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.
"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."
The folks that I speak about THINK they are proficient, that is why they complain so much. It's a perception vs. reality thing.
Experience with a company is far more likely to indicate strength, knowledge and proficiency than it is to indicate weakness as you described it......the only exception is for gov't employees......the smart ones often leave and find opportunity elsewhere, the less proficient ones stay and complain how underpaid they are. Do you work for the gov't?
You say: "Experience with a company is far more likely to indicate strength, knowledge and proficiency than it is to indicate weakness as you described it......the only exception is for gov't employees."
I agree that it is an utterly dismal situation in re proficiency with government employees. It is less bleak in private companies. Yet in provate companies it is still as I say, and easy fiat money, easy slave-rate off-shore labor has made *it* so pervasive. It being the inversion of proficiency to longevity.
I have a fierce pride in what I do -- I work to get things done, and when done and done right I am no longer needed. That means I need a steady and vibrant mix of new projects to be done. That US cornucopia of yesteryear is gone.
To India for software projects, to China for manufacturing. To speak in gross terms.
Good you are doing a side business. It impressed me when I was contracting with the government how many government employees used their position as a springboard to start their own businesses. Some were more energetic with that, others discrete.
I've seen that in private companies I've contracted with too. I remembr one project where we had to lock up key components in a cage with 24 hour security because folks were just *so* entrepreneurial.
Me -- I did neglect having three legs on my income stool. That was a mistake, I think. But I wanted to give each project I worked on my all, and that left nothing for side business. I do okay with "investments" -- but today's market I do not like.
Like you I am developing a third leg to that income stool. It will thrive, for it must.
Sorry my eyes aren't in my ears...I'm almost deaf but I see well...go do your thing...I'll do mine...you have a good life...and God be with you...
Working on your own as a contractor IS difficult work. The main problem being that you have to prove/sell yourself with every client - and it becomes more sales and marketing than technical/engineering.
Large organizations DO accumulate dead wood, I agree. However, there is also great value in having long-term employees in many cases.
That said, there is little incentive to keep employees. In many organizations, for many reasons, not the least of which is regulation, bureaucracy and liability - being an employee has little more security than being a private contractor.
As overhead increases on each employee forces companies to cut perks and benefits, employees will come to realize that they really ARE contractors for all intents and purposes - and some will start behaving that way and do as you have done and become 'hired guns'.
You cannot do anything about software development in India, or manufacturing in China. It's not going to stop, so if you find yourself competing in those arenas, I understand why you have the opinions you do, but directing your angst at all people who have longstanding jobs with big companies is hardly productive.
evolution and innovation is what has always driven this economy. If you have a better idea that will put big companies out of business, and all those long tenured employees, I'm all for it and wish you well.
Until then, you should think of those guys in big companies as 'customers'.
On that we disagree. It will stop, and my interest -- only from the inertia of liking what I done before and a want to continue doing that -- is in making it stop faster, and with less aggravtional efects to my family, neighbors and countrymen.
Americans are good at things intimately and intrinsically part of manufacturing, systems, engineering and sofware that just can not be found in any measure in other countries. However the these unique abilities are very much obscured and cut off from circulation by gross accumulations of "fat" -- they require either leaness in the economy or better yet a proper seperation of fat and lean.
I can not describe too well but what Mark Twain did in his corpus of opuses pretty well gets to them. The Connecticut Yankee, Tom Sawyer, Huck Finn, etc.
I understand the difference, having been involved in employment for over 28 years.
There's no question in my mind that the $60./hour figure is a well-structured lie.
There are a few "hot-button" programming skills which will get $75-80K salaries for 5+ years' successful experience, but only a few.
Run-of-the-mill mainframe COBOL/CICS/DB2 types are earning $60K max these days, if they are earning at all.
The BMW M3 is pretty.
"It will stop, and my interest ..... is in making it stop faster"
It will wax and wane.......but it won't stop, but it wouldn't break my heart if it did.
"Americans are good at things intimately and intrinsically part of manufacturing, systems, engineering and sofware that just can not be found in any measure in other countries."
What americans are really good at is allowing capital to follow opportunity to generate more capital. All other things are secondary and support the generation of capital in a free market.
"unique abilities are very much obscured and cut off from circulation by gross accumulations of "fat" -- they require either leaness in the economy or better yet a proper seperation of fat and lean"
What you should be focusing on is getting the gov't out of punishing business for success, for making money, for having employees, for growing. That will bring innovation and growth back to america faster than anything. What's most significant is not the outsourcing.... it's the reason behind why outsourcing is such a compelling draw, and that is gov't taxes and bureaucracy that punishes activities that are performed in this country.
You make an interesting, but somewhat futile point though...... Don't you think that if you got it your way, companies would still be faced with the same problems that are leading them to outsource today?
They can always apply for temporary Christmas work at the Post Office.
Yes, impoverished people like Osama Bin Laden. More BS from the left wing outsourcing cartel. I read these articles one after another, and if it isn't lying about prevailing wages, it is spreading wealth around the world. The only way you can be a pro off-shoring 'conservative' is if you are voting for your own bottom line, or you are one of those moral conservatives who believes in government sponsored charity.
Perhaps if you left out the goat castration part the HR folks might be a little less confused...
Bump.
Indian accomplice to the outsourcing hemmhoraging of U.S. economy..."Pay no attention to the man behind that curtain!!! Move along, nothing to see here..."
That's great but Stephen Roach of Morgan-Stanley points out this pesky little problem.
"Globalization may work well in the long run but it appears to have profoundly disruptive impacts in the short run. That could reflect its inherent asymmetries -- developing countries first come on line as producers long before they emerge as consumers."
And when the developing country has a closed economy the wait will be forever for them to start doin' a whole lot o consumin' o'er there?
Help Osama bin Laden out of poverty. Give your tech job to him. Only you can prevent terrorists' fires.
Now what will he do with the 500 million dollars he has? Would he really show up for work? Oh well. If giving up 138 million jobs is all it takes to stop terrorism it's small price to pay -- and it ends poverty, too!
Aside from your bad attitude, maybe your grammar is too good.
How many of those are shipped to India or China from here?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.