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Programming The Almighty Buck United States IT Technology

The Changing Face of Offshore Programming 670

teambpsi writes "BusinesWeek Online has an opt-ed piece on the trend in offshore programming pricing going up, with domestic rates going down. As a contractor, I've seen the downward pressure on contract gigs now to rates lower than what I was charging over five years ago. Dell Computers recently announced that it was bringing its customer service back on-shore, I wonder if this might be the start of some bigger trend -- maybe 'buy american' could be our new battle cry ;)"
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The Changing Face of Offshore Programming

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  • by jmorris42 ( 1458 ) * <jmorris@NOSPAM.beau.org> on Thursday January 01, 2004 @01:21PM (#7853159)
    Don't expect any success with simply screaming "Buy American". Offer a better value proposition.

    You are closer to the customer, not thousands of miles away.

    You understand their problem better than some Indian programmer who doesn't truly grok the underlying American business practices being codified into software.

    You are operating in their time zone.


    That will win business a lot better than trying to shame a potential customer into paying more just because you are an American.
  • Buy american (Score:2, Insightful)

    by inc_x ( 589218 ) on Thursday January 01, 2004 @01:21PM (#7853165)
    Although the "Buy American" campaign seems to be a great success in Iraq (thanks Dick!), I don't think it will go down too well in Old Europe.
  • by samdaone ( 736750 ) <samdaone@hotmail.com> on Thursday January 01, 2004 @01:22PM (#7853172) Journal
    This is keynesian economics at its best. Acutal supply and demand. Now that contractors and programmers in the states are worried that all their jobs will move over seas, they are lowering their prices. Chances are US based companies would rather do business with someone they can get of hold of, and I don't know how the legality of the system works, but you can sue people for breach of contract and such here, I do not know if you can do that with overseas contractors, is it more of a "buyer beware" methodology?

    Now you can expect the overseas operation to start lowering their prices or adding more value to their service, and vice versa until it eventually balances out, and once that happens most US based companies would probably prefer to work with someone based locally.

    Doctors may not have to worry about this problem of oversea contracting since you still need to see them in person to do the best type of work. Lawyers on the other hand may not have the same benefits :)
  • Aryans? (Score:1, Insightful)

    by Anonymous Coward on Thursday January 01, 2004 @01:25PM (#7853191)
    There's nothing wrong with siding with your own kind. It's not racism - it's common sense.

    Racial supremacy is not "common sense". "My own kind" is the human race. Yours must be the Pure Master Race of Aryans.
  • "Who cares if an Indian can do a job better: they are Indian"

    Except that they can't. Here in the US, I can keep track of my team and teach them what they need to know. If the work gets outsourced, then all you end up with is a large number of junior level programmer with no direction. It's simply not effective. Then again, neither is hiring 200 programmers for a project.

    The real problem is that buisnesses are looking for the sweet spot between quality, productivity and price. It seems counter-intuitive to companies that a smaller team of more experienced programmers will be more effective than a large team of juniors. They think that a senior developer simply costs more, and that they'll still need the same number of developers.

  • by vkg ( 158234 ) on Thursday January 01, 2004 @01:30PM (#7853227) Homepage
    Protectionism is stupid. American manufacturing workers have had to adapt to their jobs moving abroad since the end of World War Two, and it's caused enormous economic hardship here - but given hundreds of millions of people abroad new hope and new life. Sweatshops may suck, but they're better than making a living picking through garbage dumps, and that's often the alternative people face.

    In the long run, this is one world, and one market: individuals should be free to trade ideas with anybody they want, and in most cases goods and services too.

    Why shouldn't somebody in India, or Taiwan compete with me for my clients? No reason I can think of: it might suck for me, but it's going to be great for them, and probably for my clients too; the competition helps everybody except the losers.

    America enjoys it's massive economic and social advantages for two reasons: the huge natural resources of it's land, and the incredible hard work and ingenuity of it's people. I think that asking the Government to step in and interfere with free trade in an otherwise free market (as software is now) simply to keep domestic prices high is exactly what landed us with a moribund and over-subsidized farming system, a largely uncompetitive and second-rate automotive industry and so on.

    Repeat after me: government interference in markets, other than to address market failures or personal safety, is bad for the market, and bad for those who buy and sell in it in the long run. We have a history of lobbyists destroying the global competitiveness of their industry: don't become one of those people.

    So what does that leave for the domestic programmer? Well, at one end of the spectrum, there's the stuff which is too small to outsource: the transaction costs in specification and organization are too large to make it more efficient to outsource.

    And on the other end of the spectrum, there's the stuff which is too important to outsource: areas where people will pay a premium for domestic labor because it has to be done fast, and a risk of misunderstanding or second-rate work makes outsourcing unattractive.

    But in the middle? Get used to the pressure, folks, as generations of your forebears have in other industries as the rest of the world began to catch on... First mover advantage only lasts for so long.
  • Unreasonable (Score:1, Insightful)

    by Anonymous Coward on Thursday January 01, 2004 @01:32PM (#7853240)
    "Only after that come the other nationals. Race has nothing to do with it. Having such priorities is natural and common sense."

    That is the worst type of patriotism. Clearly, if a foreigner does a job better than an American, the foreigner should be favored. THAT is common sense. What country someone lives in has nothing to do with anything in such matters.

  • Re:battle cry? (Score:5, Insightful)

    by sirinek ( 41507 ) on Thursday January 01, 2004 @01:34PM (#7853253) Homepage Journal
    Absolutely. They were ALL ABOUT "Buy American" for years and then when they got big enough, they used their size to crush competition by lowering prices by going to offshore companies.

    There's a ton of websites out there chronicaling WalMart's abuses.
  • by Anonymous Coward on Thursday January 01, 2004 @01:37PM (#7853278)
    Two of the biggest culprits behind outsourcing are Accenture and Mackenzie.

    Accenture, which used to be Arthur Andersen, the same assholes responsible for Enron. Why wasn't that company's back broken after that fiasco? They single handedly destroy the life savings of ten of thousands of Enron employees and now they're getting paid to tell US employers to outsource?

    Oh yeah, and they're incorporated in a tax haven [washingtontechnology.com], so they aren't paying their share of taxes in any of the countries in which they do business.

    I fucking hate consultants.
  • by The Snowman ( 116231 ) * on Thursday January 01, 2004 @01:38PM (#7853289)

    Mind you, I'm as pro-capitalism as they come, so being driven by the battle cry of "returns!" is a good thing, IMHO.

    I think capitalism is the best socioeconomic system mankind has come up with yet. But some people get into it a bit too much -- mainly the CEOs at the top who think making ten million per year isn't enough, so they do various things to hurt the people at the bottom of the ladder (cut wages/benefits, outsource, etc).

    I like the "survival of the fittest" aspect of capitalism, but I would rather have the citizens survive than a business. Outsourcing is painful, but I think eventually, as the author of one of the articles says, equilibrium will be reached. Hopefully few of us Americans get hurt in the process.

  • by cubicledrone ( 681598 ) on Thursday January 01, 2004 @01:39PM (#7853296)
    Sweatshops may suck, but they're better than making a living picking through garbage dumps, and that's often the alternative people face.

    And this is what we should aspire to: the object of an honest day's work is either a sweatshop or a garbage dump.

    Now let's all sing the company song...
  • Re:Whinging (Score:1, Insightful)

    by Anonymous Coward on Thursday January 01, 2004 @01:40PM (#7853305)
    You can't both have the cake and eat it.

    You mean, you can't eat your cake and have it, too. Remember the arrow of time here. If you couldn't eat the cake after having it, what would be the point?

    If you won't, please stop acting like liberals or ayn randians. A true liberal would understand the necessity of moving production there where it is least expensive.

    I think you are also confusing liberals with libertarians. To put it in the terms of Karl Marx, a liberal believes "From each according to his abilities, to each according to his needs" while a libertarian is more inclined to believe "From each according to his needs, to each according to his abilities." Liberals believe that group achievement is enhanced by providing for individual security, while a libertarian believes that group achievement is enhanced by individual freedom.
  • by Anonymous Coward on Thursday January 01, 2004 @01:41PM (#7853317)
    I agree. I'm an American programmer who constantly worries about my job security as my company starts outsourcing more and more to India. So what do I do about it? I try to figure out what advantages there are to other labor markets and how to beat them. No use whining. If basic programming can be sent overseas then start studying topics that can differentiate you. SW archicture and requirements gathering. Take executive training courses. Study sales and marketing. You can keep coding, but you need to be good at the things that can't simply be shipped overseas. The point is, recognize your weaknesses, recongnize what overseas development offers, and make yourself un-outsourceable. And don't spend so much damn time reading Slashdot (oops).
  • I am not afraid. (Score:5, Insightful)

    by Apoptosis66 ( 572145 ) on Thursday January 01, 2004 @01:43PM (#7853327)
    I work for a major company which is now trying to outsource my J2EE programming position to Brazil.

    Its almost too funny watching it go so wrong.

    Our group has for years fought with the business group over software requirement specs. What we end up building almost always diverges from what they had in there minds. Yes we create software requirement specs with mock up and all that. Yet most of these are in business speak, and can be interpreted in many different ways.

    Now they are attempting to outsource to a CMM level 3 development group. The thing is the Brazilians require the software requirement specs to be in precise use cases covering every function that can possibly take place. In fact they will not even start working on a project until this document has been created and signed off on by everyone and their mother.

    What has instead happened is the business has no idea how to create software engineering specs. They can't effectively communicate this through the middle management hell that is spread out over 3 countries. The Brazilians effectively sat on their asses for 3 months, and documented the fact that they did. Once they finally wrote something it didn't integrate correctly with all the systems that we have in place in the USA, because there was nothing spelling out the fact in the specs. Now the project is late and everyone is pissed.

    Somehow this is better than paying me extra to know the systems, to interpret what business really wants (and sometimes get it wrong), and get things out on time.

    In short I am not afraid, in fact I am looking forward to the time the come back to me needing help and I ask for a big fat raise!

  • Silly Programmers (Score:3, Insightful)

    by Perdo ( 151843 ) on Thursday January 01, 2004 @01:51PM (#7853376) Homepage Journal
    We were all to "special" to form a union back when we had some power. Now we have no power because of the ease of offshoring, but we want to pick up the union battle cry "Buy American!"

    All of you Overpaid twits that were worried that a Union would not help you because you made more money than the average joe, well some jerk in India has your job now, because you didn't want a Union.

  • by SmallFurryCreature ( 593017 ) on Thursday January 01, 2004 @01:51PM (#7853382) Journal
    I think I read this article before. Exactly the same things can be said about having something inhouse vs outsourcing it.

    Outsourcing always seems cheaper on paper but it often turns out that it is not as flexible as inhouse or that the costs for being as flexible are actually higher. Not that it matters by this time the manager who signed the contract has had its bonus and is busy on the next bone headed move.

    Let me give an example. Local school wich also gave night classes had a cafeteria. It would do cheap cheerfull dinners so you could go straight from work, eat there and then go to class. Or if your class was early the other way around. GREAT. Then they outsourced the caferteria it promptly closed this great service.

    I seen the same thing in other companies. They outsource the cafeteria lady and all of a sudden the office staff has to do things like arrange cake, late night food for when a department has to work overtime and so on. Worst case I seen had us using our own Microwave and cooker since we were not allowed to touch the equipment in the kitchen since it didn't belong to the company. Great fire hazard.

    There was once a time when companies did everything themselves. They maintained their own cars, had their own doctors, had a few holiday places to send employees too. This was boomtime. Then companies started to focus on their core capabilities and outsource or sell anything that didn't belong. We been in a downward spiral ever since.

    I WANT MY BLOODY DINNERLADY BACK! An old fat woman who knows everyones birthday and gives them a little cake at lunch and puts up a x-mas tree with cookies.

  • by scromp ( 148280 ) on Thursday January 01, 2004 @01:53PM (#7853394)
    it's caused enormous economic hardship here - but given hundreds of millions of people abroad new hope and new life.

    So? Since when is it our job to take care of the rest of the planet? Join the fuckin' Peace Corps if you care so much.

    There's no such thing as a free market, only different sets of rules. Unless everyone's playing by roughly the same set, it's crooked. Until India has comparable environmental laws, a safety net, reasonable healthcare, etc, offshore work done there should be subject to taxes and tariffs.
  • by TheOldBear ( 681288 ) on Thursday January 01, 2004 @01:59PM (#7853426)
    I'm starting a new position this coming Monday. My new employer was dissatified with the output of an outsourcing / consulting firm.

    They used a mixed model, with US based management and design, and Indian grunt coders - the major difficulty was that the software modules delived to date failed to meet specifications, event the specifications originated by the outsourcing vendor.

    Hopefully, this will have a better outcome than than the last time I was taking over an outsourced project. This past summer, I never was able to obtain a full copy of the source code archive, documentation or specifications from the Ukrainian outsourcing company - I did obtain a sufficent subset to see that over half of their code would need to be rewritten, refactored or simply discarded before the project could be delivered to users.

  • by SiliconJesus101 ( 622291 ) on Thursday January 01, 2004 @02:02PM (#7853441) Homepage
    Why in the hell is the parent modded insightful? To summarize, in order for our labor forces here to compete with foreign outsourcing we would have to be willing to work at or below the labor rates in a third world country! WTF is good at all about this scenario? The last time I checked, the United States was not a third world country and you most certainly cannot buy goods and services, pay your rent, and in general live at third world rates.

    Charge me $50.00 a month for rent, $1.14 for a full dinner at a restaurant, $2.78 for a pair of jeans and then maybe we can talk about lowering my salary. There is no way in hell that you can expect American workers to compete with third world sweatshop labor! The submitter of the article seems to think that it's a good thing that the US labor force is lowering their rates to the levels of a third world country and therefore the jobs are coming back to the US but I for one think that it's all a bunch of horse shit! Why in the hell should the US, which has worked and fought so hard to raise it's standard of living, be forced back into poverty due to a necessity to somehow compete with other countries that have a low standard of living and a massive poverty problem.

    It seems such a shame that the people at the bottom of the food chain, the ones who actually fought in the wars on the front lines and the ones who bust their ass on a daily basis doing a shitty job for crap pay are being told yet again that they are getting screwed because third world nations will do the work for less and that in order to keep their job they would have to be willing to work for third world wages and somehow still be able to survive in an industrialized superpower of a country that most definitely won't lower their living expenses!

    Sorry about the run-on sentence, but for f#ck's sake!!! I'm livid over this whole thread!

  • by puhuri ( 701880 ) <puhuri@iki.fi> on Thursday January 01, 2004 @02:08PM (#7853479) Homepage

    Racism may be one factor but there are other issues also. In some side note related to recent gas explosion in China it was noted that more than 90,000 people have died in work-related accidents from January to September 2003. This figure is more than 10 times larger than in western Europe where typical rate is 8 deaths to 100,000 people. Based on stories there is also quite of lot serious accedents also, and one is typicaly paid little or nothing for losing a body part.

    If you need to pay lower salaries and can omit some safety, health and environment protection costs it can be economical to have people to replace robots. If people in cheap countires will ever get rights to ask for compensation, the current asbestos liabilities are just small money.

    As an IT worker, there is probably no great risk of losing leg, hand or life but probably ones work conditions are worse than on places where you can complain that 95Hz CRT gives you an headache and you want TFT.

  • by vkg ( 158234 ) on Thursday January 01, 2004 @02:09PM (#7853487) Homepage
    Really, it did. All of those jobs have gone abroad, and as is fairly obvious, eventually it will happen to software too.

    You can't fight that.

    Protectionism is pushing against the tide. I don't necessarily like the results any more than you do, but those who deny the future fail to prepare for it.
  • by TRACK-YOUR-POSITION ( 553878 ) on Thursday January 01, 2004 @02:18PM (#7853557)
    A few things you're forgetting: India and Europe both heavily subsidize health care and education--which are probably the two largest factors in the high cost of labor in the United States. These countries are actually practicing crypto-protectionism--government intervention to reduce to price of exported products with social programs for workers. To blame American workers when foreign governments give their workers unfair advantages is a disgusting lie.

    With the massive American trade deficit (which will eventually annihilate our economy, which will make life suck for you whether or not your job goes to India before that happens), one would expect the value of the dollar to fall. But Asian banks have been proping up the value of the dollar by buying United States Treasury bonds, to encourage more exports to America. This is great for Americans who have lots of money and property and don't need to work for a living--it means fantastically cheap products at WalMart. It makes life suck for you if you have to work for a living. Once again, foreign government intervention screwing over American workers. Free trade has nothing to do with free markets!

    Not too mention that Americans are expected to compete with workers who are restrained by American laws--no environmental standards in factories, no minimum wage laws, nothing. Why on Earth did we pass these laws if we aren't going to enforce them for all products that can be purchased on American shelves? So even American government policy encourages jobs to go overseas. (No, I'm not suggesting we eliminate the regulations--I just think we should enforce them for all products bought in America.)

    So it isn't a free market at all. It's a market in which foreign fiscal and treasury policies are forcing American jobs overseas and American regulations produce an unfair disincentive to build factories here. Basically, every other government says "Screw America!" and the U.S. doesn't give a shit as long as a few key corporations get rich. Repeat after me: Globalism has nothing to do with free markets or capitalism.

    The other insanity in your post is that you think workers (you say programmers, but all workers are just as screwed over by anti-market globalism as programers. Michigan is hurting a lot worse than Silicon Valley.) are going to just acquiesce to these changes just because you keep saying the magic words "free market". Repeat after me People need to eat, and will do whatever it takes to ensure they get food and shelter. If you tell people that there is no way for them to meet their needs within the free market, they have no choice but to destroy the free market! Why do you think those lobbyists always succeeded in argiculture and auto manufacture? Because no one cares about maintaining the global competitiveness of jobs that are going overseas anyway. Thank heavens that those lobbyists are always able to shut up fools like you--America would be vastly poorer than we are now if we purchased every last one of our cars and vegetables overseas.

    History is clear on this. There is no example of a great empire that maintained growing trade deficits indefinitely. There are many Empires that have fallen because they gave away all of their gold for luxury and consumer goods for the middle class--see Spain and Britain. The Chinese sell us DVD players we throw away next year, and buy industrial capital to make themselves economically stronger indefinitely. If this continues, China will be stronger than the entire Western World--and then, because some American leaders upheld their narrow and simplistic view of Capitalism, we will lose something much more precious--Democracy.

  • Re:Whinging (Score:3, Insightful)

    by TyrranzzX ( 617713 ) on Thursday January 01, 2004 @02:21PM (#7853578) Journal
    Normally I don't reply or even read what anonymous cowards post, but I feel compelled to say this.

    I take the farmer analogy and apply it to today, a farmer would reap the seed they sew and eat the food they produced. This is similar to our augmentation of nature, we do jobs, get money, and can afford the things we need, want, and earn. Yes we live in a society of consumeristic whoredom never before known to the human race, but that's beside the point.

    Nowdays, you'd plant the crops with efficient machines and eat what you need, sell off the rest. Many companies will simply hire you to do the work and pay you what you need. However, they've been using the idea of free market trade to push wages lower and lower and lower so as to make people homeless, hungry, uneducated, and very very VERY pissed off. 2 parents shouldn't have to work full time jobs to raise their kids and shouldn't be forced financially to send their kids to our shitty public school system but that's how it is.

    Most farmers and their wives didn't work the fields 14 hours a day to make enough food. Sure, the work was hard and long but at the end of the day you got what you made and in the winter you got some offtime to do other things.

    Free trade is simply an excuse large profit-driven corperations use to make the rest of us work for less to increase their profit margins because there's no other area left to cut up. Most companies have already cut benefits of any kind, as well as other perks to working there.

    So, I'll tell you what. Go down to a shanty town and live there for a week or two, get to know the people and why they have the problems they do instead of telling people to stop whinging. That doesn't solve their problem of not having food or shelter and being very angry at all. Infact, if you did go down to a shanty town or a homeless person and told them that they'd probably beat you to a bloody pulp. Also, if you knew about the deregulation of buisness law over the past 200 years and the effect it's had on us, then you might understand that what's happening is wrong, it's a slow and steady push to making everyone slaves. Instead you choose to throw rocks instead of doing something harder, like educating yourself. Read Gangs of America, it's free in pdf if you do a google search for the website.

  • Re:Buy american (Score:2, Insightful)

    by killbill! ( 154539 ) on Thursday January 01, 2004 @02:26PM (#7853622) Homepage
    Buying American is looking better for Old Europe all the time.

    But buy what?

    One of the reasons the dollar is falling is because of the trade deficit with Europe is the low competitivity of the US on manufactured goods (compared with Japan and Europe on premium items, and SE Asia on cheaper stuff). Why do you think Americans buy European manufactured goods, and not the opposite?

    While the service sector is now making 75-80% of GDP, and manufacturing only 20%, raw materials and manufactured goods (ie physical stuff, not services) still accounts for most of world trade. (If service outsourcing is all the rage now, it's still only a tiny part of the global outsourcing phenomenon.)

    Hence, countries that neglected manufacturing see their trade balance degrade; and as the trade deficit worsens, so does the exchange rate.

    Indeed, buying American is cheaper than ever for Europeans ; but Europeans hardly have anything to buy that is made in America. Because you guys abandoned manufacturing long ago, and prefered to go the easy, "focus on the next quaterly earnings" way and outsourced manufacturing, instead of actually investing hard cash into what was needed to develop better value propositions - which was the Right Thing, on the long term.
  • by Patrik_AKA_RedX ( 624423 ) on Thursday January 01, 2004 @02:40PM (#7853718) Journal
    The situation of every man, woman and child on this world is immeasurably better than than it was even 100 years ago and much of that is due to capitalist endeavors.
    For us, sure, things are pretty good. But you do know there are still plenty of people who die of diseases that could be easily cured if they could afford to buy the medication (medication that's even used on animals to make them grow faster rather than to cure illness, because it's more profitable)? That there are still plenty of people who can hardly feed themselfs? And not all of those people live in an African (or asian) country with an unpronouceble name. You might want to visit a local homeless shelter.
    We are the lucky few on the bright side of capitalisme.
  • Unions (Score:3, Insightful)

    by Alan Cox ( 27532 ) on Thursday January 01, 2004 @02:43PM (#7853736) Homepage
    Nothing is or was going to keep a lot of the jobs moving once WIPO and GATT existed.

    IMHO Unions do serve a very useful role, but if you look at least at UK history that role has been best served not when there have been strikes but the rest of the time, when they've been able to work with employers on safety, and quality of life while at the same time helping to ensure a company runs well and everyone is happy.
  • by Malcontent ( 40834 ) on Thursday January 01, 2004 @02:48PM (#7853776)
    I'd buy your theories if there was an actual thing as free markets or a level playing field.

    Other posters have pointed out some flaws in your logic mainly about how the other countries don't have the same environmental standards and how they subsidize healthcare and education but there are other factors to consider too.

    1) subsidized education. American workers have to charge more because they paid for their own education.

    2) Different labor laws. In india people can be fired willy nilly and female workers can get abused with no recourse. In the US corporations can get sued if a female employee get abused or if people are terminated without cause.

    2a) Overtime laws, familiy leave act, etc.

    3) Although companies are free to move work overseas the workers themselves are not free to follow the jobs. I can't go to canada and take advantage of free health care or cheaper drugs but my boss can go there and outsource my job.

    Since there is not a level playing field not only is protectionsism NOT stupid it's required.

    BTW whose people who used to pick from the dump and now are working in a sweatshop will be back at the dump when the company leaves for even cheaper labor in cambodia or africa. Depending on outsourcing from the US leads to a boom/bust cycle and the corporations chase ever cheaper labor all over the world. Nike or Walmart are not going to tolerate demands for higher wages and as soon as some poor country someplace offers $.10 less and hour they will pull out and move.
  • by Anonymous Coward on Thursday January 01, 2004 @02:48PM (#7853781)
    You missied the point of the original parent. I am suprised that your post wasn't modded as flamebait either.

    If you would calim down and take some chill pill you will see what the original post was all about. To summerize for you, he was saying that be able to adept, innovate and stay ahead of the competition will keep you employeed. Instead of whinning, move on to different challenges and let other countries do the shit work, unless you are happy doing the same work all your life which is no longer possible.

    When I got my first job years ago, the first thing that they had me sign was a right to work clause. Basically it says: we can fire you at any time and you can wlak out at any time. In today's labor market, company loyalty no longer exist. The companies are looking out for their own best interest why shouldn't you? Employee should treat everyone as competition and think how to beat the competition. The days of working for a single company for 30 years+ then retire from there is long gone.

    Today, I made a point of updating my resume on a yearly basis and looking for what other jobs are avaialble out there every quater. In addition, I also plan for what skills I need based on the job requirements I found. Either you keep on moving or you will get run over and be a road kill.
  • by Osrin ( 599427 ) on Thursday January 01, 2004 @02:53PM (#7853813) Homepage
    ... and it's driven by the declining value of the dollar overseas. Our currency is not going far when you try and spend it beyond our shores at the moment.

    We declinded 19% against the Euro during 2003, sadly it is a trend that looks like it will continue for a little while longer.

    Once the dollar recovers we will start to see jobs and services outsourced again.
  • by michael_cain ( 66650 ) on Thursday January 01, 2004 @02:54PM (#7853825) Journal
    Why doesn't freetrade work for the consumer? After all my goverment wants to make it illegal/claims it is currently illegal for consumers to import drugs from canada.

    In many cases it does. Relatively free trade is why you can buy a DVD player for $40. It's why you can buy a variety of relatively fresh produce from Chile at the grocery in January. It's why the Big Three US auto makers had to improve the quality of their products when people discovered that Japanese cars didn't start falling apart after three years. If the US government removed sugar supports and import restrictions, the consumer would be able to buy sugar at half the price they pay today.

    Prescription drugs are an interesting situation. In many cases, the drugs sold in Canada are actually manufactured in the US, or in Canada by US companies using the same processes and quality control they use in the US. But in Canada, prices are capped by the government. Much like trade arguments over steel in the past, the drug companies are opposed to anyone, including the end user, being allowed to import a competing good from a country where it is priced below cost. I'm not an advocate of the drug companies, just pointing out that they have an argument of sorts.

    Of course, the health care system in the US has far too many aspects that tend to drive up drug prices. Enough people are in the situation where (a) their health care is paid for by someone else (employer insurance, government, etc) and (b) they have the freedom to "shop around" for doctors. Enough people that it is profitable for the drug companies to advertise directly to the consumer: "Is Lipitor right for you? Ask your doctor!" And in too many cases the doctor will prescribe the drug because they know that if they don't, the patient will "take their business" somewhere else. Collectively, US drug companies now spend more on advertising than they do on research.

    It is an interesting mental exercise in economics to think about what might happen to drug prices if consumers paid their own bills. If the answer to the question "Is Lipitor right for you?" was, except for the wealthy, answered with "No, it's too bloody expensive, I'll take this cheaper drug that has 80% of the same benefits," would prices go up or down? Keep in mind that in many cases elasticities are non-linear, and total profit can be maximized by selling less at a higher price. Major league baseball discovered this years ago -- total ticket revenue is maximized at prices that leave about 15% of the seats at the ballpark empty.

  • Re:Whinging (Score:2, Insightful)

    by ergo98 ( 9391 ) on Thursday January 01, 2004 @02:56PM (#7853834) Homepage Journal
    The notion that India is somehow special is laughable.

    Yes, that's why India is the destination of almost all outsourcing. Thanks for clearing that up.
  • by ToasterTester ( 95180 ) on Thursday January 01, 2004 @03:15PM (#7853966)
    Who was it Alvin Tofler in the book The Third Wave talk about America losing it's manufacturing industry to overseas compaines was no problem. That American is becoming a Services based economy. That worked, but now America is sending its Services based economy and there is nothing to replace it.

    There was never a shortage of American techies, they just wanted cheaper wages so the government created the H1B visa program. Now the .COM boom is over and corporate America wants wages back to pre boom levels. So they start sending work outside the country, to force Americans to accept lower wages. Look at the recent announcement from IBM to send 4700 jobs overseas, and another 3700 potential jobs to go. BUT, if the American workers are willing to accept the same wages as the Indian workers they can keep their job.

    Same going on with the grocery worker strike, Unions on a power trip have pressured companies to raise wages and benefits to the breaking point. Non-union companies come in with lower prices and people are shopping in those stores to save the average 20% difference. Unions did the same thing in steel, automobiles, electronics, and other manufacturing sending American jobs out of the country. American worker became too expensive. Long term effect some old manufacturing town have died or dying.

    Trouble is with corporate American focusing only on cutting costs and increasing margins, they aren't realizing they are cutting the available funds of their customers here in the U.S. People sending all their money to just survive aren't going to be buying much.

    So after all the pain to the American worker we gain nothing. Wages drop, business slumps until they drop prices. Some people lose their homes or can't pay high rents, eventually housing prices drop. So a lot of people get hurt, some companies/industries lost forever, just to adjust everything down.

  • by megazoid81 ( 573094 ) on Thursday January 01, 2004 @03:17PM (#7853979)
    Arrogant tech support personnel aren't just limited to Indian call centers. I've had occasion to speak to plenty of red-blooded Americans back in the days of on-shore tech support, where they thought I (with a CS background and a few tech support jobs under my belt) was a lower life form. Moreover, call center operators aren't shrinks. They face pressures of reducing the amount of time spent on each call and solving the problem systematically. The script that is given to them compels them to plough forward anyway. Ever tried the Windows Help troubleshooter? That's the idea...

    As for the Indian caste system, please don't talk about stuff about which you obviously don't have a clue. Did you even know what caste your operator belonged to? Did you know that caste and economic class are fairly orthogonal in Indian urban centers? While the definition of untouchables you mention is passable, you somehow neglected to mention that untouchables are people who belong to none of the four castes and are part of Indian society and cultural context. Non-Indians are not untouchables. Their caste is 'N/A'.

    As a thought exercise, think of a social system where women were assigned different social strata based on the length of their monthly cycle, with untouchables being defined as post-menopausal women. Where would a man stand in that system? Note that the caste system and the Manusmrti are for all intents and purposes irrelevant among the urban English-speaking elite who staff call centers.

    When the divisive issue du jour of the 60s and 70s was race in the U.S., it was language in India. Sure, there have been instances in India's history when Tamils in the south have felt threatened by the contiguous block of Hindi-speaking territories. You are definitely overgeneralizing when you take one anecdote and conveniently plaster the label of arrogance on ALL Indians.

    It's much more likely that your support representative was arrogant because these jobs go to the top-notch -- people who are used to being at the top of their classes all the time. Not unexpectedly, just like in the case of U.S. geeks, some arrogance creeps in. I'm sorry to hear that your 'interesting social interaction' didn't go too well, but please quit calling all Indians arrogant just because you had a clueless and arrogant rep on the other end. Clearly, India doesn't have a monopoly on the clueless and arrogant.

  • by Colonel Panic ( 15235 ) on Thursday January 01, 2004 @03:39PM (#7854137)
    All of you Overpaid twits that were worried that a Union would not help you because you made more money than the average joe, well some jerk in India has your job now, because you didn't want a Union.

    Can you explain how forming a union would have saved our jobs from going to India? Seems to me that as soon as companies got any inkling that a union might form, they would immediately send the work offshore at an even faster pace.

    No, a union isn't the solution (at least not for American programmers). A better solution would be to unionize Indian programmers so that their wages rise faster to meet our (admittedly) falling pay rates.

    In the meantime (and yes, this sucks) as the article suggests, our pay rates will have to fall in order to equalize with rates in India and other 3rd world places. I had a C++ contract back in the summer of 2002 that paid $10 to $15/hour less than it would have the year before and now I've got another C++ contract that pays $5/hr less than I was making in the summer of 2002. But since I was out of work for over a year, I'm happy to have it.

    The problem is, as our pay rates fall so that we can compete, all the things we have to pay for are either fixed in price (like mortgages) or are going up (like electricity, gas, etc.).

  • by michael_cain ( 66650 ) on Thursday January 01, 2004 @04:09PM (#7854316) Journal
    I have an acquaintance who is blue-eyed, red-haired, is married to a Japanese woman and speaks fluent Japanese. He tells the following story about visiting in Japan.

    He was standing in line to buy train tickets. When he got to the head of the line, he asked for two tickets to Tokyo, in Japanese. The woman behind the window replied, in broken English, "No speak English." He answered, still in Japanese, "I'm not speaking English, I'm speaking Japanese, two tickets to Tokyo, please." Again, "No speak English," and the woman left the window. My acquaintance was rather embarrased by all this, since it is considered quite rude to hold up the line. After a bit, an elderly man came to the window and asked, in English, if he could help. My acquaintance, still in Japanese, asked for the two tickets. The old man responded, in English, "Oh, you speak very good Japanese," but would not conduct the transaction in Japanese.

    My acquaintance said that he encounters this situation, where people refuse to acknowledge that an obvious foreigner can speak the language, regularly in Japan.

  • by SiliconJesus101 ( 622291 ) on Thursday January 01, 2004 @04:42PM (#7854514) Homepage
    It's amazing to see that people are really blinded by what is relative to their particular situation. The fact of the matter is that there are many unskilled laborers in the United States that need jobs too. Not everyone is capable of the same mental capacity as you, and not everyone has the intelligence or skill set required to change careers mid-life. Hell, we need garbage haulers, janitors, and yes...even unskilled manufacturers but if we take their jobs away are we to assume that they will be capable of changing careers or will they simply be forced to rely upon the welfare system for survival.

    In my life I have dealt directly with many types of people and I can state as a fact that not everyone is capable of doing their work "smarter" as you would probably call it. I'm sure there are plently of manufacturing class workers that that will lose their jobs to overseas outsourcing just as their are many landscaping workers here in Florida losing their jobs to illegal immigrants that will work at or below minimum wage. The problem is that the American worker will now be forced to either collect welfare or lower his standard of living to that of the illegal immigrants that live with 8 to 10 people huddled into a 1 room apartment (all working for minimum wage), ship all of their money out of our economy and back to their homeland, and have sent yet another American to the welfare lines.

    Once again, the equilibrium seems to be set at the point where most of our workers will subject themselves to third world standards of living just to stay alive; Not good.

  • by AuntieC ( 15423 ) on Thursday January 01, 2004 @05:37PM (#7854878)
    1) Hire/fire. When the work was over, I didn't need the teams any more. With the Indian vendor, I could cut back without worry.

    Well, as long as you didn't feel bad, I guess that's all that matters. I mean, it's impossible to feel guilty about displacing local tech workers if you simply don't hire any in the first place, right?
  • Re:Accents (Score:4, Insightful)

    by vsprintf ( 579676 ) on Thursday January 01, 2004 @05:41PM (#7854898)

    wrong about one thing. the average education level of workers in indian call centers is way above that of their american peers.

    Well, apparently they weren't educated in customer service. The HP/Compaq offshored help is all but useless even after you stay on hold for 30 minutes. I'll never buy another HP product - I hope you're listening Carly, but I doubt it; you're too busy looting the company.

  • we are learning in college that the newer Organizational Management can change things. It promotes diversity in the workplace. It works people into teams. It empowers employees. It shares the wealth.

    Racism is counter-productive to an organization, and often results in lawsuits. So is discrmination based on age, gender, religion, disability, etc. The organization is effectly shutting out people that could help it grow and earn more money. Sometimes people with different viewpoints can help out greatly.
  • by penguin7of9 ( 697383 ) on Thursday January 01, 2004 @06:10PM (#7855057)
    The changing face is simple: over the next few years, India will develop its own, stand-alone software industry. US firms won't be outsourcing to India, they will be competing with Indian companies.

    Furthermore, multinationals will not be "outsourcing" to India anymore, meaning sending sporadic, low-level programming tasks there, they will be expanding their subsidiaries there and doing R&D in India, just like they are doing R&D in the US and Europe.

    Will this mean downward pressure on the salaries of US programmers? You bet. But it's only fair: companies like IBM make more than half their revenue outside the US, therefore it stands to reason that they should employ more than half their employees outside the US. Right now, the percentage is still much lower.
  • by ttys00 ( 235472 ) on Thursday January 01, 2004 @06:33PM (#7855180)
    The most racist place I've ever seen has been Israel. This [news.com.au] type of thing is more common than you would believe, as it is okay to discriminate against non-Israelis.

    In Australia, the US, or the UK, this sort of behaviour would get you sued to hell and back.
  • by frode ( 82655 ) on Thursday January 01, 2004 @07:45PM (#7855759) Homepage
    "Repeat after me: government interference in markets, other than to address market failures or personal safety, is bad for the market, and bad for those who buy and sell in it in the long run. We have a history of lobbyists destroying the global competitiveness of their industry: don't become one of those people."

    Really. As someone who spent some time getting an Economics degree please help me out with a few terms and then explain why governments shouldn't intfere with markets.

    4)Insider trading
    5)Gaming the market (also know as painting the tape)

    Many countries round the globe don't play by the same rules as we do so some protectist policies are valid and can PREVENT market failures. Becareful about painting markets with too broad a brush let alone the whole of economic theory.

  • by MillionthMonkey ( 240664 ) on Thursday January 01, 2004 @08:25PM (#7856011)
    The Japanese have a very strange concept of politeness. The culture is completely dominated by it. Politeness even complicates the grammar of the language. It's a tool for scrupulously observing the details of social convention, and everyone is expected to play by the many rules. Foreigners in Japan are quickly immobilized by a net of condescending smiles and polite retorts that permit no escape.

    I'm not Japanese, so what do I know? Here's my guess. Your friend was probably breaking a rule when he tried to speak Japanese to the people at the train station. He is a guest to the country and they are workers at a train station, which makes them servants. They are definitely at a lower point than he is in whatever social hierarchy determines these things, and so they were clearly expected to speak his native language, in deference. By placing them in a situation where he is speaking a non-native language for their benefit, he is forcing them to be impolite. They were trying to make everything polite and OK again by insisting on English. In fact he committed a grave social error when he forced the old man to admit they did understand his Japanese.

    Just a few weeks ago at work a tantrum arrived via fax from a software distributor in Taiwan who had been recently fired by our sales employee in Japan for breach of contract of some sort. It was a copy of an email that the distributor had sent in response, and the guy was so livid he faxed a copy to us in California in an attempt to go over his head. In the first paragraph it says "You, being Japanese, should not have allowed this to happen." I thought that was a very strange remark.

  • by rollingcalf ( 605357 ) on Thursday January 01, 2004 @11:13PM (#7856880)
    "I am rich and I am proud of every penny I own. I have made my money by my own effort, in free exchange and through the voluntary consent of every man I dealt with--the voluntary consent of those who employed me when I started, the voluntary consent of those who work for me now, the voluntary consent of those who buy my product."

    Ayn Rand made money as a result of the set of involuntary restrictions called copyright...
  • by PingPongBoy ( 303994 ) on Thursday January 01, 2004 @11:24PM (#7856944)
    start studying topics that can differentiate you. SW archicture and requirements gathering

    How hard is it to outsource software architecture and requirements gathering??

    Isn't that part of the contractor's job anyways - so they're already good at it. At least they will have someone good at it.

    Suppose everyone starts with the same physical resources. Then what differentiates everyone from everyone else is creativity, intelligence, physical abilities, etc. This does not stop average people from succeeding. You can find a niche with little competition or you can practice until you are really good at something.

    But to beat the competition - being able to deliver a better result is a big factor. This is one of the selling points of offshore outsourcing. "Them people ain't dumb," as heard in a song.

    Everyone should really perk up. We need a better continuing education system and a positive attitude for achievement. There are so many problems begging for a solution, more than enough to assign 10 hard unique problems to every man, woman, and child on earth. These are problems whose solutions would benefit us all. But 90% of people in the North America wouldn't even invest their time to understand a unique problem of medium difficulty.

"Conversion, fastidious Goddess, loves blood better than brick, and feasts most subtly on the human will." -- Virginia Woolf, "Mrs. Dalloway"