This sucks... Could it get worse for programmers?

[wacki]

"The BBC reports that quite a few young European tourists stick around in India to work for eSolutions companies who contract outsourced work from European companies. The salaries are mediocre, but you get free housing, great food, snacks à volonté and a free taxi ride to work each morning. Is this the first wave of the much anticipated reverse-migration which will be a hallmark of the 21st century?"

http://news.bbc.co.uk/1/hi/world/south_asia/4038069.stm

[natedogg]

Are they doing this because they want to stay in India or because they can't get jobs? The word "tourists" makes me question the underlying factors here.

As a programmer who has worked very closely with off-shored teams and offshoring companies, I don't think there's a lot to worry about for american programmers who have skills.

The panic over offshoring in unwarranted in my experience.

natedogg

[Rooster71]

[ QUOTE ]
"The BBC reports that quite a few young European tourists stick around in India to work for eSolutions companies who contract outsourced work from European companies. The salaries are mediocre, but you get free housing, great food, snacks à volonté and a free taxi ride to work each morning. Is this the first wave of the much anticipated reverse-migration which will be a hallmark of the 21st century?"

http://news.bbc.co.uk/1/hi/world/south_asia/4038069.stm

[/ QUOTE ]
People complain about the outsourcing of IT jobs to India, but I think it's just as bad of a situation with call center jobs. Of course the IT jobs pay better, so they are probably a more important issue.

Both George W. Bush and the 1st VP of Software Development to whom I used to report say that outsourcing IT jobs to India is a good thing. I'm just a stupid old crippled country boy, who am I to argue with these brilliant minds?

[Rooster71]

The US prison population continues to rise every year, so prison guards are in a pretty stable employment situation with no chance of being outsourced. For someone who can deal with having urine and feces thrown at them, it may be a career worth looking into.

[Stu Pidasso]

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People complain about the outsourcing of IT jobs to India, but I think it's just as bad of a situation with call center jobs. Of course the IT jobs pay better, so they are probably a more important issue.


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It sucks if your job is the one that is either outsourced or lost do to automation. In the end the economy will end up creating another job somewhere to replace the one that was lost.

People complain that the replacement job is not as good as the one lost. I suspect they are wrong given that home ownership along with prosperity in general continue to rise.

Stu

[ACPlayer]

It could but if you are in the biz develop more management and customer interface skills or high level design and architecture skills. If you are a pure programmer your job is possibly in jeopardy.

[Nepa]

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The US prison population continues to rise every year, so prison guards are in a pretty stable employment situation with no chance of being outsourced. For someone who can deal with having urine and feces thrown at them, it may be a career worth looking into.

[/ QUOTE ]

Thanks but no thanks! I'll stay in IT. Where else can you make big bucks and not really work hard?

[Il_Mostro]

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I suspect they are wrong given that home ownership along with prosperity in general continue to rise.

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Is this really true? I'm sure more people "own" their homes now, but how much is that dependent on the breeze it is borrow money at the moment? A home you only own because the bank gave you a loan of close to the full amount isn't really yours, at least in my book.
I get the impression that more and more people are talking about a huge property-bubble at the moment.

[Rooster71]

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I suspect they are wrong given that home ownership along with prosperity in general continue to rise.

[/ QUOTE ]

Is this really true? I'm sure more people "own" their homes now, but how much is that dependent on the breeze it is borrow money at the moment? A home you only own because the bank gave you a loan of close to the full amount isn't really yours, at least in my book.
I get the impression that more and more people are talking about a huge property-bubble at the moment.

[/ QUOTE ]
I agree that home ownership is not a very useful consideration. Of course it's good to own a home, but the high levels of home ownership are due primarily to the fact that it is so easy to borrow money at very high LTV's.

[Il_Mostro]

Excuse my ignorance, but what is LTV?

My knowledge of economic terms in english is a bit limited.

[Rooster71]

[ QUOTE ]
Excuse my ignorance, but what is LTV?

My knowledge of economic terms in english is a bit limited.

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Sorry, LTV=Loan To Value ratio. It's fairly common nowadays to get a loan with an LTV at or very near 100% (assuming credit scores are decent and debt-to-income is not too awfully high).

[Il_Mostro]

ok /images/graemlins/smile.gif

I see the same thing over here, I guess the property-bubble is pretty much universal in the western countries.

[Stu Pidasso]

[ QUOTE ]
Is this really true? I'm sure more people "own" their homes now, but how much is that dependent on the breeze it is borrow money at the moment? A home you only own because the bank gave you a loan of close to the full amount isn't really yours, at least in my book.
I get the impression that more and more people are talking about a huge property-bubble at the moment.

[/ QUOTE ]

Homeownership is just one indicator. Millions upon millions of jobs have been lost to outsourcing and automation yet the unemployment rate remains steady. Why? Obivously for each job the economy sheds in a particular sector it creates one or more to replace it somewhere else. People claim these new jobs are not as good as the jobs lost yet they completely ignore the fact that the overall wealth and the quality of life in this nation continues to improve.

The company I work for has just given the union notice that they want to eliminate my position because technology gains have made it unnecessary. The company is right. The union is going to fight it. If the union wins I will be more than happy to continue to be a highly paid economic drag. Let me thank everyone in this forum ahead of time for subsidizing my high salary by paying higher costs for your goods and services.

If my job is eliminated I will simply go on to something else. Whatever it is I go on to I will likely be producing more for the economy than I am now. Becuase I will be producing more our nation will become wealthier.

Stu

[Rooster71]

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People claim these new jobs are not as good as the jobs lost yet they completely ignore the fact that the overall wealth and the quality of life in this nation continues to improve.

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What standards are you using to judge the "overall wealth and the quality of life"?

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I will be more than happy to continue to be a highly paid economic drag.

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I used to be a highly paid economic drag. But not due to union membership. It was alot of fun.

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I will likely be producing more for the economy than I am now. Becuase I will be producing more our nation will become wealthier.

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This could be true. But the key word here is "likely". And if you go on to a much better job, what if it takes 5 to 8 years of working $7-10/hour jobs in the meantime? Just curious.

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[Stu Pidasso]

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What standards are you using to judge the "overall wealth and the quality of life"?

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Per capita income is often used to measure the standard of living in a country. Source (http://www.census.gov/hhes/income/histinc/p01.html)

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I used to be a highly paid economic drag. But not due to union membership. It was alot of fun.

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It can get pretty boring. I actually did something productive for about an hour yesterday.

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This could be true. But the key word here is "likely". And if you go on to a much better job, what if it takes 5 to 8 years of working $7-10/hour jobs in the meantime? Just curious.

[/ QUOTE ]

I don't have to go on to a better paying job to be producing more for the economy. Hopefully I will go on to a better job for my own sake.

Regarding outsourcing:

There is a lot of work to be done around my house. I could do this work myself or I could outsource it to private contractors. Although I could do the work for less than what a private contractor would charge, It looks like contracting it out is going to be the most advantageous. If I did the work, I would have to take time off from my regular job. If instead I hire a contractor, the money I earn while working my regular job subtracted from what the contractor charges is less than what I can do it for myself. It makes sense for me to outsource the job.

Example:

Suppose my regular job pays me $200/day
Suppose a contractor charges $250 to do a job I need done at my house.
I could do the job for $150 If I skip a regular day of work.

If I skip work and do the job my net out of pocket is $150
If I hire the contractor for $250 and go to work and earn $200 my net out of pocket for getting the job done is $50. I save $100 by outsourcing the job.


Stu

[ACPlayer]

Would you subscribe to the view that if some action adds to the profits of a corporation then that action is automatically good public policy?

Essentially that is the argument for outsourcing as a public policy. The corporation thinks (and let us assume that it is correct in its thinking) that outsourcing will improve its profits. The arguments made by yourself and others implies that automatically this means it is good public policy and will improve the wealth and well-being of the nation.

Is it at all possible that something that adds to corporate profits is not good public policy or that it actually causes the country as a whole some harm?

[Stu Pidasso]

[ QUOTE ]
Would you subscribe to the view that if some action adds to the profits of a corporation then that action is automatically good public policy?

Essentially that is the argument for outsourcing as a public policy. The corporation thinks (and let us assume that it is correct in its thinking) that outsourcing will improve its profits. The arguments made by yourself and others implies that automatically this means it is good public policy and will improve the wealth and well-being of the nation.

Is it at all possible that something that adds to corporate profits is not good public policy or that it actually causes the country as a whole some harm?

[/ QUOTE ]

In general if something can be done more efficiently overseas than we should allow it to be done overseas. This does not mean if it increases a corporations profits it is necessarily good public policy. There are always externalities(costs that do not enter into conventional arithmetic of a P&L statement).

Heres a non corporate example that I think will hit home the point I am trying to make. We would not want the Pentagon to outsource the production of weapons grade plutonium to Iran. While the Pentagon budget may benefit from this(in the short run), the rest of the nation would bare the costs of a more percarious national defense.

Usually when a job is outsourced overseas it increases corporate profits. The short term cost society bares in taking care of a displaced worker does not show up in the corporate balance sheets. Should we stop the outsourcing of jobs because of the cost society bares? No, because society would bare a much larger long term opportunity cost in not having the most efficient economy possible.

Its in the best interest of a society to allow the outsourcing of jobs at a pace in which the society is able to absorb the short term cost of having displaced workers. So far the economic data I have seen indicates we are not losing jobs to automation or outsourcing to fast.

We still need to be careful about what jobs we outsource. There may be cost involved, that if they were considered, would make it incorrect to send the work overseas. For instance I have a feeling that our nations outsourcing of its oil refining will come back and bite us in the ass someday. I can't think of any reasons not to outsource call center jobs though.

Stu

[CORed]

The outsourcing of call centers, etc. is a more serious problem. You can get programming done cheap in India, but you pretty much get what you pay for (or less). Most of the programming done in India just plain sucks (e.g Party Poker's software). Pretty soon, the bean counters will realize that the "cheap" software from India is costing them money. Call centers, OTOH, don't require nearly ad much skill as programming, and it probably makes sense, from a business standpoint, to outsource them.

[ACPlayer]

I am all for allowing outsourcing of jobs to the cheapest most efficient place. However, the implication that this is good for the economy or the most efficient use of the labor pool, is in my opinion untested.

As you point out certain tasks for national security you keep in the country because of the non-monetary cost to society of the outsourcing. When making corporate decision there is no attempt at even understanding if there is a non-monetary cost to society - the only consideration usually is profit (and usually short term profit at that). Automatically assuming as some do that this is in the best interest of America is flawed. IMO. It should however not be banned either.

Serious non-political, non-corporate (and hence university) study is needed to understand the non-monetary costs of the outsourcing binge presently underway.