Tech Firms Defend Moving Jobs Overseas

bobcows writes "Yahoo is reporting about leading technology companies urging Congress and the Bush administration Wednesday not to impose new trade restrictions aimed at keeping U.S. jobs from moving overseas, where labor costs are lower. 'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday. 'The problem is not a lack of highly educated workers,' said Scott Kirwin, founder of the Information Technology Professionals Association of America. 'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"

Pay foreigners US minumum wage!

[Anonymous Coward]

Or above. Any problems with that? Same goes for Nike and their "sweatshops". No difference as far as I'm concerned.

Re:Pay foreigners US minumum wage!

[theLastPossibleName]

Or even better: Ship the CEOs, CIOs, CFOs, C?0s to India. I'm sure every company could afford to lose their biggest salaries.

Not Funny!

[blunte]

Parent should be marked insightful, not funny.

Executive compensation is way out of whack, and it's because the executive club takes care of itself. Boards of one company are filled with executives of other companies, and vice versa. It's a circle of people writing each other checks out of corporate accounts.

There's always the line of defense which is, "but we're critically important, and we're doing very difficult jobs." The same could be true of the IT personnel who have been outsourced. So therefore, the executives should be outsourced as well.

Imagine the millions each company could save if their executives were paid an Indian's King's Ransom, instead of an American's King's Ransom?

If the American execs want to keep their jobs, well heck, they can take a pay cut to be on par with their Indian counterparts, right?

The whole executive compensation issue wouldn't be so aggravating if all execs did a good job. But many suck. Many run their companies into the ground, resign when things get bad, get a parting gift of a few million, and then go become CxO at another company. Rinse repeat. Once an exec, always an exec, unless of course you're tied up in a federal country club.

Re:Not Funny!

[TopShelf]

While I would agree with most of your post regarding overpayment, execs on each other's boards taking care of each other, etc., there is a big difference between CxO's and IT personnel.

There are very, very few people qualified to run major corporations, compared to the positions available. That's just an unpleasant fact. In IT, particularly after the job losses of recent years, the situation is more a buyer's market.

Oh, and given the fact that business is a highly competitive endeavor, it isn't possible for all execs to do a "good job". There will always be companies running into the ground as their competitors move forward. The trick, however, is to ensure that the chief doesn't earn $zillions unjustly along the way (see Gary Welch of Conseco, for example).

Re:Not Funny!

[Ensign Nemo]

"There are very, very few people qualified to run major corporations, compared to the positions available."
Funny, I'd say exactly the same thing about IT people. Just because you work in IT doesn't mean you're qualified to do it.
There are few good CxOs, just like there are few good IT people. Most are average and don't have any special ability or knowledge.

Re:Not Funny!

[m_evanchik]

There is no correlation between executive compensation and company performance. There is a strong correlation between company size and executive compensation. The bigger the piggy bank, the more the chief can pilfer.

Here is a recent study:
http://www.cgms.org/media_exec_pay_page.ht m

The claim that executives are worth their outrageous salaries is scienfically verifiable bullshit.

Re:Not Funny!

[Bowling Moses]

I wish I could find it, but sometime recently one of the business rags had an article in it where it was found that you could replace the CEO with anyone off the street at random. The stock price would briefly dip, but would quickly rebound as though nothing had happened.

As for making sure the chief executive doesn't get (Nobody EVER earns $5 million a year and a $40 million golden parachute) an excessive amount, there are options: 1. Pass a law saying the federal and state governments cannot do business with any corporation where the CEO recieves more than Xtimes what the average or median employee earns in a year, whichever is lower. 2. Graduate the tax system more--make it less worthwhile for the company to give out huge paychecks as the CEO will recieve less and less of each dollar spent on their salary package as the amount gets higher and higher. 3. We have minimum wage laws, we can impose a maximum wage law. I like the idea of 1 and 2, but 3 I don't care for. While it is bad for our republic to have such wealth and power in the hands of so few and the concomitantly huge gap between the rich and the poor, it just seems wrong to say nobody can get paid $x million a year. But until we have campaign finance reform it's a moot point since no laws will be passed seeking to limit excessive executive pay, since they donate money to election campaigns and money plays a critical role in politics.

Re:Not Funny!

[Ugmo]

I agree with both parents (me too!)

How about instead of passing a law that says no exporting jobs overseas, we pass a law that says executive compensation cannot exceed X times the lowest paid employee's salary.

Then when a CEO wants a raise s/he will have to give his peons a raise also. Likewise board members,senior management all forms of compensation so the weasels don't find a way around it.

Re:Not Funny!

[rizzo420]

if every company was run by people like Aaron Feuerstein, the CEO of malden mills, the maker of polartec fleece, the world would be a much better place. talk about putting your employees, the real people that make the company, first. his factories burned to the ground in lawrence, mass, a small not so well-off city. instead of taking the money and shutting down the company, he continued to pay all the employees their normal salaries and rebuilt in the same city. he not only gave the employees their fair wages, he also kept the economy of that city going. i don't think there are any others like him. the company went into bankrupcy and is now back out.

the problem with most companies is they see their employees as expendable. he didn't. he saw each person as someone that brought something positive to the company that was irreplacable. he lost a ton of money because of it, but he didn't care what happened to him, his company and employees were more important. that's a guy taht knows what he's doing. most will continue to raise their salaries. i would also like to compare the government to this as well. the senate recently voted a salary increase for themselves, something that is far greater than the cost of living for them (including all their travel to and from DC). they voted it in during the economic downfall, how convenient, people lose jobs, but they get higher pay. same goes for the governor of CT, my home state, john rowland. he gave himself a raise while the state's economy is in shambles. it's really greedy and stupid and really pisses me off. i don't see it changing anytime soon, hopefully the government won't listen to the schmucks that run the big tech corporations and put restrictions on their doings, or at least raise taxes on the companies that outsource to other countries.

Re:Pay foreigners US minumum wage!

[radish]

Yeah what a great idea - except it would totally screw up the local economies of the countries in question. When a low level call centre tech gets paid 5x as much as a policeman/teacher/doctor, how many people do you think will be interested in taking those essential jobs? You can't just impose your standards on other countries - it makes a mess. People should be paid a fair rate for the jobs they are doing in the location they are doing them. I moved recently from the UK to the US and my salary went up slightly simply because the market rate/cost of living is higher here. If/when I move back it will go back down. If I were to move to our Indian office it would go down a lot. But my relative standard of living would remain constant. Seems fair to me.

Re:Pay foreigners US minumum wage!

[anthony_dipierro]

You can't just impose your standards on other countries - it makes a mess.

However, you can impose your standards on corporations which are based in your own country.

And the only mess it would make is that it would move the vast majority of the jobs back to the United States. Low level call centre techs wouldn't be outsourced any more, because the cost savings would disappear.

Re:Pay foreigners US minumum wage!

[serutan]

If your income is $47,500 USD or higher, you are in the top 1% of the world's wage earners. Expecting sympathy from the other 99% of the people in the world doesn't seem realistic.

Oh, but your expenses are higher than in India. It's not fair. When online businesses with near-zero overhead started competing with the brick-and-mortar world in the mid 90's, did you complain or did you just enjoy the convenience and lower prices?

Welcome to Econ 101.

Re:Pay foreigners US minumum wage!

[chunkwhite86]

Or above. Any problems with that? Same goes for Nike and their "sweatshops". No difference as far as I'm concerned.

Perhaps you've never traveled outside the US. I'm guessing that's the case here. one US dollar in America buys you exactly jack shit. A can of soda maybe. One US dollar in a country like Zimbabwe buys you 10 loaves of bread and a new kitchen table.

When we heat that some factory worker in China is getting paid "10 cents per hour", you have to take that in context. If a loaf of bread in the same town is two cents, and rent at an apartment building is 80 cents per month, then I'd say that 10 cents an hour is a pretty damn fair wage.

Just my two cents.

Re:Pay foreigners US minumum wage!

[Buran]

But US laws don't apply outside of the US ... ... oh, wait ... didn't we bust Dimitri on our laws despite his having done nothing wrong here? Never mind.

Re:Pay foreigners US minumum wage!

[FuzzyBad-Mofo]

Speaking as an American, do we really care if a company is headquartered here if they don't give anything (jobs) to the local economy? If this proposal were fact, I'm sure some of these "skeleton" companies would relocate and we would lose their tax dollars. On the other hand, many more companies would likely stay and choose to hire local talent (all things being equal). That would help tremendously.

Re:Pay foreigners US minumum wage!

[utexaspunk]

but what about requiring them to have minimum wages equivalent to the same standard of living for minimum wages here? as well as enforcing our same workplace safety and overtime regulations?

it's not just cheap to move stuff overseas because the cost of living is cheaper over there- it's because it's practically slave labor. if people in the western world had to work under the conditions these people work in, they'd riot.

in addition to equal workplace and minimum wages of equivalent standards of living, free trade is only fair with free movement of labor. people worldwide should be free to live wherever they want and be guaranteed a minimum standard of living. businesses would then set up shop in the optimal location, and the workers whose skills fit the job would migrate there...

Translation

[DrunkBastard]

"We've found a way to line our pockets with more money, so why shouldn't we use cheap, hard to understand overseas techs? We're greedy, plain and simple."

Re:Translation

[*weasel]

greed is the primary motivator in our economic system.

'consumer' and 'capitalist' are just the slightly nicer terms we use for ourselves.

Re:Translation

[Avihson]

You always buy the most expensive item, or use the internet to find the highest price for any purchase? Or do you look for the lowest price?

So why should business be forced to pay a higher price for the same commodity item - labor?

You want cheap goods, but do not want to lose your high paying job. You can't have it both ways.

Re:Translation

[ericspinder]

If that were true we whould all be driving a Yugo. Most people include percieved quality in thier buying decisions. Service is often a factor as well.

Outsourced CEO

[Anonymous Coward]

'There is no job that is America's God-given right anymore,' Carly Fiorina

Your job too, babe. Can't wait until we are ordering the latest HP Presario Tandoori Edition on Anandtech or FatWallet.com

Re:Outsourced CEO

[elefantstn]

Her job surely isn't a God-given right. When an Indian company produces products comparable to HP's for a fraction of the cost, her executive position will effectively have been outsourced.

Re:Outsourced CEO

[TedCheshireAcad]

Windows Vindaloo. Yum! Instead of crashing beyond recognition, it simply shoots fire out of the DVD drive to scald you.

I hear that the Bahamas are nice this time of year

[PIPBoy3000]

Personally I think it's great that they're moving my job, hopefully to somewhere warm. Uh, I'm going with it, right?

You'd expect that from someone making millions

[TehHustler]

'The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Why should people settle for less? Of course people are going to want more, basic human instinct. Do they think that people are just going to want to work for HP just because its HP? Sounds like Fiorina is very much in favour of a form of slave labour.

Problems

[jlechem]

Well I'm a CS student about to graduate with my bachelors degree. I've found that the pay for the jobs out there hasn't decreased it's simply the number of jobs available has gone down the toilet. I used to think I would have a job straight out of college but now I'm a bit worried. There are more people applying for less and less jobs now. I've had several interviews but lost them due to a more experienced guy needing the job that before I might have had a good chance of landing. And realistically how can they expect people in America to work for less money when our cost of living is so high here?

You've had the bad luck

[wiredog]

to graduate after the dot bomb. A large contraction in the number of companies in the tech sector 3 years ago means more people chasing fewer jobs. Especially in the areas that were the centers of tech. Silicon Valley and Northern Virginia, where I live. I was unemployed for nine months, and I have 10 years experience. Bank account gone, credit card maxed, was a week from starting a job in construction when I got the job I have now. Doing Python on Windows, FreeBSD, and Linux.

Job search suggestions

[plopez]

look for small to mid sized companys in health care (hospitals have lots of IT), finance, engineering and manufacturing. Very few jobs exist per se in software companies to start with. Small to mid-sized companies are the vast majority of jobs in the US as well (something like 2/3rds!). If you are in any way competent you can become the company guru and outsourcing is usually not an option for smaller companys (too expensive). Just be prepared to wear many hats.

Interesting

[kaan]

I've found that the pay for the jobs out there hasn't decreased it's simply the number of jobs available has gone down the toilet.

This is interesting, because it seems to be in stark contrast to the comments in the story about U.S. workers being unwilling to work for less money. That suggests to me that there are still the same number of jobs in this country, only now they pay smaller salaries, and after some period of time the executives decided that U.S. workers were unwilling to accept those smaller salaries.

The thing is, as you pointed out, this is not what's happening. There are in fact fewer jobs available, and the salaries are the same (ie, not lower).

Perhaps a good summary of the article might be: "Well, we're doing the usual blind executive thing, making lots of decisions that we can't really justify to the public because our reasoning is shaky and unfounded. So please just leave us alone and give us the freedom to wreck the U.S. high-tech job market as we see fit. Thank you."

Re:Problems

[Malc]

"I've had several interviews but lost them due to a more experienced guy needing the job that before I might have had a good chance of landing."

It's just as tough for the experienced people too - many think graduates are getting their jobs as graduates are cheaper and willing to whore themselves working stupid hours, and be keen about it!

Think yourself lucky that your financial commitments are lower now than they will be. I have a friend looking for a job right now. He's senior and well paid. He's got a car, a mortgage, a wife, and a baby on the way. Oh, and he doesn't want to work stupid hours, but wants enjoy life a little. Taking a paycut for him is much harder - you don't have the same expectations, commitments, nor are do you have a lifestyle that will get worse. After being a student, virtually amy job will improve your quality of life, even if it's very poorly paid compared with a few years ago.

Many graduates seem to have the attitude of live to work, although maybe it's because their lives are simpler and that they're younger and they can still party and work without burning out. Wait a couple of years. Trust me: working to live is a much better outlook, unfortunately it brings the stress of knowing that foolish managers will look often look you for somebody with a different attitude. I have the same attitude: I worked stupid hours in the dot com boom but I won't do it now. Why should I break my back, make my life worse, and all to make somebody else rich? Next time I work like that it'll be for my own business... when I finally come up with an idea that sells.

you want your global economy, here it is...

[DenOfEarth]

I'm not american, so I can't comment on what the loss of jobs in my field their is going to do to me, but I think this kind of thing should be expected if anybody wants the global economy thing to really happen.

This could still be beneficial to the american economy, it just means that many of these out of work programmers should look into some of their own ideas and start companies around them, hiring out to the cheap labour overseas. That would probably benefit more people anyways.

Re:you want your global economy, here it is...

[cayenne8]

"...but I think this kind of thing should be expected if anybody wants the global economy thing to really happen."

Ok, this is the thing I don't understand....and maybe someone can explain it to me. Why would I want a global economy?? From what I can see, it is beneficial to everyone EXCEPT the US. It seems to do nothing but deplete our jobs...standard of living, etc. What possible good can it do for us? It seemed to be better when we led production and innovation in most areas....

I mean, life is a competition...we use to seem to win, and now we aren't, and it is our own fault for 'giving in' and this global economy our corporations are supporting with these actions is going to cause our spiral and downfall. Keep this up, and we'll lower our whole society's standard of living....

Not why, but who?

[truthsearch]

The people who are driving the move to a global economy are large public corporations. The people who believe they will see the biggest short-term gain by using global labor are corporate executives. Their goal is cut costs, increasing their profits and raking in more money for themselves. It's as simple as that.

Part of the problem is these same executives also have the most influence over American politics, which is why trade organizations like the WTO help US corporations, help some foreign governments, and hurt the average citizen (lack of adjusted minimum wage per country, no requirement to respect civil rights in China, etc.). The reason WTO meetings about public policy are held in private is because if the public heard what our politicians were setting up there would be much larger riots and some of these officials would not get re-elected.

So it's not about what you or I want. The global economy is about what the upper class in America wants.

Outsource the CEO as well

[sacremon]

Given how well HP has performed since the merger with Compaq, perhaps it would be in that company's best interest to outsource the CEO. I'm sure they could save a considerable sum vs. Carly's paycheck.

.

Outsource expenses - CEOs

[Embedded Geek]

I've heard this joke beofre, but it makes sense if you look just at the numbers. I can't find her current salary, but Carly was on track for $115M/year [com.com].

If you reduce her salary to $500,000 (ten times what a sacrificing $50K engineer might make), you can save 2290 well paying (50K) jobs.

For the life of me, can you imagine any CEO contributing as much to a company as 2290 rank and file workers? Unless they can literally print money, I have trouble imaging how an executive can make that kind of contribution compared to the employees they lead.

Re:Outsource expenses - CEOs

[ToadSprocket]

Not only does she take home a ridiculous salary, she spends enormous sums on everything apparently. My mother works for an electrical contractor in San Jose. They put in $100,000 sounds systems on each of her 2 corporate jets. I am sure she is asking everyone there to cut 15% of their budget every year while she is doing this as well. Add these costs to here salary to get a better picture of what she costs them.

Executive Compensation

[notcreative]

I've wondered about this, too. The answer that I've found in MBA textbooks goes something like this:

The investors choose a management team to take care of their capital and run the company with a profit. If the management team is payed a flat salary, they have no incentive to make, say, 15% instead of 8% profit. Their incentive is to keep their jobs, theoretically by doing the minimum necessary. If, however, their compensation is tied to the performance of the company (through growth targets, stock options, etc), the executives have a personal financial interest in maximizing the value of the company, and thus (in theory) the share price.

I guess the big flaw in this is that no other member of the company is compensated the same way, while arguably an engineer has the same influence over the success or failure of the company, at least on a small scale. If it works for the executive, why not the front-line worker? The only answer I can think of is that there is no "procedure" for being a CEO. Everything that the company does is a calculated risk, and management requires a high degree of customization. Maybe without this compensation there'd be less incentive to take risks, while the last thing you want to tell your front-liners is to take risks. I'm not saying it's a good answer, but it is all I can think of. I'm open to other ideas. Thoughts?

Outsource your CEO

[AntEater]

How long before shareholders demand that their companies outsource their CEO and other executives? It would be only fitting afterall, the problem isn't bad CEOs in America but finding bad CEOs that will work for minimum wage in the US.

okay...

[TedCheshireAcad]

The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S....

Well, isn't that kind of a fundamentally flawed problem? As a person pursuing a degree in higher education (dropping $100,000+ on said education) I don't feel like it would be worth it to work for minimum wage or less. I mean, isn't that really one of the points of college, so you don't have to work minimum wage?

HP CEO fails to understand basic economics

[glinden]

In her comment, Carla Fiorina fails to understand basic economics. You can't talk about labor costs and only talk about wages. The cost of labor is the wages divided by the productivity. It is only true that lower wages reduce labor costs if productivity is constant. But productivity is much lower in developing countries because of poor infrastructure, corruption, market inefficiencies, and weaker educational systems. It is meaningless to talk about wages without talking about productivity.

Re:HP CEO fails to understand basic economics

[Lane.exe]

But you're working on the assumption that Fiorina actually cares about the productivity of tech support workers in India. If Joe Technical Problem has to call tech support in India, and they do a bad job, it's no sweat off her back. He's already paid her the money by buying the hardware, and chances are, if tech support can't fix it, he's just going to call his 16 year old geek nephew to come fix it. And when he's buying his next computer in 3 years, he's not going to care that he spoke to some crappy, hard-to-understand Indian tech all those years ago. What he's going to care about is that UltimateBestCircuitSuperstore salesgoon who's saying "Yeah, this HP is the latest and greatest model! Look at how many megahertz it has!"

Face it -- when it comes to things like service, support, and even manufacturing of products that the average consumer is unfit to appraise, CEOs could care less what productivity is like because the quality of these things goes relatively unchecked, except by people like us who know better. But we represent a minority, and as long as the can keep fleecing an uneducated public, they're going to do it. Labor costs to them are nothing more than the wages and materials cost. Productivity be damned.

Re:HP CEO fails to understand basic economics

[radish]

So why do you think all this outsourcing is going on? Do you REALLY believe that the HP's of this world don't employ anyone with a better understanding of the basic economics of their companies than you? Come on. They are outsourcing because they can get the same work done for less money. Period. As an employee you are a commodity, if you can't distinguish functionally between 2 commodities then the only discerning factor becomes cost.

I always liken it to the whole Napster/Kazaa thing. People realised that they could get the same music [software], lose a few unimportant bits (like the cover art [local employees]) and save a ton of cash by downloading [outsourcing]. Now the RIAA [tech workers] are worried that their market is vanishing so they try to get the government to pass laws making it illegal for people to save money. Sounds very similar to me.

Re:HP CEO fails to understand basic economics

[greg_barton]

They are outsourcing because they can get the same work done for less money.

No, they are outsourcing because they THINK they can get the same work done for less money. This is a crucial difference. Just because an action is taken, especially in the corporate world, this does not mean that the action was well founded, beneficial, or even has the desired effect. It means the action was "sold" to upper management.

The jury is still out as to whether offshoring will be a good thing, even for the long term bottom line of the corporations employing it. (Not even talking about the general economy, here.) It's become so widespread so quickly because a) it's a quick fix for strained budgets, and b) it's a popular fad in business management circles.

And so globalisation goes

[lawaetf1]

Not that I like it, especially as an IT worker, but, hell, that's the nature of the beast. Our dirt cheap goods are possible because we "allowed" loads of manufacturing jobs to go to China. In the end all it really means is that we can't rest on our laurels. And that's probably a good thing.

Nice Quote

[ruhk]

'There is no job that is America's God-given right anymore,' Carly Fiorina, chief executive for Hewlett-Packard Co., said Wednesday.

There were never any jobs that were America's God-given right, but the sentiment does make a nice dodge from the real issue at hand.

What these corporations seem to have forgot is that privelege goes hand in hand with responsiblity. They fight hard to continue to be treated by the government (and thus the nation, by extension) as a citizen with all the rights thereof. However, they forget that those rights come with responsiblity. They move jobs overseas, they keep their funds in offshore tax havens so they don't have to pay taxes, and then they want they want to be treated like legitimate tax-payers. Globalisation is a nice idea, but not when it only serves as a tool to cheat.

the rest of Carly's quote

[rodentia]

. . .no job that is America's God-given right anymore,

. . . .except board and senior management positions of Fortune 1000 companies.

The flaw

[bgog]

It works like this. There is basically no job (other than service, like working at a store) that can't be done cheaper by people outside this country.

It is the governments job to make sure that jobs stay here. I don't think any job is an americans god given right but why does this lady expect an educated engineer to work for min wage? I can get a McJob for min wage. She is essentially saying that HPs workers don't matter to the company. They find no value in their skills.

I'm not trying to be paranoid here but eventually won't most jobs be shipped over seas to countries who with lower cost of living and governments who don't care. This doesn't sound good for our country.

Minimum wage??

[KE1LR]

"The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S."

Definition of Minumim Wage:

If they paid you anything less, it would be illegal.

Race to the bottom

[MillionthMonkey]

Whether or not these jobs are "America's God-given right" is besides the point, Carly, you miserable bitch. Of course they aren't a "God-given right". Nothing is. The real question here is whether the U.S. will act in its own self-interest, or continue to throw its labor force into a low wage bidding war with the Third World.

It's not just tech.

[jtilak]

Lets face it. If you're a multi-billion dollar corporation and you can get labor dirt cheap in another country wouldn't you do it? Yes there are plenty of qualified, educated American workers. So what? They work for $3/hour in India instead of $20/hour in America.

We need some kind of regulation to discourage these practices or our entire economy will go to shit. George Bush wants to help ILLEGAL immigrants out by letting them work? Because he is so compassionate?? Give me a fucking break. It is about exploiting people and getting cheap labor so the rich get richer.

Make a note

[liquidsin]

Take a look [infoworld.com] at the money being paid to Carly, then tell me again why any American should even consider buying HP ever again when she makes comments like that. An American company is paying her vast ammounts of American dollars, but when the economy's in the shitter, she ships jobs overseas. Good job. And no, I'm not American.

Were going to see the new megacorps in India

[onyxruby]

Were going to start seeing new megacorps out of India soon. We've even setup their back offices for them. We trained their accountants, their technologist, and we even set up their R&D for them. They have their call centers taken care of, everything except the front office. Some of these companies are going to start refusing to renew contracts with our megacorps and are just going to start their own with their fully trained staffs. Their getting the back office profit, how much is left for a front office? Perhaps they'll turn around and outsource that to the originating corp?

On top of this, can someone please explain how sending good paying jobs out of this company is good for the economy? Competitive advantage doesn't mean anything if all the competition is doing it. The jobs that are replacing these are the low wage jobs in fields like retail that don't have things like health insurance.

Also

[bgog]

She also says,

"Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment,"

What value to the country does an 'industry' have if they send all the jobs away? Some tax bucks, sure, but a company with jobs is much more valuable to the country.

Whose minimum wage?

[igaborf]

"The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S."

Nor are highly educated workers willing to work for the (local) minimum wage or lower in places other than the U.S. It's just that the U.S. minimum wage provides a pretty good living in some parts of the world.

You know, painful as it is to those who pay the price, one can make the argument that this trend will, in the long run, help to minimize the economic disparities between the "developed" countries and the "third world." And that can't be bad for international security.

Ok

[cubicledrone]

There are ten million unemployed right now. The average job (in my experience) lasts less than two years. People are unsatisfied with their jobs in massive numbers. Wages are stagnant if not falling rapidly.

I know zero people who are gainfully employed in a full time job paying a living wage. Zero.

Management absolutely forbids telecommuting, unless the employee works for another company.

Hiring is a subjective popularity contest with no accountability. Qualified people are passed over reguarly and often as a matter of policy.

Education is meaningless. Absolutely meaningless.

Once hired, most people find their jobs are gray, dispassionate drudgery where they are not allowed to open their mouths to say anything or to offer even a single new idea. This after being required to have decades of senior level experience and years upon years of advanced education (where, one assumes, they were also expected to keep their mouths shut).

Why not just sell it all, Mr. and Mrs. CEO? Just ship the whole fucking thing FedEx to elsewhere Inc.? It's not like you'll notice the total collapse of the economy from inside your Navigator or your half-million dollar townhouse. Just fuck over all your neighbors and cash those options. Everything will be just fine in time for the next backyard block party.

24/7 advertising. No job. No career. No credit. Basket full of crap at 28% interest. Get back on that fucking couch and keep your fucking mouth shut, consumer. This is the "corporate dream."

walmart, anyone?

[Heisenbug]

The quote about what workers in the US cost reminds me of this article from Fast Company:

http://fastcompany.com/magazine/77/walmart.html

The article makes a believable case that WalMart is singlehandedly, drastically, speeding up the move of manufacturing jobs overseas. Towards the end, they have this quote:

'Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."'

That's exactly what's going on here. 'Middle class' in the US costs a hell of a lot more than 'middle class' elsewhere, and if consumers here have a choice, they will buy the things that were not made under those expensive conditions. Of course, by making that choice, we push our own jobs overseas ...

I can't predict how this will end up, but it's going to be a trip finding out. What do you all think? I want to see I Am An Economist in the replies. :)

This is what we are choosing

[anomaly]

My dad was (for a time) a home improvement salesperson in the coalfields of rural WV. He said "I knew when I saw the driveways filled with Toyotas and Mazdas instead of more expensive Fords and Chevys that the WV coalminers were doomed to be out of work."

His point was that they were taking wages earned in the American economy and pumping the profits to another country where labor costs were lower.

Today American workers expect high pay (certainly even minimum wage is VERY high pay from a worldwide perspective) and great benefits, but we all want CD players made in China. We can't have it both ways.

If we want to keep our standard of living, we need to choose to pay more for American-made goods. I make a practice of looking for American made goods when I buy, but I know that I'm totally in the minority when I do so. I'll pay more to help sustain my standard of living. I'm hoping that someday soon others will figure that out and start doing the same.

I'm not really expecting that.

The good thing is that overseas manufacturing can be difficult because of lack of infrastructure, and overall productivity is pretty low, making our products more competetive in spite of different labor costs. This is changing and it will be interesting to see the landscape in 20 years....

Costs

[Mr_Silver]

The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S

Even if they all suddenly would work for half the salary overnight, HP would have to reduce the price of their products too in order to ensure that people can afford to purchase them.

In other words, their percentage profit on an item would stay the same. The fact that educated workers can demand a higher salary in the US means that corporations can get away with providing more expensive goods. In many other countries, you'd never be able to sell something at US prices.

Intel - Craig Barrett

[OYAHHH]

I,

Love this one:

-----
Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.
-----

I suppose Mr. Barrett would have us eating all those food surpluses that India and China are producing now-a-days.

He might get a rude awakening though if the US were suddenly dependent on India, etc. for food and they said, we're not shipping you any more food because we don't like your stand on XYZ issue.

If there is one thing that I'll certainly support is help for farmers. Hey, they put food on my table.

The last thing I'll be supporting in the future is govt. investment in high tech. Why should the US support high-tech when high-tech eggheads like Craig Barrett will just take those advances and give them to the Chinese.

I can do without a computer for a long time. I'd probably starve to death in about a month.

Talking about losing points with me, it's not even close....

why would I want to work at below minimum wage?

[rbird76]

My loans would cost me my entire take-home pay at minimum wage in the US. Why the hell would anyone want to learn a field, spend thousands of dollars to do so, and then no be able to make enough to pay the costs of the education? Meanwhile, Carly, et al get paid millions of dollars to risk other people's money while they have the opportunity/skill to drive their companies into the ground. (Good CEO's are worth the money, but lots aren't and they get paid anyway.) Do they think that we should be willing to work for nothing but that they should not? The rules of economics work for everyone, yet the people who run these businesses think that people should be willing to make sacrifices for their extravagant incomes (extravagant because of the amount of money/unit of competence). Why do I want DRM when it costs more and gives control of my computer to others while giving me no benefits in terms of costs or features? Why do I want to work in a field when I can make more money by not learning anything and being a garbageman^H^H^H^H^H^H^H^H^Hsanitation engineer? The same motives apply to everyone, yet some of the people who run companies seem to think that only they have the right (and desire) to behave in their self-interest.

The initial comments are correct - we don't have inherent rights to jobs - if someone can do it better and cheaper than us, they will get the job and we'll have to do something else. I simply have a problem with the PHB logic that the stated CEOs seem to labor under - that others should sacrifice their well-being for their benefit while they have no duty to do the same. I'm certain that if their logic were applied to their jobs (I'm pretty sure someone as competent as these CEO's could be hired from overseas at 10% of their pay), they would not be so quick to advocate sacrifice for the benefit of others.

my my my ...

[SuperDuG]

QUOTE:"The problem is a lack of highly educated workers willing to work for the minimum wage or lower in the U.S. Costs are driving outsourcing, not the quality of American schools.'"

Costs are driving outsourcing? How about wanting to make sure that ALL the money stays on the top? This is what completely amazes me in the world we live in, Joe Millionaire really believes that paying family providers a salary 1/100000th of his own is a COST.

Now don't get me wrong here, I'm not some hippie banging my Commie Drum here, but I wouldn't mind some honesty. When saying why you're outsourcing, simply tell what you are doing ...

1.) You are not outsourcing, you are laying off americans in a hope that every other company won't follow your lead (you still need people in america to buy your stuff right?)

2.) You are personally making the statement that you believe that it means more to have 3 yachts instead of 2, and the best way to get there is cheap labor.

3.) You believe that you are above 'regular' people in America, and would love to just keep screwing us all.

Well what's the problem with all of this? Think back into the history books for me a little bit here. At what point in America's history did we see an ever pressing economic turmoil because of extremely low cost labor? Was it, ohhh yes the bloodiest battle costing more American lives than any other war in our history?

Lets face it the Civil war was fought not to free the slaves, but in fact because the South was so rich because it legally could force people to work with no pay. This pissed off everyone else who HAD to pay their workers. Believe it or not some of the anger in the "Free North" was because they themselves weren't allowed to have slaves.

Getting a little bit off topic here, the point being is that this country was built on the backs of "Joe Average", who is in the lower to middle class. There's just one big problem with everything here, there are whole lot more "Joe Averages" than there are "Joe Millionaires" and you can only piss "Joe Average" off for so long before he and his buddies organize together.

So Mr Corperate Joe Millionaire, I implore you to please consider your actions and possibly not bite the true hand that feeds you, over and over and over and over again. "Joe Average" is collecting welare/unemployment because you believe he is not worthy. Lastly you can fight the government all you want, but remember there are more "Joe Averages" and if you keep pissing "Joe Average" o you may actually see democracy in action in which you as an American company will be spanked, because "Joe Average" also can vote.

what happend in the old days

[digitalsushi]

sometimes i like to think about how companies and ceos and money are kind of like back in the day, when you had a king, and a few lords, and a bunch of serfs or what have you. kingdoms are like companies. ceos are the kings, and then you have like the c[f,t,i]o who are like princes, or earls, or dukes or whatever, I never played D&D so i'm trying to remember history class. And then you have your serfs, the little dudes at the bottom doing all the work. i guess those are like employees.

so then you have all the serfs all together, and they all have to buy junk like... food and deers and arrows. so, they are the source of all the money dumplings, like gold nuggets, which are like a C-note. And then the CEO-kings go "ha ha ha thanks for the money dumpling, laddy".

K, but, what if those kings sent money dumplings to The Oriental Land of Panda-la. They pay King Chow for his serfs to make wicker baskets and... wheels, and other high tech. And then send it back with Magellan. And, the CEO-King fired all his serfs by telling some dragon to go eat em, and they're not in the picture. Cept, they are, and now they're eating tree bark cause they arent making wheels for his majesty.

So the wheels and baskets are coming back from panda-la and the CEO-King is like "dude.. this is sweeteth" and he has more gold dumplings than ever before, cause he doesnt have to pay his localites, and.. ugh, see, this is where my example falls apart, as it lacks both a cunning mix of logic, and sense. Actually, it might just be that it's veilded under a shroud of retardedness, but that's left to you, dear reader.

Maybe someone should correct my giant metaphor so that I can understand it for me...

An interesting article

[mpath]

This was posted on /. [slashdot.org] before and there's a great analogy that we should all read & understand:

Recently, I bought some chocolates as a gift for some friends from a specialty shop. These chocolates are remarkable. Owner Jean-Marc Gorce makes them by-hand and his small shop has been rated as one of the top ten in the United States. In addition to being a chef, Jean-Marc is also an entrepreneur and an innovator.

Jean-Marc recently started selling his chocolates in gold and blue boxes. I told him I liked the new boxes. He explained that his wife designed the boxes and he found a company in the Philippines that could produce the boxes in the small volume they needed for a good price.

Jean-Marc's gold and blue boxes are an example of successful outsourcing. Jean-Marc sells chocolates, not boxes. The design and production of chocolates is his core competency. Jean-Marc can outsource box production to improve his operational efficiency without sacrificing his reputation as a maker of superlative chocolates.

While outsourcing boxes improves chocolatier Jean-Marc's operational effectiveness, he would never consider outsourcing chocolate production because he would lose his core differentiation advantage. Yet, in their enthusiasm for cost savings, several US technology companies have done precisely that-- outsourcing their core technology and key strategic differentiator.

Offshoring Programmers [forio.com]

Neither "solution" is very attractive.

[Xthlc]

Seems like ever time this issue comes up on Slashdot, people reply one of three ways.

1) "Screw you, you lazy bastards. It's Capitalism, compete or shut up. Just like I'm going to do as soon as I graduate from college with my CS degree. I can't wait!"

2) "Let's outsource the CEOs! nyuk nyuk" [about five or six times per thread, always ranked 5:Funny]

3) "Dammit, if they want to work for US tech companies, let 'em come here!"

None of these responses is an effective means of addressing the problem. The Western system of democratic capitalism has worked so far specifically because it harnesses capitalism to acheive wealth and social stability. Notice that I said "harness". Capitalism is a great tool, but left to its own devices it destroys the middle class.

Banning job exportation completely is stupid. The US will quickly lose its competitive edge in IT. Already we're seeing Indian companies churning out quality, high-margin software (such as Flexcube) that's making significant inroads into US markets. When the Chinese start getting warmed up, watch out.

Allowing the exporters free rein is also stupid. It will destroy the US IT industry, put millions out of work, and we'll lose critical mindshare (as all the bright kids who would've become engineers wind up as lawyers). And people with families and other responsibilities DON'T HAVE the resources or time to retrain, you knuckleheaded Objectivist brats. They'll drop out of the middle class and screw the rest of the economy, destroying jobs they might have otherwise tried to retrain for.

Really, what we need are measures to soften the blow of global capitalism. That's what governments are there for. We need controls (but not a ban) on job exports, perhaps a tax-credits-per-domestic-employee plan. We need federal retraining incentive program, giving out vouchers to unemployed people who can redeem them for tuition to get new job skills. And we can take a big chunk of the cash to do these things out of agribusiness subsidies. Fuck Monsanto, the US stopped being an agricultural economy about a hundred years ago. Let's keep our leadership role role where it really matters: in science and technology.

What about unionizing?

[dominion]

Why hasn't anybody mentioned unions as an answer to all this? Seems we could really use them right now.

We could use them here, and they could use them in India. Unions with some kind of international perspective (instead of the nationalism of the AFL-CIO and others) are the only kinds of unions that can be effective in a globalized economy.

This is why we have to be concerned about the economic conditions of the third world, and need to support their right to organize. Our decent jobs are going to be much less likely to cross overseas and become sweatshop jobs if we give support to people in the third world who are trying to form unions.

What a friggen bunch of whiners

[johnlcallaway]

You all ran your salaries up way to far, lived outside your means, and suddenly, but bubble burst.

Look at history, the unions did the same thing. They started raising their salaries to a 'livable wage', then when companies went elsewhere to get the labor cheaper, they all started to whine to.

I knew far too many programmers that wanted to command +60K salaries that weren't worth crap. But because companies needed them, and didn't have a cheaper source, they had to pay it. Now, they have an alternative and are using it. Well boo hoo, don't cry in your lite beer too much.

It may surprise you, but Bill Gates and all the other CEOs didn't go into business to give you jobs. They went into business to make money. Get over yourselves, and if you want to be rich, do the same thing. Otherwise, settle for what other people are willing to pay, not what you think you are worth.

this is what globalization is getting us

[sbma44]

well, that, and cheaper plastic crap at Wal*Mart.

I realize protectionism is not a viable long-term strategy. I don't want to steal the potential for economic development from nations transitioning to an advanced economy.

But here's the problem: we are growing production capacity without growing the markets to support them. Everyone would be getting rich and improving their quality of life in this equation if there was a demand from within India for IT work. There isn't one to speak of.

Without such markets to support the expanded production capacity, the benefits of globalization are realized only for corporations -- and they are short-lived. The net money going to workers drops as companies utilize cheaper labor. By shipping capital out of the country to foreign workers who will not inject it back into the corporations' native economy, that economy will suffer, people won't be able to afford services and the corporations will collapse.

The corporations are not really to blame. This is irresistable poison fruit. If they don't take it, they will starve long before their competitors die from the toxicity of the practice.

Protectionist measures are not a permanent solution, but they MUST be put back into place to slow the bleeding. They can slowly be relaxed as foreign markets expand and produce consumers to support their industries.

The hard truth is that there is no shortcut to developing a nation's economy. To do it right takes a slow process. Otherwise all you get is short term corporate enrichment, the establishment of unsustainable foreign labor markets, and the destruction of local economies and cultures.

Broken record...

[leviramsey]

[Remember records... they were vinyl (in earlier days, wax) discs approximately 2 to 2.5 times the diameter of CDs or DVDs in which data was stored as a physical groove on the edge of a track spiraling towards the center.]

• Slashdot posts story whining about offshoring
• I post the following:

Offshoring is a good thing. The "lost jobs" in IT are creating a pool of capital (in the form of labor) that will allow the next great step forward to be taken.

Industrialization could only occur on the scale it did if, thanks to increased efficiency in agriculture, millions of family farms went under, sending their labor capital to the cities to work in the factories.

The "information industries" (IT, law, medicine, finance, media, etc.) could only occur on the scale they have over the past 50 years if industrial employment declined (largely because of greater mechanization and also because of offshoring of production). The evidence can be seen by looking at Europe, where those nations that vigorously tried to protect their existing industrial wage bases (through guaranteed employment laws, massive subsidies, etc.) found themselves years behind the US in terms of the state of the "information industries".

Much like the slashdotters complaining about offshoring, the RIAA and MPAA complain about technological changes that, quite frankly, doom their current models, if not their existence themselves. And much like the RIAA/MPAA, these slashdotters are calling for the government to come in and preserve their business models that have brought them prosperity.

Yet these slashdotters, in general, decry the RIAA and MPAA, while failing to realize that they are doing exactly the same thing for exactly the same reasons.

As far as I can tell, this indicates that these slashdotters are either:

• idiots, for not realizing the fact of their kinship with the *AA.
• hypocrites, for realizing this and continuing in their ways.
• egotists, for somehow thinking that their suffering from outsourcing outweighs the suffering of the *AA from technological advances.

What'll it be.

P.S.

• I get modded down for this... oh well, I've got excellent karma and can take whatever you dish out.

Craig Barrett's economic diet

[mojotooth]

Barrett complained about federal agriculture subsidies he said were worth tens of billions of dollars while government investment in physical sciences was a relatively low $5 billion. "I can't understand why we continue to pour resources into the industries of the 19th century," Barrett said.

Yeah, that whole eating thing is sooo 19th century.

Global Fascism

[Red Rocket]

This is part of the global fascism movement that is turning the whole world into a corporate slave state. The liberal/progressive way to approach the problem of world poverty and wealth creation is to lift up weaker states with workers' rights and environmental protections so that we can all grow on an equal playing field.

The fascist approach is to destroy or prevent any kind of human rights or environmental protections from being applied in poverty-stricken areas and then use those areas and their nearly slave labor to force down rights, wages, and protections in the US and other free nations so that we go on a race to the bottom.

Don't believe me? Look at the example we just set in Central America:

1. Kill a million peasants who try to establish justice [freespeech.org]
2. Sign free trade agreement [lasolidarity.org]
3. PROFIT! Big time - by sending your jobs south.

Keep fighting for corporate power and watch yourself and fellow citizens become slaves. Your stock market gains won't protect you. Corporate profits are through the roof right now. Is your life any better for it?

How does this work?

[Simon]

"Countries that resort to protectionism end up hampering innovation and crippling their industries, which leads to lower economic growth and ultimately higher unemployment," said the Washington-based Computer Systems Policy Project,

OK, so let me get this straight. To guard against "ultimately higher unemployment" we should be firing the local employees and moving the jobs overseas... :-/

I don't still get it. Well anyway, I'm sure that all the people who just lost thier jobs will sleep much better now that knowing that by being unemployed they are doing thier part to combat unemployment.

--
Simon

Re:moving jobs overseas

[cayenne8]

In lieu of laws prohibiting outsourcing IT overseas, I think I'd prefer seeing tax and other incentives given to companies to KEEP jobs here. Credits for hiring US citizen IN the US.

I don't like to see the US Govt. legislating corporate policies...but, I don't mind them giving them incentive to shape said policy towards thing beneficial to US citzens.

But, c'mon....minimum wage for an educated person? I can't believe any US business would expect that.....

Re:moving jobs overseas

[WindBourne]

Also, it would be nice to have a true label that says where manufactuering occured. All too often we hear "made in USA" when in reality it was made in china, but boxed here. But I agree. I do not like the idea of laws to keep jobs here. I would suggest incentives to start up companies based here as well.

Re:moving jobs overseas

[jxs2151]

I believe the government of India has a similar requirement.

Not the only place where India is not playing by the same rules we are. See my sig.

It's no damn wonder India can pay minimum wage for tech jobs, half the freakin' country is slaves and most of the other half is 'untouchables' forced to work for next to nothing.

Carly really needs to explain how she personally and HP feel about supporting slavery.

Re:moving jobs overseas

[cayenne8]

I don't agree. It used to be that working hard and going that extra mile was rewarded. That to me is an American value...one that was held up here in the past. Anyone can do manual labor....and should be paid accordingly. Not everyone CAN or WANTS to put off wage earning to go that extra step to attain higher education. Not everyone works as hard at that education...and the skills you attain are worth more.

Not everyone can do the same things, some are blessed from birth with inherit capabilities, some work harder for them, some don't. So yes...your hard work (education) to attain skills that everyone else does not have DOES entitle you to better pay for your job...because is not something any 'joe' can do.

I'm not happy to see the blue collar jobs moved either....I think by putting our manufacturing outside our borders along with much of our intellectual work out there, will at some point become a national security danger. If other countries at some point get pissed at us...and cut off steel supplies (add whatever other industry here) to us...what will happen? WE don't have the manufacturing capabilities dues to shipping them overseas and across borders. Right now, we're worried about oil embargos? Well, wait till it is MUCH more than that that the world can threaten us with...

Re:moving jobs overseas

[diersing]

When was the last time you were on a college campus? Education is not a product of hard work. Yes, certain degrees require hard work to obtain, but what I see on campus are kids who've never had to work in their lives. They are merely in grades 13, 14, 15 etc. And for most students, college is a test in patience, money and working through weeder classes for a degree they'll never use other to fill a frame.

Not everyone has the LUXURY of taking 4 years off of life to pursue education. Those *non-traditional* students that aren't racking up loans and are working themselves through school are heros, but they are not the students to use as the average example.

Todays univerisites are pumping out too many liberal arts degrees, which is fine if your degree in Psychology leads to your a profession in psychology, but does that same degree demand you get more money working a help desk with someone who didn't go to university? But you feel *entitled* to more money, that's fine, I invite your DEMAND it during the hiring process, I know plenty of guys that'll be there to pick up your scraps and will work damn hard once in the door.

I say all this being a college grad and having gone back twice for additional degrees. Although none of them are in the area I work in, I barely mention them on my resume and don't feel they entitle me to anything.

Re:moving jobs overseas

[meta-monkey]

Hmmm.

The following is an opinion commonly expressed on Slashdot, sometimes with more and sometimes less vitriol. Note that I am not accusing you of making this same statement, or anything like it.

Well, if the **AA can't get it through their stupid dinosaur heads that their business model isn't working anymore, then they deserve to be run out of business! Adapt or die! No business has a

right to make money!!

...followed by analogies about the buggy-whip manufacturing industry.

However, when the shoe is on the other foot, geeks who've got those beautifully framed CIS degrees on their wall, are entitled to make money, and have a job, and it's very important for businesses to take a hit on the bottom line for their sake, or for the government to legislate some kind of program or incentive to keep their precious jobs safe.

You may work for somebody else, but you're still a "business." Your business model works something like this:

1. Get CIS degree
2. Market skills to a company for cash
3. Profit!!!

Well, sorry, your business model doesn't work anymore. Businesses have found they can get the same work or a reasonable facsimile thereof overseas for much, much less. Either your price is too high, or your services are insufficient. Now, some will come back and argue that programmers in India or wherever suck, and their code stinks, and it winds up taking more time and and and... So? Obviously it's making sense for the company, or else they wouldn't be doing it. Sounds like you need to change your business model.

Re:moving jobs overseas

[meta-monkey]

The same was said of manufacturing jobs. "It's more than just jobs! That's the real products of America! Steel and automobiles and textiles and and and... If you export that, what will be left for us?" The problem is, for the most part, tech jobs these days are the same thing. There's not much "innovation." Tell me, when you're designing a database system for a company, how much are you really "innovating?"

"Well, I came up with the schema!" -- sure, but the "innovation" was the relational database model, innovated some twenty years ago.
"Well, I coded it!" -- sure, but did you write mySQL? Did you "innovate" that? No, you're just using it.

Fact of the matter is, your high-tech "skill" of database design is not much different that the skill of an autoworker installing the drivetrain on a Buick. These days, it's easy to learn, and repetative. That's not innovation.

Thankfully, most of the real innovation is still right here. New standards, protocols, specifications, fabrication techniques, etc, are still being developed right here in the U.S. We still make the tools. You just can't get paid near so much for merely using the tools anymore.

Re:moving jobs overseas

[cayenne8]

But, if no one is here doing those techinical jobs...there is no one to say.."Hey, there has to be a better way to do this...and set out to create something.

Ideas don't generally come from the clear blue sky...they usually are built upon something else a person is familiar with. If no IT jobs are here for a person to live off of and stay in the environment where he can see a need to invent something...it will be lost.

That's the basic argument I'm making...

Re:moving jobs overseas

[meta-monkey]

The government protects individuals more than businesses, I'd say. If you're an individual, and you're completely screwed, there's welfare, government housing, food stamps, etc. I'm self-employed, and my business is a corporation with one employee (myself). If my corporation fails, the government won't bail it out.

Re:moving jobs overseas

[swillden]

Why arent these mgmt types outsourcing *their* jobs?

They are.

They're creating large pools of trained, experienced people in foreign countries who, once they've obtained a bit of capital, are well-positioned to form their own companies and compete with their former employers.

Look at how much of the PC industry has outsourced itself to Asia, for example. A few years ago, it was just US companies building component factories in the far east to cut production costs. Next the US companies started buying components from Asian companies. Next the US companies started outsourcing entire products to Asian companies, from design through manufacturing. Now the US companies are increasingly finding themselves trying to compete with foreign products that are going head-to-head with their own.

The next step is what happened to Zenith.

Of course, this process will take a while, so the people doing it will retire with their millions before it becomes a serious problem.

Re:moving jobs overseas

[fiannaFailMan]

I'm a software engineer in Silicon Valley. I know some manual workers (and I'm not talking unskilled) back in Ireland who earn wages on a par with mine. Reason? A) They work damn hard for it, and B) The market dictates that they be paid more since their skills happen to be in demand. You know what I say? Fair play to them. They were smart enough to gain skills in a field where there was a shortage of suitable labour.

I'm not a market fundamentalist (i.e. one who believes that market forces always magically coincide with the public interest) but if someone works hard all the way through college and gets a degree in something not very useful, like thermionic valve design, that does not automatically entitle him to a higher wage than the guy who left school at 16 and invested in the qualifications necessary to drive a truck carrying hazzardous goods.

If the market dictates that workers in a call centre earn more than a software engineer with a degree, why shouldn't they earn more? Supply and demand.

Interesting point you make about steel supplies. Only recently George Bush had to back down on his illegal steel tarriffs under threat from the European Union who were preparing to retaliate with tarriffs on goods produced in politically-sensitive American states. The USA's vulnerability is already here, and it's no bad thing. Bush was forced to behave himself, which was good for Europe, and good for America. Only a few special interests (the steel producers) got hurt.

Re:moving jobs overseas

[Bendebecker]

Wake up, dude. Not only can you not live on minimum wage (even with two jobs), there is the added concern for college costs. Education cost money. It isn't like a blue collar job where you can get along on a high school diploma that's free to get. In order to get those white collar jobs, you need a diploma that will cost you on average some $80,000 from a decent school to get. That isn't free, you have to pay back loans. You can't do that on minimum wage. Now, I'm not saying it entitles you to a good paying job, but you shoudl get payed what your worth - and having a college education (notice I didn't say diploma - just because you have a diploma doesn't mean your educated) and working a job that requires such an eduication entitles you to a higher wage then someone just out of high school (which is probably the minimum wage standard). How many good doctors work for minimum wage?

You can't get by on minimum wage (that's single - forget having a family), you certianly can't pay school loans back on minimum wage, and you definitely can't send your kids to college on minimum wage. Someone with a college education that works for minimum wage insures that their children probably won't even make it to college. As it stands the system cannot support itself. The avergae us worker cannot compete against a guy who only makes $10,000 a year. And foregt this baloney about balancing out lifestyles and setting us eqaul to the rest of the world. You want to know how the rest of the world lives? Read "Nectar in a Sieve". That's where life styles are going to balance out. The way things are going, BladeRunner would end up looking like paradise. The reality would be more like the slums of south america or africa.

Re:moving jobs overseas

[meta-monkey]

Now, I'm not saying it entitles you to a good paying job, but you shoudl get payed what your worth - and having a college education (notice I didn't say diploma - just because you have a diploma doesn't mean your educated) and working a job that requires such an eduication entitles you to a higher wage then someone just out of high school

I fully agree with you. People should be paid what they're worth. The problem is, what you ARE worth, and what you THINK you're worth, seem to be two completely different things. People with CIS degrees seem to think they're worth $50,000/year, when, in fact, according to the companies outsourcing their tech jobs to India, they're in fact worth something like $10,000/year. Either you need to lower your price, or increase your services.

Your education has nothing to do with how much your services are worth. Your services are worth whatever somebody is willing to pay you to perform them.

Re:moving jobs overseas

[Grishnakh]

Well there is a bit of a difference. A factory worker doesn't have an education investment that helped him get to that career. He just showed up one day, they took a few minutes showing him how to do some repetitive job, and that was that. It also didn't help them get any sympathy when they were getting paid very large wages for a manual labor job that a monkey could do, and other people in other parts of the country were doing jobs that had the same skill level but only paid minimum wage.

When the overpaid factory jobs went elsewhere, it wasn't that hard (in theory) to retrain those workers for something else. In many cases I believe, those workers had other skills, but stayed with the factory jobs because they paid very well and were very stable. When they lost the jobs, they used their other skills to find other employment. If you're already skilled in assembling cars, how hard is it to learn how to do oil changes, and go to work at Jiffy Lube? Construction also is a manual labor job that doesn't require any education, and it pays very well too.

Tech jobs are different: they require years of education to become qualified for. Sure, help-desk operators don't have Master's degrees, but companies are also moving engineering jobs overseas. If you have a Master's degree in engineering, which probably took 5-6 years to achieve, along with tens of thousands of dollars in student loans, you can't just retrain on a whim and get a different job.

Worse yet, just a few years ago all these same companies were whining about how there weren't enough engineers for them to hire. They yelled at the government to improve science and math education and encourage more kids to go to engineering school. Now that a bunch of people have gotten engineering degrees, they're being kicked out the door because these same companies found out they could outsource the work to 3rd-world countries for much less. Now these engineers are stuck with too much education to easily change jobs, and high student loans they still have to repay.

What I don't understand is why these stupid execs are still calling for better education in this country. What's the point if there's no jobs for the kids to go into because they've all been outsourced?

Re:moving jobs overseas

[Politburo]

There's a bias in many comments on this issue. There is the idea that ALL factory jobs are mindless and can be done by monkeys. This simply isn't true. While there obviously are assembly-line type jobs which are very simple, there are many factory jobs which do not require a college degree, but still require technical knowledge that comes largely from experience, and is not taught in a few minutes.

While my experience is not going to represent every factory, I have worked in a factory, on the floor. It really opened my eyes to a world which I had previously known only through stereotypes and the media.

Re:moving jobs overseas

[Spyffe]

According to my Indian friends in graduate school, Indian engineers get a starting pay of 300,000-350,000 Rupees per year.

Now, admittedly, in US currency that's ca. $6500-$7500. But consider: Rent around Bangalore is 6,000 Rupees per month. That's $131 dollars a month. A good computer in India costs 30,000 Rupees or $656.31.

These are not people at the poverty level. They are self-respecting middle-class IT workers. America's cost of living (which drives the computation of minimum wage) doesn't apply.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Minimum wage?

[Hoi Polloi]

No problem, just lower the cost of college to a few thousand a year, free health care, cut my rent, utilities, and food by more than half then provide me with public transportation that takes me from where I can afford to live to where I end up having to work. Do all of that THEN we can talk about dirt poor wages.

Funny how the executives never have a problem justifying their massive pay and perks.

Re:Get a nice curry

[Fortunato_NC]

This post is symptomatic of a larger problem.

Go on any job board or discussion about outsourcing and you'll see the trolls and out-of-work complaining about how Indians are "stealing" American jobs, either through H-1B visas or overseas outsourcing. This is a case of blaming the wrong people.

The Indians aren't "stealing" anything. American CEOs, with the willing complacence of their bought-and-paid for politicians, are giving them the jobs. Until last year, the H-1B visa caps were permitted to increase despite convincing evidence of a slowdown in the tech market. Outsourcing advocates have convinced American companies that lower hourly pay rates are the savior of their bottom lines.

Some jobs, especially call center work and manufacturing are gone and aren't coming back. Others may drift back and forth as industry discovers a balance.

It's a supply and demand thing. One thing that you might also want to to worry about is those "schools" churning out paper MCSEs month after month, advertising big $$$ and life on Easy Street by passing a few tests and getting a few certificates. In an already overcrowded tech market, these places are turning out tons of folks with overblown expectations. Once their dreams are crushed, who knows how cheap they'll be willing to work?

Re:Get a nice curry

[Golias]

1. "Until last year" there was not much of a market slowdown. Prior to 9/11, all indications were that we would climb our way back from the dot-com bust. In 2002, the landscape changed dramatically because of the rise of terrorism awareness at the end of 2001, and the H1B expansions were suspended.

2. CEOs are hiring people who can do the work for the least money. In some cases they get burned by that because it turns out that the outsourced workers are inferior. However, in those cases where somebody can do your job just as good as you for a fraction of the wage... Guess what? You were getting paid more than you were actually worth. C'est la vie.

3. The "paper MCSEs" are not going to be willing to work cheap. Most of them went chasing after the advertising of "big $$$" because they wanted to make a lot of cash, not because they love to work in IT. When it they discover that they more as a plummer than as a PC help desk worker, they will change jobs, and we will be right back to needing H1Bs to fill some of our jobs when the market picks up again.

Re:Get a nice curry

[sg3000]

> American CEOs, with the willing complacence of their
> bought-and-paid for politicians, are giving them the
> jobs.

Exactly. Fiorina, for example is a Bush supporter, having given thousands of dollars to his campaign according to opensecrets.org [opensecrets.org]. Then she's rewarded by the Bush Administration by raising H-1B caps and reducing restrictions of corporations to move more work offshore. So it doesn't surprise anyone when she flippantly suggests that Americans lose jobs to cheaper workers overseas.

Eventually, middle class jobs will be sent to countries like India, leaving America as the land of the millionaire heir (thanks to the Bush administration for getting rid of the estate tax), the millionaire CEOs, and millions of minimum-wage Walmart greeters.

Well, that's not fair; we'll also have illegal immigrants [yahoo.com] who get a 3-year work visas but are denied U.S. citizenship.

Re:Holy cow

[km790816]

RTFA: Scott Kirwin, founder of the Information Technology Professionals Association of America, said that.

Although the way the story was posted on /. made it hard to tell.

Re:Holy cow

[rsax]

After reading the article and then reading the comments on /. I kept noticing that numerous readers keep making the same mistake. I didn't want to post this earlier to risk sounding like flamebait but guys, seriously, what's with your reading comprehension? First of all she didn't say that, Scott Kirwin founder of the Information Technology Professionals Association of America said that. And secondly he was using that as an argument against outsourcing jobs so try not to take it word for word as his opinion. Sheesh.

Re:Morons in Tech Companies

[Kenja]

"What other impetus is there?"

To better serve your HP masters of course.

Re:Finally fighting back

[American AC in Paris]

Carly's totally right -- what makes a job yours by birthright? Compete like everyone else.

Oh, but wait 'till you hear her whine when overseas companies stop being cheap labor centers and start forming companies that take a nice, fat chunk out of HP's business. Once it's her ass in the fire--once the firms in India realize that they can make a killing by cutting out the middleman of overpaid American executives--she'll be screaming bloody murder.

I'm not disagreeing with your sentiment...rather, I'm suggesting that you reconsider holding Carly up as an example on this one.

Capitalism for workers, protectionism for mgmt

[swb]

Yeah, that's right, capitalism is great and protectionism is bad. Unless its bad for business, in which case, we'll call it something else like "protecting intellectual property" or "national security" or even give it a *good* economic/management buzzword like "differential pricing" and conclude thats how markets most efficiently operate, and only terrorists and zealots and pirates and other people that aren't willing to go along with capitalism would disagree.

Well, I disagree. I think some protectionism IS worth it. I like my way of life, and I'm not willing to sacrifice it so the capitalist elite can get bigger bonuses or the pedantic economists can proclaim "more efficient markets".

"More efficient markets" sound great, but that perfect efficiency risks turning us all into faceless cogs of some huge machine, having to justify our every move and every need on the basis of its economic efficiency and benefit to the markets. Yuck.

Re:Minimum Wage

[Buran]

Agreed. A lot of people go to school for long periods of time, get doctorates, master's degrees, etc. for the purpose of raising their earnings potential.

I've got a friend who's got a master's degree in biochemistry, and he's squeaking by (but not by much right now) but he's aiming to get a Ph.D. and end up in the upper middle class later in life. Would he do that if highly-educated people would get the same amount as a high-school dropout flipping burgers at McDonalds'? Hell no.

By HP's logic, we should all go to grad school (or equivalent) for ten years after getting our BS/BA, and then live in debt for the rest of our lives because our McJobs won't pay enough to pay off the horrid student loan debt.

And this is okay? I can't believe that anyone would make a statement like that, even a corporate flunkie, and be able to keep a straight face.

Re:Isn't HP making money hand over fist?

[ericspinder]

Amreica has been getting good wages compared to the rest of the world for some time now. If this was truely a problem American companies would have trouble competing for some time now. As industries mature there is a natural tendancy for them to move to cheaper markets overseas, in the meantime we (the U.S.) will go on to create new oppurtunities and markets, this is nothing new. What interesting about the moving of tech jobs is that how quickly it's happening, but I believe that it is a favor of the week. Most of the "cost savings" will never materilize or will be negated by falling sales, and higher corporate management costs. Some of the more technical jobs will return. However most will be lost (esp. the call centers), but then again how many televisions are made in the U.S. (none, BTW)

Re:Radical idea

[Tazzy531]

A US corporation can only remain a US country if a majority of its employees are US citizens. So if HP, etc. start employing Indians or Chinese, they should be forced to become either an Indian or Chinese company (and listed on their stock exchanges as well...)

Most multinational companies already list on foreign stock exchanges in addition to their home exchange. Also companies can be registered as a company in multiple countries. Much of this is a requirement of the laws [us and abroad]. Also listing on an exchange is a financial action rather than a legal one. You typically list on an exchange in a country where you need to or you think you can raise funding.

Now here's a counterpoint to your argument. If you want HP or Microsoft and other multinationals to only list as a foreign corporation, the entire US economy would disappear. If a company moves its headquarters to another country, the US government loses out on all the tax revenue from the corporations, same thing as using a tax haven like Bermuda as your corporate headquarters. Many of the large companies have threatend to do this in the past if they don't receive preferential treatment.