Outsourcing is all too real and will only intensify in the near future.

tec699

Banned
Dec 19, 2002
6,440
0
0
I was in my stats class last week. The class is taught by a female who is from India. Well we started to talk about our majors and one student had stated that he is going to be a computer programmer and wants to work in the IT field. Well guys she literally blew up on this kid and started to talk about outsourcing. Supposedly she has cousins that work in India as programmers and they get the work that would normally be going to American workers. I thought it was quite sad that she would even say these things because if the student wants to pursue his dream than why should he alter his choice of work.

I decided to do some research on outsourcing and found this very interesting article. Do you guys agree or disagree with it and what are your feelings towards outsourcing?

On a side note we have a fellow who just started work as a security officer. He also was a programmer and was making $70,000 plus just a few years ago. Now he cant find work and is making a measly $8 an hour. I really feel bad for him.

Note: I had to copy and paste because since it's a paid site they do not allow direct links.



Press of Atlantic City, The (NJ)

August 1, 2004
Section: Business

JOB INSECURITY SPREADS AMONG U.S. WORKERS
KATHERINE YUNG The Dallas Morning News

American workers are encountering a harsh truth about how they earn a living: Old expectations about safe careers, the best opportunities and steadily rising incomes are being shaken as never before.


For the first time, a growing number of middle-tier service jobs - software engineers, financial analysts and the like - are moving offshore or paying a lot less than they once did.

This globalizing of the world's work force - still in its early stages - has allowed American employers to drastically lower labor costs, giving them more flexibility and choices in hiring. Feeling the pain are American workers, who face a much more brutally competitive job market, stagnant or declining pay in many cases and widening income inequality, experts say. For now, the number of lost U.S. jobs represents a fraction of the overall labor force - about 2.5 percent. But many labor experts predict that offshoring will grow rapidly, becoming a permanent way for companies to do business.

With an expanding array of jobs vulnerable to being moved offshore, many Americans will migrate to such fields as health care and education, which require face-to-face contact, the experts predict.

"We live in a service economy. What's changing is the mix of services," says Richard Judy, chairman of Workforce Associates, an Indianapolis consulting firm that specializes in worker retraining programs.

To be sure, the destruction of old industries and the creation of new ones is a pattern often repeated in U.S. history. Indeed, the American economy's ability to regenerate itself - from agriculture to smokestack industries, and then on to high technology - has made it the envy of the world.

But the long-term economic payoff from these shifts can seem elusive to Americans buffeted by offshoring and the other forces shaping a new U.S. work force.

Cash-strapped companies sent productivity to record levels in recent years by keeping hiring to a minimum. Those levels are expected to drop as the economy strengthens, and companies begin to add workers again.

"We will see a return to more reasonable levels of productivity," says Catherine Mann, senior fellow at the Institute for International Economics. But companies also emerge from the downturn having learned how to stay lean.

Automation isn't just allowing individuals to do more work than they once did, it's eliminating the need for many of those individuals in the first place. Technology is wiping out whole categories of lower-wage jobs such as supermarket cashiers, airport ticket agents and bank tellers.

The movement of U.S. jobs overseas, which began with smokestack industries and then spread to low-end service fields such as call centers, is now affecting middle-class jobs in Web development and design, pharmaceutical research, tax preparation and patent research.

"This thing is going to take pieces out of all parts of the U.S. wage pyramid rather than just the low end," says Martin Kenney, senior project director of the Berkeley Roundtable on the International Economy.

Raj Asava, senior vice president at the Indian outsourcing firm Satyam Computer Services, put it succinctly during an April presentation at the University of Texas at Dallas: "Nothing is sacred."

The technology research firm Forrester Research has forecast that nearly 10 million U.S. jobs will move offshore between 2003 and 2015. These white-collar jobs will come from many areas, from office and computer work to management, sales and architecture.

And in a recent study, the Fisher Center for Real Estate and Urban Economics at the University of California at Berkeley calculates that 14 million jobs are at risk. Some of these jobs, in fields such as software, technical writing and translation, and financial analysis, pay average annual salaries upwards of $50,000.

"The developing countries are not satisfied with low-level work," notes Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology. India, China and other countries are building technology parks to attract more research and development work, he says.

Forecasts like these leave many Americans wondering how they're going to earn a living.

As the educational and technological gaps between the United States and India, China and other developing countries narrow, labor market experts say the U.S. work force will be divided into two camps.

At one end will be an abundant supply of low-paying jobs such as teaching and retail sales. These positions require direct personal interaction, not a voice at the other end of the telephone line or an e-mail. Wal-Mart alone will create more than 415,000 jobs in the United States over the next five years.

On the opposite side of the spectrum will be fewer high-paying jobs such as software project managers and information systems security professionals. These jobs involve complex tasks that can't be performed offshore because they often entail handling sensitive information.

This is the type of work that the United States has long excelled at.

"We still have a significant advantage in creativity and innovation," says Phillip Bond, undersecretary of commerce for technology.

In both camps, many jobs are expected to spring from the fields of health care and education.

The Bureau of Labor Statistics estimates that one out of every four jobs created in the United States between 2002 and 2012 will be in health care and social assistance or private educational services. Among the agency's list of the top five occupations with the most job openings: registered nurses and primary, secondary and special education teachers. The five fastest-growing occupations include medical assistants, physician assistants and home health aides.

The boom in health care-related jobs will extend far beyond nursing, several futurists predict. Advances in medical science and technology will lead to a slew of yet-unknown occupations devoted to maintaining people's health and enhancing it, they say.

"This trend will be driven by the aging baby boomers," says James Canton, chief executive of the Institute for Global Futures, a business think tank in San Francisco. "They will have the largest concentration of wealth on the planet."

But talk of future jobs provides little consolation for people adapting to a new reality after their livelihoods head to India. Most eventually land other jobs but often with pay cuts and few or no benefits.

For Michael Melvin and his 23-year-old son, Stephen, working with computers had long seemed the pathway to a more prosperous future, a haven of security in a rapidly changing world. This year, they discovered how wrong they were.

In January, Michael lost his job as a contract worker in software development for J.P. Morgan Chase & Co. The financial services giant replaced him with a worker in India.

"I can't compete with $700," Michael says, referring to the monthly pay his replacement earns. He is now working on a six-month contract for another bank, MBNA, at about half of his former salary.

Stephen hasn't had it any easier. Fresh out of Pennsylvania State University with an information technology degree, he has tried for more than a year to land a tech job. He spent the last few months delivering parts for an AutoZone store for $8.50 an hour.

"It's been brutal," he says.

Lisa Pineau, 47, can sympathize. Her tech job migrated to Canada - a practice known as nearshoring - but the effects have been no less harsh.

Since TIG Insurance Co. moved her job to Toronto in November 2002, the veteran computer programmer hasn't landed another tech position. She's working part-time as a court abstractor. For $15 an hour, she drives to local courthouses and downloads into her laptop information about liens, tax judgments and other matters. She sends the data to a company that compiles credit reports.

That's down sharply from the $32 an hour she made at TIG. But it's a step up from the $10 an hour she was earning in April doing part-time administrative work for the Plano Symphony Orchestra.

Pineau and other workers who have seen their jobs take flight feel their hands are tied. Thanks to the Internet, tumbling telecommunications costs and more open societies in some developing countries, employers can tap into cheap labor markets around the world.

"The transaction costs that have kept labor from being substitutable are dropping," says Sandra Polaski, senior associate of the Carnegie Endowment for International Peace.

In a May policy briefing, she warned of a global oversupply of labor. Even if all U.S. jobs were moved to China, she noted that the Asian giant would still face a labor surplus.

"The imbalance means heightened competition for jobs, downward pressure on wages and growing profits for business," she wrote.

Employers are reaping the dividends.

When Humphreys & Partners Architects needs 3-D, computer-generated drawings of its projects, it turns to a network of firms in Russia, India, Argentina and Uruguay.

The Dallas architectural firm pays a fraction of the $4,000 to $8,000 it would cost to do the drawings in the United States, says chief executive Mark Humphreys. And the process couldn't be any easier. Humphreys employees e-mail their instructions, photos and hand sketches. The information speeds across the ocean in seconds, and the overseas firms can return renderings in three days vs. the minimum of a week in the United States.
 

FoBoT

No Lifer
Apr 30, 2001
63,084
14
81
fobot.com
Originally posted by: XietyCOM
cliff notes or ban

<cliff notes>

professor is wacko, told kid not to become a programmer
dude read about outsourcing coding projects overseas and wants to know what we think

</cliff notes>


what i think:
companies should do what is best for customers and shareholders and if they can get quality code from off-shore, then that is fine
 

beer

Lifer
Jun 27, 2000
11,169
1
0
Software code is a commodity. When you build, for example, an aircraft engine, you import raw materials, integrated circuits, and software code. If an American company, GE, is trying to compete with Pratt &amp; Whitney, for example, a rise of cost in any of the commodities increases the price of the final product. For a business whose primary venture is not software, software needs to be treated as a commodity for the effects of it to be realized. Trying to treat it as anything other than that distorts the economics of software development..
 

tec699

Banned
Dec 19, 2002
6,440
0
0
Originally posted by: FoBoT
Originally posted by: XietyCOM
cliff notes or ban

<cliff notes>

professor is wacko, told kid not to become a programmer
dude read about outsourcing coding projects overseas and wants to know what we think

</cliff notes>


what i think:
companies should do what is best for customers and shareholders and if they can get quality code from off-shore, then that is fine


roflmao. nice job.

:D
 

RKS

Diamond Member
Oct 9, 1999
6,824
3
81
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.
 

yllus

Elite Member & Lifer
Aug 20, 2000
20,577
432
126
Just know your employable worth. Not all software-related jobs can be outsourced.
The movement of U.S. jobs overseas, which began with smokestack industries and then spread to low-end service fields such as call centers, is now affecting middle-class jobs in Web development and design, pharmaceutical research, tax preparation and patent research.
Even though I make a pretty decent amount of change in Web development (specifically building Web apps), it's not really a job that someone overseas couldn't do for less pay. Know your worth.
 

tec699

Banned
Dec 19, 2002
6,440
0
0
It's more then just software code guys. Read the article because the author is talking about the restructuring of the American economy.

The movement of U.S. jobs overseas, which began with smokestack industries and then spread to low-end service fields such as call centers, is now affecting middle-class jobs in Web development and design, pharmaceutical research, tax preparation and patent research.


"This thing is going to take pieces out of all parts of the U.S. wage pyramid rather than just the low end," says Martin Kenney, senior project director of the Berkeley Roundtable on the International Economy.


The future is bright if you're in education or the health care field:

The Bureau of Labor Statistics estimates that one out of every four jobs created in the United States between 2002 and 2012 will be in health care and social assistance or private educational services. Among the agency's list of the top five occupations with the most job openings: registered nurses and primary, secondary and special education teachers. The five fastest-growing occupations include medical assistants, physician assistants and home health aides.


In January, Michael lost his job as a contract worker in software development for J.P. Morgan Chase &amp; Co. The financial services giant replaced him with a worker in India.
 

Pocatello

Diamond Member
Oct 11, 1999
9,754
2
76
As more Americans are losing good paying jobs, the less stuffs they will buy, which mean American firms will make less money, which mean firms will have to cut down in production, close down, or move jobs abroad.
 

pulse8

Lifer
May 3, 2000
20,860
1
81
Originally posted by: RKS
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.

Or program something very specialized.
 

DougK62

Diamond Member
Mar 28, 2001
8,035
6
81
There are plenty of IT jobs around. You can't outsource everything. The need for technology savvy people will only increase in coming years. Diversify yourself.
 

tec699

Banned
Dec 19, 2002
6,440
0
0
I've been reading that China is the new hotbed for outsourcing? Is this true? How can a American worker compete with a worker from India who makes $700 a month? How many college educated Americans are willing to work for $700 a month?
 

nakedfrog

No Lifer
Apr 3, 2001
60,145
15,039
136
Outsourcing sucks, if for no other reason than the time differential. I worked with an outside vendor who's programmers were entirely outsourced. Caused problem to no end, because I had to wait a minimum of 2 days for even the most minor code change. An in-house programmer would have probably enabled us to finish the project 1-2 months sooner. There were also the communication problems, and the fact that the entire database had a non-standard collation; I can only assume this is because they didn't have english set-up as the default on their servers.
 

JoeKing

Lifer
Oct 9, 1999
10,641
1
81
such are the growing pains of globalization. Unless we rethink our economic polices in the near future the US will be left behind. Now our isolated location once thought of to be an asset will prove a hinderance since services cannot be so readily exchanged as with european countries.
 

Whitecloak

Diamond Member
May 4, 2001
6,074
2
0
Originally posted by: nakedfrog
Outsourcing sucks, if for no other reason than the time differential. I worked with an outside vendor who's programmers were entirely outsourced. Caused problem to no end, because I had to wait a minimum of 2 days for even the most minor code change. An in-house programmer would have probably enabled us to finish the project 1-2 months sooner. There were also the communication problems, and the fact that the entire database had a non-standard collation; I can only assume this is because they didn't have english set-up as the default on their servers.

this shows your ignorance of the Indian software industry. Dude, English is the language which is most commonly spoken out here. And, definitely, all databases will be set up to use english rather than hindi or anything else.
 
Nov 7, 2000
16,403
3
81
its a global economy now. if there is cheaper labor over there, thats where the work will go. but the more money that gets pumped over there, the higher the cost of living will get and wages will go up and then its not so attractive to outsource. the real key to the matter is that the demand for IT work is not going to dissipate and will in all likelihood keep increasing. More demand = more jobs = more money worldwide.

cliff notes, teacher is an asshat, if you are good at what you do you can make money
 

tec699

Banned
Dec 19, 2002
6,440
0
0
Originally posted by: welst10
Originally posted by: pulse8
Originally posted by: RKS
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.

Or program something very specialized.

or retail salesman


Wallmart? How can people survive on $8 an hour? Well I guess they don't own anything.
 

BladeWalker

Senior member
Aug 31, 2002
892
0
0
Like it or not, outsourcing is a reality. While I won't want to crush anyone's dream of going into IT like your teacher, I would have the say that the IT job market is definitely more competitive now that it's on a global scale. People should go into fields they enjoy doing and are good at it. The bubble has burst. You shouldn't go into something because lure of money.

From $70,000+ to $8.00/hr. What a hit. I would be having a few drinks if I was him.
 

DougK62

Diamond Member
Mar 28, 2001
8,035
6
81
Originally posted by: tec699
Originally posted by: welst10
Originally posted by: pulse8
Originally posted by: RKS
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.

Or program something very specialized.

or retail salesman


Wallmart? How can people survive on $8 an hour? Well I guess they don't own anything.

When I bought my first house I was making $8.50/hr - I owned a decent, little, old house and two cars that ran and drove fine. It's very possible.
 

RKS

Diamond Member
Oct 9, 1999
6,824
3
81
Originally posted by: tec699
Originally posted by: welst10
Originally posted by: pulse8
Originally posted by: RKS
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.

Or program something very specialized.

or retail salesman


Wallmart? How can people survive on $8 an hour? Well I guess they don't own anything.

If you really need money get into car sales. A lot of people sacrifce self-respect for money. I know I will in a few months when I have my JD.
 

BD2003

Lifer
Oct 9, 1999
16,815
1
81
As much as I want to hate on the indian programmers, when I met a few of them that were visiting our company, they were proabbly the best workers out of everyone.

That being said, the reason I'm holding off on any plans for grad school is simply cause I want to see how this whole outsourcing thing pans out for the next couple of years.
 

bigalt

Golden Member
Oct 12, 2000
1,525
0
0
Originally posted by: BD2003
As much as I want to hate on the indian programmers, when I met a few of them that were visiting our company, they were proabbly the best workers out of everyone.

That being said, the reason I'm holding off on any plans for grad school is simply cause I want to see how this whole outsourcing thing pans out for the next couple of years.

but the beauty of being in grad school is you lose all touch with that world. there is no outsourcing in academia.
 

Pocatello

Diamond Member
Oct 11, 1999
9,754
2
76
Originally posted by: tec699
Originally posted by: welst10
Originally posted by: pulse8
Originally posted by: RKS
Get into a career path that can't be outsourced eg; sanitation engineer, doctor, lawyer, etc.

Or program something very specialized.

or retail salesman


Wallmart? How can people survive on $8 an hour? Well I guess they don't own anything.

Which mean the demand for products like mac&amp;cheese and ramen noodles will increase significantly :)
 

torpid

Lifer
Sep 14, 2003
11,631
11
76
Cliff notes: until our education system stops sucking and we stop sucking as programmers, it won't change. but there's hope - lots of new theories slowly being integrated.

I think people who don't work in the field are more scared of this than those of us who do. Maybe I'm wrong. It seems to me that eventually outsourcing will get to the point where in order to compete with outsourcing, we have to increase the quality of product. My quality of product is pretty good but still has a long way to go before I'd be comfortable calling myself a great programmer.

The real problem is that a vast majority of programmers suck. In my opinion this is largely due to the way we are educated, but obviously there are plenty of people who just can't cut it too. I think the can't-cut-its are slowly dwindling away as the myth that if you go into programming you'll make money no matter what dies. Now we have to focus on achieving the kind of quality that cannot possibly be attained with outsourcing...

Right now there's already a noticeable difference, but in the eyes of management the difference in quality is significantly less than the difference in cost. Anyone who has read a technical manual written by someone with minimal english skills or had to work with a program that had cryptic errors with extremely questionable english would know what I mean.

I also agree with the creativity point above. It's hard to constantly innovate, and I think almost by definition when you outsource, you are only leveraging existing ideas/technology.

My final point is this... we already have a lot of innovation in software that programmers are still trying to catch up with. Design patterns, design methodologies, "advancted" programming paradigms, etc. I think that american and european software architects/programmers are catching on to some of these things pretty quickly, but I'm not sure that management cares about them.