US workers see hard times

Boston.com ^ | 11/3/03 | Chris Gaither

[Tumbleweed_Connection]

FRAMINGHAM - Andre Brassard keeps sending out resumes but has largely given up on the profession that employed him for a decade: writing software.

In his old department at Mindspeed Technologies Inc., most of the software engineers are gone. The work Brassard and his colleagues did is now largely done in Ukraine for one-quarter to one-third the cost.

[Joshh86]

What would Ayn Rand say?

[CO_dreamer]

Greed is good.

[Moleman]

This outsourcing continues to have me greatly concerned about the future of the U.S.A.
Everyday I read article after article about the continued outsourcing of Americas jobs. I am an engineer currently in a technical sales role.
You used to believe that a professional job you were safe. After all it's just the union jobs going over seas.
I have a three year old and am concerned that if there are jobs available when she gets out of college, they will be flipping burgers- if anyone is employed and can afford to buy a burger

[thoughtomator]

It was obvious to me in 2001 that there was no future for a United States citizen as a software developer. It's just gotten worse since.

If it's always cheaper to send work elsewhere, why are there any jobs at all left in the United States? No matter the job, it's cheaper to have it done overseas!

[CO_dreamer]

The ONLY jobs that are safe anymore are site jobs - the ones that actually require you to be physically at the location of the work - nursing, construction, etc.

[oceanview]

all IT to India. China is taking the chip industry.

and forget this nonsense about sending the "grunt" work overseas while we keep the cutting edge stuff. they said the same thing when consumer electronics went to Asia. "don't worry, let them make the cheap stuff, we will keep the good stuff here in the USA". So who today dominates the market for plasma and LCD display technology: Japan and South Korea.

Once the basic underpinnings of a technology industry is lost, when there is no new investment in it domestically, its gone for good.

[discostu]

And right there you stumble on the answer the doom and gloomers ignore. It isn't always cheaper to send work elsewhere. There's a lot of overhead involved in offshoring (not all outsourcing goes overseas) and it presents a lot of challenges in the development process. Many companies can't and won't lay down the money to address it, others are learning they didn't have the processes in place to handle it and are moving development back.

The tech industry is slowly rebuilding in America. There will always be some work offshored, that's been the case for nearly 10 years, but it is by no means a threat to the industry as a whole.

[oceanview]

don't forget the lawyers

[Fudd]

The ONLY jobs that are safe anymore are site jobs - the ones that actually require you to be physically at the location of the work - nursing, construction, etc.

Even then, there is a downward pressure on pay in many blue-collar site jobs (like construction) because of the use of illegal immigrants. Don't have to pay them as much, don't have to cover their payroll taxes, and don't have to worry as much with those pesky work regulations.

[oceanview]

so why don't we make plasma and LCD displays in the US anymore?

[discostu]

Did we ever?

the TV industry in America died to direct competition, not offshore outsourcing. Different discussion than software offshoring.

[Snuffington]

Big agreement with your post. I've been trying to explain that to people for some time. But pessimism is much catchier.

The offshoring fad (and it is a fad) is being driven primarily by the stock market. After the tech stocks crashed, blame was largely placed on tech companies ignoring fundamental financials. The new executive priority, exacerbated by a poor overall economy, was to put finincial concerns above all else. One of the most obvious targets was reducing labor cost.

The executives, generally not being terribly knowledgable about IT development, didn't understand the full complexity and cost they were undertaking by trying to integrate development in places like India with the U.S. Some companies are already realizing they didn't get the expected savings from offshoring. Some are also realizing the imbedded "hidden" costs - like culture and communication gaps, impact to morale, loss of flexibility, and increases to project timelines - aren't worth the labor savings, even if they did materialize.

I suspect in the long run, offshoring will go back to tits initial purpose: a way to make up for tech sector labor shortages in the U. S. It's not going to succeed as the primary means of technical development.

[discostu]

A lot of CEOs (including the one in charge of my company) became obsessed with headcount, outsourced labor (offshore or not) doesn't count against headcount so they dig it. It's a short term solution to short term problems, in the long term though it has other problems that not everybody is happy dealing with.

I'm not sure offshoring will ever go back down to where it was, the labor IS cheap and for any company that has the infrastructure setup to handle it it's a great solution. The thing people forget is that 90% of software companies are single building and less than 100 people, offshoring is a poor solution for those companies. And those are the companies that went under during the bust and those are the companies having a hard time finding startup funding which is delaying the rebuilding of the tech sector. Once those companies regain the momentum to drive the industry the offshoring thing will fade from the headlines as domestic development will resume it's growth.

[ex-snook]

"The ONLY jobs that are safe anymore are site jobs - the ones that actually require you to be physically at the location of the work - nursing, construction, etc. "

Don't bet on it. The only job that may be safe is government work. Based on grounds maintenance jobs, I suspect the same thing will occur in construction through some group contracting. Money talks, jobs walk.

[SpaceBar]

The dichotomy in all this is that these companies retain all the perks and privilages of being US registered and headquartered entities, including tax breaks and low interest bailouts, while not having to deal with the inconvenience of employing the domestic labor force. It is a major sellout. A company that hires all or most of its employees from Bangalore shouldn't have the privilages of the US tax structure. They want the economic benefits of sovereign isolationism that produces the vastly different wage scales across borders while at the time crying the "free trade" mantra. It ain't free trade folks, it's free rape. The real criminals in all this are the lawmakers and politicians who sell out the US workforce to the lowest bidder.

[expat_panama]

``It's not like the downturn of 10 years ago. Then it was just bad times.''

Is this a great country or what!  We've got the Boston Globe saying that we're facing the worse job crisis in history-

and it's all G W Bush's fault-

and that the worse part is that people are loosing their high paying jobs in the service sector?

But they got one part right:

software coders used to making $60,000 or more a year will have to learn newer programming languages to stay employed.

Duh!

[CO_dreamer]

That's a good point. I think most of the skilled labor is still American (electrician, plumber) but a lot of the other work is going to illegals.

And I'd forgotten about us importing nurses too. I read about that just a few months ago.

It amazes me that neither party wants to address this issue. The only job Senators and Congressmen seem to care about it their own.

[SpaceBar]

But they got one part right:

software coders used to making $60,000 or more a year will have to learn newer programming languages to stay employed."

Please name one programming language that is in such high demand, is so powerful, and still obscure enough that learning it will make a US programmer competative with a programmer in New Delhi? I will cut to the chase and answer it for you. Their ain't one. It's all variations on a Turing machine. The problem exists because a loaf of bread in the US is $3 and $0.20 in New Delhi. Oh, and raw employment numbers don't cut it, because it includes the CS PhD waiting tables in The Olive Garden. A job isn't a job isn't a job. But your comments were so quippy, glib and clever that you knew that.

[debaryfl]

LOL
>>Since then, Kuhl found only one monthlong contract, and that was for investigating why a $6 million programming job outsourced to a major Indian consulting firm was $40 million and 18 months overbudget, she said.

I have heard of niche companies that make good revenue by correcting the mistakes of the outsourced code.