I believe that a major revamping of labor law is necessary to stop offshoring. The rats have dropped some major labor bombs on the economy, most notably the Lily Ledbetter law. This terrible law will highly constrain hiring practices especially for talent with highly demanded skills. Beyond this law, I believe that the rats have issued many executive orders encouraging collective bargaining and providing ammunition for EEOC type of lawsuits.
Even if the rats had not changed labor laws, I think that major revamp of employee-employer relationships would be necessary to stem offshoring. The IRS has very tight restrictions on employee-employer contracts. The IRS wants tax withholding. In the 80s, one could become an independent contractor easily. Although many may prefer to work as employees, working as a contractor is much better than not working. With the current arrangments, the only way to work as a contractor is to work for a temp agency. For many, it is advantageous to eliminate the temp agence and work directly as a contractor. Over time, independent contractors can develop a diverse set of clients.
Unfortunately the IT company I work for is in the midst of moving many jobs to India (and possibly China). The math is very easy. An American engineer costs the company over $60/hr. Someone in India costs $20/hr. If you’re a CEO selling IT services, you are very apt to take the option that allows you to sell services at a very low rate. Therefore you offshore.
And if you’re a CEO buying services, patriotism usually isn’t a good enough reason to pay extra and have to explain that to Wall St. The only viable solution, other than protectionism, is to wait until the cost of resources offshore don’t offer the 3:1 advantage they do now.
Agreed on contracting.