Posted on 05/23/2004 4:27:06 AM PDT by sarcasm
Louisville resident Jeffrey Antman has seen offshoring up close.
After graduating with a master's degree in mechanical engineering at age 21 in 1974, Antman spent the bulk of the next three decades working for local startups and technology firms, including IBM, Quantum and Storage Technology Corp.
In the 1990s, he personally assisted the transfer of local disk drive manufacturing offshore to China, where volume manufacturing could be done cheaper.
Today, the engineer says he is struggling to find a job. And he says the current trend in offshoring — sending highly paid professional jobs to low-wage countries — is to blame.
"Now, when the next big thing hits, all of the software to run it is going to be written in India, and it's going to be built in China. What's going to happen here?" Antman said.
Forrester Research released a report on Monday that claims more white-collar jobs are being sent to places such as India, China and parts of Eastern Europe than was previously thought. Forrester said that about 830,000 U.S. service-sector jobs, including software engineers and other technical specialists, will be sent overseas by the end of next year. The firm estimates that 3.4 million jobs will leave U.S. shores by 2015.
According to Forrester research, the average computer programmer in India earns roughly $10 per hour, compared with more than $60 per hour for the average American programmer.
One Silicon Valley offshoring expert — who believes offshoring is an important strategy for some companies — disputes the numbers.
"Everybody's getting a little freaked out over offshoring," said Vamsee Tirukkala, co-founder and executive vice president of Zinnov, an outsourcing consultant with offices in India and the Silicon Valley. "If you do it right, you can be more productive. But it has been overhyped and now there is an offshoring bubble, the same way there was a dot-com bubble."
Tirukkala, who was raised in India and educated in the United States, said some firms are unrealistically enthusiastic over offshoring because they've overestimated the cost savings.
But some of more recent support for offshoring comes from quarters far from the corporate boardrooms.
Sustainable Resources 2004, a forum that will take place in Boulder Sept. 30 to Oct. 2, will cover several issues, including offshoring as it focuses on world poverty. The event is co-sponsored by the University of Colorado, the Sustainable Village and Naropa University.
Steve Troy, executive director of the Sustainable Village, said the "digital bridges" created by information technology give Third World and other poor nations a chance for their citizens to make more money than they otherwise could. The result, he says, is a chance for those countries' citizens to become more active consumers of the things U.S. companies produce as well.
"In the long term, you could see poverty elimination," Troy said. "But even in the medium term, it is creating all these customers who are in turn creating new jobs, and new needs for goods and services."
Troy said eliminating poverty in foreign lands serves more than just the U.S. corporate desire to cut costs and serve new markets.
"One of the roots of terrorism is desperate people, poverty and hopelessness," Troy said. "You could make the strong argument that it (moving good jobs overseas) undermines some of the roots of terrorism."
But in the current climate — where U.S. workers are worried about job losses — companies are more likely to tout the cost savings of offshoring than any possible social benefit.
The Wall Street Journal reported earlier this year that IBM anticipates saving $168 million annually starting in 2006 through offshoring. IBM's plan — revealed in internal documents — included moving jobs away from IBM facilities including the one in Boulder, the newspaper reported.
The savings would result largely due to salaries, the report stated: A programmer in China with up to five years experience would cost the firm $12.50 an hour — less than one-fourth the cost of a programmer with benefits in the United States.
Sun Microsystems is another company with a large local employment base that is increasing its offshoring. Sun Chairman and CEO Scott McNealy, in a conversation with workers in April, announced plans to cut about 3,300 jobs. Affected facilities included the Broomfield campus, local workers said. But those job cuts would be in addition to the jobs lost to offshoring, McNealy said.
"I can also tell you that in addition to the reduction in the work force, there will be employees who will be affected by outsourcing well into (fiscal year 2005) and beyond," a transcript of McNealy's announcement reads.
Tirukkala and Forrester agree on one thing: Many companies who were not interested in offshoring before are getting more interested as the media reports an offshoring increase. But Tirukkala said offshoring will slow once expectations align with reality.
"The trend right now is if there is anything people can do by taking their laptop home and working from there for two days, well, that job will be easily outsourced," he said.
But he said many offshoring efforts fail because the executives planning them fail to see the hidden costs of sending jobs to foreign lands.
"Offshoring works," he said. "But you can't just say, 'I'm going to go over there and save money.'"
Costs such as having a staff to communicate with the foreign office during off hours and expensive — sometimes frequent — travel are often not considered, Tirukkala said. Costly communication breakdowns and cultural misunderstandings are also factors in offshoring failure, he said.
But Antman said companies should have a wider interest in keeping jobs in the United States than just the bottom line.
"I think we're at risk of becoming a Third World country," Antman said. "We had taken the knowledge jobs, and sent factory jobs overseas. And now we are chopping off the top of the pyramid. What are we going to do when those jobs are all gone?
"They say that the stockholders benefit. But what are they going to do when the country has no jobs for educated workers? We can't compete with someone who's going to be paid a nickel to our dollar. No matter how smart, or how experienced you are, you can't compete with an educated worker overseas who wants to make $2,500 a year," Antman said.
Damn!...I wish I had that line a few post ago...nice going and well said!
"Thanks for the offer, but there is nothing wrong with my resume. There is simply no demand in post-industrial America for someone like me who knows how do do everything pretty well. It just confuses the hell out of the HR people who vet the resumes."
But I think that you are wrong. There are plenty of jobs for folks like you - maybe not at the salary and location that you expect (no, I'm not talking Bangalore).
I'm not saying this is you, but the folks who most vehemently complain about offshoring tend to be those that really never were qualified for the jobs they had back in the "boom". To them, that they can't get anywhere close to that boom-time salary and perks means that somebody is conspiring against them. In the meantime, folks who adapt, relocate, and learn are doing just fine.
The problem with this brand of whiner, in my opinion, is that they are just partially correct, which allows them to ratchet up the sanctimony and bitterness until they've convinced themselves that they shouldn't have to change. You never hear about the (majority of) folks who persevered and prospered. They are too busy being successful to complain.
Free traitors do lie. What is also included in that number is the American workers benefits like health care and their parking. Hell, I bet they include the electricity bill to power the office lights. Even after that, some of these people still can't turn a profit after they send American jobs to India.
You are with HotDog. Wonderfully knowing about doing someone else's job. That job being -- finding work in one's field, technology, maufacturing, etc. The fields that by the research of major professional organizations such as the IEEE and the ACM -- have been domestically hollowed out -- offshored. So able to speak of what you have tried not -- finding a professional job in today's desert climate for such jobs, without doing so yourselves. Just how good are the two of you at doing your own jobs, one wonders?
Well the exact opposite is closer to the case -- the less proficeint you thought of yourself the more likely you were to do everything possible to hang on to your 20-plus year position at all costs for fear of not finding something else, for that lack of ability and talent.
Of course -- that's my opinion and theory, and I knwo the difference between real data and informed opinion.
Sure, this will be the excuse of free traders when caught on this lie. By the text clearly says about EARNING. This is is intended to make readers resentful toward "spoiled programmers". Average $25 would look very different.
Quote again:
According to Forrester research, the average computer programmer in India earns roughly $10 per hour, compared with more than $60 per hour for the average American programmer.
We should not confuse earning on the check with the cost for the company. When these liers say that average programmer makes MORE than $60/h they present it as $120/hour cost. BTW, project manager is not an average programmer.
And if you do not have family, friends and local roots.
I understand those realities (I'm a big family man and family in my mind comes first)...but in that situation why not change careers or start a business? Sounds daring but after all this is the USA...not Russia or China...believe in it and it will happen...good luck to you and your family
" And, that would be what? What do you know about me from that post that tells you I have an attitude "problem"?"
Read your post....if an HR person were to read that he would read the same thing in it..."this guy will not work well with our caliper of people"...next?
BVD,
I don't need to post my credentials to you, because I'm sure it wouldn't be good enough for you.
The IEEE, which I am a member of (off and on), is a lobbying group on this, so one must be careful of the veracity of their claims in this regard. They represent their members interests, which in this case would obviously favor gov't controls on outsourcing/offshoring. Manufacturing and engineering are FAR from being hollowed out. What is really happening is productivity enhancements are reducing the need for staff. This is not bad for the country.
IEEE has had problems evolving to be relevant, just like many people, such as yourself, who know better than the market and people who live work and breathe the industry every day.
Your supposition is that because one has a job, one possibly could not be knowledgeable about your industry, or opportunities therein. I respect HotDog's 27 years, you should too, that is, if you weren't obviously smarter than everyone else.
As for me, I've had a number of positions over the years. I moved and evolved my career. presently I am employed, and wear a number of hats at my job in the industry. I also have a startup and work very hard to stay in touch with the engineering industry. I know, it's not good enough for someone like you who knows better than me, but try to accept that people pay people like me, and HotDog because we add value far and beyond the cost to employ us.
If that were ever to change, we would no longer be employed. Life is tough. One wonders how long your last employer carried you, hoping you would learn to add value before finally giving up......If you were good at your job, and identifying opportunities, you'd be working instead of complaining. Some people take longer than others to figure this out.
Oh puhleeeeeze - Don't give me THAT!!! We ALL act differently online with an anonymous persona than we do in real life. Or is your name REALLY Hotdog?
You are living a very insulated "career". I can understand how you are so well ... insulated. Able to maintain fantasies. Stay in Disneyland, you may not be able to handle life outside the insulated and structured environement that has grown big with you in it.
Of course, that Fortune 150 company of "ours" may be next year's General Atomic, or Pennsylvania Railroad, RCA or even Enron. All of those Fortune 10 or bigger at one time.
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