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garbanzo
23rd March 04, 10:03 AM
One of the issues being debated recently is how the government ostensablity free-market economy should handle the problem of off-shoring.

Many companies, in their effort to maximize the profits reaped by their executive officers are seeking to take advantage of low wages abroad and favorable exchange rates by moving jobs (not employees) overseas.

In the technology and financial services industries the three primary destinations for jobs formerly held by people in America are: India, Singapore, Ireland.

The discourse concerning this type of issue usually presumes that ther is a hard and fast line between the public and private sectors. That line, of course, is movable, and is usually relocated from time to time to the the advantages of large corporations: the bail-out of the airline industry, for example.

Most macro economists seem to the think a few hundred thousand American jobs are a small price to pay for the profits that will be gained by offshoring, and that any attempts by the government to solve this problem would amount to excessive government interference.

Rather than attempting to stop the export of jobs to people in other countries, why can we not stop the import of people for jobs in this country?

Specifically, why can we not revoke all work visas for all citizens of India, Singapore and Ireland and deport them?

Why can we not institute a moratorium on any further work visas for citizens from those countries?

I am aware that there may be serious problems with this approach, but I'm thowing it out there for debate.

CanuckMA
23rd March 04, 10:43 AM
The main problem is that there are instances where we need to import skill workers. Also, the visa holders, at least work and pay taxes here, thus stimulating the economy. Offshoring just puts worker out of jobs, unable to pay taxes and consume. The goods are not getting cheaper, just more profit for the corporation. I'd be more in favour of placing a hard limit on the deductability of compensation, and a minimum time that a stock must be held before it can be resold. If you buy stock and know that you must keep it for, say, 2 years, you will care less about the next quarter results as opposed to the long term viability of the corporation. I'd even be in favour of placing limits on the value of stocks based on real analysis of that corporation's worth.

I shake my head everytime I read about a stock going down because the corporation says it will not make as much as it thought, or going up because it says it won't lose quite as much as tought.

garbanzo
23rd March 04, 10:51 AM
Originally posted by CanuckMA
The main problem is that there are instances where we need to import skilled workers.

I guess I am skeptical as the the need. I think that it gets overblown because hiring companies know that when they sponsor someone for a visa, they own them. So they fabricate an whay a college graduate from Dehli is the only person who can do a job that a college graduate from Anywhere USA is capable of doing.

Your other points are quite interesting. I hadn't considered the role of speculation in all this.

nasty_totoro
23rd March 04, 11:16 AM
By deporting the foreign tech workers you will do several things

1. raise the wages of tech workers in the US by creating an artificial shortage ... thus raising costs ... american tech companies may become uncompetitive

2. deport a highly educated, dedicated workforce ... a lot of the research, development and production is done by foreign workers ... deport them and where do they go ... other countries whose companies will benefit from their skills

3. force even more tech jobs offshore ... if your costs are going up ... export them ...

CanuckMA
23rd March 04, 11:17 AM
Originally posted by garbanzo
I guess I am skeptical as the the need. I think that it gets overblown because hiring companies know that when they sponsor someone for a visa, they own them. So they fabricate an whay a college graduate from Dehli is the only person who can do a job that a college graduate from Anywhere USA is capable of doing.

Indeed. I think that making skill worker migration between Canada and the U.S. visaless would solve the problem. The economies and values are similar enough that they should be viewed as a single worker pool. The elimination of visa would eliminate the servitude from the work.


Your other points are quite interesting. I hadn't considered the role of speculation in all this.

Speculation is what forces company to plan for the end of quarter numbers as opposed to the longer view. I have worked for Hyundai, Asian philosophy, privately owned and seen true 5 year planning. I've also worked for enough U.S. based (I'm in Canada) public companies to see the grilling that business unit managers go through if the 'numbers' are not met. I've seen shiiping being closed for days before the end of the quarter because the 'numbers' had been met, and why go too much over, we may need tose sales in the next quarter, to make me sick. I've also seen public companies have contract people, at 2-3 times the cost of the equivalent full time employee, for years because it does not inflate the body count. Unchecked capitalism is not good.

garbanzo
23rd March 04, 11:33 AM
nasty_totoro:

Excellent points.

I must question your use of the term "artificial" however.

When a company exports jobs to Singapore, the government of which heavily subsidizes the off-shoring industry, it is "natural".

When the U.S. governemt allows people to come to the U.S. and work, it is "natural".

An effort made in defense of working Americans is "artificial".

CanuckMA
23rd March 04, 12:23 PM
Originally posted by nasty_totoro
By deporting the foreign tech workers you will do several things

1. raise the wages of tech workers in the US by creating an artificial shortage ... thus raising costs ... american tech companies may become uncompetitive

There currently is a glut of tech workers in North America. I have 23 years in IT, have been unemplyoed for 8 months, along with an estimated 20 to 30,000 other IT workers in the Toronto area ALONE. Toronto is typical of the rest of North America. The 'shortage' is created by using requirements that are un-realistic to facilitate the import of workers. Who would you rather have have working for you, a citizen, with a family who will balk at working 80 hours a week, and in a normal market might leave, or somebody on a visa that knows few people, and is aware of the fact that if he loses his job, he has to leave the country?


2. deport a highly educated, dedicated workforce ... a lot of the research, development and production is done by foreign workers ... deport them and where do they go ... other countries whose companies will benefit from their skills

And when their visas expire, they go where?



3. force even more tech jobs offshore ... if your costs are going up ... export them ...

There are ways to control that. Remember that the cost savings are not being passed to the consumers, they usually go to the executives.

punchingdummy
23rd March 04, 01:09 PM
Originally posted by garbanzo

Rather than attempting to stop the export of jobs to people in other countries, why can we not stop the import of people for jobs in this country?

These two alternatives are the same side of the coin...stopping the import of people WILL aggrevate the export of jobs to other countries.

punchingdummy
23rd March 04, 01:15 PM
Originally posted by garbanzo
I guess I am skeptical as the the need. I think that it gets overblown because hiring companies know that when they sponsor someone for a visa, they own them. So they fabricate an whay a college graduate from Dehli is the only person who can do a job that a college graduate from Anywhere USA is capable of doing.

Agreed. They are used because they are economically actractive. They can be hired for less (in spite of INS attempts to guarantee market wages) and are generally lower maintenance that their US counterparts. We've got some of the best, if not the best, technology workers in the world. But those workers also have high demands and expectations.

CanuckMA
23rd March 04, 01:33 PM
Originally posted by punchingdummy
Agreed. They are used because they are economically actractive. They can be hired for less (in spite of INS attempts to guarantee market wages) and are generally lower maintenance that their US counterparts. We've got some of the best, if not the best, technology workers in the world. But those workers also have high demands and expectations.

Yeah, like a job!

garbanzo
23rd March 04, 01:43 PM
What about taxation?

We tax things that some people don't like: alcahol, tobacco.

Why not put a tax on the export of jobs?

nasty_totoro
23rd March 04, 02:10 PM
some points ...

Point #1. there are only 2 types of tech services ... those that are portable and those that aren't ...

portable is basically any service than can be done elsewhere with minimal transportation costs ... sofware, some database and some call centre jobs ...

those that aren't portable are those that need someone onsite ... networking, basic hardware support, etc ...

as you will notice, over the last decade more and more tech jobs have become portable for 3 reasons ... 1 the adoption of the internet and other technologies which facilitates communication ... 2 superior integration design in software to allow for remote access ... 3 the availability of highely educated workforces overseas ...

Point #2. a company only cares abour 1 thing ... profit ... it doesn't matter whether some is right or wrong (that isn't the same as legal/illegal) ... if i were to hire programmers in the US or Canada ... there had better be a damned good reason financially why i'll pay them several times the wage of a skilled indian programmer ...

is he more skilled, works harder, more creative? ... is the advantage of having someone who is less than an hour aways enough to offset the time and communication costs of someone in india?

if you can't give me an answer to this ... don't expect me to hire you ...

Point #3. A lot of companies are setting up shop overseas ... because thats where the growth will be ... for companies such as HP and MS ... they NEED research and development centres there in order to develop products that will sell in those cultures ...

this happened many years ago with cars ... the days when cars where designed, produced and shipped from detroit to overseas markets are gone ... automakers realized that if they didn't start selling products that appealed to more than just the US market ... their competitors would ...

china is about to become the worlds largest internet user in the next few years ... the growth in computer sales there is many times the rate here ... software companies have to insure that they have a presence in those markets ... and the best way to do that is to set up production there ...

the milk has been spilled and it's not going back into the cup ... what we have to do is figure out what we can do better ... and do it ...

rainfall
23rd March 04, 02:43 PM
I would be very interested to know where the "Singapore, India and Ireland" list came from. Do you have a source?

I also saw an interesting article lately. Apparently, cutting wages and benefits does not always equate to cutting costs: http://www.workingforchange.com/article.cfm?itemid=16603

garbanzo
23rd March 04, 02:50 PM
Originally posted by rainfall
I would be very interested to know where the "Singapore, India and Ireland" list came from. Do you have a source?


Largely anecdotal.

I've heard those three countries mentioned in this regard in the news recently.

Doesn't really matter which countries, though.

CanuckMA
23rd March 04, 02:59 PM
nasty_totoro,

Problem is, you can move you're infrastructure offshore, and all of your tech workers. You are also moving your information offshore.

Also, the government has a duty to it's citizens. In the '80s, when manufacturing jobs were moving offshore, the governemnts were saying that all was well because we could retrain the line workers to be knowledge workers. Now that the the knowledge workers are leaving, what are you going to retrain to?

I know a lot of people who are abandoning Dell because they can't deal with the Indian tech support. That will prompt Dell to layoff more people. It's a vicious circle .

What happens when young people do not go into IT because there are no job prospect? what happens in 20 years when os older folks are no longer in the field? What happens when all of your critical business data is hosted in India and China?

As I stated earlier, there are between 20,000 and 30,000 unemplyed IT workers in the Greater Toronto Area. If this was a manufacturing sector, government and media would be all over this story. Think about it, at an average salary of $40,000, 30,000 unemployed just removed $1,200,000,000.00 out of the economy.

garbanzo
23rd March 04, 03:06 PM
Ther overall message that I am getting is that American corporations cannot remain profitable while paying a living wage to American workers.

nasty_totoro
23rd March 04, 03:07 PM
let's ask a simple question ... how are you going to stop it ...

let's get everyone here to play the role of government ...

i'll take devil's advocate and pretend to be a heartless, profit chasing corporation ... which i really am not ... i think :)

garbanzo
23rd March 04, 03:13 PM
And I am simple-minded but all powerful dictator.

I hereby revoke all work visas for citizens of the top 5 offshoring coutries.

I hereby require all companies to report headcount by location.

I hereby levy a tax on the the export of jobs that is heavy enough to make it not seem profitable.


( While I am at it I hereby:

End all farm subsidies.

End the practice of selling timber from national forests at below market rates.

End the government's practice of building roads in national forests so that the timber industry can clear cut the timber they just bought at below market rate.

Outlaw the practice of exporting raw timber.

Raise grazing fees on public lands to market rate.

Make it mandatory for Managed Care Providors to insure everyone.

I like all this power. Just wait till I outlaw automobiles.)

CanuckMA
23rd March 04, 03:26 PM
Originally posted by garbanzo
Ther overall message that I am getting is that American corporations cannot remain profitable while paying a living wage to American workers.

The overall meesage that I'M getting is that American CEOs cannot keep getting mutil-million $ bonuses while paying a fair wage to American workers. What happens if you limit CEO compensation to, say, $3M a year? All that bonus money becomes available to pay worker wages while not touching profit.

garbanzo
23rd March 04, 03:29 PM
We couldn't do THAT.

That would be government interference in the private sector.

CanuckMA
23rd March 04, 03:31 PM
Originally posted by nasty_totoro
let's ask a simple question ... how are you going to stop it ...

let's get everyone here to play the role of government ...

i'll take devil's advocate and pretend to be a heartless, profit chasing corporation ... which i really am not ... i think :)

I set a maximum tax deductible compensation for executives.

I set a very punitive tax on compensation above that level.

I give incentives to keep the workers in NA.

I get toghether with industry to come up with reasonnable figures on support personnel and enforce them.

I enforce that NA phone support be done in NA.

nasty_totoro
23rd March 04, 03:35 PM
the US is still a new exporter of software ... however most of the growth will come from overseas markets in the future ...

this means that

1. if you suddenly raised the costs of US software development ... software of such companies could be uncompetitive overseas ,,, remember costs must be reflected in the sales price ...

also rasing of wages has usually led companies to adopt even greater efficiencies to offset .. simply put ... they'd find ways to get people to do twice the work through productivity increases ... even if they pay that person 1.5 times the wages ...

simply put ... the net employment of US tech workers may not increase ... there might simply be the same or fewer # working harder and smarter for more money ...

2. without the posiblity of strong overseas growth ... the tech industry would not be growing at the clip it has been ... simply put ... your market might now well be limited to the US and Canada ... while overall, these are the largest markets ... they aren't where the growth is ...

catering to only a local market may well reduce change the industry from a dynamic to static one ... in other words, since the growth potential is no longer as great ... companies might not make the investements necessary to compete internationally and become ossified ...

this has already happened once before the the american automobile industry ...

in order for a local market to produce more jobs ... the growth in said market must exceed the gains in productivity in the industry ....

3. some things you can't really police .... for example ... source code is simply text ... good luck trying to show that it came from china or india instead of seattle ...

say some of the code is written in india ... some in seattle ... and the product is packaged in ohio ... now you get into those messy content rules like automobiles ..

4. if i were a company ... i'd simply increase my overseas operations to support higher growth markets and eliminate as many jobs as possible from the US ...

some might say that this is happening already .... but i don't think that this is anything compared to what will happen if companies realize that they

1. can't use the best workers .... some of whom may be foreign

2. can't use anything developed overseas

3. have no labour mobility within their multinational organizations

i'd start running away ... or at least moving away ...

5. if the US tries to limit foreign content or workers ... innovation will be reduced ... the inventor of hotmail was a foreign indian worker ... many anti-virus companies have operations in europe because of the advanced security skill set there ...

right now ... i can develop a new product ... which does not take away anyone's job ... relatively cheaply ... simply because i can do the development and testing here ... the mundane coding in india ... the product packaging and production in china ... and ship it over ...

even if 80% of the new jobs are created overseas ... i'm still adding 20% to this country ...

if entry costs are prohibitively high ... then i wouldn't even bother to take the risk ...

nasty_totoro
23rd March 04, 03:42 PM
Originally posted by CanuckMA
I set a maximum tax deductible compensation for executives.

I set a very punitive tax on compensation above that level.

I give incentives to keep the workers in NA.

I get toghether with industry to come up with reasonnable figures on support personnel and enforce them.

I enforce that NA phone support be done in NA.

i really don't know how you're going to enforce them ... unless you force everyone to keep a huge log of every support call and have auditors go through it ...

either way it will simply add to the expense .. and that expense will be transferred to the consummer ...

also the administrative work will be a headache ... like the MS licensing documentation ...

the point is also pretty redundant ... in the future we will be working off a web-server based model ... not the desktop one ...

simply put .. most software problems revolve around program conflicts ... the way we fix them with patches is horribly inefficient ... some places have already moved to a system where all applications are web based an on the server ...

with this model ... the only support needed will be hardware (which will never move away), training (which is local anyways) and the server end (higher wage workers, but very few of them) ...

shinbushi
23rd March 04, 05:37 PM
The answer is to quit relying on mommy and daddy corporation or government for your welfare. Start your own business then you are truly in charge of your life.

HAPKO3
23rd March 04, 06:21 PM
As far as I'm concerned, it's all good. And this is coming from someone who works inthe IT industry.

I think it is ridiculous to expect Americans not to have to compete on what's now becoming a global job marketplace. If there are people who are willing to do an equally good job for less money, more power to them. I would have no problem outsourcing some of the work my company does to India, Russia, or wherever else if that made business sense. In my case, it doesn't, and I don't do that.

If we force American companies to hire American workers and pay them unjustifiably high wages, american companies will no be able to compete on price with foreign ones. Then, unless we impose draconian tarrifs, they will be shut down.

American workers, particularly the lazy and unskilled ones are whining about their jobs going away. Instead of pissing and moaning, these pussies should either be wiling to work for less, or increase their skills to compete. Period.

I, personally, am VERY competitive with offshored workers. Sure, I cost about 4 times as much as an equally skilled programmer in India, but I also have industry experience, business knowledge, etc that is unique to working in this country, and can not be replicated outside. This is how I compete, and I am very successful at it. I am also constatnly deepening and expanding my expertice. If I did not do that, I would not expect my career to advance.

All of these whiny bitches should get off their ass, and make themselves competitive. If you can't compete on quality, then you have to compete on price.

Overall, outsourcing IT labor is a viable option, but has a whole slew of problems associated with it. It is not the panacea that it's often made out to be, and I find that the market is starting off on a rebound from the outsoucing mania that began a couple of years ago.

HAPKO3
23rd March 04, 06:26 PM
The internet boom of the late 90's created a whole slew of IT workers that made good money despite not knowing their ass from motherfucking Microsoft Windows. They're used on bing handed shit on a silver platter and don't bother actually learning.

These are the people whining about outsourcing.

Fuck them.

HAPKO3
23rd March 04, 06:41 PM
Originally posted by garbanzo
Ther overall message that I am getting is that American corporations cannot remain profitable while paying a living wage to American workers.

That is an untrue generalization.

American companies can't be competitive if they're paying their workers more than they are worth. It doesn't matter if these workers are in the US or in India.

What American workers have to do to keep their jobs is remain competitive. There is a number of ways to do that. Being a lazy fuck and whining is not one of them.

CanuckMA
23rd March 04, 07:59 PM
Of course Hap, the jobs have to be there first. I was downsized 8 months ago. I've in IT for 23 years, adapted more than I can remember and I still can't find anything.

HAPKO3
23rd March 04, 08:15 PM
Sorry to hear that. I was donwsized a couple of years ago, during more or less the lowest point of the US IT industry, and three months later I picked a lucrative and interesting job out of a number of possibilities. And I'm not some sort of genius. I'm good at what I do, but there's a number of people out there more talanted than I am.

I don't know how the market is in Toronto, but if you couldn't find anything, not even a short term contract, in 8 months here in San Diego, I would say that there's something wrong with your resume, references, interview performance, whatever.

If you're a highly skilled and highly compensated employee, I'm talkin over 120K or so, then it could be a different story, but there's plenty of jobs around here with salaries in the 80's or 90's for qualified people.

Is your skillset not up to date? Look around to who's getting jobs, and see what's different about them...

Good luck.

HAPKO3
23rd March 04, 08:17 PM
We're looking for a good Java guy here, contract to perm, by the way... Amazingly enough, it's not that easy to find one...

Meteora
23rd March 04, 10:52 PM
You know if there wasn't so many damn people in the world, this wouldn't be a problem.

The Wastrel
23rd March 04, 11:09 PM
Some European companies are outsourcing to the United States to take advantage of our comparatively lax worker's compensation laws and workplace standards. If I can dig up a link, I'll post it.

Azteca
24th March 04, 03:10 AM
The tech industry is just the tip of the iceberg when it comes to the sad truth of lay-offs my parents have been laid off my sis and myself and we are the working class and unlike the tech industry none of us had a severance package. There are many fancy words for the term lay-off and the media and corporate spin doctors think the public is too stupid to know the difference like the term lay-off is so un-PC like the word fuck. A company like Nike will make their wares at pennies on the dollar outside the U.S. wich means the off shore employees will never afford a Nike shoe at American prices so how can corprorations explain that?

Worse yet these companies answer more to shareholders than the consumer wich sucks big time and makes me think that the economy would do better if it just ignored Wall Street.

CanuckMA
24th March 04, 08:14 AM
The short term gain and speculative mind set is the main reason why the economy is so screwed up.

punchingdummy
24th March 04, 09:32 AM
The economy is actually pretty strong, at least for time being. The issue is a relative lack of news jobs which are typical at this point in a recovery cycle. Off-shoring is not the culprit.

garbanzo
24th March 04, 09:41 AM
HAPKO3:

Do you own your own business?

nasty_totoro
24th March 04, 10:26 AM
the real culprit is the increases in productivity over the last decade ... we've seen the same thing happen a century ago ...

simply put ... it takes less to produce more ...

US manufacturing as measured by output is at its highest level ever ... but now employs the least people ever ...

we are not producing less ... simply hiring less people to produce more ...

punchingdummy
24th March 04, 12:18 PM
Originally posted by nasty_totoro
the real culprit is the increases in productivity over the last decade ... we've seen the same thing happen a century ago ...

simply put ... it takes less to produce more ...

US manufacturing as measured by output is at its highest level ever ... but now employs the least people ever ...

we are not producing less ... simply hiring less people to produce more ...

Yes, there are some similarities to the frictional unemployment created by the industrial revolution. Our current situation is only slightly more complex. There was a heavy investment in IT prior to Y2K and corporations are still squeezing efficiencies from them. However, there seems to be a growing consenus that the growth in efficiencies is diminishing and companies will need to hire soon. Companies have also been benefiting from a highly favorable monetary environment and have been able to maintain or grow profits through lower interiest rates (allowing them a more conservative apporach on hiring). This ties into the final major contributor which is the reluctancy to hire by companies given the a perceived instability with the war on terror. In the end, companies will need to hire and there is growing evidence that the trend has started and, absent any additional external shocks, should be picking up steam through 2004.

HAPKO3
24th March 04, 01:51 PM
Originally posted by garbanzo
HAPKO3:

Do you own your own business?

No I don't. Didn't mean to come across like that. But I was one of the first people in the startup that I work in, and have quite a bit of say in the technical descisions that get made.