 6 month MCSE crash course to get employment. Sure, sometimes these people turn out to be great employees but more often than not, they are paper MCSE’s that aren’t worth hiring.

[Algernon]

A couple of years ago I was head of Development for a company where we had about 400 programmers; ~300 spread between four US cities and the other 100 or so in India.

This was my experience:

The Indian people I dealt with…
… were hardworking, intelligent, technically skilled, and ethical;
… delivered code with relatively few defects;
… were not particularly creative;
… tended to blindly follow requirements even if they knew of a better way;
… could not successfully translate user needs into design requirements.

They were best at debugging and maintenance rather than new code development, so that’s what I ended up having them do. Code was developed here in the states, electronically “shipped” overseas where it was tested overnight, and “shipped” back to the US to be worked on the next morning.

This worked well from our perspective, but it was not intellectually challenging enough for the Indian programmers. As a result, morale was low and turnover was high.

Others that I know have had similar experiences. To be fair, still others are finding that it works quite well. I am not sure of the success factors. It is an interesting experiment, albeit painful due to the significant job losses.

My belief is that as the pendulum is currently swinging to off-shore development, it’ll swing back and eventually find an equilibrium that is satisfying to all constituents (the company, the US employees, and the off-shore workers).

[ralph124c]

When will we hear of MANAGEMENT OUTSOURCING? seems to me that IBM could save even MORE money-by outsourcing those >300K$/year jobs to India (or the Cech Republic).
I’d love to hear of high-paid lawyers getting axed by foreign competitors.
Really, we must face the facts…our executives and managers are overp[aid! let’s outsource theirjobs!

[MrVisible]

It’s all well and good to say that we in the United States need to work hard to remain competitive, but it doesn’t take into account that in the global economy, we have a massive disadvantage.

We’re expensive.

The high cost of living in the US is going to continue to make hiring from other countries attractive for a long time, until the disparities in living costs even out. Once it gets to the point where the cost of living in India is equivalent to the cost of living in the US, we can once again be competitive price-wise.

That doesn’t bother me; it makes perfect sense. What does bother me is that right now, both problems have the same cause. Corporations in the US are outsourcing jobs to India while they depend on the disposable income generated by the traditionally lucrative US economy.

It’s a classic have and/or eat cake situation. If they want the US to continue to be able to afford their products, then they need to keep us employed. If they want to outsource our jobs to countries where the workers can afford to live more inexpensively, then they should expect their revenues to drop.

If the world is, as I suspect, homogenizing into being mostly made up of second-world nations, that’s fine by me. But I won’t be driving a new car to my $3/hour job, and I won’t be stopping by Bennigan’s for lunch.

And I won’t have any sympathy at all for the companies going belly-up in the transition. They’re the ones that killed the goose that laid the golden eggs.

[Avumede]

mssmith writes:

1. A .75% per year loss of jobs in a particular industry where there was an overpriced glut anyway is hardly a “giant sucking sound” of exported jobs.

I agree it doesn’t warrant the OP’s reaction, but it is cause of concern. Plus, while there indeed was an overpriced glut, you’ll have to convince me that there still is one. In fact, now instead of a glut of jobs, we have a glut of unemployed developers. The few job postings there are are swamped with hundreds or thousands of resumes.

2. If a person is in an industry that is in decline (and they all decline at some point) it’s a good idea to start training for your next career instead of being the best buggie-whip maker in the last buggie-whip factory.

Just because we had a huge tech boom, and therefore a necesary decline, does not mean the industry is in any long-range decline.

Plus, theoretically, there aren’t that many jobs that exist that can’t be done cheaper by someone else in the world. So even if developers decided to retrain themselves in some new field, they probably will find themselves in the same situation again.

[ralph124c]

You are absolutely righ! In fact, if you GO to India, you will find that these programmers are highly paid! That is why American tourists find the 3rd world so attractive-things are cheap! (To us).
I would aregue that most things that we have are vastly more expensive for an indian…you can buy an air conditioner here (in the USA) for less than $100. In India, such a machine costs the equivilent of >$500.
Evrything is relative, the difference being that the USA is a vastly more productive country than India…it takes YEARS to put up a building there, in the USA, months!

[NurseCarmen]

Bang your head against your desk trying to get anywhere with Dell service. I’m sure Dell was told that the folks in Bangalore spoke perfect English, but here’s a customer who calls at least once a month with specific detailed technical problems, that is just about to give up on buying Dells due to the headache I go through trying to get service. My most recent call had me trying to explain for 5 minutes what I meant by “boot up”.

Not the fault of the worker. Not the fault of the Indian company. Dell’s fault. Pure and simple, they’re being cheap and they’re risking my business.

[UrbanChic]

I admit it’s been a few months since I’ve called Dell for tech support. Did they outsource to India?

[NurseCarmen]

*Originally posted by JuanitaTech *
**I admit it’s been a few months since I’ve called Dell for tech support. Did they outsource to India? **

yep.

[Spectre_of_Pithecanthropus]

In other threads I’ve made the basic point that, if too many jobs go overseas, a point of diminishing returns must be reached when the local economy can no longer generate the buying power to keep those companies in business. In other words, when one company individually exports its jobs, it greatly aids its bottom line; however, if many or most companies start doing this, they shoot themselves in the foot by robbing themselves of their consumer base. The trouble is that what they’re shooting themselves in the foot with is a BB-gun, and it’s going to take time to reach the point of diminishing return, just as it would take a number of BB shots to seriously injure a foot. And taking the long-range view is something that U.S. companies have not been famous for. This is what causes the anger and anxiety among American workers.

[Eva_Luna]

[bump]

Link to recent (July 29) testimony in the Senate Immigration Subcommittee on the L-1 visa category:

http://judiciary.senate.gov/hearing.cfm?id=878

I welcome any informed comments on any of the linked testimony. Please note that multiple witnesses note that the L-1 category has been in existence since 1970, and that it serves several valuable and legitimate business purposes. IMO most of the pending legislative proposals that would modify the category almost beyond recognition are short-sighted.

Yes, business conditions have changed in the past 33 years, and perhaps some legislative tweaking is in order, but many of the highly publicized recent news stories could be resolved with better enforcement.

[Evil_Captor]

*Originally posted by Andy *
**The way I see it, we make choices all the time. If we get crap service from a company, don’t use it again. But to suggest that we can know in advance the level of service and quality of work we will receive from a company by knowing the nationality of the workers ludicrous. Unless you reserve that for particular countries…

Let’s not go there. **

So, bhy analogy, if I go to three gas stations run by guys who look like Pakistanis, and they all have poor service and are diryt and their air and water services are broken, I’m not allowed to expect that the fourth station run by Pakistani looking guys will be dirty and have poor service, etc., because I “shouldn’t go there.”

Y’know, you can say I can’t or I shouldn’t till the cows come home, but … I will.

[SuaSponte]

Don’t we want nations like India to rise up out of poverty? Don’t we want them to end their dependence on things like sweatshops and child labor?

Or do we only want those things if it comes at no cost to a single American? Sorry, that’s not going to happen.

Sua

[laigle]

Ha, you think that’s bad. After they’ve moved all the white and blue collar jobs to India, then to Guatemala, then to forced prison labor camps, they’ll be moving the CEO jobs to Monte Carlo. Of course, the CEOs will get a 300% wage hike as compensation.