U.S. jobless claims [455,000] rose in latest week

Biz.Yahoo/Reuters ^ | April 24, 2003

[Billy_bob_bob]

Well, this is where you will probably think I'm nuts. I actually believe in paying a living wage. Where I live laborers usually make about $7-$8 an hour for their efforts. I pay $15 when I hire people to do work around the house. I strongly believe in paying a good wage to people, and I am very opposed to paying people a substandard wage simply because they'll accept it.

So, I admit it, I'm a weirdo. I actually believe in people earning a living wage, and I believe in paying a living wage when I hire people. I guess I'm just not a good Republican.

[PatrioticAmerican]

"hatemonger"..OK, ya gots me. I Love America and hate everyone else. That's me. Damn! It feels good to get that off my chest! thank you. (haha)

[Poohbah]

However, let's be honest:

If some American programming firms insist on delivering non-robust, buggy bloatware, AND demand premium prices for the stuff, they'll continue to get underbid by the offshore developers.

[PatrioticAmerican]

Very true, and we not even speaking of Oracle, Sun, and Microsoft here.

[Republican Party Reptile]

Actually, you just made the point I was implying -

True, the market set the rate (including myself, for what I do, IT project management and tech product management/marketing, my salary in the last 5 years hasd gone from 80's to 90's to well over 100's back to 80's, briefly 40's and 60's, and now creeping back up to the 90's) ...

BUT, the market does not set the rate based ONLY, or even primarily, on the lowest rate. You can buy a car for 15K or 50K, and there is a market for both.

So by the same token, you can get a programmer for 40K or you can get a programmer for 80K - and the market should offer opportunities for both *if* the market has a demand for both and can clearly differentiate (and assign value to) the difference between the two - if the 80K programmer offer superior value to the 40K ones - harder working, better coder, speaks English,live in the same time zone, no strange foods, whatever, if the better paid programmer offers a better bang for the higher bucks, and the market values the better bangs (superior products and delivery time, for example), why shouldn't you be able to charge more for the superior bang? People buying 15K cars and 50Ks are both getting what they want for however they value what's important to them - so why wouldn't the market pay higher for the better programmers when they offer superior ROI?

Companies buy all kinds of goods and services, do they always buy the cheapest of everything in goods and services? Or do consideratiions other than the lowest price ever enter into the equation when corporate America buys everything from furnitures to computers and servers to new CRM and ERP systems to advertising to programming projects?

[Republican Party Reptile]

Well, don't tell me, tell PatrioticAmerican to pay a better wage for his American programmers.

[Jhoffa_]

Speaking of such things.. the richest man I ever knew once told me his motivation for building the business was that he "needed a job, so he made one"

Brilliant man. High school dropout to boot. One of the "uneducated smart"

I have been thinking allot about what he said recently.. Two distinctly separate events have left me with an opportunity to get into the automatic transmission business. I am still mulling it over.

These unemployment threads and the SS threads really make me think hard about such a move. If any FReeper Entreapaneurs or Auto Mechanics have input, I would certainly welcome an FR Mail. It's kind of a scary proposition and any feedback would be appreciated.

[PatrioticAmerican]

"BUT, the market does not set the rate based ONLY, or even primarily, on the lowest rate"

They sure do. Why do you think indian firms are getting the job? Because they are better? It is because they usually are the cheapest.

Clients have only so much to spend. It doesn't matter a damn if the higher price is worth it, they can only pay so much, and we usually most if not all the budget. After 24 years in this business, I'm pretty damned good at that.

For me, a single 80K dood is no more efficient in some projects as a 40k dood. Some projects are brain dead work and only require the minimal skill set. In some projects an 80k guy is needed and that's why he gets 80k.

For 40k jobs, I'd rather give two 40K doods a job than one 80k dood. Besides, who says that there are two 40K jobs that I can combine into one 80K?

[PatrioticAmerican]

"Well, don't tell me, tell PatrioticAmerican to pay a better wage for his American programmers."

Sure, as soon as you tell the clients to pay more, we'd be glad to. I'm sure you can't be a child and think that money grows on trees.

[PatrioticAmerican]

Autotrans? My Bro-in-law is a mechanic. Does OK in Phoenix. About $55K. Warrantees are killing him. Dealers are taking his business.

He doesn't recommend it. Then, again, any business you own might do you far better than the guy next to you, if you are better at the business.

[Starwind]

Republican Party Reptile:

"BUT, the market does not set the rate based ONLY, or even primarily, on the lowest rate"

PatrioticAmerican:

They sure do. Why do you think indian firms are getting the job? Because they are better? It is because they usually are the cheapest.

Moreover, the customer (or contracting manager) often lacks the competance to disceren the more skilled service vendor and hence all vendors look alike, in which case, choose the cheapest.

[PatrioticAmerican]

You got it. Even if they have more money, it is a hard sell.

[Republican Party Reptile]

OK then, if the market set rate ONLY on lowest cost - so the market is clearly saying there is no value for being better - at least not a vlaue that the market is willing to pay for. So if it is a cost based only competition - why harping on how American programmers are better and how much the outsourcer sucks when the market is saying it doesn't care enough to pay for it? To the market, it's really better only if the market think it's better and is willing to pay for it. And "PatrioticAmerican", if you say the market is what it is because the client only has so much to spend; in that case, it's not the client or market intentionally push the rate down to squeeze out a fatter margin, it's just the market finding its own equalibrum.

There is no intrinsic value to being a programmer, or a marketer, or a burger flipper, no matter how much work you out into it or how much you may have made previously, nobody is intrinsically deserving being paid $5 an hr or 500K a year. It's just supply and demand, no?

If the market oesn't value what you are offering, you can't make the market to assign a value to something it doesn't value, and you can't say this or that deserved to be valued at such and such because of such and such value above and beyond the lowest cost when the market says it simply doesn't care about any value other than the lowest cost.

If I build a widget and want to charge $1000 a piece for it and nobody wants to buy my widget for $1000, am I still correct in insisting that my widget is in fact worth $1000? ... I'm talking about what it's worth in the marketplace, not how much investment I have put into the widget, which may be $1 or $1000,000, but my cost has nothing to do with how the market assign value to my widget.

If I happen to think I am worth 100K a year but the market says no, am I still right in insisting that I am in fact worth 100K per year?

[PatrioticAmerican]

"OK then, if the market set rate ONLY on lowest cost "

Are you always an extremist? Thre is no such thing as "ONLY" in any market or event in life. The fact is that cost is the primary factor in contracting, today. Remember the dynamics of the market, it isn't static. Those lower priced companies are also selling their value against ours. They convince the client that they can get the same or better value for less. Usually, they fail to deliver.

Sorry you got spoiled by the 1990's and the "anything goes" when it came to pricing, but the party is over. Price matters, the developer market is saturated with unemployed developers, companies are no longer cash rich and are pulling back their IT spending (Considerably!), so supply outweights demand by a large margin.

"willing to pay for it."

Again, money doesn't grow on trees. Just because you are "willing" to pay for it doesn't mean that you "can" pay for it. The fact is that companies are paying plenty, but under qualified teenagers want $100K to write Java and Visual Basic.

"If I happen to think I am worth 100K a year but the market says no, am I still right in insisting that I am in fact worth 100K per year? "

Aboslutely, so you have made my point. I didn't lower wages by asking for too less or not selling the value. The market has decided the value just isn't there, and, frankly, it usually isn't.

I have watched time and time again companies getting screwed by high priced development that resulted in no product or a lousy product. The engineering industry shot itself in the foot by letting any idiot who could spell "computer" enter the market.

[Republican Party Reptile]

Nah, I'm not such an extremist :) Just playing the devil's advocate ... As many of these H1B vs. American argument does tend to come down to making points about perceived value vs. what the market is willing to pay for - so in that context, people making 40K now who used to make 80K is really not under paid, it's just the dynamics of the market at this point in time.

If one look at it in that context, H1Bs and outsourcing is really not the cause of lowered rate, maybe a contributing factor, but the cause of the lowered rate for programmers is really simply reflecting what the market is willing or able to pay - and the H1Bs and outsourced shops just filled the demand for lower pay scale faster than the previously better paid American programmers - and if the better paid American believes he has superior value and should be paid more - but the market is not willing or able to pay for the added value, it in fact has no value, so the better paid American programmer has to either work for lower pay or be out of a job to someone who is - but that's a function of the market, not the fault of that someone who is willing to work for the lower rate.

That is, the rate is primarily driven by what the market is willing and able to pay, not what someone is willing to work for - the market sets what it's willing to pay before the worker respond by willing to (or not, as the case may be) work for the market set rate.

So maybe it's a fallacy that the H1Bs and outcource shops are taking away the jobs from Americans - it's really just the market has now set a lowered rate for the job and H1Bs and outsourcing were faster and more willing to react and adjust to the lowered market rate. The H1Bs didn't set the lower rate, the market did, the H1Bs and outsourcing just filled in the new demand for the lower rate when others mnay have initially balked.

If the rate is set primarly by what the market can pay, even without H1Bs and outsoruced shops, the rate will still be lower because the market is only willing or able to pay a lower rate - and if the current workers can't or aren't willing to adjust to the lowered rate - they'd still be out of a job because even without the H1Bs and outsource shops, companies still can't afford to pay the higher rate - with or without H1Bs and outsourcing, the recession would still have meant job cuts and lowered salary - in fact, probably even higher unemployment rate because if existing workers won't work for the lowered rate and the H1Bs and outsorucing didn't exist to fill in the lower rate work, more projects and products and companies just won't get funded, period.

There are no H1Bs airline pilots - so if the comapny say they can't pay pilots 160K a year and the pilot insist on still getting 160K per year, the company goes into bankruptcy and the pilots are still out of a job.

[PatrioticAmerican]

" H1Bs and outsourcing is really not the cause of lowered rate, maybe a contributing factor,"

Absolutely, but there are not enough jobs in America to allow foreigners to take what is available. Denying H1-Bs would be a significant help to the industry.

Also, foreign, or "offshore", as people hate the word "foreign", development should be considered a foreign product as all products developed outside the US, subject to import restrictions and tariffs. Unfortunately, it is not.

Also, because companies spend the money outside the US, the money should not count as a business deduction for tax purposes. I don't care if SYSTIME has an office in New Jersey, they are foreign owned and the work is primarily performed in India. Their services should not be tax deductable to American corporations.