I had not looked at the graph previously, I just saw you list those 2 years, which are both extremes (a peak and a valley).
THIS JUST IN!
Today the company I worked for announced another round of layoffs…
…
…
In INDIA!
Just received a phone call from a coworker there (who normally works here but flies out there a couple times a year)…that it took some effort to get them to understand they were being layed off. The whole India office was incredulous…
To Indians…WELCOME TO THE PARTY PAL!
Businesses will do whatever they can to increase profit and lower cost for their consumers at the same time because Americans on a whole tend to value cost over every other factor when considering a purchase. If you want to do what you can to keep those kinds of jobs in the US do some research and spend your money with businesses that only employ people in America. Then send those companies an email (or a letter, as that supports the US postal service) and let them know why you are purchasing their products. It will cost you more out of pocket to purchase American made goods or products that are local to your area but that is the only way to influence their decisions.
This is very true in India. It’s cultural. People are not used to lay-offs. Until the early 2000s, no company used to lay-off people en masse (except for union/labor issues). If you had a job, you could pretty much keep it for life. But that’s changed in the last few years. It’ll take some time for the general public to get used to the new normal. But I think it’s a good change, as it will increase overall efficiency and competency over time.
How does a company increase profits while lowering costs? 
Sellers will do whatever they can to charge as much as they can, while consumers will generally try to pay as little as possible. You act as if that is completely irrational.
I think you’ll find that very few companies of any size employ only Americans in the United States.
I was reading about India workers getting pissed off a couple years ago when some of the phone desk jobs were being transferred to Korea and other places with even cheaper labor. I felt no sympathy. Loyalty is a one way street. The company wants a huge commitment from you and they will cut your job in a second. The relationship between workers and companies has been fundamentally altered for all time.
When engineering jobs were first outsourced a couple decades ago, the quality of work diminished rapidly. But the cost was low enough that companies could find a way to live with it. They could patch things up and make do. Eventually they would get up to speed. But soon after, the companies would pull the work for still cheaper labor costs.
Bingo!
We are living our “fat years” now. We also realize that in all probability these years will be temporary.
I am learning Chinese as fast as possible, and we save 75% of our take home pay. We’ll pay off our mortgage next month – after that, we’ll be able to maintain our standard of living on one minimum wage job (not that we’re planning on doing that). We also have disability and life insurance.
I’m also delaying babies for these reasons. If I delay them too late, I can always adopt.
It’s just prudence.
Outsourcing to India, specifically, is already beginning to burn out. All those outsourced jobs have increased median salaries in the major cities, and Indians are becoming more expensive to hire than they were 5 years ago.
The next big thing will be outsourcing to other Asian (and potentially Eastern European) countries. However, none have the educational system in place that India does, and perhaps more importantly, none can offer a workforce with similar English fluency rates.
When we first started outsourcing engineering jobs to India ,i investigated moving there. It was made clear, if you had a start up and we going to hire and train workers, you were welcome. But they would not allow you to move there and do a job an Indian could do. They were protecting their jobs. We were shipping ours out to make the rich ,even richer and put downward pressure on labor costs here. We have shown no interest in protecting American jobs or businesses.
Are you in favor of curtailing immigration, both illegal and illegal, as well as curtailing all social services to illegals and deporting them whenever possible, to stop them from taking our jobs?
The downward pressure exists whether jobs are outsourced or not. In any case, we don’t allow Indians to move here to do jobs Americans can do either. We choose the ones in high demand professions, like medicine.
Think health care costs are high? Imagine what they’d be like if we didn’t have 100,000 foreign-born physicians (50,000 or so of who are from the Indian subcontinent).
A company called RuralShores is building outsourcing offices in remote villages in India, partly because of the rise in the cost of staff in the urban centers like Bangalore. But my comment was partly a response to the idea that the outsourcing of IT jobs was something new, when it’s really the same thing that’s already happened to industrial jobs.
Oh, yeah. If anything IT outsourcing should eventually be more efficient, since there’s no bulky/heavy finished product to ship back afterwards.
If the Indian subcontractors are getting half what the Americans were getting, then it sounds like the wages have been rising over there which is a good thing. It’s obviously good for the workers there, but it’s also good for the workers in the States because it shows that we may be on the way to reaching equilibrium. It’s also good for the profession because it suggests that Indian programmers and software engineers are expecting, and often receiving, good salaries.
OTOH there are still fundamental problems with outsourcing. For one thing, unless it is done very well, it can be logistically awkward for people in the home office to get their jobs done. When the overseas staff aren’t really up to speed in the company’s business, or in the systems they’re supporting, the home office support teams have to end-run around them to find domestic people who can actually fix the problem. This happened to me while working at a large pay TV company. The middleware support team we were supposed to call was in Manila. We would hang around on a conference call with them for an hour and a half, and get nowhere. After that, we were cleared to call the subject matter experts in Denver, who would fix the problem in twenty minutes. Then we could all go home. I don’t mind telling you it was pretty bad.
The other problem I have with outsourcing generally, and of technical work in particular, is that it’s hard to get the experience of actually doing this work, actually building components, before being asked to manage, support, or troubleshoot them. And it hastens our (the USA’s) drift towards being a country that manufactures and produces nothing and consumes everything; where all the young people want to be lawyers, MBA’s, or financial consultants because there’s no security anymore in designing, making, or building. (I know, a lot of young people in those fields struggle also, and not all of them are in it just for the money.)
The skills that go into good software or other technical work cost years of time in education and experience, and buckets of money in education. But the skills so hard won no longer command the salaries they once did, and college students shy away from entering those fields. I don’t see how we can continue to have a viable middle class when only the entrepreneurs have any claim on a decent share of the pie.
Back when the term “middle class” meant something, people who built cars and buildings weren’t middle class.
I’m no fan of exploitive outsourcing, but when the incomes of the offshore workers begin to rise, than that is a good thing for us, too. Of course, as has been mentioned, then the jobs often get moved on a second and third time to find cheaper labor. But if the offshore wage structure, in general, rises, it’s good.
I just have to ask, how can anyone save 75% of their net pay? Do you live in a tent outside of Point Barrow, Alaska? No, you wouldn’t be paying mortgage on that, I realize.
Or do you live in the year 1963 commute by time machine to your jobs in 2010s?
McDonald’s dollar menu, man.
That is exactly what happens. The majority of the companies I have worked for are ones that everyone here is heard of. The end-run around the Indians for IT work for the score doesn’t take much. At my last job, we actually had a standing policy to send the project work to India, let them fail at it which they almost always did, and then recall it and do it ourselves at the last minute which made our nights and weekends hell.
I am head of IT of a pharmaceutical factory now and I don’t let them get involved with anything more than logging help tickets and password resets because I am too busy to wait for them to screw things up. It is a medical production facility with, you know, people waiting in hospitals waiting for surgery here stateside. That is against written procedure but they will have to fire me first before I will rethink that and no one ever will because it is just a big accounting smoke-screen in the first place.
Paying someone overseas $14 an hour to waste time and make things much worse than they already are additional time and money lost and certainly not saved.
[Disclaimer]As I’ve said before, I don’t think there are national boundaries to being a good software developer, just experience level and being the right person for the job.[/Disclaimer]
[Anecdote]I’ve been going back and forth with 1 vendor’s remote shop for the last 4 months on a critical piece of code. I’ve spent about 120 hours testing, retesting, explaining, documenting problems, etc. etc. Today I said fuck it and wrote the thing the way they should have originally: it took me 4 hours total. It’s amazing how much additional work can be created by simply approaching a problem from the wrong angle. They tried to fit a square peg in a round hole. (Note: this is a fixed bid, not hourly work)[/Anecdote]