paleogryph
MIS
This is a must read:
>Think for yourself<
...or someone else will do it for you.
>Think for yourself<
...or someone else will do it for you.
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Foreign engineers will change our economic world; prepare yourself 4
- Thread starter paleogryph
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dilettante
MIS
What was the author saying? It sounds like "get used to living with dirt-floored houses in the country or dank coldwater flats in urban ghettos along with high rates of infant mortality, because Asia's gonna steal your standard of living away."
I don't live in Silicon Valley and never have. Is it all Rolexes and luxury condos there or do they live like the Jetsons or something? I know I never could afford conspicuous consumption in the 1990s. Correcting for a mild rate of inflation, my pay actually fell in the '90s relative to the '80s and I've worked in software engineering full time since 1978.
As I read this article the feeling I get is "don't blame us crooked politicians and greedy multinational corporations for what is about to come, it is your own fault: you are living too high on the hog."
Frankly, I know of a great many blue-collar auto workers of the '60s and '70s who lived a lot higher than I ever have been able to afford. They lost out to global competition as well, but at least they had a nice ride while it lasted. Maybe that's true of software folk in some pockets of the U.S. too?
I assume this is about software and not hardware engineers, but the article is not very clear about that. Hard to believe it's about consumer electronics, that's been fairly dry here since the mid to late '70s.
What am I missing?
I don't live in Silicon Valley and never have. Is it all Rolexes and luxury condos there or do they live like the Jetsons or something? I know I never could afford conspicuous consumption in the 1990s. Correcting for a mild rate of inflation, my pay actually fell in the '90s relative to the '80s and I've worked in software engineering full time since 1978.
As I read this article the feeling I get is "don't blame us crooked politicians and greedy multinational corporations for what is about to come, it is your own fault: you are living too high on the hog."
Frankly, I know of a great many blue-collar auto workers of the '60s and '70s who lived a lot higher than I ever have been able to afford. They lost out to global competition as well, but at least they had a nice ride while it lasted. Maybe that's true of software folk in some pockets of the U.S. too?
I assume this is about software and not hardware engineers, but the article is not very clear about that. Hard to believe it's about consumer electronics, that's been fairly dry here since the mid to late '70s.
What am I missing?
I don't live in Silicon Valley and never have. Is it all Rolexes and luxury condos there or do they live like the Jetsons or something? I know I never could afford conspicuous consumption in the 1990s.
On a lark, a couple of coworkers looked up Silicon Valley real estate values at realtor.com -- the cheapest house we found was a 2 bedroom, 1 bath house with 1400 square feet (130 square meters, for the Europeans), for the low-low price of $335,000! I mean, this house looked to be in really rough shape - had dirt for a yard, rusty chain-link fence around it, and was painted an awful shade of blue (which was flaking off). A house like that in Raleigh would go for maybe $65,000, and be located in a scary neighborhood with the drug-dealers. In Silicon Valley, they probably had buyers lined up waiting to put deposits down.
So while the average programmer there is making six-figures, he's spending it just as quickly because it's a high-cost area. I've heard stories of entry-level support people living out of their cars because they couldn't afford a house or apartment, and didn't want to commute 2 hours (one-way!) to work each day.
Chip H.
On a lark, a couple of coworkers looked up Silicon Valley real estate values at realtor.com -- the cheapest house we found was a 2 bedroom, 1 bath house with 1400 square feet (130 square meters, for the Europeans), for the low-low price of $335,000! I mean, this house looked to be in really rough shape - had dirt for a yard, rusty chain-link fence around it, and was painted an awful shade of blue (which was flaking off). A house like that in Raleigh would go for maybe $65,000, and be located in a scary neighborhood with the drug-dealers. In Silicon Valley, they probably had buyers lined up waiting to put deposits down.
So while the average programmer there is making six-figures, he's spending it just as quickly because it's a high-cost area. I've heard stories of entry-level support people living out of their cars because they couldn't afford a house or apartment, and didn't want to commute 2 hours (one-way!) to work each day.
Chip H.
guestgulkan
Technical User
To me - a rather vague article which doesn't actually say anthing much.
What do YOU make of it Paleogryph ??
What do YOU make of it Paleogryph ??
This blabla I am reading for years in magazine like chemical engineering and other technical magazines.
So what is your point? Your opinion? why must we read it?? Must we boycot the Asians? Hide american technology so they cannot use it?
I am no american either
Steven van Els
SAvanEls@cq-link.sr
So what is your point? Your opinion? why must we read it?? Must we boycot the Asians? Hide american technology so they cannot use it?
I am no american either
Steven van Els
SAvanEls@cq-link.sr
Bullschmidt
Programmer
Don't think we should be TOO afraid of competition. Seems like it can spur ourselves to improve more.
And maybe sometime you or I might actually contract with some out-of-country, low-priced developers.
Power to people with talent no matter where they happen to live.
Best regards,
J. Paul Schmidt - Freelance ASP Web Developer
- Creating "dynamic" Web pages that read and write from databases...
And maybe sometime you or I might actually contract with some out-of-country, low-priced developers.
Power to people with talent no matter where they happen to live.
Best regards,
J. Paul Schmidt - Freelance ASP Web Developer
- Creating "dynamic" Web pages that read and write from databases...
The article seems to be keying on the 'offshore programming' trend. This has no doubt taken some tech jobs (G.E. a big example), but it hasn't and won't cause 'a giant sucking sound' of jobs headed to India. Several of my clients have looked into this, and the bottom line is that even if you're looking at $30 per hour offshore compared to $60-$80 (which is what the rate has dropped to here in midwest for typical PC coders), very many companies learn that that there is no substitue for face-to-face, daily contact with developers. 'Net meetings' (a joke) or expensive long-distance phone calls just don't do it. There's too much that's lost in the transaltion (both literally and figuratively), and too much of a diconnect.
I've heard talk that this offshore work is good for 'massive heads-down coding', but what is that? What system has so many lines of code that's so generic that a PM can give 1 line of direction to some team of offshore coders and have them go to it for 3 weeks and then have some perfect result? I've never seen any project that has any type of 'mass-produced-generic' code (that's not already in a library) that would benefit from assembley-line (no pun intended) coding.
I personally am not worried.
--jsteph
I've heard talk that this offshore work is good for 'massive heads-down coding', but what is that? What system has so many lines of code that's so generic that a PM can give 1 line of direction to some team of offshore coders and have them go to it for 3 weeks and then have some perfect result? I've never seen any project that has any type of 'mass-produced-generic' code (that's not already in a library) that would benefit from assembley-line (no pun intended) coding.
I personally am not worried.
--jsteph
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2
- #8
I don't like the way companys in North America are moving everything off shore now, but I don't believe it's as bad as people are making it out to be. I have been working as a professional geek for a few years now, programming, fixing, sysadmining, etc. Some of the big software companys are closing down thousands of jobs to go overseas, but there are still a lot of jobs available. A good portion of the unemployed are either looking too high for a salary after the dot bomb, or they don't know where to look. In certain areas, sure the market is flooded, but there are thousands of small companys that don't know how badly the need our assistance.
I don't develope a lot of software from scratch. Most of my work is company specific, such as pulling info from a database into a report in excel, or developing scripts that will read the excel file into the database, and developing websites that will interact with that database. This kind of work requires too much communication to make it realistic for me to work from home most of the time, let alone have someone on another continent try to do it instead.
If the major software packages are being developed in India, they will need more of us testing because of cultural and language differences. This also puts more money in the hands of the people in the developing countries, and they will buy more western technology, which means they will need more training in western technology, which creates jobs in education.
As the economy swings around, changes need to be made. One change is not final, it will act as a catalyst, and bring about more changes. The number of students entering the IT field has droped in the last couple years, and as the previous generation starts retiring, the flood of engineers will decline, and the new generation will be able to spread through the market. Everything works in cycles, and sometimes things have to get worse before they can get better.
I don't develope a lot of software from scratch. Most of my work is company specific, such as pulling info from a database into a report in excel, or developing scripts that will read the excel file into the database, and developing websites that will interact with that database. This kind of work requires too much communication to make it realistic for me to work from home most of the time, let alone have someone on another continent try to do it instead.
If the major software packages are being developed in India, they will need more of us testing because of cultural and language differences. This also puts more money in the hands of the people in the developing countries, and they will buy more western technology, which means they will need more training in western technology, which creates jobs in education.
As the economy swings around, changes need to be made. One change is not final, it will act as a catalyst, and bring about more changes. The number of students entering the IT field has droped in the last couple years, and as the previous generation starts retiring, the flood of engineers will decline, and the new generation will be able to spread through the market. Everything works in cycles, and sometimes things have to get worse before they can get better.
offshoring makes so much sense if you are a CEO though!
100 employees at 40000$ a year layed off
100 overseas employees hired at 10000$ a year hired
net gain of 100*30000$ a year!
3 000 000$!!!!!
He can pocked 1.5Mill for saving the company another 1.5Mill.
Only problem though is that if all CEO's do that they won't have any clients anymore, because the people that buy products in the states are the ones that were layed off.
The ex-clients were the people that got layed off, and the people that made a living with the money these ex-employees were rolling back in the USA economy.
Eventually the CEO sees the company is dying and sells all his stocks, quits, and goes on vacation on his expensive sail boat. He doesn't care that he made this money off his fellow American's backs.
Gary Haran
==========================
100 employees at 40000$ a year layed off
100 overseas employees hired at 10000$ a year hired
net gain of 100*30000$ a year!
3 000 000$!!!!!
He can pocked 1.5Mill for saving the company another 1.5Mill.
Only problem though is that if all CEO's do that they won't have any clients anymore, because the people that buy products in the states are the ones that were layed off.
The ex-clients were the people that got layed off, and the people that made a living with the money these ex-employees were rolling back in the USA economy.
Eventually the CEO sees the company is dying and sells all his stocks, quits, and goes on vacation on his expensive sail boat. He doesn't care that he made this money off his fellow American's backs.
Gary Haran
==========================
<< Only problem though is that if all CEO's do that they won't have any clients anymore >>
It's Economics 101...and the other side of the coin is if all CEO's do that, then the demand for foriegn talent goes up and so does the price. Now that theoretical $10,000 per year for foriegn talent becomes 25,000 per year, and the desperate layed-off employees here are offering themselves at $30,000...now the huge logistical hassles of trying to manage employees on another conitnent (many find it near impossible to manage them in the same building!) doesn't seem worth $5000, so the the locals are re-hired.
Eventually the natural governing effect will stabilize offshore costs with local salaries, and the bottom line is that if today you can say the national average for a 'typical' (if that can be defined) programmer is $65,000, it will maybe drop to $55,000 when this shakes out. This has the effect (which has already been noted in another thread) of causing high-school grads to re-think that CS degree--maybe they'll be welders instead.
So now the supply of coders shrinks and let's say the demand is stable, so the salaries edge upwards again, and the cycle continues.
--jsteph
My wife works for a company that does manufacturing in Asia. The problem that her boss runs into constantly, is no good supervision. He has to go over to Malaysia and India all the time to try and spur them into working, because "When the Cat's away, the Mice will play."
So the money he saves on labor, he spends quite a bit of in Overseas travel, not to mention worrying about the status of the world where he goes....
Excellent post garwain!
Thanks,
Matt Wray
MCSE, MCSA, MCP, CCNA
So the money he saves on labor, he spends quite a bit of in Overseas travel, not to mention worrying about the status of the world where he goes....
Excellent post garwain!
Thanks,
Matt Wray
MCSE, MCSA, MCP, CCNA
Here is another good one from news.com today (5/30/2003)
Article on possible abuses in the L-1 Visa program (which has been around for 33 years now), and i'll be glad when the H-1B goes back to the 65,000 level (hopefully for good).
Article on possible abuses in the L-1 Visa program (which has been around for 33 years now), and i'll be glad when the H-1B goes back to the 65,000 level (hopefully for good).
I'm not so sure this is good news Dogbert. I could be wrong but I believe it is better for your country's economy to hire people that will work inside their country than to outsource them in another country.
If slowing down visas means that less people work in your country and more businesses sends their contracts to India then the money given to indian people will not roll back into the American economy (through income tax, buying clothes, food etc...).
The way I see it, a rich CEO making 50 times what salary we make is not rolling much more money in your country than another less fortunate middle class person does.
Sure he'll buy a more expensive car but even being paid 50 times what we make doesn't mean he is giong to buy 50 cars.
He's not going to buy 50 times more clothing, 50 times more food and 50 times more computer hardware for home. He's actually keeping a larger percentage of his money in his pockets whereas the low to middle class spends a bigger percentage of money which makes the economy work.
Rolling money is key to a good economy. It is best to hire someone from outside and bring him inside your country (where he'll demand a higher salary in the first place) so he can spend money that creates more jobs around him. So even if you happen to loose your job in IT you probably can sell the guy a car or a cellphone. When the guy is in India it's kinda hard to sell him a car isn't it?
Gary Haran
==========================
If slowing down visas means that less people work in your country and more businesses sends their contracts to India then the money given to indian people will not roll back into the American economy (through income tax, buying clothes, food etc...).
The way I see it, a rich CEO making 50 times what salary we make is not rolling much more money in your country than another less fortunate middle class person does.
Sure he'll buy a more expensive car but even being paid 50 times what we make doesn't mean he is giong to buy 50 cars.
He's not going to buy 50 times more clothing, 50 times more food and 50 times more computer hardware for home. He's actually keeping a larger percentage of his money in his pockets whereas the low to middle class spends a bigger percentage of money which makes the economy work.
Rolling money is key to a good economy. It is best to hire someone from outside and bring him inside your country (where he'll demand a higher salary in the first place) so he can spend money that creates more jobs around him. So even if you happen to loose your job in IT you probably can sell the guy a car or a cellphone. When the guy is in India it's kinda hard to sell him a car isn't it?
Gary Haran
==========================
"When the guy is in India it's kinda hard to sell him a car isn't it?"
Is it?
The real barrier is the pay disparity - jobs are being exported to India to take advantage of 2 main cost savings - lower logistic costs (building rent, services...) and lower employment costs.
They're being paid less (in absolute terms), which means they've got less (in absolute terms) to spend. Of course, they may be well paid (relative to the Indian average) but the rolling money stays in India, because they can't afford the higher cost of foreign imports.
example
US: pays USD 30 /hour
India: pays INR 500 /hour ($10 /hour)
the Indians' relative income is quite high, but is still a third of the US wage. unfortunately, the imported american cars are not a third of the price. so the Indians will choose a cheaper, locally produced option.
<marc> i wonder what will happen if i press this...![[pc]](/data/assets/smilies/pc.gif "[pc] [pc]")
[ul][li]please give feedback on what works / what doesn't[/li][li]need some help? how to get a better answer: faq581-3339[/li][/ul]
Is it?
The real barrier is the pay disparity - jobs are being exported to India to take advantage of 2 main cost savings - lower logistic costs (building rent, services...) and lower employment costs.
They're being paid less (in absolute terms), which means they've got less (in absolute terms) to spend. Of course, they may be well paid (relative to the Indian average) but the rolling money stays in India, because they can't afford the higher cost of foreign imports.
example
US: pays USD 30 /hour
India: pays INR 500 /hour ($10 /hour)
the Indians' relative income is quite high, but is still a third of the US wage. unfortunately, the imported american cars are not a third of the price. so the Indians will choose a cheaper, locally produced option.
<marc> i wonder what will happen if i press this...
[ul][li]please give feedback on what works / what doesn't[/li][li]need some help? how to get a better answer: faq581-3339[/li][/ul]-
1
- #16
CajunCenturion
Programmer
xutopia has a good point in that its better for the employee compensation to remain in the country. The local economy benefits from the rolling money.
Whereas it is certainly possible that not renewing the extended cap on H-1B quotas will lead to more offshore outsourcing (not a good thing), I don't think it's a given. I am aware that today, and this can be verified by looking at the on-line job boards, that many openings will not consider H-1B canidates now. Therefore, the total effect of reducing H-1B caps may not be a severe as feared. Only time will tell how much effect it will actually have.
From the economic standpoint, it's best to hire local citizens, and keep them local for the "rolling money" reasons, unemployement reductions, and by no means least, the morale of the local citizenship. The worst thing is to contract offshore. Bringing in outsiders (H-1B or L-1) in falls somewhere in between with both positive and negative impacts.
I thought we could solicit opinions from economists, but I'm reminded of the story of the three economists who went hunting. While sitting in the blind, a beautiful buck strolls into range and the first picks up his gun, fires, and misses 10 yards to the left. The second takes his turn and misses 10 yards to the right. The third economist gently sets his gun down and announces, "We got it".
Good Luck
--------------
As a circle of light increases so does the circumference of darkness around it. - Albert Einstein
Whereas it is certainly possible that not renewing the extended cap on H-1B quotas will lead to more offshore outsourcing (not a good thing), I don't think it's a given. I am aware that today, and this can be verified by looking at the on-line job boards, that many openings will not consider H-1B canidates now. Therefore, the total effect of reducing H-1B caps may not be a severe as feared. Only time will tell how much effect it will actually have.
From the economic standpoint, it's best to hire local citizens, and keep them local for the "rolling money" reasons, unemployement reductions, and by no means least, the morale of the local citizenship. The worst thing is to contract offshore. Bringing in outsiders (H-1B or L-1) in falls somewhere in between with both positive and negative impacts.
I thought we could solicit opinions from economists, but I'm reminded of the story of the three economists who went hunting. While sitting in the blind, a beautiful buck strolls into range and the first picks up his gun, fires, and misses 10 yards to the left. The second takes his turn and misses 10 yards to the right. The third economist gently sets his gun down and announces, "We got it".
Good Luck
--------------
As a circle of light increases so does the circumference of darkness around it. - Albert Einstein
![[thumbsup]](/data/assets/smilies/thumbsup.gif "[thumbsup] [thumbsup]")
guestgulkan
Technical User
But if you keep 'importing' workers, won't this make a country a 'closed' economy?
Taken to extreme - a country would be full of rich clever people surrounded by poorer countries. Exports will go down.
There will be no new money coming in - it would just be the same money going around in a circle. A financial island.
Taken to extreme - a country would be full of rich clever people surrounded by poorer countries. Exports will go down.
There will be no new money coming in - it would just be the same money going around in a circle. A financial island.
guestgulkan
firstly - rich and poor are comparative: unless every country has identical resources, there will always be richer countries and poorer countries.
To expand on your "'closed' economy" - the globe may be considered a closed economy. We neither export nor import products, services or workers with other planets. This does not make us a stagnant economy.
Without the economic flow of importing and exporting, a country would be totally reliant on using it's own resources to improve it's lot.
You could say that country x is poorer than country y, but how would you measure it? The 2 countries would have seperate currency - and without imports and exports, there would be no defined exchange rate to enable a comparison. Which means you would have to compare wealth using a set of indicators - these could be the number of colour TVs per household, access to fresh water, cost of housing (all relative to a local currency comparator, such as median wage).
As another thought, is outsourcing a service requirement overseas any different from importing a product from overseas?
<marc> i wonder what will happen if i press this...[ul][li]please give feedback on what works / what doesn't[/li][li]need some help? how to get a better answer: faq581-3339[/li][/ul]
firstly - rich and poor are comparative: unless every country has identical resources, there will always be richer countries and poorer countries.
To expand on your "'closed' economy" - the globe may be considered a closed economy. We neither export nor import products, services or workers with other planets. This does not make us a stagnant economy.
Without the economic flow of importing and exporting, a country would be totally reliant on using it's own resources to improve it's lot.
You could say that country x is poorer than country y, but how would you measure it? The 2 countries would have seperate currency - and without imports and exports, there would be no defined exchange rate to enable a comparison. Which means you would have to compare wealth using a set of indicators - these could be the number of colour TVs per household, access to fresh water, cost of housing (all relative to a local currency comparator, such as median wage).
As another thought, is outsourcing a service requirement overseas any different from importing a product from overseas?
<marc> i wonder what will happen if i press this...
[ul][li]please give feedback on what works / what doesn't[/li][li]need some help? how to get a better answer: faq581-3339[/li][/ul]Taken to extreme - a country would be full of rich clever people surrounded by poorer countries
Correction
The clever people in the rich countries outsource to make more profit. At the end the clever people are surrounded by poor people from both their country and poorer countries.
Rich countries full of clever people? How does a pyramide looks like?
Steven van Els
SAvanEls@cq-link.sr
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