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The Almighty Buck Businesses United States IT

Outsourcing is Good for You 963

gManZboy writes "Catherine Mann, from the Institute for International Economics, has a look at What Global Outsourcing Means for U.S. IT Workers up over at Queue. She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US. Ummm, did you follow that?"
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Outsourcing is Good for You

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  • bah (Score:2, Interesting)

    by DNS-and-BIND ( 461968 ) on Friday August 27, 2004 @06:43PM (#10092540) Homepage
    An economist. Lovely. International economist, actually. Have those people *ever* been right about anything?
  • Something Similar (Score:5, Interesting)

    by xeon4life ( 668430 ) <devin.devintorres@com> on Friday August 27, 2004 @06:43PM (#10092550) Homepage Journal
    I've been hearing more and more often about something similar. While not the same idea, it's the idea that America "recycles" (to be put in an Economists terms) jobs every year, something in the order of 50 million or so if I'm not mistaken, and that outsourcing somehow is just a natural process of this recycling...

    If you ask me, I think Economists have it tougher than Computer Scientists, but that's just my opinion. :-P

    -Devin Torres
  • by tao_of_biology ( 666898 ) * <tao.of.biologyNO@SPAMgmail.com> on Friday August 27, 2004 @06:44PM (#10092558)
    OK, first of all, where is the evidence outsourcing jobs overseas makes anything cheaper?

    Last time I checked the market set the price (with obvious unnamed monopoly exceptions *coughMicrosoftcough*). The price the company pays for the production of the item has negligable impact on price--and that's fine. The price people are willing to pay for something has a much bigger impact on the price. All outsourcing overseas does is fatten the profit margin for the sales of these IT projects. So right there, her basic premise is crap.

    I mean, is she REALLY saying that companies will have more money to pay you with, because they don't have to pay you? WTF.

  • Hello Catharine. (Score:5, Interesting)

    by Dark Lord Seth ( 584963 ) on Friday August 27, 2004 @06:51PM (#10092612) Journal
  • One more time (Score:3, Interesting)

    by Nuttles ( 625038 ) on Friday August 27, 2004 @06:52PM (#10092632)
    I am a programmer, I make my money from making programs. I expect to get paid very well for what I do. I have spent thousands of dollars in not only college expenses, but also other training and materials. If x number of programming jobs are exported to another country because U.S. coorporations don't want to pay what I expect how does that benifit me the programmer? The economy as a whole 'may' not be hurt, but actually helped, but in the end there are less programming jobs out there than if there weren't outsourcing programming jobs. The big picture doesn't make me feel better.

    Nuttles
    Saved By Grace
  • by Anonymous Coward on Friday August 27, 2004 @06:58PM (#10092670)
    It's not that funny. I did this and got two promotions! My old job became the jobs of 3 guys in Taiwan, and I was their boss. Then I gave my _new_ job to another couple guys in Taiwan; and got hired in a different company to help build a team overseas.

    Scary, but it works.

  • Basic economics (Score:5, Interesting)

    by gmhowell ( 26755 ) <gmhowell@gmail.com> on Friday August 27, 2004 @06:58PM (#10092673) Homepage Journal
    It's basic economics. What is described is how it works in theory. However, the theory requires perfect knowledge for all parties involved, zero costs for movement of capital (human and otherwise). I'm also unsure how comparative advantage [google.com] (Google and David Ricardo are your friends) works in a market that is essentially saturated.

    Perhaps the thing that really needs to be looked at is that IT support is viewed as a commodity. Support offered in India or Russia is viewed as the same quality product as that offered in the US. If this is the case, quitcherbitchin. I doubt you are buy American in other walks of life. If there is a difference in quality, it's time to express that. Was it Dell who found that their business customers wanted US tech support instead of Indian tech support? (or HP?) The product wasn't a commodity, so it couldn't be switched.

    Rather than gripe about losing your job, explain why it's better that you have it than someone in another hemisphere.

    And if you made it this far, here's a link to a non unreadable article [slashdot.org]. Will Taco et al. ever admit they are wrong with this color choice?
  • by DrCode ( 95839 ) on Friday August 27, 2004 @06:58PM (#10092677)
    I don't see stocks doing so well these last few years. Looks to me like the savings are more likely going into the executives' pockets.
  • Re:Executive Summary (Score:3, Interesting)

    by subterfuge ( 668314 ) on Friday August 27, 2004 @06:59PM (#10092686)

    Net Result [Appendix A]: Those employees are now doing essentially the same job for substantially reduced income and benefits.
  • by Shivetya ( 243324 ) on Friday August 27, 2004 @07:03PM (#10092707) Homepage Journal
    I don't believe it reduces prices but it does delay some price increases. The market is pretty competitive across the board and pressures on this market prevent any real changes in the costs of most goods. So what is a company to do? Try to do the same for less. This allows some, not all, companies to be able to forgo raising their prices.

    Of course its all a vicous circle. Eventually one of the companies succumbs to the fact it will have to raise prices... and they lose a little marketshare but it evens out usually as others end up with the same issue.

    However it is just as outrageous to not believe that using cheaper resources doesn't result in lower costs.

    Seems to me that too many people can justify the milkman losing his job to technology, the seamstress to technology, and even the gas attendants to technolongy. Yet threaten the geeks and they act as if its the coming of the end.

    Face. The economy churns through jobs all the time. Some of these go overseas which does result in lower costs for people here. Just as the cost of clothing is less when it comes from China so can the cost of tech.

    Like that nice PC you got there? Cheap memory eh? Where is the crying over the person whose job was lost to a PC?

    Sorry but the world maturing does suck at times for those caught up on the wrong side of it. Getting emotional and claiming its all a lie won't make it stop.

    Remember 138 million jobs exist in this country and compare that to the number outsourced. Also remember that the number of people who are employable will decrease over the next 10 to 15 years... so...
  • by madro ( 221107 ) * on Friday August 27, 2004 @07:03PM (#10092715)
    is that economics is a zero-sum game. Lower costs supposedly means more profit to executives, but no increase in jobs. Higher overall demand supposedly means higher demand for outsourced workers.

    What the author is trying to point out is that whole new markets of opportunity will open once the cost of basic programming activities is low enough. One of the benefits of open source software is that poorer countries can now obtain technology that before was out of their reach (or they can at least extract higher discounts from proprietary vendors).

    I have a friend who works as a software consultant customizing proprietary accounting software for small/medium enterprises like those described by the author. That's the basic outline of the future -- smaller companies could benefit from technology that goes beyond office applications, but to more backroom ops, or e-commerce opportunities, or whatever. You won't get paid based on your ability to write something that can be written cheaply overseas to target a generic problem -- you'll be paid to tweak that piece into something that gives a competitive advantage to your customer ... or you'll be paid to integrate that piece with other pieces that can be picked up cheap as open source software or as cheaply developed components.

    Many industries assemble cheaper components into an overall design that delivers a value greater than the cost of the parts. Software, as an intangible good, provides some interesting (perhaps worrying?) differences that make economic analogies a little tricker to apply.

    But I think while some components are open to a research/science approach (algorithms, maybe frameworks) I think the majority of software is close to manufactured goods in that customer requirements drive a solution that isn't generically applicable or saleable (a problem for Microsoft-ish companies that try to sell the same thing to everybody). The world of de facto standard products gets a lot of press because it's typically winner-take-all (google, MS Office, MS IE), but the growth in demand and in jobs will be in the world of tweaked software.
  • Re:Something Similar (Score:1, Interesting)

    by Anonymous Coward on Friday August 27, 2004 @07:09PM (#10092742)
    "While not the same idea, it's the idea that America "recycles" (to be put in an Economists terms) jobs every year, something in the order of 50 million or so if I'm not mistaken, and that outsourcing somehow is just a natural process of this recycling..."

    Your body constantly recycles blood cells.

    But if you start losing blood cells faster than they're being produced, you're in deep shit.
  • Competitive Advantage is Crap unless YOU personally have a job.
  • Lou Dobbs Says No (Score:5, Interesting)

    by mankey wanker ( 673345 ) on Friday August 27, 2004 @07:14PM (#10092780)
    See:
    "Exporting America : Why Corporate Greed Is Shipping American Jobs Overseas"
    by Lou Dobbs

    "The power of big business over our national life has never been greater. Never have there been fewer business leaders willing to commit to the national interest over the selfish interest, to the good of the company over that of the company's they head."

    See also:
    http://www.pbs.org/now/transcript/transcript334_fu ll.html

    DOBBS: I want to hear one of these candidates sharply and clearly say this country is about the people who live in it.

    ...

    DOBBS: You have a responsibility not only to your investors, you have a responsibility to the marketplace, you have a responsibility to your customers, to the community in which you work. You have a responsibility to the country that makes your business possible in the first place.

    MOYERS: Heresy. Are you a traitor to your class? The investor class.

    DOBBS: Well, I'm, you know, I think most of us are investors. And I hardly think I'm a traitor. I think it's traitorous and treasonous and absolutely ignorant for these people to be out ballyhooing double-digit returns on equities when first we have to get our house in order in this country. And bring back integrity, principle, leadership to our business enterprises, to our markets. And try to do a lot better for the people who count. That is the middle class.

    ...

    MOYERS: You begin with a stunning quote. I'll read it. Quote, "The 20th century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda as a means of protecting corporate power against democracy."

    DOBBS: Absolutely. Corporate America has at this time controls the national media. It controls nearly every avenue of an American citizen's access to information about the way he or she lives, about those forces that are influencing our lives.

    And corporate America is protected in Washington by the dollars it spends. It is protected in the media by some virtue of ownership.
  • Re:Executive Summary (Score:2, Interesting)

    by NotQuiteReal ( 608241 ) on Friday August 27, 2004 @07:18PM (#10092815) Journal
    ...put a ton of IT talent out of work.

    It put a lot of un-talented folks out of work too! There were a lot of band-wagon IT people in the dot-com parade. I sure hope they stay out of IT so they never get a chance to program my pacemaker or anything else more important than some retarded half-baked if-we-do-X-on-the-internet-we'll-get rich scheme.

  • Purely theoretical (Score:2, Interesting)

    by DrFalkyn ( 102068 ) on Friday August 27, 2004 @07:24PM (#10092855)
    The author shows how IT oursourcing might be good for the U.S. economy as a whole, but I fail to see how that is going to help the average IT worker.

    The author's main point is that by saving money, supposedly it will free up money in sectors such as education, health care, and construction. What the author fails to realize is tha most of the outsourcing WAS in customized applications. It wasn't the big boys like Microsoft, IBM, etc. doing most of the layoffs, it was the smaller shops. In addition, I would call in to question the value of IT spending in each of these industries.

    1) Education - need better teachers, not better software. I've taught before and that is the main problems. Computers won't keep Johnny from . Secondary schools are mainly just babysitting

    2) Construction - ?? you hire a bunch of drunks to pound some nails in, what do you need computers for. This industry loves cheap labor, I don't see much opportunity here

    3) Health services - IT could really shine in this area, but it is such a huge mess that it won't be fixed without government regulation, which means that few will profit from it. I remember this was what MicroStrategy tried to concentrate on back in the mid-late 90s, I suppose they just dropped it after they realized what a colossal mess it was. A bigger problem with health care is the cost of health insurance and the fact that people are living longer and needing more care, long after their productive years are over. Malpractice is another issue effecting this industry.

    Really they only way you can make money in the IT sector anymore is you can show businesses that it will save them money. IT is mainly just a cost center nowadays. I don't see this happening for any of those industries.

    Also, consider this: Are Windows/Office any cheaper now than it was 10 years ago, adjusted for inflation? I don't have the statistics on hand, but I'd be suprised if it were true. Though I suppose hardware is a bit cheaper.

    Consider what happened during the 1980s - 1990s . I suppose you could say it was good for the U.S. "economy*" that all the decent wage manufacturing jobs left the U.S. Consumers got cheaper cars, but workers lost their jobs, and they NEVER came back. If you use the author's analagy and applied it to the manufacturiung sector, then as prices fell on consumer goods, demand should have increased since consumers now had more money which to purpose. Well I suppose that did happen, but the sector never responded, and things only got worse.

    Some of them were able to retrain to IT jobs, quite a few were relegated to WalMart. A few years later they also lost their IT jobs. Its just not possible for a 45 year old with three kids and a mortgage to be constantly retraining like this. Quite a few familes have never recovered.

    The author suggests that by outsourcing programmers you create more positions in design/interface, interacting with customers and management. But how is someone who has never programmed Only a few with can be a manager/CEO straight out of college. You need some time in the trenches. And if they layoff all these junior positions where are our next batch of managers going to come from? I suppose from whatever country you are outsourcing to.

    In short, I don't see no light at the end of the tunnel for those in IT/Programming, which is part of the reason I'm getting out. Luckily I'm still young and have no family, I suppose with the way the U.S. works, from a purely economic standpoint it is uneconomical to have one.

    * Interesting how these lassez-faire types hate collectivism yet often resort to a purely aggregate word such as economy, GNP, GDP, etc.

  • by Anonymous Coward on Friday August 27, 2004 @07:25PM (#10092868)
    In the NY Times a while back, in a Virginia Postrel column about outsourcing, Mann suggested that (paraphrasing) "perhaps technology would allow IT workers to find IT jobs".

    Clearly, the woman was unfamiliar with Monster.com, Dice.com, or the realities of the IT job search.

    I think this was earlier this year, so clearly, she's had her head up her ass for the better part of a decade.

    Her idea was that there might be "hidden" IT jobs in hospitals, and other places where an IT worker might not be smart enough to look.

    If she knew what she was talking about, she'd know that you don't just look for jobs at IT companies, you look for jobs that require the skills you have. (Because there's not much point applying at a VB shop if what you know is Java.)

    In IT job ads, you're likely to find ads from hospitals, insurance companies, banks, and local government, as well as "IT" companies. Slashdot readers know this.

    Mann seems to have no concept of what an IT job search is like, yet she doesn't hesitate to consider herself an expert.
  • Re:Inevitable (Score:2, Interesting)

    by mankey wanker ( 673345 ) on Friday August 27, 2004 @07:27PM (#10092882)
    When the people you employ have no chance of living under the same conditions that you do, it's exploitation. You are exploiting their lower standard of living for profit. You are exploiting their less free political system for profit. You are exploiting their near starvation level of subsistence for profit. No, it's not quite slavery - but perhaps not leaps and bounds better either.

    When the conditions in China improve, then we can start this conversation again.
  • Re:Indeed (Score:1, Interesting)

    by Anonymous Coward on Friday August 27, 2004 @07:28PM (#10092884)
    " That cash goes back into the economy. Some of it will go to higher-level software, some to cusomisation and services. It'll all still be taxed."

    Nah, it'll go for gas and healthcare.

    The gas and healthcare companies will offshore their inhouse IT work, and the companies they buy packaged software from will offshore their workers.

    Big upside for the executives. Not so much for anyone else.
  • I'll give credit to our dear analyst for actually trying to reason thru why offshoring everything in sight is a good thing, rather than just waving her hands. However, this just makes it clearer than she's full of shit.

    Example #1:
    Design and interface must be done together with the customer, but coding and maintenance do not require close proximity with customers and can be done by less costly programmers abroad. The higher-wage jobs, involving design and interface, must still be performed in the U.S.

    Good try, but wrong. There are times when the designer and the coding monkey can be safely separated, but in general you're asking for trouble. Prepare to be IMing a lot. The offshore outfits are becoming better designers in any case, and soon the US designer's employer is going to be shipping his/her job out to be where the code is written.

    Example #2:
    The value to the U.S. economy of cheaper outsourced software and IT services is that it reduces the price of customized software. Econometric estimates are that, to an even greater degree than IT hardware, demand for software and services increases more than one-for-one with reductions in price. Therefore, as prices fall, demand for services and software rises more than one-for-one, diffusing IT into the lagging sectors and deepening the use of IT in the leading sectors, thus increasing demand for workers with IT skills in all sectors.

    So with cheap custom software, more businesses will use it and the user employees become computer skilled. The first assumption I'll buy into, assuming that an easy and cheap local consultant is available at the start of the coding chain. If this plays out to the scale she thinks, therein lies the benefit to US IT workers. The second assumption is complete crap. Someone using a customized Access database front end is no more "computer literate" than someone using Word, all else being equal.

    Example #3:
    Meanwhile, U.S. IT jobs continue to move up the IT skills ladder. Demand increases for workers with the skills needed to design, customize, and utilize IT applications...

    Nope. This assumes the US always holds the high ground. However, as more development and design occurs overseas, and the host countries become ever more developed and self-sufficient, this falls apart. They sell to us, and by and large don't need anything back... except our increasingly worthless dollars.

  • Correction... (Score:1, Interesting)

    by Anonymous Coward on Friday August 27, 2004 @07:32PM (#10092929)
    outsourcing WAS good for you, until you got arrested by your own govt as a "terrorist" for crossing the street.
  • Re:Executive Summary (Score:2, Interesting)

    by Anonymous Coward on Friday August 27, 2004 @07:37PM (#10092956)
    This is really true. while the high-end high-paying jobs of programmers of the .com era are over, there is a whole world of companies who have IT infrastructure that they need people to run. for example, i work for a freight forwarding company with stations in 30 states accross the US, and while we don't do a single bit of software development, we do have a website, a large sql database backend for our main shipping software, email, SAP/R3, and a few other goodies, and these things get upgrades or repairs or whatever almost constantly, so we have a few IT people employed to mostly maintain our equipment, deploy software, and administer the domain, which is a surprisingly large job and mostly keeps us quite busy. although my company is a freight forwarder, i still consider myself an IT worker in the IT field, because that is what my job is. i think furthermore that a lot of people out there who can't find "IT" work are looking in the wrong places. hospitals, law firms, large manufacturers, banks, schools, universities, and most large corporations all have HUGE IT departments, even though they don't actually produce and IT products. also, these people can never be outsourced because most of them must be located on-site to do their jobs (try replacing a SCSI card on a machine in seattle when you're in india). as these companies grow, the number of computers and users they have grows also, and their IT infrastructure gets more complicated and larger and more time-consuming to maintain, and they hire more IT people to fix stuff. it isn't the most glamorous job in the world, but I make more than enough to live confortably and someday i will be a supervisor or IT manager or something similar and make even more.
  • by EXTomar ( 78739 ) on Friday August 27, 2004 @07:38PM (#10092963)
    The problem with outsourcing is that it isn't a buisness move that creates growth. You remove a job here and create it over there. Profit is generated but no real change has happened so there is little modivation to create new jobs.

    Yes its true the new job over there creates higher standard of living and wealth over there but at the cost of the standard of living and wealth over here you really haven't gained anything but CEOs with larger wallets.
  • by linuxpng ( 314861 ) on Friday August 27, 2004 @07:47PM (#10093026)
    how do you figure that the guy making the decision to outsource is going to decide to eliminate his/her own job? I'm 100 percent with on you ship the exec jobs overseas.

    How do *we* the average person make that happen?
  • Re:CEOs (Score:2, Interesting)

    by puz ( 222978 ) on Friday August 27, 2004 @07:53PM (#10093072) Homepage
    CEO's don't create any value; scientists, engineers, and programmers do. Without the technological infrastructure invented and perfected in the USA, the workers doing the outsourced work won't have a platform to work from. By treating American tech workers as disposable commodity, the CEO's and high level managers are in effect stealing from the very people who created the technology. Bush or Kerry, whoever is elected for '05, needs to start creating laws to protect the IP rights of tech workers, thereby empowering the individual workers against the corporations. For example, many companies require new-hires to sign a form that says any idea one thinks of while being employed in the company belongs to the company. This practice should be made illegal. Also, if one participated in a group project, one should be able to claim partial ownership to the intellectual rights associated with the project even after he or she leaves the company. Currently obtaining a patent requires significant work, whereas obtaining copyright is very easy. I would like to see a middle-of-the-ground, semi-pattent law so to speak.
  • Re:Hello Catharine. (Score:3, Interesting)

    by lawpoop ( 604919 ) on Friday August 27, 2004 @07:53PM (#10093074) Homepage Journal
    Thanks for the link. I've been bouncing that idea around in my head, but I never could express it so precisely.

    However, can you explain how outsourcing is an example of the broken window parable?

  • by LihTox ( 754597 ) on Friday August 27, 2004 @08:02PM (#10093128)
    Previous poster:
    Outsourcing is bad for the person whose job goes elsewhere.
    But the job goes elsewhere because someone else can do it cheaper.
    It happens all the time. Sooner or later, all those guys in India will price themselves out of the market and lose their jobs to people in China or Africa.
    I have sympathy for people who lose their jobs. I have no sympathy for people who want government to distort economics.

    How about a metaphor...

    AIDS is bad for the person who gets it.
    But the person gets AIDS because he is exposed to the HIV virus.
    It happens all the time....
    I have sympathy for people with AIDS. I have no sympathy for people who want medicine to distort biology.

    Your hidden assumption is that natural "economics" is a good thing. I would not agree with this assumption myself, as I find raw capitalism, based on the motto "Look out for yourself", to be cruel and short-sighted.

  • Re:Exactly (Score:4, Interesting)

    by TrekCycling ( 468080 ) on Friday August 27, 2004 @08:07PM (#10093158) Homepage
    Because we're all shareholders, remember? Except the 50% of the population that isn't, like those of us still trying to pay off the student loans we took to get us into white collar jobs and out of the dying manufacturing industry. We're the real suckers. Thousands invested in a future that was pulled out from underneath our feet.
  • by Anonymous Coward on Friday August 27, 2004 @08:08PM (#10093162)
    In industry X, base production is moved offshore, while higher-level refinement/assembly/r&d/management remains stateside. Moving production offshore promotes efficiencies blah blah blah.

    The problem is that this is mostly an illusion. Production is hard and requires skills and capital. Refinement, management, and assembly can be done anywhere. They're moved to the US more for tax purposes and for "Made in the USA" stickers than for any concrete advantage. The only thing that's tough to move offshore is R&D, and the software side of the tech industry doesn't even have that going for it.

    In short, this is what's really happening: The third world is becoming the producers (food, industrial, whatever). The first world is becoming consumers. The only thing that keeps the third world from becoming self-sufficient and raising prices on the first world is crippling debt and indemic corruption.

    Yes I know the terms "first" and "third" worlds are passe. "Developed" and "developing" countries is worse, because it creates the impression that all countries can become all super-developed like the US (and if that's the case, who grows our food again?)
  • How is this good? (Score:2, Interesting)

    by coredumpman ( 637020 ) on Friday August 27, 2004 @08:43PM (#10093336)
    How is outsourcing beneficial at all in the long term? To me it is a short term solution to increase the stock value of a company. I don't know if it is just me that thinks this, but it seems to be like the middle class America is disapearing, does it not seem that outsourcing is to blame for this? To some degree I can see some jobs getting outsourced (like Levis jeans for instance) where a developed country such as the US is wasting resources, this won't hurt the economy, but when companies like Nortel Cisco and IBM and pharmaceutical, and R&D companies start outsourcing university level jobs, this is a problem IMHO. Take a look around, the middle class America is slowly slipping away.
  • by 0111 1110 ( 518466 ) on Friday August 27, 2004 @08:47PM (#10093361)
    Well I for one very much appreciate tax breaks for the poor. When are we going to get a candidate who runs on the platform of eliminating completely all income taxes on anyone who makes less than $40,000 year, while somewhat raising taxes on anyone who makes between 40K and 100K and signifantly raising taxes on anyone who dares to make more than 100K/year.

    Also, lets repeal that stupid gas tax. That's about as regressive as they come and our highways and byways are just fine the way they are.
  • Re:Numbers game. (Score:5, Interesting)

    by Delphiki ( 646425 ) on Friday August 27, 2004 @09:41PM (#10093599)
    Tarriffs as an economic strategy are crap. If you try and save a non-competitive industry by way of tarriffs, you end up hurting everyone, to protect a segment of the economy that would find ways to adjust if it wasn't propped up. It comes down to a small segment of society bitching loud enough to politicians to get them to screw over everyone else, since the general population doesn't notice most of the time anyway. Tarriffs add nothing to the U.S. economy.

    Take the tarriff on the steel indstry. It saves a dying industry, so that the workers do not need to try and find other jobs. But it makes cars more expensive, and hence makes domestic made automobiles less competitive, as well as forcing consumers to throw away extra money giving it to an industry which isn't able to produce enough value to cover it's cost.

    People need to learn that having to change and adapt in order to survive is a fact of life.

  • Re:One more time (Score:2, Interesting)

    by MrBigInThePants ( 624986 ) on Friday August 27, 2004 @09:50PM (#10093644)
    Not that I should enter this arguement, but I have never subscribed to doing all that is good for me...far too boring

    Money that is redirected from the US's disproportionately rich economy helps ALL of those countries, not just a particular IT worker. That worker will spend his savings in his country and that will benefit the economy and therefore provide more jobs helping poverty etc etc etc. Basic economics really.

    The reality (and also basic economics) is that all that wealth your country has didn't just come from nowhere. If it wasn't for 3rd world countries producing lots of cheap produce/gadgets/etc you would have none of it. The US government has become extremely adept at manipulating markets and so forth to benefit their own economy. Sometimes with far reaching and deterimental effects on poorer countries.


    Not that their is not poverty in the US, of course, but this is mostly because the distribution of wealth in the US is so screwed up.

    PS: This is not a troll, just an objective opinion - such as it is.
  • by Nept ( 21497 ) on Friday August 27, 2004 @10:12PM (#10093730) Journal
    Yeah that's great, except you can't offshore outsource lawn mowing

    You can't offshore it? Maybe not. But you can still lose it. There are a slew of "undocumented workers" in most states (at least western and mid-western) who have those jobs: the blue-collar, low-income and unksilled labour jobs.

    Proponents (not perhaps without some justification, I suppose) argue that since no Americans want to pick strawberries or mow lawns for a living, without the illegal/legal migrant workers, the work will never get done.

    But how soon will it be before proponents of white collar outsourcing start saying that no American would want to do low level I/T Work - eg., Call Centers, 1st Line Tech Support, basic coding? I think it's already being said.

    Those with the "have" are in a position to call the shots here. Or put another way, capitalism being tied to the private ownership of the means of production allows the private appropriation of surplus value. Companies outsource more for marginal benefits at best it seems, and yet nobody things to cut the salaries of the top executives?

    If anyone thinks I'm taking this too far, then why are the CEOs and top executives of some of the companies responsible for the most outsourcing making millions of dollars? (Carly Fiona [aflcio.org] and Sam Palmisano [aflcio.org]).

  • by Anonymous Coward on Friday August 27, 2004 @10:26PM (#10093806)
    Here is the logic -
    This pattern of India, China, and the Philipines beying able to do US work on the cheap for US companies, frees capital up for investments in ever increasing sophisticated technologies of which, low end labor will have to provide the manual labor needed in these endeavors (until they are outsoured at a later date).

    This is what enables innovation - this is why you are using a computer and discussing this subject via the internet. This cannot be planned. Valuation needs to be organic.

    CEOs will be able to give themselves big bonuses by outsourcing your job but that will not last long - soon no CEO will be able to get a bonus for doing something everyone knows how to do.

    Quit being such a control freak.
  • Yippee! Then WE win! (Score:1, Interesting)

    by Anonymous Coward on Friday August 27, 2004 @11:02PM (#10093953)
    If a large prison/slave labor pool is what it takes to win, WE WIN AGAIN. Why? Because the United States has BOTH the greatest number of people in prison AND the highest percentage of its citizens in prison.

    USA! USA!

    Sometimes it IS better to be lucky than good (or smart).
  • Re:bah (Score:2, Interesting)

    by UdoKeir ( 239957 ) on Saturday August 28, 2004 @12:03AM (#10094276)
    Except that sometimes they do.

    From here [leadershipnow.com]:

    In 1984, a questionnaire was sent to four ex-Finance Ministers, four Chairmen of multinational firms, four students at Oxford and four London Dustmen (referred to in the U.S. as Garbage men).

    Ten years later the predictions were compared to the actual results and the British Garbage men outperformed the ex-Finance Ministers and the Oxford students while equaling the foresight of the multinational business executives on a number of key economic predictions. (The Economist, June 3, 1995)
  • by PetoskeyGuy ( 648788 ) on Saturday August 28, 2004 @12:27AM (#10094367)
    So now you have your new job, but you have to move overseas to train people, and there are 5 or 6 guys in Taiwan with new jobs.

    So how are there move jobs back in the US? Must be less competition for jobs because there is one less you. Makes perfect sense.

    It's called knowledge transfer. You teach them your job, then you let them have it. Glad it's working out for you.
  • Re:One more time (Score:2, Interesting)

    by TheUglyAmerican ( 767829 ) on Saturday August 28, 2004 @12:29AM (#10094374)
    Whoa. I work for a US company that has outsourced development to India. I work both sides of the Pacific. I've done significant work with the India team and find them to be smart, hard working, and very capable. In fact looking from here (I'm in Bangalore right now) back to the US, the US teams appears sloppy and don't think things through.

    People that say outsourcing doesn't work don't have a good process in place to take advantage of it.

  • Fair Tax (Score:2, Interesting)

    by z-thoughts ( 716174 ) on Saturday August 28, 2004 @01:34AM (#10094606)
    The problem with your progressive tax is expressed fairly well by Reteo Varala. It's exactly what the powers that be want in order for them to be more dependent on the government.

    A better tax idea would be the Fair Tax plan. The idea is to abolish all forms of taxes except one, the retail sales tax. And by all taxes, I do mean all. No income taxes, no business to business taxes, none. Just a sales tax on items you purchase.

    This allows our businesses to thrive and removes the "rich vs. poor" in taxation that the political hacks use to promote class discriminations.

    You can find out more about this here. www.fairtax.org [fairtax.org] Good reading :)
  • by prockcore ( 543967 ) on Saturday August 28, 2004 @03:28AM (#10094958)
    Well how do you get those years of experience if all the low level jobs have been shipped overseas?

    There's an analogy you can use to describe this to people who just don't get it.

    It's like taking a ladder, and cutting off all the bottom rungs. I mean, how useful is a rung that's only a foot off the ground anyway?
  • by cruachan ( 113813 ) on Saturday August 28, 2004 @04:56AM (#10095109)
    I know the posting is meant to be funny, but it does raise an interesting question - would a jihad against hindu's take priority over that against christians? As I understand it (being a born-again athiest) islam regards the other 'people of the book' - jews, christians - to be preferred over anyone else, hence islam's long tradition of tolerance to enclaves of such people living in it's borders (although this would have appear to have declined with the rise of the fundies over the past 70 years).

    Any muslims care to enlighten me - I know I've probably made a complete has of explaining, but is there any milage in the general idea?
  • by salesgeek ( 263995 ) on Saturday August 28, 2004 @07:39AM (#10095385) Homepage
    Labour force is a very limited resource, so with outsourcing those low-grade jobs, you have more people who can concentrate on doing the more profitable (ie. higher added value) jobs.

    Not everyone wants to be a sales person or a manager. If there are no "low-grade" (read: entry level and junior) jobs, no one gets the experience to become a manager.

    A lot of the urge to outsource comes from the unnaturally high price of software anyway. If 42% of a firms IT spend wasn't on software licenses... great things could happen. Monpolies suck - and there's no shortage of monopolies in the software business real and artificial.

  • WalMart Economics (Score:2, Interesting)

    by lewi ( 806353 ) on Saturday August 28, 2004 @08:02AM (#10095427)
    If WalMart was in charge of running our economy would it be good for America?

    1) Everything would cost less.
    2) Everything would come from a third-world country.
    3) The largest employment sector would be in the transport of goods whether that be truck driving, warehousing, or stocking the shelves.
    4) The second largest employment sector would be in business management.
    5) Programming, IT and other high paid skill positions would likely be in third-world countries to keep down costs.
    6) Everything would have to come from a third-world country because the largest employment sector would have low wages that prevent them from being able to afford anything else.

    Of course this is hypothetical, but it seems to me that this is the goal of our economy.

    I can't wait to hear the uproar when middle-management positions start getting outsourced to third-world countries to further lower costs.

    Maybe truck driving wouldn't be a bad career after all...

  • by KontinMonet ( 737319 ) on Saturday August 28, 2004 @08:26AM (#10095474) Homepage Journal
    This sort of asinine logic really gets up my nose. Software development is still a sort of craft, code is not (yet) churned out like burgers or chocolate bars. So some sort of apprenticeship is still required if you are to have any expertise in the field. Anyone who claims that learning UML (or whatever) now provides you with the tools magically to produce quality designed systems (from which resultant quality software is generated) is talking out of their backside.

    If you are to check the quality of code produced offshore (back in the West say), you have to do some form of code walkthrough, never mind re-testing. Testing and performance checks alone are not sufficient to determine code quality (what if a bug occurs and the code is obscure?). If all the code checks, design checks, testing cycles and documentation is outsourced, what are you left with, apart from some (relatively) simple management tasks such as project tracking?

    But how are even these management tasks to be properly carried out if you don't understand the software development cycle (as your PM has little contact with software people)?

    I read somewhere recently that 160,000 IT jobs had been created in the US last year - but there was no net increase in US software expertise because an equivalent number of jobs had been outsourced. The same is beginning to happen in the UK (although not quite as bad as the US, despite our govt's efforts otherwise). The number of students taking IT exams in the UK has dropped significantly, which is usually a pointer to where the money now is (ie,not in software).

    As software people age, they tend to drop out of direct involvement with software (some become managers) whilst the new intake is shrinking. In other words, the apprenticehip is moving offshore. In 20 years, there will be very little expertise left in the West, the corporates will have moved the bulk of their operations to where the expertise lives. And I venture to judge that software will still not be automatically generated. We'll be left flipping burgers for the new class of Asian tourist (of which I see a lot more in London these days), who've come 'to see history'.
  • by deaddrunk ( 443038 ) on Saturday August 28, 2004 @09:10AM (#10095602)
    It's only been the last 100 years or so where the poor have been living in anything better than subsistence and not dying from preventable diseases like cholera and tuberculosis. That's because in the 20th century some of the wealth was taken from the very rich and used to create the society we now take for granted.
    Look at history; how much further have we advanced in the last 100 years than we did in the previous 10000. That wasn't due to greed, it was increasing the opportunities of those who normally would've died by the time they were 40. The massive economic, technological and social success was built on secure jobs and social justice, not laissez-faire capitalism. Throwing it all away just to increase the Dow Jones will be catastrophic.
  • by umpa ( 38894 ) on Saturday August 28, 2004 @10:39AM (#10095919)

    Try out this article from Reason Magazine in July.

    Ten Truths About Trade [reason.com]

    It goes into the concepts more than the numbers. Could make it easier to explain to others.

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