U.S. Offshore Outsourcing Leads to Structural Changes and Big Impact

cio.com ^ | August 13, 2003 | Diane Morello

[Fir3_Brand]

I created an account to reply to this post:

Let me, if I may, give a short testimonial of my life w/ H1B since, say, 9/11.

I was working at a local university near Myrtle Beach, S.C., at a steady network tech. gig. My wife was finishing her undergrad in Biology and Chemistry. When I was told my contract wouldn't be renewed because of state budget problems I wasn't very upset...Wife was headed go grad school somewhere either in California or Florida, so...onward and upward, right?

We settled on FIT on Florida's Space Coast. Per my research, I found that there's *lots* of tech here, w/ the space program, and other government contractors.

We moved on Apr. 30, 2002. After faxing nearly 1200 resumes' out and only getting 3 interviews over the course of one year(!), I fell into a deep depression. At the moment, I am delivering pizza for tips alone and I'm working minimum wage during the day. I spent last Spring and this Summer in classes at a local community college, and I'm 4.0 for the first time in my life. I am *NOT* majoring in IT, but I'm looking for a Ph.D in Law History or the like. The worst part is that classes start tomorrow, and while I can go for free, I cannot afford the hundreds of dollars for books. I will likely sit this semester out.

That's been the only thing to help my depression, and I've even been suicidal several times. Us men identify heavily with our work, and when we're found to be worthless time and time again, it bothers us. Per research I've done with H1B, it's quite likely that several of my potiential jobs have been shipped to India.

So now we're going through a bankruptcy, living off student loans and still looking for work.

I feel so bad in the a.m. that all I want to do is pull the covers over my head and pretend that this is a nightmare. I had a career, I happen to be a very bright, skilled, and motivated technician. Wife and I are solid conservatives with a great work-ethic, yet we're living off apples and our future is on pause.

From where I sit, the terrorists have clearly won. Those flying airliners into buildings, and those shipping our jobs overseas while protecting the scum with our tax money.

Gotta go, the pizza parlor calls.

(before you begin to lecture this conservative on the merits of giving our jobs away so one-sidedly, put yourself in my position)

Take care, and pray for us.

[Dominic Harr]

The only thing I see here, is an opportunity to make big bucks cleaning up their mess.

I've an interesting update on this story -- today was judgement day for Satyam. Because of this out-of-control project, we are cancelling our contract with them.

And the VP in question's solution for this project?

He's hired another Indian subcontractor, and is going to start the project all over again, with them.

Failure didn't teach him one single thing.

But it's a step. They've finally admitted that bunch of Indians failed. It's one first step.

[Lazamataz]

I've an interesting update on this story -- today was judgement day for Satyam. Because of this out-of-control project, we are cancelling our contract with them. And the VP in question's solution for this project?

He's hired another Indian subcontractor, and is going to start the project all over again, with them. Failure didn't teach him one single thing.

But it's a step. They've finally admitted that bunch of Indians failed. It's one first step.

WOW. Fascinating tale. The inability to recognize reality speaks of faddish allegiance more than anything. This further tells me that this is the New Buzz Idea, the Paradigm Du Jour.

We're gonna be okay, Dominic.

[harpseal]

I've an interesting update on this story -- today was judgement day for Satyam. Because of this out-of-control project, we are cancelling our contract with them. And the VP in question's solution for this project?

He's hired another Indian subcontractor, and is going to start the project all over again, with them. Failure didn't teach him one single thing.

Now clearly a high school kid making mimimum wage could do a better job than the VP in question and most certainly would not do worse.

But it's a step. They've finally admitted that bunch of Indians failed. It's one first step.

True

This really should be sent to the creator of Dilbert. The VP in quewstion is a clear case of the Peter Priciple in action. Now a way for the company to save money overall would be replace teh VP in question with a high school kid (hey be really generous give him minimum wage plus a 100% premium he/she is after all a VP.) Take the savings and fund a project that will get the job done and done right.

[stylin19a]

Whoa.......I cn't believe this thread is still cooking.

Good grief ! I can't believe this VP was able to get this by the CFO or CEO.

Nothing like open ended development - billing time and materials forever.</sarcasm off>

[harpseal]

First I shall pray for you.

Second I have worked out a pacjage deal to attract as much support as possible that will hopefully fic teh problem by getting as good an investment climate as possible in the USA

In no particular order of importance.

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.

3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.

4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.

5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.

8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.

9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.

10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.

11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage

I note guest workers are H and L visas.

[harpseal]

That's been the only thing to help my depression, and I've even been suicidal several times.

Please do not ever consider suicide again there are way too many people who need killing as it is and to few good peopel.

Us men identify heavily with our work, and when we're found to be worthless time and time again, it bothers us.

Hang in there it sounds very rough.

Per research I've done with H1B, it's quite likely that several of my potiential jobs have been shipped to India.

Per research I can tell you there are close to 100,000 unemplotyed IT people out there. You are not alone. I would suggest you find a networking group of other unemployed IT peopel where one can share tips and get some additional pointers on honing your presentation for when teh jobs come back. Alternatively practice combat skill because if teh jobs do not start coming back there will be violence in the USA the likes of which have not been seen since the 1860's anbd maybe not even then.

To other readers this is not a threat merely an informed observation.

[Dominic Harr]

We're gonna be okay, Dominic.

Better than okay, I think.

I'm encouraged because I'm starting to see real, new development on actual software products. I think the real 'internet' boom is yet to come. Compare this 'internet' we play on to what it was just 10 years ago. Now, imagine just 10 years from *now*. We're certainly close to full video, sound, video-game level graphix, and a level of interactivity we literally can't even imagine yet.

I think there's a lesson in what happened with radio. I think people here could take comfort in that story.

Way back when, pre-1929, radio was the 'hot new tech'. Shares of RCA went thru the roof, from $5 soaring to over $500. Then the market crashed. The shares of RCA didn't reach pre-crash highs again until the late 50s. But radio is now bigger, and more amazing, than any of them could ever have imagined.

Software is the same. This 'internet' thingy is what radio was.

There is a massive revolution in the offing here. I can think of literally dozens of amazing software products that are certain to become every bit as much parts of people's daily lives as google, ebay, America Online/MSN/etc, Amazon.com, and on, and on.

This outsourcing thing is just a fad.

American programmers can compete with anyone. Now granted, a lot of good programmers are being put out of work by Dilbert pointy-haired bosses. But what goes around *will* come around. The industry is just streaky. We just went thru a huge boom, then a bust.

And I believe the best is yet to come.

[Lazamataz]

All of what you said, above -- plus we have incredible genitalia.

Yes, life is good.

[Dominic Harr]

This really should be sent to the creator of Dilbert.

I think this is pretty close, actually.

Remember, as stylin points out, we charge our customers by the hour.

---

[Dominic Harr]

I can't believe this VP was able to get this by the CFO or CEO.

We charge our customers $115/hr and up, and pay the Indian ~$20/hr.

And we can bill *more* hours, because they take longer.

The VP, CFO and CEO know exactly what they are doing, don't they?

It's got to be the oldest contractor's trick in the book: bid the contract low to get the job, then milk that revenue stream for all it's worth as long as you can. We do it to our customers, and now the Indians are doing it to us.

Ironic, eh?

[harpseal]

I went to a read an interview with scott Adams once and he says he gets most of his ideas from people telling him about incidents in their offices and the mild ones are tehones taht make it into the strip. The really serious stupidity by management according to him is just too unbelievable.

[Dominic Harr]

I found one line that made our division CIO shake her head.

I said, "If an Indian developer is worth $20/hr to you, then if I can produce 5 times what that person can aren't I worth $100/hr?"

I got the, 'you just don't get it', smile.

[Lazamataz]

I found one line that made our division CIO shake her head. I said, "If an Indian developer is worth $20/hr to you, then if I can produce 5 times what that person can aren't I worth $100/hr?" I got the, 'you just don't get it', smile.

That wasn't the 'you just don't get it' smile. That was the 'this guy gets it but I'm clueless' smile.

[harpseal]

Roger that i had a dilbert where the female with teh fist of death when she made the argument and was given a response of why that would be ridiculous from ol' pointy hair could barely control the Fist of death. That was years ago at least six.

[harpseal]

I think I just discovered a program to make MBA's a positive contributor to a company they work for incluse a requiremt the study Parkinson's law, The peter Priciple and A full year of Dilbert before they become managers.

[Myrddin]

I'm feeling like organizing.

What would you call it? Perhaps the "Unemployed Programmers Union". About the only thing you could strike is a match. Zero leverage.

The capital that is flowing to India is employing electricians and plumbers in India where the new construction is underway to house all the new employees. The electrician and plumbing jobs are outsourced too. There will still be maintenance work for those vocations in the U.S., but not lots of new construction. The quantity of abandoned, premium office space in the U.S. is astonishing.

In Pocatello, Idaho, we have lost most of the white collar and blue collar jobs. What remains is farmers, retail stores, restaurants, doctors, lawyers, a university and lots of government employees (city, county, state). AMI Semiconductor is the last large employer that contributes any sizeable payroll to the community. There is a limited amount of traffic left from Union Pacific railroad.

I work from my home office. My boss is in Beavercreek, Ohio. He suggested that he might close the physical office in Beavercreek soon and have all the staff work from home offices. That would enable us to drop our loaded rates into the $50 to $75 per hour range to be more competitive. The folks in San Diego are running at rates of $150/hour and they can't close any deals. They are simply too expensive to be competitive. Their San Diego real estate costs, utilities, taxes, disability insurance, etc are burdens that my work group can dodge.

I can offer one suggestion for a vocation that won't be sent offshore. Road maintenance in states where it snows. As long as cold winter weather destroys the roads, there will be a market to clean up behind the destructive efforts of mother nature. Police and fire jobs may also be suitable, but they are hard to get.

After visiting Yellowstone last Sunday, I can see a great opportunity for harvesting dead trees and selling the wood. It's work that needs to be done to clear the massive amounts of fuel from the forest areas. If only we could get rid of the stupid influence of the green commies. That wood is still suitable to burn for fuel and possibly still good enough for paper pulp. It is unsatisfactory for traditional lumber use.