[stuartcr]

Would we use new, state-of-the-art sweat shops, or old ones?

[Pikachu_Dad]

Hmmm. Lets start offering CHINESE style wages to U.S. workers.

[Smogger]

And he is convinced that having people working onsite gives him control over quality and timing that he wouldn't have enjoyed if he had subcontracted overseas.

Duh. Gee this guy is practically a rocket scientist. Anyone with a small to midsize business could tell you that. Only huge corporations can afford to absorb the potential losses associated with outsourcing to offshore companies. If you had only one or two major projects would you trust them to nameless, faceless programmers in a country a dozen time zones away for whom english is a second language? Only if your the moronic executive of a blue chip company.

[Shermy]

How do we replace the hundreds of thousands of information-technology, call-center, paralegal, and other jobs rapidly exiting the U.S. for India, Russia, and other low-wage countries?

Who is "we?" The outsourcers aren't part of "we" and don't care.

[Orangedog]

Great way to entice kids to study math and science in high school then spend 4 years at college in a challenging field. "Come, spend a small fortune in tuition and years of your life so you can earn what they pay people in countries like India!" Anyone still wonder why law schools are cranking out so many lawyers?!

[Capitalist Eric]

An excellent demonstration of macroeconomics in action. Since India or Russia (or whatever) are essentially "local," in terms of the exchange of labor for cash, and delivering a (relatively) instant result without real transportation costs, the deciding factor becomes the labor rate. Since the barriers to competition are essentially nonexistant, Indian labor rates have forced down the prevailing world-wide labor rate for the same talent...

The ultimate winner, just as the theory says, is the consumer (NPO, in this case).

Very cool.

[RogueIsland]

And then Jon had a brainstorm. What if he offered Americans the jobs at the same rate he would be paying for Indian programmers? It seemed like a long shot. But it also seemed worth the gamble. So Jon placed some ads in The Boston Globe, offering full-time contract programming work for $45,000 annually

That's probably pretty bad in Boston, but it would be pretty liveable where I work, if one could get reasonably priced health insurance.

[Khurkris]

This is simply finding the value of a position. Its also called - REALITY.

[Moleman]

Interesting although scary article. Although the programmer will only get 45K per year I rather keep jobs in the US and potentially negatively impact the US standard of living
than to ship the job over seas and improve the standard of living for Communist China.

[Snuffington]

In the meantime, the matter of overseas subcontracting appears to have become open-and-shut. If you're an executive with half a brain, you can come to only one conclusion when tallying the differences in costs between hiring computer programmers in the U.S., vs. India or Russia.

And if you're an executive with a rare case of having an whole brain, you'll notice that hourly billing rates aren't the best measure of productivity or value in IT work. You might even examine a few studies finding that most companies sending work overseas are exeperiencing little to no overall savings, while experiencing slowdowns and quality problems with their product development.

Hats off to Jon Carson for his innovative solution. But I suspect in the long run those salaries he pays will rise again. Why? Because they'll prove it's hard to replace truly productive onshore workers with less efficient offshore ones and save any money. He's running a business, not a quarterly spread sheet. Labor cost means nothing unless it is tied to what is being produced with it.

[PoisedWoman]

I have trouble believing that a programmer in India actually gets that $40K. There, it would be a fortune. I suspect many middlemen are involved.

Maybe a new business venture for a savvy out-of-work programmer would be to start an employment agency for Indian programmers, pay them $10K and keep the $30K.

[Alouette]

$45,000 for an overseas programmer is very high end.
The average Indian programmer makes $8,000 a year. Are Americans ready for that?

[ThinkDifferent]

What if other companies begin taking the same approach -- offering Indian-style wages to American workers? On the positive site, we could begin to solve our job-creation problems. But on the negative side, America's standard of living would inevitably decline.

The negative is incorrect. Yes, lower salaries hurt developers (of which I am one), but they benefit everyone else.

[MineralMan]

I know there are lots of folks who consider this a bad thing...US programmers working for $45K/year. Oh well. The guy advertised, and got lots of resumes. He hired folks who were quite willing to work for that amount, and two of them have now been promoted to higher pay rates.

Sounds like a solution to me. Nobody's coercing the programmers to apply.

[Old Professer]

And so, the other shoe has a soft-sole; the way this story reads, this is a done-deal.

[Eva]

I know some top rated computer guys who have been working for these wages for the past few years because any job is better than no job when you have a family to support.

[ColdSteelTalon]

This reads like a SPAM e-mail posted on Free Republic as news.

[William McKinley]

On the positive site, we could begin to solve our job-creation problems. But on the negative side, America's standard of living would inevitably decline.

How could America's standard of living possibly decline by taking out-of-work people and giving them jobs that would otherwise go out of America?

[null and void]

I would cheerfully take a 50% cut to be able to work in my field.

It sure beats the 100% cut I've had last year...

[A. Pole]

And then Jon had a brainstorm. What if he offered Americans the jobs at the same rate he would be paying for Indian programmers? It seemed like a long shot. But it also seemed worth the gamble. So Jon placed some ads in The Boston Globe, offering full-time contract programming work for $45,000 annually. [He had decided that it was worth adding a $5,000 premium to what he'd pay the Indian workers in exchange for having the programmers on site.] The result? "We got flooded" with resumes, about 90 in total, many from highly qualified programmers having trouble finding work in the down economy, Jon says. His decision: "For $5,000 it was no contest." Jon went American. And the outcome? "I think I got the best of both worlds. I got local people who came in for 10% more [than Indians]. And I found really good ones."

Interesting.