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.
ping
Mama, don't let your sons grow up to be engineers...
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.
Here we see another side of the offshoring coin. The do-gooders wish to pick American pockets to fund their social engineering.
Do not let the honeyed words deceive you - these advocates of offshoring are members in good standing of the hate America crowd. They won't be satisfied until the American worker has been reduced to the level of Chinese prison labor.
If you want on or off my offshoring ping list, please FReepmail me!
Listen to some of the pro-offshoring people on FR. They say the exact same thing, paroting the liberal line like it is a Good-Thing(tm).
Again outsourcing is here but it is not a major factor, the major factor is that hi-tech boom is over.
I've worked for a major airline in the catering department for 15 years-outsourced. I was then moved to the cargo department-outsourced. No one, in either case, was taking their laptops home.
I regret to say I didn't! I don't suppose you have a link?
Let me search - it was posted here.
I've been and engineer for 27 years...7 years with my first job and 20 years in my current position. I have never lacked any work...if anything, it's getting harder to keep up with the work load. Trust me...if your good at what you do...someone out there is willing to hire you. You just need to look for it!
"$60 per hour for the average American programmer."?! Why are they lying?
The free traitors lie about everything anyway - why shouldn't they lie about this as well?
The rate in NYC is down to about $20 to $25.
Let me be the first of many to tell YOU, you aren't showing ANY of an egineer's analytical skills in that remark.
Why? Because you give advice about hiring and the availability of jobs to be found when you have only had TWO in 27 years -- and been twenty years and more since you HAD to find a job.
You might be expert in HOLDING a job -- measured by your remarks -- but you showed yourself a rank tenderfoot and dilletante at looking for work in current market. Not very analytical, not at all.
It's like the "civil" engineer whose never seen a bridge collapse, and only studied two cases of collapse himself back years and years ago. Would you hire that civil engineer to analyze a suspect bridge for it's tendency to collapse? When the first thing he says -- on seeing it as you drie up to it - is "That bridge is a good bridge, and not likely to fall"?
Or would you think he as mite too quick on the draw and likely to shoot his foot off before the gun was out of the holster?
I hate to say it,but everybody lies.
It seems to have become the great American pastime.
Lie,get caught in the lie,apologize.
credit limit bump
Your right...I've only held two jobs in the past 27 years...but I have to say I get job offers almost monthly. I'm a world traveler and can tell you jobs are out there...the best ones are right here in the good old USA! (by the way...I'm an Eagle Scout...)
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