When do we get to offshore senior management?

And Politicians? One thing I noticed that killed the dot.coms that no one really talked about was that the net-market-makers would have reduced the need for much of middle and upper management in non-it fields. Once the upper management at these companies realized this fact, they killed their commitment to any of the net markets that I worked on. We need to start offshoring the blatantly horrible upper management in US corporations and mainly those in Finance/Wall St. Once this happens, all offshoring will cease.

I realized this was happening quite a while ago. American upper management is way overpaid for what they actually do. There are managers in Europe, Canada and India that would do a much better job and for less than half of what we pay our managers in the USA. Start off-shoring these jobs and watch how fast the policy changes.

hahahhahahhah no kidding ! it would mean they would have to trade in their BMW SUV's for a Buick ! End-result, policy will change tomorrow, along with lobbists in Washington lobbying to ban offshoring ! hahahahahahahah

Couldn't agree more. Lots of savings to be had employing Indian CEOs and VPs. Let's export the jobs top down.

Pfeffer and Sutton in Hard Facts, Dangerous Half-truths, and Total Nonsense espouse evidence based management. And one of their evidence based management observations is that at best the top person of a company impacts performance no more than 10%. So why is one person or a handful of upper level managers getting more than 10% of the compensation? Pfeffer and Sutton argue that in the best businesses, their is a great system and the CEO is as interchangeable as a light bulb. The company keeps running smoothly and successfully and profitably no matter who is at the top. Share holders need to speak up and demand greater competition in executive selection and need to demand lower executive compensation. The money paid to executives comes from the shareholders' pockets. There are examples where companies would have made profits or at least broken even but for CEO / executive compensation. Why on earth are executives paid, especially bonuses, for failing companies or business losses?

I agree. Put them on our working level to live and see how management like it. Even better - put the politicians on the same level as us. We cannot support them when we aren't able to support our own families.

That happens when workers at offshore R&D operations are the ones who come up with the next wave of disruptive technologies and decide to quit to form start-ups -- this time in Mumbai or Beijing instead of Silicon Valley. They and their backers will become the senior management at the companies that will ultimately replace IBM, Oracle, and all the other formerly U.S.-based tech firms that thought they were being so smart by sending jobs overseas.

The whole idea that all the high-value jobs would somehow stay in the U.S. always struck me as almost racist -- as if people in other countries didn't have the brains or ambition to fill those roles given the chance.

it may seem racist, however the problem is fundementally that cost of living is much more here then in other countries, until that is equalized, jobs will ship to india and china and we will collapse as a country with no tax base. Then we will become the new india and china in the future, so i guess we get to put our communist hat on then.

I agree, I'm a Canadian computer programmer and all 3 companies that employeed me have outsourced to India and Brazil. As outsourcing increases, there will only be minimum-wage jobs left in North America. A major cause of the Great Depression was an increasingly wealthy few and poorer masses. If workers can barely survive, the North American markets will dry up and economic crisis will follow. Governments can help by evening up the playing field. Force North American companies to obey employee standards for offshore workers. Indian programmers get university education almost free and taxes are extremely low, but they are forced to work long hours. Following are examples of possible offshore employee standards:
- 37.5 hour work weeks with 2 times salary for overtime
- Mimimum wage equivalent to U.S. and Cdn. minimums
- Force some of their education to be done in N. America
This would make life better for Indians and enable North Americans to compete for jobs.

What gets me is all these years in IT. Nobody trained me nor held my hand. It was eye for an eye, mono y mono. Now all of a sudden this cheaper, lower quality, associates level education degree people in the world for these piss ant 3rd world countries equivalent to our South America, all of a sudden, corporate management wants U.S. Tech workers to befriend thy enemies. (some of which our own U.S. military and policy makers in Washington even disagree with) and hold their hand, train our jobs to them, and expect to be nice about it ! I totally don't get this philosophy ! They sure as hell weren't nice when they were trying to move up the corporate ladder !

This article was written in 2009? It took that long to realize this?

No it hasn't taken this long, SEVERAL groups have been talking about this for YEARS. The only problem is that unless someone reputable says something nobody listens.

...that an article about the horrors of offshoring is framed by a dozen ads for assistance in offshoring.

Love these experts who don't view the whole picture. It's not only about the high paid jobs in technology, it's about any job a country should maintain, jobs and trades, in order to maintain a strong national security, in a world that ...countries follow failed policies. If a nation doesn't have the knowledge to build or develop it's own needs, especially when trouble arises.

We may as well call it what it is - These companies are liquidating US jobs, at some point a critical mass will develop that will drop the bottom out of US manufacturing and technology industries.

Manufacturing has had it's bottom gone for years. Ever check where your t-shirts and jeans are made? How about the majority of the components in your "American" car.

The ugly truth no American wants to admit is that we've long been over-paid for a spectrum of worker tasks. As long as there is a task that can be done by an $8/hr Indian, then the task is only worth $8/hr, whether an Indian does it or not. If an American worker once got $80/hr for the same task, then he should have saved some of that money before the last Gravy Train left the station. There was no chance those economic profits would last forever, off-shoring or not. Competition is not just an abstraction for corporations; it applies at a per-capita level as well. Asking for protectionist policies from the gov't will not save anyone. The only thing that will save the American worker is elevating our own game -- we have to work smarter, harder, faster than our competitors, or be annihilated by them. No one is going to save you, no one will bail you out for humanitarian reasons.

How can you blame Americans for not saving.. You cannot raise a family in America on $8 an hour unless your working 80 hour weeks. It's the fault of our politicians that jobs are being outsourced not companies. Government needs to step in and strictly outline what can and cant be done outside of America.

Now sewing a t-shirts has been done for over 70 years, but I'm not happy with companies setting up call centers and allowing people with access to my personal information such as SS, # bank account and credit card numbers.

Agreed, although like many of us in IT in the US don't like to admit to this. Our hopes are to continue to innovate and to develop and maintain a skilled workforce. Both require long-term national investments in education, and it seems the phrase "long-term" is synonymous with political suicide. Unless the dwindling inertia of our past successes can be overcome, IT workers in the US - like me - will continue to feel the realities of global competition. Whining about it won't change it.

Great job not standing behind the American worker.And the United States of Amereica. The cost of living in Bangalore is the reason the Bangalore worker is making $8 an hr as opposed to $80 hr in the US. By the way your $80 and hr analogy is wrong! maybe $32 hr. The way the economy is in America, $32 an hr is still not enough to raise a family. I wish it was $80 an hour!!! Why don't you get your priorities right and stand behind the US! Unless you're not an American!

God Bless America

I understand your patriotism here, but this doesn't seem to be a matter of pride; rather, it's one of economics. My company is headquartered in the US, but it outsources some tasks (not all) because it's cheaper in absolute dollar terms to engage foreign workers for those activities.

Mine is a publicly-held company, whose ownership is widely dispersed. Those owners, among whom I count myself, "demand" a return on our ownership investment. If we don't get at least a comparable return for commensurate risk, we drop this investment for one giving higher returns, ceteris paribus.

So who's the villain here? Is it the company's management who serve at the behest of its Board of Directors? Is it those directors whose interests are guided by the forces of risk and return? Is it the stockholders (again, among whom I count myself), who it seems, reasonably require good employment of their investment dollars?

The answer is never as simple as an appeal to what seems on the surface to be the righteous and patriotic choice. I admire your support for American interests and workers, but we workers, from the top echelons to the botton, aren't fully in control of the forces guiding our hands.

You are correct on one point: the answer never is as simple as people would like it to be.

If we want to point the finger, we could start anywhere, because there is so much blame to go around. Blame the politicians for not having enough ethical fortitude to say no to the corporate money when it comes, and to say "No" to off-shoring of jobs. Blame the constituents for voting these unscrupulous, bribe-taking politicians into office term after term; it is said, quite rightly, that we get the government we deserve.

Blame the shareholders for only being concerned with their immediate financial profits, and not with other forms of less-tangible profits; the shareholder is the new Massa (slave-owner). Blame the corporate management for not finding better ways of running business, and for not considering the long-term implications of moving not only their workforce, but their Intellectual Property, and ultimately control of their business, overseas. At least the shareholder usually has the excuse of not knowing better, but the management are the "experts".

Yes, in the right-here-and-now profits, offshoring makes sense, but when the wealth has left the country, you're going to be left with a country in ruins, stricken by poverty, crime, indifference. And you'll forget about the profit you made on those shares. Likely, you'll never consider the part you played in it as a shareholder.

If you want an answer to the question of who's to blame, the answer is: All of the above.

that profit comes from the american consumer right now. neither india nor china has a middle class big enough to buy whatever you're making offshore.

government is a corporation too, mandated by the constitution to demand protecting the interests of the american people. if our governmnet wasn't bought by your company and others and would perform its constitutional duty, whatever products you make offshore will be taxed at the same rate as all foreign products. in fact, should be taxed higher in the case of an american company operating overseas because they're directly hurting domestic economy. you should also be forced to pay for retraining all displaced american workers and pay them unemployment benefits until they find other jobs

I understand the frustration, but many large companies operate in multiple geographies. That is a fact in today's business environment. For example, I work for a US based company that has offshored a significant amount of work to India and Latin America. My two clients are from Europe and they also have offshored and centralized their operations. Where this has made sense, the work is done in the US. Unfortunatley, to remain competitive price does need to be a factor when determining where the work should be placed. I would say the one criticism I have of outsourcing is that too often price is the only criteria. Even when looking at the price, many times the overall project price is rarely taken into account and only a comparison of the hourly wage is used.

Sorry - it was "Tim" who submitted the previous commment... Name got dropped through my own fault.

BS, if you can't raise a family on $32/hr you're an idiot! I have 5 children and raised them well on much less than that w/o government help. So stop the lying. What you are really saying is you can raise a family on less than $32/hr AND have cable TV AND had cell phones for everyone in the family AND take vacations to Disney Land/World ever summer AND buy a new car every year AND buy/live in a 5000sqr/ft home AND buy a boat, AND have ATVs, AND... AND... AND... I don't begrudge anyone for wanting a _great_ life, but sometimes Americans are totally full of crap about how bad they have it. Maybe we SHOULD try living a little more resonably and watch how we spend. Perhaps we SHOULD be saving a little more.

the argument that americans are overpaid is ridiculus.
one is paid according to the market one operates in. it costs 20x more to live in a US city than it does in a city in India.
Someone who makes $8.00 in Chicago is much poorer and may be in poverty compared to someone who makes $.80 in india or china as the cost of living is relatively different.
did that occur to you?

Your counter argument is as lame as your spelling and grammar. You mistake intensity of feelings for logic.

American workers are most definitely overpaid. Many merely put in their set number of hours, and do only the work they can't avoid. They pick and choose which rules they will follow, believing that freedom consists in disregarding time-tested values like grammar and honesty.

Most American workers also expect too much pay. They do not try to live well for the least expenditure, but believe everything they see on TV. "Your teeth need to sparkle. All natural smells are evil, unless they are from a bottle of herbal something. It is too hard to mop your floor with a cost-effective rag mop, you need to buy our system that makes extra garbage. Food doesn't taste good unless you pay someone else to add unhealthy grease, sugar, salt, etc and package it in future garbage. You have to trick your kids to get them to eat vegetables. You are nobody unless you keep up with the Joneses. You deserve the posh life, so borrow money and hope you can afford it when the bill comes. Brand X jeans will make you sexy, and of course, you HAVE to be sexy, whether or not you are a good and productive citizen."

Clearly you have a biased opinion of the American worker. But I will not ignore your silly argument that only the American worker is feeding at the trough. Anywhere people are exposed to luxury items, they want them, be it Bangalore or Budapest. I'm so tired of reading opinions that bash Americans, when almost without exception the writer takes the view that only Americans are somehow the only wicked, self-centered creatures on the planet. Most of the world would live as Americans do if they could, and in fact many do.

The key point that so many seem to ignore is that the US worked very hard to get on top. Unfortunately, it now lacks the leadership on any level to keep its lead.

Mrs.Berry,

Sounds to me like you're watching too much TV. Too much free time on your hands?

BTW, a persons ability to spell, and form proper sentences, is not what is being discussed here. Also, emotions do run high on this subject - people are losing jobs, homes, etc. This is not just an intellectual discussion to millions of Americans who have seen their jobs outsourced.

And just for the sake of argument, assuming we agree that American workers skirt responsibility (and I only minimally agree with that) - what evidence do you have that workers in foreign countries are not lazy, responsibility skirting, and dishonest? I guess those are traits are only in the genes of people born in North America?

Your arguments are foolish and lame, and show a complete lack of empathy and understanding.

Matt

Spot on, Matt.

Matt, I would agree with your assessment of the American worker and, in fact, I have been pleased with the American work ethic from the people on my team. We definately have a unique culture where getting results is highly valued and taking responsibility and initiative leads to success. This isn't to say that this is always the case or that it isn't present in other countries, only that as a general rule I have found this alive and well in the US.

Ultimately in a global economy there should be only one wage for a given job, such as the $8/hr in India would equate to $8/hr in the US. The problem is the other side of that equation. In India a prescription drug only costs $2 while in the US it is $50 (depending on the prescription). So the cost of living will eventually adjust in the US.

It may not be the same drug David. There is no question that India or many other countries have "cheaper" services, but many times they are not equivalent services. Take HVAC. How many Indian households have AC of some sort. It will surprise you that given construction techniques and materials, the cost of Ac in watts will skyrocket in India, be it not for subsidies. Unless everybody had a similar lifestyle or environment, we can only have this "standard" $xx.00 USD/hr rate. The jobs, are moving target as well. A particular function, although needed, may be cheaper in say, Vietnam, where Energy may be subsidized by the Government[actually the People of Vietnam] and the hourly rate energy costs, infrastructure etc, is cheaper. The function will be relocated.

Tim makes a fair point in that if it can be done for $8/hr , it will be, this is what CEO's are doing to this country, because they are incented by not just the labor expense of it , but indeed incented by the US Gov't to send these jobs elsewhere. If we didn't give the companies such significant tax breaks, would they still have this "growth country" adoption rate ? Further, the entire economical situation needs taken into consideration that Tim completely overlooks, and is taken up in subsequent replies. This country can not live on $8/hr in any location that I am aware of, period. And so there needs to be "an across the board" resetting and readjusting of ALL economic entities to level set ourselves back so that the jobs once again become attractive to US Companies. And by the way, How come we don't see the Corporate officials and boards of these Big US companies moving their families to the 'growth countries' ?

I'm taking the plunge and doing the unthinkable: Unions are also to blame for the mess we are in. UAW is probably the biggest offender that has had the most influence on the economy. Last word I heard was that the average US Auto worker made 78/hr not including benefits. Compared to their foreign counterparts that made half that. (US means Ford, Chevy, Dodge and foreign is Toyota, Honda, etc . . .)

The Airline Pilots took voluntary huge pay cuts and pension cuts, why not the Auto Workers?

Plus, with the Unions, and I don't belong to one, people figured out how to keep their job even though they don't work at it or do anything. "If you complain about my workmanship, I'll file a greivance" "If you make me do something I don't want to do, I'll file a greivance" Too many folks in the Union positions know what they can get away with and if my company didn't have a union in the shop, the lazy ones would be let go.

we pay $25 to $30 an hour for an offshore programmer, $65 to $70 for an on site lead, they deliver 30% of quality of work an experienced programmer here, yet we pay $50 an hour for a programmer here now, you count who is more expensive.

yet $8 job in India cannot be delivered here, unless if you lived in offshore, otherwise you have to count living expenses.

I wonder why US companies are not adjusting salaries based on prevailing rates in other parts of the world.

These adjustments could create a chain reaction in US economy and bring competitive rates for accountants, lawyers, doctors
etc.

And ultimately buying power of dollar is more important then just the amount of dollars one get paid?

Yes, we have too many lazy and / or poorly educated people demanding $60,000 or $80,000 a year for semi-skilled and even unskilled labor. Why on earth does an entry level garbage truck driver earn $60,000 a year? Answer: Union - based anti-competitive restraints on trade. I'm all for things like protecting worker safety or fairness of wages, but wages over $8 or $10 an hour for someone without a college degree or even a high school degree in some cases doing things that many many people could do just is not right. These people have priced themselves out of the market and better reset their expectations and demands to what they are really worth, not what they want to be worth.

Mike - your figures are way out of wack. Indian firms are using new graduates in IT jobs for $22.00 per hour. The average US IT worker makes far less than $80.00 per hour, more like $40-50 per hour and this rate is falling fast. US workers are called lazy as an excuse by those who can't explain what is really happening. US workers are near the tops when measured by actual productivity. And Indians who work here indicate the work environment in the US is quite hostile thanks to all of the job slashing and carnage in the works, and the job environment is much more humane in India though lower paying. They will tell you they are here for the money and thats it. The US job market will continue to be brutal until the carnage is over and there is nothing left.

I have over 20 years of IT experience (technical & management) and I surely don't make $50/hour. I make $40, or did when I had a job. Speaking of which, I was on call 7 days a week, 24 hours a day. I was expected to respond within 15 minutes of being called - no ifs, ends or buts. I had to drop everything and take care of the problem - no matter what! I worked long days and weekends, holidays, family birthdays, etc, etc. Not saying every IT employee does this, but enough of us did and some still do. The stress level is very high. So, I don't feel guilty for making $40/hour. In the end, it really was more like $20/hour when you added all the 'overtime' (no, most IT employees don't qualify for overtime pay, but are expected to work it).

This is the reality! I agree in its totality.

the even uglier truth is, 2 billion people are malnourished and willing to take any job for a bowl of rice a day. as long as we're not willing to compete with that, we're fat, lazy, ugly americans, right? this whole bull@#% with the "work smarter, harder, faster" is just a poster for reinventing slavery

globalization is not a law of nature, that we can do nothing about. it's a law created by corrupt politicians bribed by greedy corporations. the net effect of globalization will be that everybody in the world will be equally poor except for some 2% of the population who will be extremely rich

I see a LOT of complaining about competing globally. It's a fact that we have to compete globally, get over it. What is your alternative proposal: stop all trade? Force US consumers to buy highy overprice crap from union workers that restrict and prohibit competition even in their own labor markets? I fully support open and true competition - it's MY responsibility to stay marketable in any job market I wish to work in, not the governments job. Just how much will that burger meal cost from MickyD's when the kid fixing it is being paid $40/hr. Is that even reasonable to pay that high of a wage for a skill anyone could do? So what's your solution to the all this?

McD kids get more like $7/hour. Have you noticed how old some of these kids are? They look more like middle aged man and women! Oh, maybe it's because they are middle aged. Hmmmm. Interesting. Why would anyone in their right mind work for $7/hour when they can get a good paying job that enables them to support their family? Can't get a better paying jobs maybe? Could be, since most of the manufacturing jobs have been exported, and the high tech jobs are on the same path. It's encouraging to know that the stockholders are getting good return on their money by doing this. Not so good that a lot of us are left holding the bag. College grads with tens of thousands of college loans, no jobs, work at McD (no offense big yellow arch), and support your family. Will they be smart enough to not push their own kids to go to college? They surely don't need college to work at McD and Co, do they now?

I have no objections to someone truly competing on equal terms and equal footing and winning. I DO have objections to U.S. companies making experienced IT workers like us TRAIN our own replacement. The Indian workers I've had to deal with at my workplace got their jobs SOLELY on the fact that their hourly rate is far less. Their experience and knowledge level is far below even entry-level requirements. I've practically handed them answers and solutions, and all they'd have to do is follow my notes and comments to fill in the blanks, and they couldn't even do that. They clearly do not have the skills required of the job, so of course I object to Americans losing their jobs to these people. If they had the same skills, same knowledge level, same abilities, etc., and simply charged a lower hourly rate, then I can see how it could be ethical to hire them instead of an American. However, in my experience, that simply isn't the case. It's downright unethical to make American workers literally train their own replacement!!! May God strike down all those who lack honor and a sense of fairplay.

When was a "sense of fairplay" ever a consideration in a free-market open capitalistic society? Last I checked, the word CAPITAL was a two-sided defintion: supply and demand. Your charity, in a purely capitalistic sense, is completely ludicrious. However, I have to concede, I fundamentally agree with you. I was in the same situation once.

We do work harder and smarter and are a lot more productive than our discounted, dirt cheap replacements. Have you ever had to train your off-shore replacement? They call come with multiple degrees, but can't solve simple problems. Sometimes you have to ask them to repeat what they say several times and then take the best guess as to what they say. Sometimes what they say sounds ok, but makes no sense in the context. All the while you're training them and doing their job for them. Have you ever try to partner with them and work on same or partnering team? There is no partnering. You end up doing most of the work. They can talk your head off - can't deliver diddly squat to the business community. I've lost two jobs in as many years to off-shoring, each time trained my successors, each time the business community was up in arms because these people had no clue. They just talk and talk about whatever it is they do know, which a lot of time has nothing to do with the problem at hand. They keep on repeating themselves until you get so frustrated and walk away. I agree - we should outsource C-level executives. It would save us all a lot of money and headache. Oh, lastly, they do have the technology knowledge a lot of times, but there is a lot more to solving a technology related problem then knowing how to program. A monkey can learn to program. It takes a lot more experience and knowledge to use the programming skills to solve business problems.

What are some of the ways offshoring could be avoided?

How about by my pet idea - namely, devise a scorecard for all nations, ranking them on criteria such as minimum wage, environmental protections, intellectual property protections, workplace safety, etc. US companies that offshore to various countries for providing services or creating goods would then be subject to a penalty tariff pegged to that nation's score. Offshoring to first-world nations like England, Germany and Japan would result in a tariff of zero (since they meet all the necessary criteria), while offshoring to nations who meet less of those criteria would meet with progressively stiffer tariffs.

This accomplishes several things:

1) It protects all first-world nation citizens from direct competition from the third world. This is only fair since a first-world worker can't as easily move themselves and their skillsets to a third world, as a first-world corporation can its capital (with which they employ these third-worlders).

2) It punishes first-world companies who move a large percentage of their labor overseas. It acts as a natural barrier to excessively doing it.

3) It incents third world countries to improve their societies, not keep them the same or allow them to worsen as the current trend encourages (currently companies head to the most-impoverished nations that have the necessary education and skillsets without regard for their adherence to first-world standards). In fact some companies may go to these nations specifically to avoid these things (as they increase costs), making those nations less likely to improve.

One thing that should be done to make offshoring reflect true costs is tariff equalization. Senator Byron Dorgan on the floor of the senate a few years back laid out data on how our trade policy actually favored sending jobs abroad. Lou Dobbs wrote an editorial about that time, too, indicating the average tariffs on US outbound goods was 20% and the average tariff on inbound goods was 2%. That has to stop immediately. There is no free trade when foreign governments place higher tariffs on our goods than we place on theirs. Second, we need tariff equalization. For example, I think most people agree not breathing polluted air and not having polluted water is a good thing. We have laws in place to limit or control pollution. Other countries have little to no environmental pollution. China is a good example where they trade environmental degradation for jobs. I think most people agree that slave labor and child labor also are not good. So we need to determine the dollar cost per unit sold of compliance with each of these regulations and then impose tariffs on inbound goods to equalize the true cost of that good manufactured abroad with those manufactured here. If a policy is bad, then we should get rid of it as a law and not impose its costs on US businesses. If a policy is good (like clean air, clean water, and children not working in factories), then we should add tariffs to inbound goods manufactured in countries that have lesser standards than ours.

I recall this debate some time ago as well. One thing that I didn't hear was how to automatically set all tariffs. I'd propose we let each country determine the rate the US charges BUT, that rate is determined by the rate THEY charge for US imports. The US simply uses the HIGHEST rate and apply it to all imports from that country. For example India has various rates but some as high as 100% from what I'm told. Thus the US would place a tariff of 100% on EVERYTHING coming from that country. Any country that complains would be told we are being as open as they are and that THEY determine what rate is charged. This should/could be applied to labor and services as well.

What're you going to do, pass another law? Que sera, sera.

I have seen the degradation of the employee moral first hand working in a company that prides itself on off shoring it labor. As well there is little to no drive for domestic students to study IT. It will be a lost art with one to two generations. We will be dependent on the rest of the world.

You can say that the US employee was overpaid, but do you see US Companies reducing any pricing because they are off shoring their work? Nope not one thin dime, greed is still prevalent, particularly at the top.

My daughter had a conversation with her career center in high school a couple years back, they advised her to look into a career other than Software Engineering because the job she would be qualified for upon graduation from college would be a sales associate since the Software Engineer jobs would be over in India or the Phillipines. I was quite irate when she told me of the conversation, but it seems that reality has a was of changing one's point of view.

these offshore companies ever setting up R&D centers in US and hiring American workers other than for Business Development? It's just not fair to American workers...

Then they advertise the jobs for very low wages, tell the US that they can't find the "right" employees for the job, demand more H-1 visas, bring the foreign workers here to work for home land wages with the threat of returning them to the home land if they don't like what they are getting.

Slavery by any other name while using the American cost of living as an excuse.

I come to this question from the perspective of how off-shoring impacts the North American Call Center Industry.

While Globalization and Free Trade are here to stay - along with the potential to outsource Call Center functions to offshore, low-labor cost locations such as India - I think it's important to consider the difference between "Fair Trade" and "Free Trade".

As currently practiced, "Free Trade" means that offshore Business Process Outsourcers (BPOs) pay substantially less in taxes to compete and do business in the U.S. and Canada than North American companies do. It also means that offshore-based BPOs are free to ignore the most basic aspects of US & CDN Labor Law - for example, India's labor standards are low or non-existent.
Indian Call Center Agents are treated as 21st Century 'cyber-coolies'. They work graveyard shifts - under high pressure - in work environments where liberal attitudes to sex and club drugs are encouraged and thriving. "Blacklist" data bases - containing the details of all those employed in the Indian Call Center industry have been set up - so that "negative insider elements" can be detected by employers at the recruitment stage. Workers in their hundreds are fired without so much as one cent in severance pay.
I think it's well past time to bring the principles of "Fair Trade" into any discussion about the North American Contact Center Industry and BPO to offshore locations such as India. The principles of "Fair Trade" have been around for a long time, and are primarily based on ideas of human rights and economic justice. "Fair Trade" is about improving the social and ethical well-being of people in both developing and developed nations. It is about the Pursuit of Happiness rather than just the pursuit of wealth. And the Pursuit of Happiness has always been about improving social relationships among people - and about moral and righteous living - not just the pursuit of material well-being.

We just celebrated Labor Day - when we pay tribute to the creator of so much of our strength, freedom, and leadership - the North American worker. Through generations of political debate, elections, strikes, lockouts and other conflicts, the vital force of labor has added materially to the highest standard of living and the greatest production the world has ever known. The North American fight for Labor Standards has brought us closer to the realization of our traditional ideals of economic and political democracy.

Globalization & Free Trade - without considering "Fair Trade" - has resulted millions of North American workers and the communities where they live being left to their own devices. We see the results daily in the squeezing of the Middle Class, the rising Trade Deficits, and a bleaker economic outlook for our children.

The majority of North American Consumers speak with their wallets in support of "Fair Trade" - just ask Starbucks. And equally, we've seen how North American Consumers punish companies exposed for exploiting labor in the developing world - just remember Kathie Lee Gifford's clothing line, or Gap Inc. and the "Sweatshop Uproars" they had to weather.

The North American Call Center Industry will become ever more entwined with those of other nations. The issue is how this will be done - to what degree - and in whose best interests. What will you say if one of your customers - or shareholders - or children - asks you if you practiced "Fair Trade" when outsourcing your Call Center jobs to offshore locations such as India?

David Filwood, Principal Consultant, TeleSoft Systems david_filwood@telesoftsystems.ca

"Indian Call Center Agents are treated as 21st Century 'cyber-coolies'"

Baloney. Bull Excrement.

I've been over to Bangalore to a couple call centers, yes-at night.

I don't understand what you are trying to say! Do you agree or disagree with that statement of "...cyber coolies"? So, what happend or what were your observations during visit to the call centers there in India at night.

Indian Call Center Agents are being treated as 21st Century ‘cyber-coolies’. http://yaleglobal.yale.edu/article.print?id=6433

They work graveyard shifts - under high pressure – in work environments where liberal attitudes to sex and club drugs are encouraged and thriving. http://www.timesonline.co.uk/tol/news/world/article742928.ece

“Blacklist” data bases - containing the details of all those employed in the Indian Call Center industry have been set up - so that “negative insider elements” can be detected by colluding employers at the recruitment stage. http://www.wiego.org/publications/EPW/Non%20WIEGO%20Articles/Noronha%20and%20d'cruz%20organizing%20call%20centre%20agents%20-%20emerging%20issues.pdf

Workers in their hundreds are fired without so much as one cent in severance pay. http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article4321488.ece

As long as the cost of living is so disparate, the trend for offshoring will continue. I would love to see jobs moving from Urban US centers out to lower cost locations in the US. At some point we choose the best course by doing whats right, not cheapest.

Many organizations are offshoring based on price alone, but was is lacking is comprehension. Many offshore development shops have technology skills, but lack the business acumen to accurately understand the problem being solved. Sure you can offshore technology, but we have rescued many projects from the Walmarts of technology in India, China, and eastern Europe. Look at the immense numbers of offshore workers. Do you really think that there is a 1:1 productivity improvement, I believe not. Innovation will always be centered on business need, not technology for technology sake. Monkeys flew in orbit, but astronauts landed on the moon.

You are playing right into it. NASA was not a business. It was a project with a capping budget. A business, a public business, is governed by a different set of guidelines. Last time "business" overran common sense there they've lost people. Does Von Braun qualify as a "monkey", Ja?

The US will become a third world country where all the design, development and manufacturing is done. That does not seem to bother the politicians at all

Best response I saw..."How can we stop offshoring?" (paraphrased)

I am afraid the answer is either "get x times more efficient" or "Accept the same wages as offshoring".

Neither will happen until offshoring becomes more expensive. We must teach the offshore communities to consume at higher levels. In general, spend like Americans spend. Or put more simply, spend your future wages now (credi)."

We do NOT have to wait until offshoring gets more expensive to improve worker efficiency! We can start right now, right at home.

Worker inefficiency in the USA is phenomenal. I meet people in all kinds of workplaces who speak substandard English. I also encounter substandard spelling, grammar, and usage in business communication. There are apparently millions of middle and upper management types who can barely read, and do not bother to read the reports they request. American literacy is at a low ebb, while spending on education is astronomical.

This literacy crisis not only has it's own destructive effect on efficiency, it opens a window on other causes of inefficiency. It isn't as easy to see, but mathematical ability is also in decline. WE have a credit crisis largely because people fail to do the math and see how many years of their lives are signed away with each upside-down car loan, lease, mortgage, credit card purchase. People are just as numerically stupid in the workplace. In addition to inefficiency, innumerate American workers demand exorbitant wages because they believe they are entitled to be rescued from their personal financial folly.

But the worst cause of employee inefficiency is the lack of work ethic, the lack of training in what it takes to get a job done well, and the years of training that mediocrity is key to social popularity. We've all heard that "Men/boys don't like smart girls/women." It is also taught in our schools the other way around.It is taught, in fact that if you work harder, get better grades, show up your agemates, you will be labled a nerd or geek or whatever and be unpopular. Special classes for various groups teach children that their failures are not their own fault, but the result of discrimination against their demographic. Sure, no one is coming right out saying smart boys will be unpopular or that your race/color/sex/orientation is making your a victim, but the unspoken message is getting through loud and clear. We applaud mediocrity with social promotions, school-sponsored popularity contests, speakers who come to schools to recruit new members for thier victim groups, and reduced expectations AKA "dumbing down." We teach children that pointing fingers is more important than striving for personal excellence, and that you will get "paid" a good grade simply for "clocking in" with good attendance.

Until we individually take responsibility for our own slackness, and nationally take responsibility to educate our children to the truth that the job market is competitive, we will have worker inefficiency makes Indian, Chinese, and other workers seem like a good employees.

Then there is the matter of wage competition. That is another topic.

I agree with what you say, but how many career changes can one economically handle? I'm on a third career. Despite being a good student in a once well paid profession, that profession become overpopulated and demand dropped, and many graduates struggle to find work. I thus switched to IT and learned and taught myself programming. I've been through IT layoffs. I'm on a third career now in project management, and I still feel very insecure in my wages. I'd love to go back to school and beef up my technical skills and do something with more security, but it just seems like there isn't anything with any kind of stability, except perhaps being a medical or dental professional. Show me the clear path to some stability and I'll go learn and master those skills.

Mrs (sic) Berry,
You clearly have a bias against the American worker, and reality probably won't change it. But what you say about the inefficiency of the American worker flies in the face of study after study showing the opposite is true.

So, who's correct, the clearly biased and prejudiced person, whose cross-section of the public is counted as herself, and possibly her peer group, or the many studies referencing tens and possibly hundreds of thousands of people and metrics? Hmm...

She hits the nail on the proverbial head, here.

As long as economic benefits to individual organiztions can be gained by offshoring, it will continue. The only way it will be dsicontinued is if strong disincentives can be put into place. For example,if every offshore job were subject to a heavy tax,such that the economic incentive to offshoring became a negative one, offshoring would disappear. Such action, however, would be castigated as "Communistic" and so arouse unthinking passions against such action.

unfortunately, people and companies are always going to try to save a buck. therefore have to make incentives, let the US dollar collapse to 1/4 its current worth, add tarrifs for imported goods,
bingo, we will have 100% employment, at descent wages (eventually) to boot. Current policy incents companies to send taxpayer dollars overseas, this will lead to collapse of government as we know it. Perhaps a dictator will come in charge and reinvent US promising people a middle class lifestyle (after the majority becomes lower class and suffers for a period of time). People discount such scenarios, but look around, it is happening now. Rich people are short sighted and are going to go where to make a buck today, they don't about long term consequences to our country

Besides weakening our global competitive status in every metric, offshoring also reduces state and federal taxes. Every job that is offshored eliminates federal and state government revenue. It also reduces the already too small number of people paying into Social Security (FICA). Corporate America gets slightly more profitable by reducing salary and insurance costs, but the system overall suffers.

We make efforts to protect trade with other countries, why should jobs be any different? Offshoring is a lose/lose, but until we get it on the ballot it will remain an open valve siphoning off our economy.

Click on this link to see how they are going to start importing foreigners to the US to do jobs at a cheaper rate. This information is also from eweek.com.

http://www.eweek.com/c/a/IT-Management/Indian-Trade-Group-Proposes-New-H1B-Visa-Approach-631896/?kc=EWKNLBOE09042009STR2

the issue is not high paying jobs in US anymore. I make less (nearly $5/hr less) than i did 10 years ago. I manage and maintain telecommunications, security system, and computer configurations for an university. Our home front has us increasing our workload and responsibility levels because of outsourcing and off-shoring jobs in IT industry. One thing is for sure, you cannot off-shore personal service (actual interaction and support of computer configuration requiring hands-on)support. IBM is basically a foreign owned company, no longer a true US company, so i am not surprised that it has 90,000+ employees outside the US. Personally, i would like to see IBM leave the US. It is not benefiting the economy here any more.
Bottom line, off-shoring always hurts the country it is done from.

Another result of off shoring is importing off shored folks mainly from India into the US.
There are American companies in the US with primarily Indian IT departments. Those departments are run by Indians. These folks are also very quickly moving into management positions then turn their departments into mini Bangalores on the US soil. If you have an Indian boss, he/she will be taking you to the Indian restaurant 4 days a week. I hope you like vegetarian food and discussing Kashmir wars.
I witnessed a lot of unfair treatment of non Indian IT folks – there are many jobs where non Indians will not even have a chance applying. On another part of the spectrum is the fact that if you are the only non Indian working with 30, 40 Indian IT, the place will feel very, very unpleasant. This is today’s reality of American IT.
In your own country, you will feel and be treated like a foreigner. American business will have to learn how to deal with this culture clash it has created on it’s own turf if it is not too late already. A lot of Indians are very skilled in IT, there is no doubt about that. But a lot of people have problem breaking into or staying in the field these days. If you don’t practice technology your skills will become obsolete. If you think the solution to the problem is to bring fresh grad from India and pay them $60,000 year then you are not cultivating your high tech skillet. When the Visa expires, the skill set will disappear as well.
Very short term thinking. Indian’s are already taking advantage of the American job market. And they think we are idiots. After all, they are paid big bucks to perform high paying jobs.

I TOTALLY agree with this assessment - I've been in various IT departments across different industries and this is VERY true. Once you hire someone from India into a management position they will fill that department with ONLY folks from India with a few token other race folks. Unfortunately this is one of the main reasons why a lot of IT departments are failing/suffering - because instead of hiring the best individuals for the job - it's hire anyone who's from India.

This happened at United Airlines in Chicago a few years ago.

Was it because of this slumdog ? :


Nirup Krishnamurthy


http://www.cio.com/article/119903/The_Hiring_Manager_Interviews_Northern_Trust_CTO_Nirup_Krishnamurthy_Looks_for_Candidates_with_Impact

I have seen this happen. One other reason is, white folks are not much inclined to work for an Indian manager. When an Indian get promoted, I see exodus of white people from his team. But with recession going on, I see a change in attitude, people of different races are willing to work together.

I agree. The people hired cannot even speak clear Engligh or understand what we are trying to accomplish or they give you the wrong info. It has happened on several of my projects. They may be smart people - but there is no understanding of how we operate etc. It is a nightmare.

In 1 year my department went from a white management chain with over 50% of the workers being white and 25% being Chinese to an all Indian management chain with over 50% of the staff being Indian and only 2 white workers remaining.

Does Brad Reese know about this?

"I hope you like vegetarian food and discussing Kashmir wars."

We might have much less off-shoring if Americans didn't spend so much on bad habits like dining on the fatted calf 5 or 6 times a week. Our cost of living here is not all from a better standard of living, witness the epidemic of obesity and other diseases caused by unhealthy habits. If each wage earner who does not want his/her job off-shored would spend no money s/he does not have, and would eat two or more meatless dinners each week, the cost of living would go down. It would also reduce our dependence on foreign oil, our pollution, and so on.

I don't have a problem discussing international history. I didn't learn much of that in school, but I did pay attention in American History and I did my own reading about WWII. I found there are some universal truths in all human history, such as the link between elitism and dictatorship, between national debt and wars of aggression, between bad science and bad government. Although I have no natural interest in rocket science, I can ask intelligent questions, and maybe even learn something. You see, I went to school and *earned* an education, I didn't just occupy a chair and wait for someone to give me all the answers.

No matter what happens to the USA Economy, I will have a higher standard of living because I used those years of free education to pack my brain with useful and interesting knowledge. If I ever have to live on nothing but beans, I will know how very healthy they are. And no one can take away the culture I've experienced, or the way a liberal education has equipped me to find solutions by cross-disciplinary thinking. The same attitude means that I have more to offer an employer than someone less flexible, less interested in life, less imaginative.

US wages being excessive & non-competitive naturally forces companies to offshore whether you like it or not...but US cost of living and health care make it IMPOSSIBLE to live on a small fraction of US wages. However, a recent report in the WSJ indicated that "Executives and other highly compensated employees now receive more than one-third of all pay in the U.S." I'm not suggesting we redistribute this income, which would accomplish nothing, but rather that these US execs and other highly paid people make TOO MUCH.

How good is Walmart, if everyone is out of Job?

With most low level jobs going off short we now have few US employees in the Human Resources pipe line, getting on the job training to take the higher level jobs. Within this generation whole companies will be moving off shore in an effort to find talented employees.

I agree with the person that mentioned greed. If our US Companies weren't so greedy, and trying to make the top dollar for all there officers, maybe they could lower prices for things and people earning the $8.00/HR can afford some niceties in this country without working 80 hrs a weeke and leaving their children alone during the day or night like so many NEED to do. Politicians need to take a cut as well. They are supposed to be working for US the public, not trying to earn top dollar.

Seriously, it's a no brainer - of course off shoring will hurt the US - not only in technology but in all aspects of the value chain! It's all about the bottom line and senior management and CEO's who are WAY OVER COMPENSATED for SHORT TERM RESULTS ONLY... they're not held accountable for LONG TERM effects or impact to the company, employees, industry or US. Long ago - companies were built up from individuals who cared not only about the bottom line but also making a mark and showing what the US is made of. Smart, innovative, hardworking individuals. What's the US made of now? Greedy, uncaring, selfish, lying and unscrupulous individuals with no integrity but big bank accounts riding on the backs of those individuals who fill their bank accounts.

.. the United States itself is weakened when it loses its technical expertise. The reasons of cost, justness, morality, or anything else on the part of companies is a distraction from the real point. The United States is permanently exporting its way of life when the earning power leaves. The United States is at the mercy of the countries that own the technology.

As a employee of the big technology company with an acronym of three letters and likes to create many other acronyms.... I have seen many high paying jobs (Developers, Researchers, Designers, etc) moved to Brazil, India, & China regions. It used to be just testers and low level support jobs in listed given regions.... now in terms of support teams... even level 3 support can be found in any of the given three regions. It used to be a task to bring in people from those given regions and have them work here in the US with "work visas" and pay them the big bucks.... that is no longer needed. Companies can now have them work from their own region and pay them the "low bucks" associated with their region of being paid. If there is any increase of employees for a given location in the US... it is probably they had certain number of employees moved from site location to another.... another past item my given company knows well.... as coworkers have referenced that the company stands for "I Been Moved".

Things need to change.... and soon... at least within the next 5 years.

--Active and concerned reader

This article hits the nail square on the head. I agree totally with Professor Ron Hira. If we keep going at the present rate in 20 - 50 years we will go from the richest to the poorest nation. Since congress wants to turn its head, why don't we off-shore them and maybe the judges. Since they do everything from a far there wouldn't be much change or would there?

What happened to "Common Sense" here?

RIT is a respected venerable school in thought and in teaching of technology. In printing for example some of our best ideas are vetted and business leaders trained.

Our Executive and Legislative leaders need to take heed to prevent further USA hemorrhage and "brain drain" which no doubt about it - the loss of jobs does affect our standard of living.

Should we permit USA job and tax losses lets also add in intellectual property losses all for short term profit gains. Why not? Short term thinkers gain only short term results.

If USA Business and Government leaders do not now take responsible action to heed the USA needs - from the research of respected educators then we are indeed in serious trouble.

I think it still comes back to the Bottom line like so many others think. Top Execs are only worried about the bottom line. If they OffShore our jobs for cheap, then they will make a bigger profit margin. And none of it will trickle down. Instead, you have these people setting up golden parachutes and whatever.

We need to focus on putting Americans back to work at all levels of the job market. Without these types of jobs coming back to the states we'll see lower advanced educational enrollment and higher government dependency. I think it's time for the US government to get back on the "Buy American" bandwagon and support US companies that wan to keep Americans employed and growing the US economy.

I AGREE WITH HIRA!!! BUT.....

Why does it cost so much to employ the same expertise here?

Why are workers so eager to see my bottom line plummet as I employ hideously expensive workers based in the U.S.? Do you know what this will lead to? My business being hurt, perhaps to the point of closing doors.

But if I kill my company by paying what High-Tech U.S.-based workers consider "the going rate", what good is that?

I built everything I have, and I am fighting for my survival as well.

I dont see the "spirit of compromise" coming from the "locals". If either side gets everything they want, then both will ultimately lose.

HELP ME!

Jbbs of all kinds are migrating away - IT, Manufacturing, you name it - going GLOBAL has only hurt the US and the pain is going to increase. Our elected officials have for years adopted policies harmful to the US work force and now we face having the people still fortunate enough to have a job being squeezed into the new "Redistribution of Wealth".

WHAT wealth? Its gone overseas and it won't be back.

JOBs are the answer, if everyone that could work had a job (just one, not 2 or 3) and the salary was enough to live on and had benefits (i.e. health care) we would be far better off.

Who exactly is going to fund these expensive "government" programs - where is the $$$ going to come from??

Who else but the American Public. TAXES, TAXES, TAXES. Or the US will borrow more from foriegn countries and owe them OUR FUTURE.

Still, the cost of everything else people need to live. Electricity, Auto, Shelter. Why don't the manufacturers lower prices so people can afford a decent car to get to a good job so they can afford a nice house in a good neighborhood. Because we have people in certain places that don't care about any class but the upper. If these people cared so much about all Americans, then why aren't ALL AMERICANS Employed?

Yes, why don't companies lower costs to American consumers?

They are trying very hard to do so, and the thanks they get is people belly-aching about jobs going to countries where better workers are happy to get less pay. Paying less to employees lowers costs to consumers! Paying more, for less efficiency, raises costs to consumers!

Same way you stop tax thieves who set up their corporations off shore -- tax them at a higher rate than if they claimed on-shore status. You wanna sell your stuff here? Pay taxes like the stuff made here.

Same with Programmers. Wanna do business in the US? Wanna sell your shit here? Tax them until it hurts and they bring the work back here. Solves our budget problems, too, in the meantime.

BTW, I hire programmers to work here. 99% of those with degrees from India or China ain't worth %$&#! Slow and SUPER UN-MOTIVATED.
That outta get some words flyin'...)

I like the tax part.

Another way is to remove tax-exempt status for offshore expenses. That should slow things down or spawn a whole new industry.

Let's face it. The Lords always try to displace organized surly serfs with more compliant ones. This is part of American history no less than other empires. However, when companies not only get cheaper labor out of country but pay NO corporate income tax on "out of country" profits until they repatriate those profits, they will keep them out of country indefinitely. Hence, just on a tax basis, it is 25% or so cheaper to set up and run a software development facility in a low tax/ no tax country. A fairer method would be to tax in the jurisdiction of final sale of product or service.

Hopefully these company's future customers will be in low wage countries, as over time there wouldn't be any customers left in the USA. Poor countries don't buy much. The only winner here will be WALMART...

Oh, please!

Some protectionist measures should have been immediately instituted when the USA just started to outsource abroad, years ago.

Now we are paying the price dearly!

Obama has some *REAL* work to do, if he doesen't want to let this country go the way of the H.M.S. Titanic.

Better move real fast before the bow breaks off!

Disgusted :0((

Back in 2002 I was the victim of offshoring. The Company I worked for built a multi-million dollar state of the art call center in India and within 3 months of this news release I was unemployed. Fortunately I wasn't one of the hundreds, possibly thousands, that had to train their replacement.

In this same year, 75% of the IT Jobs left Utah. Salt Lake City was the 5th largest tech city in the nation and growing. Of those 75% only 10% found jobs in the IT industry and of that 10% only 5% found jobs at or above the pay they were making when they were replaced.

Imagine where the US would be IF Corporate US brought back just 50% of those jobs.

This article is long over due, and it's conclusion has been obvious to many of us in the field, for years. Instead, of giving India the majority of projects, how about keeping the projects in the US. College students by the thousands are not going for computer degrees, because all the jobs are out of the US. We going to be a country of computer illiterate people, if the trend continues. It is all due to the greed of large companies wanting to increase profits, at any cost, even if the cost is driving the US down the drain.
The US needs to reverse this trend, and build a strong student population, with computer knowledge, for the future. The future will belong to the country with the best computer knowledge and skill.

I think it was Sam Palmisano (CEO of IBM) that said jobs will naturally move toward geographies were they can be done most efficiently. Such statements never apply to the jobs of people who make them, only the jobs of anyone below them in the corporate hierarchy. You can't tell me that there aren't any competent upper level managers in India or China that couldn't do the same job for less money (ie. more efficiently).
Nobody should accept the unwanted exodus of their job to some low wage geography. If you don't care nobody else will. Also, don't sit back while jobs disappear around you because yours might be next. I offer the following parity with apologies to Martin Niemöller, the original poem's author:

First They Came ...

In North America, they came first for the support personnel, And I didn't speak up because I wasn't a support person;
And then they came for the contract employees, And I didn't speak up because I wasn't a contract employee;
And then they came for the information developers, And I didn't speak up because I wasn't an information developer;
And then they came for those on the traditional pension plan, And I didn't speak up because I wasn't on that plan;
And then ... they came for me ... And by that time there was no one left to speak up.

This article is long over due, and it's conclusion has been obvious to many of us in the field, for years. Instead, of giving India the majority of projects, how about keeping the projects in the US. College students by the thousands are not going for computer degrees, because all the jobs are out of the US. We going to be a country of computer illiterate people, if the trend continues. It is all due to the greed of large companies wanting to increase profits, at any cost, even if the cost is driving the US down the drain.
The US needs to reverse this trend, and build a strong student population, with computer knowledge, for the future. The future will belong to the country with the best computer knowledge and skill.

actually the writing was on the wall for long time,it is interesting that it took that so to recognize it. But it does not matter, what will happen the limit less greed will continue with it. First the production was shipped offshore, now the design tomorrow the R+D, what is next? the universities? what will be the left over; people without work, the military [ which will import his gears perhaps from China to..] and lots of deficit broken infrastructure, broken government... Do I need to go further? Sooner or later the whole country will be sold to the creditors, they will come and clean out the mess including the high society,

Sounds like we all see the problems with outsourcing, but what can we do about it? (Suggestions?)

Seems like the base problem is corporate greed. Upper management wanting best returns on stock and higher salaries.

I also agree that the quality of work performed by offshore is typically poor. You may pay them $8.00 per hour, but over 90% of time it seems that what one onshore can do in one hour takes them more than 10. I do admit that sometimes you find someone good, but the odds are right up there with winning the lottery. Hmmm 8x12=…

It is also discouraging that corporate execs are willing to accept less quality code, or they do not audit what they get. I can not count the number of times I see where they fix a Bad data error by just moving zeros into the field. I wonder how that will affect the bottom line results? It’s a slap in the face of American pride that they accept this poor quality and reject ours.

As employment becomes more difficult, and pays’ go down, so does the client base for products those corporations try to sell. Other industries then begin to hurt. How many workers lost their home? Could that be the real cause of our economic issues? Who knows?

Years ago when the auto industry had problems the government added import taxes. Maybe this would work for the IT industry based on % of off shore employees. For example if a US company had 25% us workers, and 75% offshore, they would pay 75% of the required import tax. They would also need to include those companies that outsource to a US company that in turn outsource to offshore. Just a thought.

And who are we going to charge the Offshore Tax too? The Big companies that have Lobbyists in DC bribing the Politians to not pass any bill that would make them pay?

Hi-tech companies are not charities donating jobs to Americans. They are competitive enterprises who create jobs to accomplish tasks and they are looking for the same price/value mix that I look for when I shop at Best Buy.

Yes, but they often have a very short term view that is detrimental to long term growth and profits and value. For example, after the wave off offshoring at the start of this decade, studies showed the average cost of offshoring was probably 120% of the cost of keeping the project / work here. It looked good on paper because of the obvious, easily visible, short term visible hourly rate. But in the long term when projects were done, it often ended up costing more. Too many are the examples where short term business thinking ends up with bad results. Just revisit the news from September 2008 - remember that little housing market / housing loan thing and the sales of opaque derivatives?

We are in a global economy. Yes, the US sends a lot of jobs overseas, but so do our competitors in the Western sphere. We need to be mindful of this facet as well. Basically, anyone building a product/service x has to compete globally to deliver it at the lowest cost to the company in order to compete with similar product/service category companies.

Innovation cannot be off-shored. However, commodity programming can. High touch customer service cannot be off-shored; commodity call center services can.

Creating products for a market (US, Europe) is very difficult to do without a core innovation group that lives and participates in the market. Likewise, building products for India & China can scarcely be done from the US. Fortunately, a significant portion of the market is not yet China/India.

Touching on the next generation: There is a significant jobs market for software engineers who excel and pursue a higher skill set. It is far more efficient (cost, again) to work with good talent than have 10 offshore that need high touch coordination. This is happening naturally and always seeks equilibrium. With demand going soft, wages for offshore labor has also taken a nose dive. The lower skill set (Bachelors in accounting, diploma in Java) is going back to the villages. A trend today is for graduating US students becoming interns and earning the type of wage that is at par with offshore costs. Persevering for a year or two of this, such students achieve mobility into the innovation engineer ranks. Likewise, commodity IT activities such as change management can be done offshore. Design & implementation of complex IT infrastructure is best done by expertise on-shore.

The bottom line observations are that: a) protectionism will hurt the US, as our global competitors are not playing by those rules b) commodity jobs will continue to move to the lowest cost delivery geography c) innovation and market reach is still the advantage of US companies, one that is an impedance to offshore companies d) government taxation policies do impact the movement of jobs (even state to state: watch California lose its jobs to other states) e) conversely tax credit policies can create incentives for companies to keep workforce in country f) stemming health care costs is a common imperative, but neither at the expense of higher taxation to business (or for that matter individuals) nor at the increase in annual deficits and US debt.

First I will say that you sound like a person gifted with some insight and a good measure of communications skills.
My advice to high school and college students is at the end.)

I continue working for a very large IT company that continues to actively replace US software engineers with overseas workers for nothing more than the short term bottom line. I define short term as the number of years the highest level execs plan on staying with a company.

Look back 20 years from now, and we'll have a much better perspective on current off-shoring practices and their long term effect on the IT industry in the US and the US economy. I fear we will see something similar to what we see now with the US auto industry.

Over the past few years several US software engineers on my team have been let go and replaced by India developers with significantly less experience, less software engineering skill, less ability to analyze and correctly solve a problem, etc. This practice is growing in speed. Our applications have suffered quite a bit. The defect counts are way up from any time we can remember. There are far more high severity defects immediately after a new release goes to production.

Contrary to what you say: One of the first software engineers who was replaced on my team with an India counterpart had an MBA, a master’s in computer science, and was a doctoral candidate in an IT related field of study at the time he was let go. To make that clear: the US software engineer had the excellent education credentials and pretty good software engineering skills too.

The PhD candidate was replaced with a less experienced developer in India. That developer left our team a few months later and has been replaced by another developer in India, etc. That is a very common practice we are seeing with our developers in India. They don’t stay on our team very long. I was told our company has a policy of allowing them to move around every six months in order to keep them employed with our company.

Only two out of many India developers have stayed on our team long enough to get at least a minor level of application knowledge and experience - to be able to work without daily hand-holding.

I continue to be employed because I have a depth of experience and knowledge that is still needed on our team. Other reasons may be: I have a way of seeing through to the core of a problem, have a history of producing quality work products, am hard working, and I think pretty creative too. Academic education really has nothing at all to do with any of that. How long that will make my relatively high salary cost effective in our short-sighted execs view, I don't know. We never know from week to week who will be replaced next by an overseas worker.

All said: I am looking forward to what life may bring my way after a long and somewhat successful and lengthy stint in the steadily waning US IT field. I am once again looking inward at my passions. I am again asking myself: what would I do with my time if money were not a concern. It definitely is not sitting watching TV or lounging around doing nothing. I have to create. I am looking for something that will allow a more open outlet for my creative drive – without the ongoing threat of being off-shored. Maybe I’ll start putting a whole lot more time into what I originally went to college for – many years ago before switching to IT. After all that is still my biggest passion.

My advice to high school and college students is this:
1. FOLLOW YOUR DREAMS. Think about what really drives you. What do you think about frequently? What are you passionate about? Pursue college studies in that area. Stay with your dreams. And stick it out when the going gets tough. That is what you were made to do.
2. Do NOT pursue studies in an IT related field unless you have a deep inner drive to work in that field. Certainly do not let the fading promise of high salaries in the US IT field draw you into a career that may be short lived – or that might never get off the ground.
3. Remember this: even if you end up obtaining a PhD in you field of study, college is just a small part of a life long education. Never stop learning!

On reading what I just posted, I see a few grammatical errors and repetition. Oh well. I think you get the point.

You cannot blame industries for going off shore.
Look at the negative environment we have created: 1) High corporate & business tax rates. 2) No tort reform, to reasonably limit law suits. 3) EPA regualations driving out manufacturing and industry. 4) Tree Huggers & Environmentalist wackos who convince law makers fish are more important than farmers (CA), the environment is more important than people. 5) Global warming backed up by junk science has convinces law makers to over regulate industries and force them offshore. Even though the earth's temperature is cooling over the last ten years. 6) Sin taxing to the extreme.

So why would anyone want to stay in an industry hostile environment, that does not let common sense and reason dictate law.

This is a self defeating spiral since out of work people cannot pay taxes, industries are taxed more and that shuts down more industries.

DO YOU SEE THE TREND?
Yes we should be good stewards of the environment but balance that with reasonable legislation. Clean air and water are pointless if no one can afford them without a job.

Richard you are absolutely right. Attorneys (in abundance) are charging 450 an hour wrecking healthcare, technical advances, etc. All the other points I also agree with.

I think you are partly right. But read about the environmental conditions of China and some of India. Maybe we're a little overboard, but I'd rather have more conservative land use and environmental development than live in places where smog pratically blocks out the sun or fesces, urine, and water flow down the street together, dead chickens and road kill are sold for food, and overgrazing of grasslands creates dust bowls and forces shepherds to slaughter animals because they can't feed them long enough to get a wool harvest.

Companies are doing business Globally and have employees Globally -- the main question, why are we sending jobs outside of the US? The reason is simple, low wages and taxes. We have many smart, talented IT people in the US, we have college students pursuing IT careers but if there are no opportunities than shame on government for allowing this to occur. How offshoring May be hurting is the wrong title -- it is hurting US technical jobs which in the end will continue to hurt the economy. Look at home for wonderful, IT workers -- we're here.

I know many programmers effected by the economy and outsourcing. Yet, today, there was another article published by David Worthington - he states"...Large segments of the U.S. population are not considering careers in IT, shaping a shortage in qualified developers. Few students are enrolling in computer science courses, and a dwindling number of those are women and minorities, government experts say. The U.S Bureau of Labor Statistics forecasts high demand for programmers. Its Occupational Handbook for 2006-2016 lists computer application software engineers as the fourth most in-demand occupation due to "increased applications of emerging technologies" and the growing complexity of businesses. Software engineers for systems are listed at number 25. ".

So, are we in IT in short supply or over supply?
From where I sit - there is an over supply; and with all the talk about outsourcing - would you recommend your kids take computer science?

IT, and software in particular, is an easy production activity to outsource.

Perhaps our kids are better off choosing an occupation (brick laying?) that cannot be outsourced; and they know it.

Offshoring MAY be hurting U.S. employees.

First - everyong knows it already, it's not news to anyone except you.

Second - H1B visas are taking what jobs are left.

What's wrong with this picture. The country's real unemployment rate is 16%, and many of those are qualified, experienced information technology professionals.

It's time for people to get up off their ass and roll the bums in D.C. out of office for creating the incentives to make this happen.

Bring the jobs back, bring the tax dollars back here, and save this country from a deeper Recession.

Wasn't this issue put to bed when off-shoring started, what, 20 years ago? Of course it's hurting US technology, but Wall Street, VCs, and IPO shareholders were making so much money when the concept first started that no one gave a hoot. I can't believe this took professorial work for anyone to get this. If I publish a paper entitled, "Lying outside in the Tropics for too lone may cause sun burn," will I get the same attention?

I've been laid off so many times because my job was easier filled by three people to do in India or China. This has been happening for a while now and insane CEO salaries and greedy corporations play a key role in this. I remember speaking with a co-worker in India who had a higher position than I did at the time. He was getting half of what I was getting and that was a lot to him.

May? May? So silly and so stupid.

For the few places where I've worked and outsourcing existed; it's not cheaper.

Sure, the $/hour labour costs maybe lower (which is probably the only real peice of measured, qualified, and quantified data management has); but there are additional development/production costs such as the need for laboriously detailed requirements, increased quality assurance activities and associated product corrections, increased Project Management and potential time-to-market losses.

Management, just like a lot of IT folks, are guilty of the lemmings mentality. Let's do it so we can put it on our resume.

Shame on us all.

It's time to outsource editors, management,
politicians and other clueless bottom-feeders

You are joking, right?

The ownership of public corporations is increasingly concentrated in a tiny global elite. See the livescience article link below. They have little concern about where the labor that supports their wealth comes from. If the US becomes too expensive, they'll move elsewhere and will care less if our economy collapses; there are plenty of billions of people elsewhere to exploit. This is what we are seeing, this is our new life in the global economy, get used to it.

http://www.livescience.com/culture/090826-stock-market.html

In my company, MBA talk about the bill of materials, reading financial reports, seems has handle on things, but never knows outsource actually is more expensive, and drag down overall deliver quality, it takes many months to teach offshore resources to understand the importance of qualities.

Once trained offshore resources, they require higher pay, yet those MBA says we are gladly to change outsource partners, so we just constantly train Indian programmers, there's no US graduates ever gets this kind of opportunities, they have been asked to perform the day one.

MBA occupied senior management positions, rather not knowing any complicated science or technologies, just focus on management, for management, outsourcing perfectly make sense, but probably not for any other sense.

This country is declning, the middle-class is evaporating, and half our college grads can't find work in their own country, while half those grad's parents are unemployed or at risk of their jobs being sent to india, or trying to complete with coolie labor brought over from India to work for less than half the salary.

Reading all of the comments should make it obvious that offshoring does not HELP the US IT industry.

I try to look at both sides of the equation/argument.
Whether you look at it from a business &/or technical angle, one thing that always should be maintained is a sense of "balance".

Executives will tell you that they have to do this to lower costs, remain competitive with other companies..etc.
US IT workers will tell you they are qualified, experienced, skilled and can do the jobs, but require
a salary that is commensurate with their US cost of living needs.
Offshore IT workers will tell you it is the US companies that are coming to them for their lower costs.

I have no problems with IT workers from other countries getting on board to help us lower costs, and gaining experience to develop their IT base in their own countries. We are a Global Workplace and live in a Global Economy, however, it is pure Corporate GREED that exploits the cheapest human capital possible.
I have worked for IBM since the late 90's and can clearly see the stealth way that executives and their lower-level managers carry out their offshore missions.
IBM has a policy that it will not speak to "rumors" about layoffs, offshoring..etc.. This is pure corporate and legal bullshit, and no way to treat their most precious assets, it's people !

IBM knows that it cannot offshore too many US IT jobs because the IT talent in India is not as experienced, struggle with language barriers, and have a high turnover rate when they obtain marketable skills.

Not too mention that the customer satisfaction levels plummet when there is too much offshoring, or in IBM-speak "Global Resourcing".
Customers and US IT talent have become increasingly frustrated with the IT talent coming out of these "Emerging Growth Countries".

If these non-US countries are truly growing at fast levels, then why can't that local IT talent remain focused on its local growth?
If US IT talent were remotely taking Indian jobs by working on Indian business applications, they would not like it either.

It really comes down to a "balance" that US corporations and possibly the US Government must establish. There will be NO benefit to higher US unemployment and discouraged US graduates without some form of balance and fairness.

I appreciate your time in reading this and look forward to some feedback, pro or con.

Best regards.

Hmmm. Pure Genius.

How about off-shoring hurting entire US, not just tech?
How about how China and India is smarter than US?
( at least as far as students & testing is concerned )

Yeah, its cheaper, and it shows.
You get what you pay for.
I am part of a small company, and have seen mountains of waste in just the few outsourced projects we tried. For the record, I was against the idea, but I don't sign the paychecks, so it wasn't my final decision to make. After 3 failed projects, we're never going down that road again. In the end, You end up re-doing a LOT of code if you really want it to work the way it was supposed to, because yes, 1000 code monkeys being paid bananas can create more code than 10 good people. But the bananas have to go somewhere, and the monkeys usually relieve themselves in the code that you purchase. And your tech dept and company will slip on plenty of banana peels.

I am surprised that someone actually spent money researching this? Was this OBAMA's brain child? or was Al Gore involved since he invented the Internet and tech?

A far more useful study: How about how many of the companies that went under in the last 5 years outsourced their tech/IT dept? That's a useful number!
How about how many of the surviving companies had to re-write the outsourced code that they purchased in order to survive? That's a useful number!

America is being purchased right out from under us and unless we open our eyes and fend for ourselves, we'll be led liking lemmings into oblivion.

As American business owners we should cut out the middleman directly like IBM and go straight to the source like Infosys (Indian Consulting Company) to purchase IT services if we expect them to be provided offshore. The reason being is if IBM is going to over charge us for offshore workers we may as well pay the cheaper rate directly from the offshore company. I am all for paying a fair wage to American workers from smaller consulting companies that don't use offshore arbitrage to make there wallets fat like IBM and Accenture at the expense of the highly skilled and well educated American workers. I have personally cut my investment positions in imperialistic American corporations like IBM & Accenture and have used that money to invest in foreign consulting companies like Infosys and Wipro which is like outsourcing my money for better chance of growth and eliminating the middleman who does not see the benefit of American workers providing better services. It is very hard for an American IT worker to compute with workers in other countries who have an average wage of $3000 a year (Bombay India). The more money we send overseas the weaker it will make our dollar slowing reducing the wage differentials, but currently in India our dollar has a tremendous amount of buying power compared to their Rupee which makes this a very uphill battle for the American worker to compete. I do not blame these emerging market countries directly (although they do keep their currency value artificially low), but rather the our corporations that take this bait thinking that it will be this easy for them forever. I believe that have forgotten that the American is there biggest consumer and they cannon buy "stuff" from them unless they have jobs. I have been hedging this risk by investing in many foreign currencies due to what has been going on with America for the last 8 years.

You make a very good point about American Corporations making there wallets fat by using "Offshore Arbitrage". It looks like it to me that companies like IBM and Accenture have too many fat cats working for them hording up all the money and I would rather invest in smaller IT companies and offshore companies that have a more "pure" growth engine not based on taking advantage of wage differences from other markets. Just imagine if these American Companies had to count on these lower wage markets as a revenue stream rather than the American consumer!

The Indian offshoring companies are going to love you! The already have US management in their pockets and now they have a new ally - even though they don't need it. What about the flow of capital out of the US and the ever increasing balance of payments deficit. There is no saving here - you are offshoring capital permanently. That excuse that low value jobs are the only ones being offshored is a ploy, the high value jobs have already followed and will continue to follow.

I believe the author above in the original comment is not siding with the offshore companies. Rather he is saying why support big US companies like IBM and Accenture when they charge US based clients $120/hour for a contract job and then in return pay the person who is doing the actual work offshore $10/hour. That same US client can go to Indian Consulting companies directly like Infosys or Wipro instead and pay $40 an hour for the same job being done offshore. Bypassing IBM and Accenture is directly cutting out most of the "fat" in this type of business transaction.

The most efficient way to get the same job done in this case would actually find an American worker directly through a small US based company (with no offshore consultants) or hire contractor directly for $60 an hour. With this strategy you are doing 3 things: 1. Getting the most bang for your buck as for as quality work goes 2. Keeping money in this country to be spent on other goods and services locally. 3. Most important improving the skills of a local talent base that are not going to run off on you whenever they feel like it.

There is no point for us as Americans to do business with American Corporations that outsource most of the there core work offshore and depend on the same people they fire for a revenue source later down the road. They need to understand that this relationship is a two way street. There is no way a big American company would be able to operate strictly based on revenue from a third world country. Japan has a very smart model for the auto industry because they build cars in America and then sell them to American consumers. GM and Chrysler would make cars in foreign countries taking advantage of cheap labor, sell the cars to Americans, and then the auto executives would suck up all the revenue as bonuses(not profit, because there was none). Therefore I would prefer buying a car from a Japanese car company made in America and help the little guy out rather than the greedy American Executives.

Company bigwigs open their big stupid yaps about sending jobs overseas, then they bitch because people are passing over undergraduate CS and Engineering majors. Bust people's rice bowls and they stay away. That's what appears to be happening....

What do these morons want? We get the message that CS enrolments are cratering and that women and minorities are staying away. We in the education establishment are tired of the stupid outsourcing rhetoric. It makes us into liars and makes us look stupid.

Get with it. Soon we will be a nation of MBAs selling each other worthless stuff no one wants. I guess that is when big business will be happy.

Oil companies, driven to make the higest return for the stockholders, will pump high quality oil from a field not until it's dry, but until the cost of recovery cuts into stockholder's returns. The rest is left behind as they pump lesser quality oil from cheaper fields.
IT corporations, driven to make the highest return for the stockholders, have found the cost of high quality code is cutting into stockholder's returns. The high quality coders are left behind as they search for lesser quality code from cheaper sources.
Stockholders pay the ridiculous bonuses to executives that get the best returns. Executives will completely screw the workers to get their bonuses. If you ain't a stockholder (I mean a real stockholder, 10k shares in your 401K don't mean squat), and you ain't a president, then you're gonna' get screwed sooned or later.
It's how business works.
Stockholders in both cases are several times removed from the consequences of the lower quality product. When they do finally see the consequences of poor quality hit the value of their stock positions, they dump and run. Leave the schmucks in the 401K's holding the bag: am I wrong, did anyone check their 401K balance in January? Yea, me too.
The new global economy will balance the playing field by pulling the US down to a third-world level, 'emerging economies' won't be brought up to our level. Economies are zero-sum games. Rising India and China economies means contracting economies elsewhere. Watch, this little recession we hope is ending is just the first in a series of downward steps.
This is a matter of the global elite maintaining their control of the world's wealth. All your senators and representatives, and your president, and secretaries of state, and all ther rest are all bought and sold pawns, just like you and I. We're only indentured servents that have been allowed to believe in the grand illusion of freedom and self-determination as long as it profits the stockholders. Now we're starting to cost too much and they're starting to dump and run, drill for their cheap labor elsewhere; and all we can do is sit here and say 'wah-wah! It's not fair!' It's never been fair, we were just enjoying the ride so much we never realized we were being lied to.
I'm in the IT department of a really big-ass company and we lost half our staff. Business is picking back up but it's been made perfectly clear to us that there will be no re-hiring; in fact we should be prepared for more cuts. The stockholders like not paying so much. They just canceled all the projects that aren't minor enhancements to existing systems. They've been trying for 6 years now to figure out how to support mill-floor systems from India; even Russia and Ireland have been mentioned in their 'best-shoring' quest. Written into our performance metrics is a task to document everything we do so they can train our replacements, this is not an exageration, it was just added a month ago.
Yea, I guess this is a deranged rant from a senior developer stuck on back turns reseting passwords for bored and appathetic mill operators.
They tell us every day:
This is your new life, get used to it.

Hey man, look on the bright side that dollar has hit its lowest point this year today compared to other currencies. If this trend continues it will make it harder to outsource, so pray for a cheap dollar. I am surprised you listed Ireland as one of the potential places for outsourcing, because our dollar is now weak over there and does not buy very much. I believe this is a reason why Ireland has been slowly phased out for outsourcing due to the rapid appreciation of the Euro. India is a different story since they artificially keep there currency "cheap" compared to ours, that is why it takes the average Indian worker about 1.5 months worth of labor to be able to afford to buy an Ipod Classic priced in US dollars. On the other hand they can eat lunch for about a dime and pay $50 a month for rent.

I was a bit surprised when I saw Ireland on the list too; I doubt it's still in the running for the reasons you mentioned.

We used to say 'it can't get any worse' every time they tightened the screws.

The few of us that are left are so numb to it we now just say 'you'll have that.' Do I smell curry from the lunchroom....

What I find amazing is that Obama and all before him don't seem to connect that for every high paying job that goes off shore the government is losing revenue, permanently.
corporation don't spend the savings on new jobs they just keep the money offshore so they don't have to pay taxes on it. The "raise all boats" has become "raise all other boats and lower Americas". Wake up people your government isn't going to help you , they want a two class society the rich and everyone else. They want you to be beholding to them as that what gives power. it's starts with jobs and moves on to housing and on to college and on to your kids and grand kids have nothing.

Wow...just figuring this out afyer 25 years...God, I'm sure glad we have so many 'experts; in the US ...makes being an unemployed IT worker here for 6+ years much more bearable!

Of course, being an uneducated lazy slacker (MBA, BBA, 20+ yrs experience as IT Director) white guy American worker who needs a living wage to live in the US makes me quite expendable...

What amazes me is we are just now noticing this! The US is the Ronam Empire... the rich are selling the countrry piece by piece so they can have all the money!!

When equilibrium hits, or at least gets much closer, then you'll see the offshoring taper. Our wages might not necessarily need to drop 90 cents on the dollar to compete, but I would certainly expect 50 cents to 70 cents on the dollar drop before the outflow tide hits its peak and the offshoring tapers at an equillibrium. To get there, we will probably either face a great depression or an extended multi-year or decade recession. The sad thing I suspect is the ignored risks. Business risks, like higher redos of work and higher preparation costs, like requirements development and specification writing, and the societal and government risks like loss of intellectual, technological, and manufacturing know how and ability. When our bright college graduates get out and can't find technical work, and when experienced engineers face months or years of unemployment, we may have weakened abilities and response times to business and national security threats.

This makes sense. Once enough people are unemployed in our local economy and enough money is sent over seas to outsource American jobs, the American Corporate profits will disappear since they will now depend the underemployed American consumer. It is similar to the water evaporation cycle except the water does not go back in the sky to later come back down to earth, rather the money evaporates locally and is kept for good somewhere else. Then our government will combat this by inflating our currency even more or by borrowing more money putting more pressure on the deficit.

Problem with this is some of these companies see themselves replacing US consumers lost with others overseas. Thus they can dismantle our economy and still prosper at our expense.

I would like to take the other side of that argument here. If the average worker in China's income comes out to $5000 a year (half of this goes into savings) and the average Indian workers income is $3000 a year, then how much money to these multi-national corporations expect they will get from these consumers? I do not mean to sound crude here, but these workers get paid in peanuts compared to American wages. The difference is their local goods are so cheap due to its government goosed currencies that there is no way for American companies to charge anything close to a premium like they can to developed nation consumers.

If American companies want to gain market shares and increase there revenues from Western European countries, developed Asia, and Australia then that is a different story since their currencies are actually worth something to us. Then American companies would also have to pay these workers a fair wage at the same time if they wanted to utilize their services and expertise.

What is not understood here is that as IS IT jobs continue to be outsourced and filled by foreign workers in the other professions in the US will be targeted more as well. This is already happening in medical professions and in other office careers such as accountanting . All professions in the US will have thier salaries driven downwards and US workers will be replaced by a stream of foreign workers willing to work for less than the prevailing wage which soon becomes the downward spiraling wage. It is unfortunate that the US government doesn't recognize this or the majority of the US population. By the time they do the US will have already become a third world country. Kiss the American dream goodbye!

Another side effect is the re-marginalization of women in the workplace. You try being the only woman in a group of 50 plus Indian men--almost all under 25 and single.

The culture of arranged marriage, no reproductive freedom, mother-in-law ruling the home, bride burning etc, not to mention female infanticide and gender-based abortion is not a fun culture for a western woman.

As more and more of these guys flood into the workplace, the diversity balance changes.

And do not get me started on attitudes towards African-Americans! There is a real disdain for the descendants of slaves.

Don't think that US management cares one ounce for the marginalization of women and disdain of minorities. They will do anything for profits. Do you think they care about the high unemployment or permanent job loss. These people have no souls. They are cutthroats. And they will continue to do thier dirty work unabated. Where was the regulation during Wall Streets big ripoff? None. There will be no stopping of this carnage until it is way too late. The US way of life is being sold off at a record pace. Believe me - the overseas countries are laughing at this. The US worker has been put in thier place by massive political correctness and are way too stymied to say or do anything. The US will soon be a has-been and no one will care. It will be too bad for the displaced workers, and they will scrape by a meager existance the rest of thier lifes. It will be sad for those who remember how life was in the US, but the US government won't care, US management won't care a hoot, and the overseas countries will be laughing as their countries rapidly surpass the US.

It is not a matter of particular fields that are targeted for replacement. It is any job that pays a good wage by US standards. Any such job will be soon or eventually be taken by a foreign worker within the US who will work for far less, or be outsourced. The only reason management hasn't been replaced is they are leading the charge to outsource more US jobs - which is highly appreciated by the big Indian offshoring firms. To say all jobs can't be outsourced is BS. There are a multitude of visas that can be used to replace any US worker here in the US, even management once they stop beating the drum to offshore everything. One thing that is forgotten is that for every work visa issued results in the replacement in multiple jobs as that person soon brings over thier spouse and other family members to work in the US for less wages as well. The first visa is simply the first link in a long chain.

Notice that every high level executive in the US is courted by Indian offshore firms, and falls for it hook, line, and sinker. US management is the offshoring firms closest ally. And let me tell me they could care less about any of thier fellow Americans. As long as they get paid thier fat salaries and bonuses. We saw the crooks on Wall Street, believe me US companies are rife with plenty more chiselers and snakes. And they CAN get away with it easily as not only so many visa types that can be used to facilitate the process, but also that the laws governing these visas are not enforced at all - these laws are truly a joke. US management loves this lack of enforcement as it allows them to move the offshoring along rapidly unrestrained. And don't forget the kickbacks they are recieving. Don't think they are not getting paid kickbacks for this - GET REAL!!! The US job market is for sale and guess who is profiting from this.

Citi Group spends $100+ mil a year on offshore resources through TCS, money coming from US taxpayers. Using people with very marginal skill sets. Usually requires 2 to 3 people to replace a single US based resource. Definitely not cost effective.

It took 9 hrs of De manual sad by off shore techs to tell me that I had to remove everything on my NEW FACTORY installed Dell computer when they actually sold me the wrong printer that did not network.

They do not understand or speal clear English - let alone all of our dialects. They refuse to put a supervisor on the phone to assist. If the USA is supposed to be a support country - at least let us support and speak ENGLISH not de manual sad.

I can understnd plight of that call center person understanding you.

An offshoring call center job is not a plight. They are getting paid to understand thier customers, just like any other call center. No need to generate false sympathy. They are laughing all the way to the bank.

Those companies which outsource need to have all taxpayer/government support removed. As long as they continue to receive taxpayer money while outsourcing taxpayer jobs they are not reflecting their true cost of outsource operations and the government is operating very unfairly with us taxpaying citizens.
In addition the government should remove/stop issuing H1-B visas as well - thus disallowing unfair entry of people from other countries occupying US citizens' jobs. If those from other nations wish to work technology here- -first they should become citizens!!

Forget the call centers - look at the engineering and the programming jobs that are going overseas! Corporations do not care how the US economy is hurt either. These behemoths think of themselves as global entities and will do whatever is in the best interest of their pocket books. Interestingly, some engineering is coming back to the US because the cost of development overseas is higher than the bean-counters calculate. That is because American Engineers and Programmers can create products faster (with better warranties costs) than can our counter-parts overseas.

Don't forget the offshoring of accountants, business analysts, financial & insurance workers, and most office professions. And to complement this there is onshore replacement by visa workers of doctors, nurses, physical therapists, airline pilots, professors, coaches, and many others. Do you think the new green jobs will not be subject to replacement by foreign visa worker. Any decent job with a living wage will be taken! And low paying jobs will be taken by the illegal workers. What will be left? Do the math!!

I think you missed the point of the article if you think it's just call center work that has been offshored. It's more that just that, it's R&D, Manufacturing and Engineering work that had been done in the US. Some of the call center work is coming back because of the problems mentioned, but the meaty jobs may never find there way back.

We must do what everyone else does and protect ourselves. That means first becoming far more restrictive to all kinds of immigration and secondly increasing the cost of imported goods. Capitalism and competition are okay within America but it's been shown we can't compete with countries which never had standards such as minimum wage, 40 hour workweeks, polution control, and overtime. "Free trade" has benefited mostly CEOs and hurt the rest of America. Everyone else protects themselves far better than we have.

I partly disagree. There is nothing like exporting R&D jobs. I believe R&D centers should be opened across the globe to tap into local talent and bring more innovation.

'... When China gets better at the things the U.S. is good at, the U.S. can get poorer. ...'

how can the US (or any other country) get poorer when someone else makes something better (more efficiently)?... we should all have in mind the consumer instead of any other particular/lobby interest... EVOLVE OR DIE

Evolve into what? A low paid skilled educated worker scraping to get by? There will always be lower paid workers in other countries who can attempt to do any job in the US and the US management will be more than willing to make a go of it with them. Is the US always going to compete with the country with the lowest wage? It has already been proven that the offshored quality is not there, and there are numerous difficulties in communication and setting up an offshore facility, so it comes down to wage. This downward wage spiral does not stop with India, there is a never ending list of other countries also that will be eager and willing for the offshoring work. What pathetic future are you attempting to evolve too?

Evolve into a more skilled and more educated worker... if your job can be done much more efficiently why would anyone but yourself want you to keep doing it?... for example, if YOU can get a bottle of milk for 1$, would YOU spend on the same bottle 10$?... and, of course, in the long run (and probably in the short one too) it also benefits the worker himself, would anyone make a living carrying around bricks and mortar or is everyone glad cranes are used?... I'd say the only person who curses on the invention of the crane is the one who can only carry around stones (and even him is extremely short sited!)

RIGHT ON!!! The only disagreement I have with this article is the title. Change "may be" to IS Hurting U.S. Technology Employees. You could also add "and will ultimately hurt ALL U.S. Companies and employees." But that "may be" a little too long.

If you believe in bringing those jobs home, start buying AMERICAN, and the demand will itself drive these AMERICAN firms to hire more (local) employees. Quit hanging out at Walmart and Target and shop at places selling MADE in AMERICA products.
The reason most American businesses fail in Asia is because the locals would not buy "FOREIGN" products.
We all know MOST upper level executives are WAY OVERPAID to do a lousy job of saving a few dollars for their company. But then, how many of us have said we will pay twice for an American made product rather than buy something made in China (at half price)?

Another thing that needs to be done is to BOYTCOTT those US companies who import the highest number of foreign workers. These companies take the US consumer for granted and assume we will buy thier products no matter how badly they undermine the US worker. Just do a search on H-1B visa sponsor and start at the top of the list with Microsoft and work your way down from there. These companies should not assume that the US worker will blindly buy their products as they are busily repacing US workers.

The typical American consumer doesn't give a damn about American workers or any other labor component of the products they buy. Hell, half of this country can't even tell you WHO the VP of the US is today; they certainly don't give a damn about WHERE their clothes are made, only what brand they are - if even that anymore. Why do you think Wal-Mart has been doing so well - price! Consumer's care about price above and beyond quality, source, or labor. We want more, more, more and want to pay less, less, and less for it. If American workers don't like to be viewed as fat, lazy people, then we should stop being so damn fat and lazy as a society!

No kidding? This is absolutely true. Take a look at the number of employees in the US of any of our tech companies and you see they are offshoring or outsourcing more and more of the work including design and development. It is not just the low paying jobs that go, it just starts there and then moves up the food chain.

Offshoring does not save one single broken penny to the companies that sends the work overseas. Between the umpteen layers of intermediaries that are inserted into the development chain, and the "broken telephone" syndrome where what gets produced is a vast distortion of the original work, the reduced hourly cost is wasted ten fold by having to rework and repair the terrible product arriving from India, China, Russia or the Ukraine.

What I completed with a team of onshore engineers using less than 80,000 hours has taken the equivalent ofshored engineers 1,600,000 hours to complete. So their "blended hourly rate" of $60/hr compared to ours $120/hr resulted in an expediture of nearly $100 million to do the same thing that we did onshore for 1/10th of the price.

Offshoring is a buzz that all the ignoramuses at the CIO level and above are caught in, not an economically justifiable direction, and in the process it depletes our capabilities as a nation to remain the technology leaders of the world.

Soon all the jobs that will remain here are in road construction, built from prefabricated components from China.

As a high paid American worker I suggest to all my fellow high paid American workers, Outsource first!!! You have a computer sitting in front of you, do everything you can to make that computer work for you.

No human, in the USA or world, can work as efficiently as your computer sitting right in front of you. That is the cheapest worker on the planet, and it does not need a coffee break.

And it will work for you, so if you get outsourced, the company will not only loose you, but your computer also.

I "saw" this coming two years ago --- I automated everything I do (and can do for new Employers) in Batch Language (who does Batch Language anymore?, but me?)

I told my Manager to "Pack Sand" four months ago.
and have not regretted it ($!!!).

I found out last week this Fortune 500 company had "massive" IT Lay-Offs.

PS --- He was demoted during the Lay-Off process

The American tax system gives big incentives for companies to fire their US workers and hire offshore. An example is the business payroll tax. It should be replaced with a net receipts tax. It would help level the playing field.

Learn how the Russians do it ...

Write a poorly performing, yet functional "Business Critical" application that is only understood by the programmers who write the code. Then hold the offending Company hostage ... that will buy you three years of employment until the Company can re-engineer the application with another off-shore group --- then the process repeats itself, ad nauseum

I am 42 and for the last two years I have been preparing for the possibility that I will have to leave electrical engineering for another profession.

I'm not certain what my next career will be, but I suspect whatever it is, it will be far less rewarding both monetarily and mentally. I am an engineer, not a businessman, salesman or entrepreneur and I never had any desire to be any of those other things.

But like any good engineer I'm preparing for the use-case where I become an obsolete, overpaid relic by eliminating all debt, learning to live with lesser means, focusing on getting the mortgage paid off, and learning to define myself as something other than an "electrical engineer".

I expect when it is all said and done, the last item on the above list will be the hardest.

Offshoring costs more and work takes considerably longer than local work. I've had a conversation with my manager's manager where he said "developers in India are practically free." Well.... assuming that this is the rationale for offshoring and, assuming that other managers think the same way, this is a trend that will continue and will pick up momentum. We, as local Americans, have to figure out ways of doing our work so efficiently, that the value proposition speaks to keeping the work here. Of course, another tactic is to convince the politicians that there are a lot of voters and tax payers who are losing jobs and not paying taxes anymore. Our standard of living will, necessarily, drop. And the standard of living in India will increase. I don't dislike Indians, they seem to be good people. But, they are being exploited by American companies who are taking advantage of the low cost and standard of living in another country.

The problem is the execs who make these decisions are only around for a short period of time(usually 3-5 years), then they move on to the next gig..golden parachute and all...so what do they care about the long term impact of offshoring. As I have said before in one of my posts...there is nothing wrong with coming to the US, working and becoming a citizen..hell that was part of the American dream. What is wrong is when big companies import cheap labor and ruin the American workforce.

These companies are obviously fleeing the over burdened Taxes they have to pay in the US, by sending the work off-shore. I know for a fact there are places in the US that would be more than happy to get High-Tech Jobs even if the pay was $8/hr. Yes, not all areas of the US need or require $50/hr jobs. For a call center to go off-shore when the customers that need it, are US citizens is irresponsible. Your customers can't understand what the person on the end of the line is saying, they get frustrated and you end up loosing customers because of it, or they just set your broken widget to the side and buy something else.

There are lots of places that would love to have a call center set up in their home towns, I can safely say Wilkes-Barre Scranton area of PA would jump at that opportunity.

After working with multiple offshore teams (and bringing development back to US) I figured out what country has the workers with worst attitude:

1. Russia - many companies, the same problem - lack of any responsibility and proper project management, neglect every possible rule
2. China - language barriers and concentration on details instead of the goal of the project
3. India - qualification and "yes sir" desire to promise unrealistic results
4. Brazil - soccer nation

We also need to realize this issues is not one of ptectionism or preserving American jobs but rather one of Economics.

Prior to the fall of Rome, that society outsourced everything and made nothing towards the end. All the skilled, and highly skilled jobs were done by non-Roman's.

The issue of Offshoring is built on the same principle and the business case is not the same. But when we begin to offhsore all jobs non-skilled, skilled and highly skilled then what will our country do to produce anything of economic value to compete in the global market place.

You need to look at facts. An indian worker getting paid $22 / hour does not and cannot do the same job of an Americanworker at $80 / hr. The ratio of US to indian worker is still roughly 4 or 5 to one. so there is no real savings. Then you have to factor in the additional quality assurance issues and language barrier challenges along with additional management that was not budgeted for and you have allot of people running around trying to hold on to their job by saying it is working. Wake up...I am a CIO who came up through the technical ranks and I also run a business so I see both sides of the equation. You can find plenty of college kids who are willing to work for $22 / hr and you would be investing in your kids future and the future of the United States.

My two cents...

One aspect of the offshoring debate that is often ignored is the effect U.S. tax laws are having on the current trend. The way the laws now exist, U.S. companies are encouraged to invest in offshore facilities and training for offshore workers. Monies invested overseas can be brought back when the tax and exchange rate advantages suit the corporation involved. Plus large offshore investments have tax advantages in the U.S. while also reaping monetary rewards from foriegn governments. American companies can actually lose money on foriegn operations and make money on the the government monetary rewards (both foriegn and U.S.) while also making money on playing the currency exchange rates to their advantage.
American workers are still superior in skill and experience but are disadvantaged when it comes to companies willingness to invest in America & American workers.

Well, I've been through two different offshore exercises with my company. Neither one of them are working particularly well. There's been a lot of money spent on hiring expensive offshore engagement managers... Now there's some job creation for ya...

I think the first round we dropped about 25 people and picked up just over 50 people in Bangalore. Just about everyone of these 50 people have masters degrees..Um yeah - right- Masters Degrees.

Anyway I lost 2 members of my team (making roughly $45/hour) that knew what they were doing, knew the processes, and more importantly knew how to deal with the people who work on the business side of the house. Those two members of my team had to train 4 people to replace them which was torture to watch. Of the 4 guys in Bangalore (each getting approx. $21/hour - at least the vendor was making 21 bucks an hour) only 1 of them spoke English well enough to interface with anybody on this side of the world. When the two original guys were done with their training and left, quality took a nosedive. All of a sudden 4 guys with masters degrees couldn't figure out any problems on their own so support calls were getting routed back. Time and time again....and again...and again.

Well, productivity kind of dropped like a rock since these new guys couldn't produce anything and were basically overwhelming the higher level support people back at the ranch to support "them" - basically tell them what to do. Nobody ever told me or the other members of my team what to do. We had to figure things out for ourselves. We wrote manuals and procedures and all other kinds of documentation and they still can't follow along and figure out the right way to do things.

We moved from a fixed cost with the employees we had to a completely variable cost with the offshore people, all projects all of a sudden took about 3-5 times longer to get done (this rate hasn't improved over a year into this).

Gee.. let's do the math. 2 guys at 45/hour is 90/hour multiplied by 35 hours = 3150 for the week. you can factor in the other stuff like SSI and health coverage. Now at this rate, project deadlines were always met and sometimes even beaten by a few weeks.. Now for the other side of the story: 4 guys 21/hour = 84/hour @ 35 hours = 2940 (wow..big savings). Oh wait, now let's talk about a 3-5 times increase in getting a project to completion... Well gee, now the project which was budgeted for 100 man hours actually took 300. Plus now that this current project was delayed, the other projects behind have suffered as well. Hmmm 100 hours X 90 = 9000, 300 hours X 84 = 25200...

Oh wait...something's wrong here 25K isn't cheaper than 9K, is it? Well, well, well...it was actually cheaper to keep the two guys we had...and oh, the contract that we signed with the offshore vendor. If we don't pay them within a reasonable amount of time or we disagree with the amount or services rendered, they have the option to walk away and not do business with us. So that would leave nothing but a skeleton crew for the remaining workload.

This is real folks, the math and all. This is the result of a complete idiot of a CIO that didn't do his homework before pulling the trigger. Watch out for that offshore vendor, he might be selling lemons.

IT and business executives make excuses and pass blame every which way instead of admitting they they were wrong and making the necessary adjustments. Ah, there's nothing like the ego of an American business executive. You'll take everybody down just to keep from admitting you've made a boo-boo and need to "re-evaluate" the situation.

And for the love of God...If you hire a CIO, make sure he's got a real technology background somewhere in his past. You know hands-on tech skills. Yes, you want someone with business saavy, but having someone who understands the way technology people work will save you a lot of headaches.

Ken, that's quite the story but, unfortunatley, one that's repeated much to often. From the brief description of what happened, it sounds like this was seen as a quick way to save money instead of looking at the the overall direction of your company and seeing if offshoring these resources was a good strategic decision. In this case, it sounds like the opposite was true.

The article by Professor Hira confirms what is happening on a larger scale than just US (confirming from a European perspective). We all may have different views at it, but globalisation is a phenomenon that's been impacting economies and people for a very long time. Protectionism or not is a choice a country can make. We've seen this happening in agricultural and industrial environments before.
However, very few decision makers have been aware that the educational investments a country has made, all the industry experience and skills that its people have developed, are valuable capital in our knowledge society. Human capital as we already called it at EDS in the ‘90s.
Let’s face it, we’ve created our own challenge. The development of the internet and remote working facilities has strongly impacted the global mobility of knowledge and its implementations. To the better of humanity or not. As we experience today, we created and still are creating our own competitors. Economic laws always prevail. We’ve been lowering the thresholds to enter the market with our higher salaries (linked to a financially richer society). This way, the logical next step for multinationals has been to move projects to financially more interesting (even virtual) locations.
And this leads us to new challenges. How can countries control multinationals ? Should one stop knowledge transfer ? Should we control all internet traffic and limit the access to knowledge ? How do we stay ahead of competition ? Study harder, longer, continuously ? (This has always been an imperative within ICT anyway.) Should countries invest even more in academic development ?

I myself have been involved in different activities to push decision makers in Europe. Still the challenges remain. It’s tough to be confronted with a hard reality in times of change. There’s only one law that remains : business still comes down to making money with only a narrow grey margin that allows for preferential (read local) treatment.

And referring to some of my personal experiences. When talking about nearshoring or offshoring, we talk about countries like India, Romania, Hungary, Russia, China, and a lot more. Each of these cultures have their strengths and weaknesses. And like in any culture, there are bright people and there are master degrees that can’t change a light bulb. The strength of India (always speaking ‘on average’) is that so many of them are used to obedience and they’re (‘on average’) better at executing than being creative. But they’re manyfold our numbers and they’re fighting for a living (referring to other reactions to this article about cost of living) and they want what we have. So like I read in other comments, yes, the US (or the Western world, or whoever) will have to fight and make sure to stay ahead of the others and make the price difference worthwhile for the investor. Virtual work teams exist for a while now, and bringing together the best of both worlds may seem a good solution. But teamwork comes down to communication and trust. The truth is that people do communicate easier with other people from the same cultural (like in geography) background.

I know that understanding each other is not going to solve the individual issues of people in distress having to feed their family, send their kids to university or just buy this culturally highly needed status symbol. But it’s always better to know what we are competing against. I’ve always known Americans to be full of energy and focus, but I’ve seen the strengths and ingenuity of other cultures as well. So get on that field, team up and make sure you’re in the position where you can make the biggest difference. I’m sure YOU CAN, but you’re not the only ones… ;-)

Eddy

I live in California and over the past few years I have seen a huge influx of Indians..Not Indian Americans..I mean Indians straight from India. I was recently laid off along with thousands of other US employees, while the company I work for continues to have a HUGE influx of Indian programmers being brought to this country. Its one thing to come to the US, work and become a citizen. It is quite another for a company to import cheap labor. Its all about as much profit as possible for these Execs so they can continue to earn their excessive pay packages..I don't see execs being outsourced any time soon!

I think you can find any opinion you want on offshore outsourcing depending on who you ask. As a an onshore Rural Outsourcing IT consulting business we have certainly heard the down side from some of our customers. I am surprised that Rural Outsourcing ( http://www.saturnsys.com/rural-outsourcing.aspx ) rarely comes up as a viable alternative when discussing offshoring.