Why Offshore When Canada's Next Door? 1111
Roblimo writes "A study by accounting and consulting giant PriceWaterhouseCoopers claims Canada could lose up to 75,000 IT jobs by 2010 to offshore outsourcing, but could also *gain* 165,000 jobs through U.S. outsourcing contracts. The trick is, according to this story at IT Manager's Journal, that while Indian, Chinese, and Russian programmers may cost 80% less than U.S. programmers, the time zone, language, legal, and other problems involved with sending work half way around the world can eat up much of the labor savings, while Canadian programmers are nearby, speak English with nearly American accents, have a similar culture and legal system, and get paid 40% less than U.S. programmers. Might be time to think about moving North, eh?"
Are costs of living... (Score:2, Insightful)
So much for Canada being pompous... (Score:1, Insightful)
Re:And get paid 40% less? No thanks. (Score:5, Insightful)
Think of Canada as another state. Except that while they tax you in Canada, they actually seem to do something with the tax dollars besides 'defence' spending.
Why not outsource to me in West Virginia... (Score:5, Insightful)
Cost of Living (Score:3, Insightful)
This is why people are leaving California. Cost of Living. They may make 100,000 a year, but have to pay 450,000 for a 1 bedroom 1 bath 'house'- with no yard or garage.
Re:And get paid 40% less? No thanks. (Score:2, Insightful)
Re:And get paid 40% less? No thanks. (Score:5, Insightful)
Re:And get paid 40% less? No thanks. (Score:5, Insightful)
One challenge would be paying any US debt load (student loan, US car payment, credit card debt) with Canadian dollars.
Re:And get paid 40% less? No thanks. (Score:4, Insightful)
Overhead Absurd (Score:2, Insightful)
Aj
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Re:Well, I'm one example (Score:5, Insightful)
I thought that one of the big attractions of India et al. is that they're on the other side of the planet, so they can effectively extend the work day overnight. Are there going to be a bunch of third shift programming positions opening in Toronto?
I should have it so well. (Score:5, Insightful)
Where can I sign up? Really.
Re:And get paid 40% less? No thanks. (Score:3, Insightful)
Re:The land of the free (Score:2, Insightful)
Re:And get paid 40% less? No thanks. (Score:1, Insightful)
1) The choice is NOT fast food or another programming job. I am a smart person, as are most of the programmers. I can easily get another tech job in NYC paying 20% less than I make now. It might not be as nice a job, but it is a tech job. The economy in the US is not bad, but not HORRIBLE. If you can't get another tech job if you are willing to take a 30% pay cut, then you are either a well trained moron, or getting WAY over-paid.
2) I am young and put a large percentage of my paycheck into the bank for retirement funds, etc. 40% less pay check with 40% less costs of living, STILL COSTS ME 40% OF MY RETIREMENT FUNDS. If you have enough brains to save money for retirement, you have to be pretty stupid to take the 40% less job even with the cost of living reduction.
3)Living in NYC has it's own advantages. Here, I can go Tango Dancing every day of the week, see the best museums, never have to drive the death machine we call an automobile, can go out drinking without worrying about how I am getting home, can see world class plays, theater, etc. etc. etc. Living in Canada would be a marked decrease in my Life Style. It might be OK for people that don;t care about this kind of stuff, but not for me.
Re:I should have it so well. (Score:1, Insightful)
As a Canadian Programmer (Score:3, Insightful)
I think it might be time to move South!
Re:And get paid 40% less? No thanks. (Score:2, Insightful)
1) Your 40% cut does not have a linear connection to cost or standard of living, nor to disposable income. You have to consider two jobs in two places with full information about taxation (marginal taxation in Canada is not as far from US as most seem to thing, btw), cost of goods, etc.
2) Now you are talking about disposable income, which you get to decide to save. This also involves tax law (e.g. 401(c) vs. RRSP) etc.
3) Montreal, for example, is one of the top cities in North America for culture. No, it isn't NYC, but neither is any other US city.
80% Savings 40% Savings (Score:5, Insightful)
COmpanies used to use child labor util we made laws about it. Companies used to work people round the clock until we made laws about it. From their past track record companies WILL DO whatever they can GET AWAY WITH - until we unite and make a law about it.
SO GET OUT THERE and crack some skulls!
Or rural America. (Score:1, Insightful)
I have to believe for most the "Fargo" accent is easier to understand than an Indian one.
Re:And get paid 40% less? No thanks. (Score:1, Insightful)
Uhm no, I think of them as competition. And judging from their taxes, outsourcing to Canada is a non-starter. It will take awhile for the PHB's to figure this out, and I'm sure some outsourcing will take place. After it becomes empirically obvious to the least astute holder of an MBA the business will either be pulled back into the US or placed offshore in Albonia.
And it's Canuckistan, not Canada.
"Nearly American accents"? (Score:3, Insightful)
I challenge the average Slashdot reader to grab a life-long resident of Alberta and Montana at random and decide who is who based not on their word choice or beliefs, but strictly their accent.
Re:Overhead Absurd (Score:2, Insightful)
For my company, we can have 20 Indian guys trained and if 10 of them leave we still have 10 more.
That's 10 programmers that:
a. Have a tough time understanding what you're saying and making themselves understood.
b. Don't completely understand our social and business culture.
c. Will typically do only what is outlined in any spec you give them, or more importantly their interpretation of your spec, and will typically work to a level and standard they are comfortable with but that doesn't meet the generally accepted standards of a major US company.
And I'm not just spouting here. I've worked for US companies that have been burned by Indian firms that did what they thought they were supposed to do simply because the US firms made assumptions that they thought the Indian firms would also make.
There's a lot to be said about hiring people that share the same mindset and experience as you, or at least what you're used to dealing with. The one major problem I keep hearing is that Indian firms either produce shoddy or under-featured software, or they refuse to produce anything until the product is spec'ed to the nth degree, resulting in no real savings in either time or money.
This, by the way, is not a slam against Indian programmers. They are, in my experience, very polite, very nice to work with, and have scads of tech skills. The difficulty is, primarily, the cultural difference. The language difference doesn't help, but the business and social cultures are the gating issues.
So for you to say that more is better is naive.
Re:And get paid 40% less? No thanks. (Score:5, Insightful)
Someone's never been to Montréal...
Re:Overhead Absurd (Score:1, Insightful)
Lack of programmers may be a problem.. (Score:2, Insightful)
All we have to do is put up with the Patriot Act, DMCA, George Bush, and..
Wait? Why did I want to take that programming job in the States, again?
Re:Overhead Absurd (Score:3, Insightful)
Or to Michigan (Score:3, Insightful)
I almost headed out to Silicon Valley during the boom, but after considering that state taxes are literally double what they are here in Michigan, the cost of housing is 2+ times as much, traffic is worse, people expect you to work way longer hours, and federal taxes are going to bite down hard on that extra marginal income, I figured: what's the point?
Plus I never did get the hang of Spanish...
Oh yeah, the weather. Well, there are a lot of states that have better weather than Michigan, so there.
Re:I should have it so well. (Score:2, Insightful)
Re:And get paid 40% less? No thanks. (Score:3, Insightful)
I think your arguement that you cant get culture in Canada doesnt have any real basis.
Re:And get paid 40% less? No thanks. (Score:2, Insightful)
Why not outsource IT to Canada...? (Score:3, Insightful)
You know what? (Score:5, Insightful)
Re:80% Savings 40% Savings (Score:3, Insightful)
Again, this is a case of the small business getting lumped with Big Business. Just like Bush saying Edwards is against small businesses; well, no, he's not. He's against corporations that break the law.
Join a union (Score:3, Insightful)
Yet any time it comes up that companies are looking to get cheaper labor for the same work, Slashdot cries foul. It's all fun and games until it happens to you. Companies hire fresh college grads for less, too.
What's the other Slashdot mantra...oh yes "adjust or die." Isn't that what we keep telling businesses like MS and the RIAA? Oh, but this affects YOU so we have to make laws banning companies from utilizing an international work force. Like I said, join a union.
We are now in a global market. Companies for a very long time have been looking to take advantage of it. There are very few companies that don't have people working in foreign countries.
If you don't like it, you need to convince your boss that you are worth your pay and some foreign person can't match your price to value ratio.
People who work in tech fields are just simply not as valuable as they were 20 years ago. We've passed the time when people who could work in the field were few and far between.
Ben
Re:50% tax rates?? (Score:4, Insightful)
"[This calculator includes] all taxes from all levels of government that Canadians pay. This includes: income & sales taxes; liquor, tobacco, amusement & other excise taxes; automobile, fuel, & motor vehicle licence taxes; CPP/QPP and EI contributions, medical & hospital taxes; property taxes; import duties; profit taxes; and natural resource levies"
You can find the Fraser Institute (right-wing thinktank) tax freedom calculator [fraserinstitute.ca] here. Just did mine (for Ontario) and it turned out to be almost exactly 50%.
Re:And get paid 40% less? No thanks. (Score:3, Insightful)
Not as such. Just as there is cost of living diversity among states and cities in the U.S., there are differences among provinces and even cities therein.
Here in Alberta (debt-free province, no provincial sales tax, top 3 IT hubs in Canada), cost of living and wages are approximately 10-15 per cent less than in Toronto, Ontario. However, services like education can be up to 50 per cent cheaper than in Ontario or BC. Within Alberta, prices for many consumer goods and services are about 10-15 per cent cheaper in Edmonton than in Calgary, while the total cost of a four year degree costs about $1,500 more per student than it does in Calgary (yet students pay approximately the same in tuition). In both Edmonton and Calgary, it is possible for one to live comfortably on approximately $US 11,000 per year gross, and still be called a yuppie.
Interestingly, Edmonton is always in demand for computer tech people with experience in the oil industry while Calgary seems to have a bit of a glut of such individuals at the moment. Some combination of the three hour drive between the cities, and the different cultures is appearently keeping the natural solution from emerging.
Re:It isn't necessarily all it is cracked up to be (Score:4, Insightful)
You mean just like with my HMO, which is one of the top 10 US HMOs [tufts-health.com]?
Re:And get paid 40% less? No thanks. (Score:3, Insightful)
I make 40% less here than I did in Houston, but my quality of life is almost identical. On top of that, while I didn't save much in Houston, I save a lot every month here.
Plus, you know... not in Texas. w00t.
Effective tax rate (Score:3, Insightful)
I don't know about you but I pay over $2k in property tax, 8% PST, 7% GST, fuel taxes, alcohol taxes and a health care levy.
To me this comes up pretty damn close to 50%.
Count all taxes? (Score:2, Insightful)
Income tax is not the only tax. In Canada, as here in the US, after you're taxed on your income you get taxed again almost every time you spend your money.
Sales Tax
Alcohol Tax
Tobacco Tax
Gasoline Tax
Again I don't know about Canada, but here in the US we can't get a bill in the mail without a sizeable number of taxes and "gov't mandated fees" ( same as tax as far as I'm concerned ). A basic phone bill has a large percentage of separately listed fees that are mandated.
So the figures are all well and good, but leaving out all the fees paid post-tax is a pretty good omission.
Just on the gas tax, if you earned $10.00, paid 18% you'd net $8.20. When gas is $2.00 a gallon you can buy 4 even gallons. In CA the combined State and Federal gas taxes are about $.46 a gallon. For the 4 gallons purchased you'd pay $1.86 in taxes.
So, on this particular $10 you'd pay $3.66 in taxes, 36.6% being a little bit different than the 18% income tax.
Not all taxes are as high as those on gas, alcohol, tobacco and other "luxuries", but any comparison of taxes for a region has to include the taxes on the post-tax income to be accurate
Re:80% Savings 40% Savings (Score:3, Insightful)
They still do.
This is, after all, why the likes of Nike, Reebok, and Levis have exported their labour. Labour laws that apply only to domestic workers and not the products for sale, coupled with fairly efficient global transportation and communication networks ensures that companies continue to use exploitative labour. The countries where manufacturing labour gets exported to generally has few legal restrictions on working conditions.
You can probably find something about this on Naomi Klein's nologo.org [nologo.org] web site.
Canada's Next Door? (Score:1, Insightful)
Re:Count all taxes? (Score:3, Insightful)
However, I don't feel these give a good sense of how much people are taxed, since these are sort of 'opt in' taxes. The less you buy, the less you're taxed. The less you drive, the less you're taxed. The only way to avoid income tax is by not working.
Since I don't smoke, drive very little (I commute by bike), don't drink, and tend to not buy too many things, I don't pay as much tax as someone else down the road who likes buying a lot of consumer electronics, drives a Hummer, and goes out every Friday to drink and smoke a lot.
Re:And get paid 40% less? No thanks. (Score:3, Insightful)
Re:Well, I'm one example (Score:5, Insightful)
In about three years, the big names will notice that product quality and sales have dropped dramatically while adjunct costs of outsourcing kept the price per product about the same, and they'll start looking to hire people here to clean things up. Either that, or all the great little startups popping up in this country will steal away their business.
Oh, and maybe we'll get lucky and companies will reverse the process, start hiring Indian executives willing to work for mere hundreds of thousands a year, rather than millions. This will help us effectively extend the slacking-off day.
Re:Join a union (Score:3, Insightful)
A government IS a union, set up by the people living somewhere to help themselves live well, not just to enforce some pure ideology, even if it's capitalism. Businesses don't play favorites or have loyalties, they go for the best return on investment, whether hiring employees or buying a copy machine. But if my government feels the same way, why should I be willing to go fight and die for my country? I'm loyal to the government that's loyal to me.
Don't assume that I'm all for protectionist tarrifs etc. based on what I said. In the long run I think that only generally market-based economies are viable. But I believe that the debate over US policy should revolve around what's best for Americans, NOT some ideological belief that capitalism is natural law which we must never be broken, and certainly not by a simplistic Econ 101 explanation of why current events are to be expected given current policy.
Re:No military in Canada (Score:5, Insightful)
Your right, Canada had a signifigant contirbution to WWII ( and I ), and in fact had the second largest Navy at the end of the second world war ( Mostly because of the shit kicking that Japan and Germany took... ). However, entering the war, that was not the case. Canada is a country that rallies at the time of war ( real wars, not political invasions... ).
Now, the biggest irony is the reason why Canada is not a military power these days... The US! Do a search on a company called AVRO. The created the CF-100, then the CF-105(Arrow). The AVRO arrow was basically decades ahead of its time ( actually, it was heavily ripped off to create the F15
Now the real reason? Basically it boils down to one of two reasons. THe first one is a no brainer... War is a major industry for the US. Had Canada had the best jet fighter/intercepter on the market, how well would sales of the StarFighter, F4 Phantom, etc have gone? Second reason, basically boils down to the U2 spy plane. That plane was the backbone of US intelligence, however its only defence was the alltitude it flew at, and altitude the Arrow could easily fly at. Ironically, the U2 didnt prove to be that invulnerable in the end did it? I believe in the end, Gary Powers was shot down by an AA missle launch from a Mig25.
So, long story short, Canada was on route to becoming a major military power, at least industrially. One of the biggest reason that Canada isnt these days, is because America basically dictated ( weilding a big stick ), come under our protection, OR ELSE!
Finally... the world isnt really that dangerous of a place with two exceptions. 1) Nukes. 2) The US. With the end of the Cold War, the US is the only country maintaining a large and agressive force, with the possible exception of China. TO put things simply, I think the world was much safer before the US invaded Iraq, then it is now.
However, thats the nice thing about Canada... should the US join "the dark side", watch how fast the "free world" unites against you, should you invade ( and not simply annex, big difference ). Also, dont kid yourself... Canada does not have nuclear weapons... but they are pioneers in the field. I imagine it would take a matter of minutes to create a weapon. The amount of weapons grade material in Canada if you were a parnoid, and Canada not a peaceful country, would probrably keep you up at night. Canada is a peaceful country by choice, not necesity. Dont get me wrong, should a landwar happen, Canada would get clobered... a budget of 100x to 1, and a population of 10x to 1 just cant be overcomed. However, if there is another WW, its going to be nuke based... population size and military budgets mean jack-shit in those situations.
Todays conflicts are going to be resolved with terror, because frankly, the US is the only country heavily investing in the military. However, the nicest defence against terrorism, is not to be a prick. Thats a defence that Canada has mastered... the US still has a hell of alot to learn. Im not even gonna mention isreal here... they are going to be targeted by terrorists for a very very long time.
Re:sorry (Score:3, Insightful)
I live in Ottawa, make CA$82K and paid a total of 19.7% in income tax for 2003. I took advantage of RRSP contributions. This is also short of the 50% income tax rate that Americans like to comfort themselves by saying.
We do pay more taxes overall, but we get more for them. The total Canadian tax burdon as a percentage of GDP is 35%. The American tax burdon is 28%. We get universal health coverage for 5% of the burdon; Americans stuff the coffers of private insurance companies. The 2% remaining is probably lost in economies of scale and snow removal. Regionally, Californians and New Yorkers probably pay more in taxes than I do.