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Tech Sector Expansion Blunting U.S. Job Outsourcing
Posted by
Zonk
on Tue Apr 24, 2007 12:39 PM
from the bringing-it-home dept.
from the bringing-it-home dept.
xzvf writes "BusinessWeek summarizes a new report from the American Electronics Association (now known as AeA) that they think mitigates the effect of outsourcing on IT employment. US demand for tech workers is through the roof, the highest it has been since the boom of the late 90s. The tech sector added some 150,000 new jobs 2006, and there are no signs that interest will flag in the near future. 'There is so much global demand for employees proficient in programming languages, engineering, and other skills demanding higher level technology knowledge that outsourcing can't meet all U.S. needs. "There would have been a lot more than 147,000 jobs created here, but our companies are having difficulty finding Americans with the background," says William Archey, president and chief executive of the AeA. One culprit is the dearth of U.S. engineering and computer science college graduates. Second, immigration caps have made it difficult for highly skilled foreign-born employees to obtain work visas. Congress has been debating whether to increase the numbers of foreign skilled workers allowed into the country under the H-1B visa program.' "
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Politics: Annual H-1B Visa Cap Met In One Day 473 comments
CNet is reporting that the door has closed on the H1-B visa application process for this year, one day after it began. The US Citizenship and Immigration Services said that it had received 150,000 applications as of yesterday afternoon. 65,000 H1-B visas can be issued for foreigners with bachelor's degrees. The USCIS will choose randomly from the applications to determine the winners.
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Incredible (Score:4, Funny)
(Sarcasm stemming from having to spend two years of my professional life on a contract fixing "subcontinental code" - ah well, I guess it paid MY bills).
Re:Incredible (Score:5, Informative)
Not really. This is part of a PR blitz to raise the H-1B cap. Otherwise, in order to increase supply they'd have to increase salaries. And we wouldn't want that, would we?
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PR blitz +1 (Score:5, Insightful)
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In a perfect equilibrium... (Score:5, Insightful)
That statement is true only in a perfect equilibrium.
Most equilibriums have a degree of lag. Supply increases in one area, demand takes a while to catch up so costs are low. Demand increases in an area, supply takes a while to catch up, so costs are high.
Businesses are profitable by moving faster than that equilibrium shift and exploiting it. Businesses lose profitability the closer they are to an established equilibrium and they outright lose money when they fall behind it.
India is a great example:
There were a lot of very highly skilled engineers with minimal to no demand for their talents and thus would work for next to nothing. Smart businesses identified this and exploited them. Those businesses could now get high skill levels for very low cost.
Everyone else saw these profits, Newsweek wrote articles on it, everyone moved in to the sector. As demand increased towards supply, profitability decreased. As demand exceeded supply with many dumb U.S. businesses working on articles and quotes from three or four years earlier, costs increased rapidly, the supply of skilled engineered diminished, many poor engineers saturated the market looking for the now great wages, it became a lousy area for U.S. businesses to exploit.
The same has gone for big screen TVs. A few years ago, Circuit City, Best Buy, CompUSA, etc. were making a killing on every high end unit they sold. About a year ago, Walmart finally woke up, realized there was money to be made, slashed the margins so it could insert itself and killed their business model. For a long time, demand for TVs was greater than the number of stores supplying, profits were high. Once Walmart and Target realized there was money there, supply increased, profits decreased.
It happened in the U.S. with the dotcom bubble and it's happened more recently with housing. For a while, a given market is massively exploitable. Over time, everyone thinks it's exploitable, everyone moves in to doing it, the margins decrease, it loses its exploitability.
So, your statement is only partially true...
Over time, yes, you get what you pay for (you may even get less if you're on the wrong side of the wave).
BUT, if you're smart enough to identify the trends and get there ahead of others, you really can get far more than you pay for.
For those that bitch about high executive salaries, that's what they're often really getting paid for: They're people who've established they're good at staying ahead of the wave, surfing its leading edge and keeping their companies hugely profitable. If your ability can keep your company on the leading edge of the equilibrium wave, making $500m more a year than a company that rode the top of the wave, isn't it worth paying you $50m for that edge?
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Re:In a perfect equilibrium... (Score:5, Informative)
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Re:In a perfect equilibrium... (Score:5, Insightful)
Personally, I no longer shop at Home Depot.
Another good example is Carly Fiorina of HP; got rid of the test & measurement group that did actual innovation, turned the company into a printer maker and white-box builder, and then took a nice golden parachute.
Or how about the guy who took over SGI, ran it into the ground by making them move to Windows NT, then took a golden parachute and went to work at Microsoft?
There's so many examples of this crap it's not even funny. There are examples of well-paid CEOs of companies with spectacular performance, such as Whole Foods, but you don't hear much about these. Probably because no one's complaining about them and the shareholders are happy.
Parent
Why bother getting into CS (Score:5, Insightful)
thesedays when a plumber or car mechanic or even a house painter can make more money and doesnt have to bother with degrees etc
dont blame education blame multi-millionaire executives (and shareholders who pay their wages) who think their workers are worth less than the person that paints their house or fixes their car, why would anybody bother ?
pay peanuts get monkeys
Re:Why bother getting into CS (Score:4, Informative)
I don't know about you, but I could never see myself as a plumber or car mechanic or house painter. They're probably far easier than computer science could ever be, but I don't think I could find a fulfilling life in it.
Why are people teachers when there's not a lot of money in it? Scientists? Come on.
Parent
Holy unfounded optimism, Batman! (Score:4, Insightful)
Emphasis mine. Now where have I heard this before? This should be your warning that the bottom is about to drop out of the economy again.
Once burned, twice shy: be careful; protect your wealth; keep the best interests of your family in mind; avoid irrational exuberance.
Re:Holy unfounded optimism, Batman! (Score:5, Interesting)
A lot of companies offshore do have employees with fake resumes. I know people from several "top" offshoring companies with resumes that look good but are full of crap. In a lot of countries (including India), your ability is gauged to be proportional to the length of your resume - you will find people with 4-5 page resumes and it gets ridiculous. If you have several years of experience and/or are a PhD with a godawful number of publications, two or three pages. Else, just give me a page long resume and nothing more. Of course, I am in R&D and usually people are sometimes asked to submit their CVs, which can be as long as they like.
Secondly, these companies (HCL, TCS, Wipro, Infosys) hire engineers from all over the place. For instance, I know people who studied material sciences or marine engineering working as IT contractors or consultants. How much sense does it make? Of course, the reason they are hired is because you assume that having an engineering degree is representative of some level of analytical/quantitative skills. Which, of course, isn't always true because their hiring is a function of their academic performance. Once again, it boils down to the fact that academic performance != skill, which becomes especially true in an goal/achievement-oriented culture like India.
On top of this, a lot of companies are known to add people to more than one project at a time. So, while you are technically a part of the project, you do not really do much. At the end of the day, your resume mentions several projects over a frame of just a few years, but you haven't really deserve putting them there.
Add all this and you have the average resume from one of these companies looking way better than the average US kid. Any surprise then, that these kids aren't getting hired?
(I'm not saying that all of this is true for everybody; obviously there are exceptions and some are better/worse than others, but there is definitely a significant percentage of people for whom this is true.)
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Mistakes learned. (Score:4, Insightful)
Mistake 1: Thinking IT is on top of the food chain. No we are not IT is on the bottom of the food chain we need to service everyone. You may get paid more then the other guy and you may be more skilled but who ever you are doing work for is your boss.
Mistake 2: Not being professional. You should not stand out as the IT Guy because everyone else is wearing business casual and you are in tee-shirt and jeans. It is unfair and wrong but it is the way it is you need to dress to fit in. Otherwise you make people uncomfortable if they are uncomfortable your job can be at risk.
Mistake 3: Saying No. They need to get the job done just not doing it because you personally don't like it will not help anyone.
Mistake 4: Saying Yes. Being Blind to problems without brining them up in the beginning and getting someone else above you involved in a solution could lead you working on a quagmire.
Mistake 5: Thinking you are better then everyone else. Just because they don't know the difference between USB and Firewire doesn't make them stupid. Just because you do doesn't make you a genius. Respect the people you are working with, and they will respect you back.
Mistake 6: Respect your boss. They are a lot of bad bosses out there also a lot of good ones. Even if your boss seems to be cut from Dilbert you should give him the respect that they deserve. For being in that position. It means things like not publicly humiliating them and when arguing your point try not to make it personal.
Mistake 7: Trying to change the world. Don't try to change the world just try to make your work environment better. Put your feelings about GNU, Patents, Microsoft.... Aside and focus on getting your work done.
Mistake 8: Money doesn't matter. It does always keep an eye on how you are effecting the bottom line. You can save 10 minutes a day in computation but the cost for you to make that change would take 100 years to recover the costs then it is not worth doing.
Mistake 9: Work should always be fun. If that was the case most people wont have a job. You need to do the annoying stuff as well as the fun stuff. They hire you to do the stuff that others can't or are unwilling to do.
Mistake 10: You are separated from the business. Try to be involved in the business not make yourself a separate identity who just fixes the computers try to keep IT involved in the major decisions.
Re:Mistakes learned. (Score:5, Funny)
You must be new here, you jackass.
Parent
Surprise, surprise (Score:4, Interesting)
Today they lobby the US government for increased H1-B quotas to keep employment costs down, in addition to lobbying for contracts. It is in the best interests of tech companies to have an increased supply of qualified labor. Great -- although there will be a lag, if pay and prestige increase for these high-demand positions, more students will enter comp sci and engineering programs. Instead, AeA is asking the US government to subsidize their industry by increasing the labor supply.
I'm not saying there wasn't job growth in tech sectors the past couple years. What I am saying is that AeA has an agenda to push, and it's not one necessarily aligned with tech workers.
Re:Surprise, surprise (Score:5, Interesting)
I've worked in the U.S. in the past, but would be very unlikely to accept a position there since the passage of the Military Commissions Act of 2006, whose passage makes clear that the government believes that no constitutional protections apply to non-citizens, as it explicitly suspends habeas corpus for non-citizens suspected (for any reason) of terrorism. Given that the constitution explicitly forbids congress from passing any law that suspends habeas corpus except in cases of invasion or insurrection there is no reasonable interpretation that can be put on this except that foreigners have no rights in America. All it takes is one baseless accusation of terrorist activity against you, and you're out of luck.
Given that this has actually happened [maherarar.ca], it is not at all unreasonable for foreigners to want to stay away.
Parent
conspiracy? (Score:4, Interesting)
BS (Score:5, Insightful)
I can believe it (Score:5, Insightful)
1) The only two pretty reliable technical degrees on the software development side are Computer Science and Software Engineering; IS/CIS/MIS/BIS/IT are dumbed down, and they pay a lot less on average for the same position because they're assumed to be bringing a weaker knowledge with them.
2) Non-software development positions are better filled by people with real experience of any kind that people with real technical degrees. There are very few schools that will teach you how to be an admin type.
3) You may have to move. To get a good job, I had to leave rural Virginia for Northern Virginia.
4) A lot of people who go into these degree programs are horrible at practical work. Not just lazy, but they genuinely suck at it. I'm not being elitist here, but just because you have a degree, doesn't mean you are capable of performing a job. GPA doesn't necessarily mean much either. Brilliant people often get 3.0 GPAs in Computer Science for a variety of reasons. I've known people who are mediocre at best who had 3.8-4.0 GPAs in the subject, all because of hard work and memorizing the textbook and lectures.
Parent
Consider the WAGES (Score:4, Insightful)
Here's a quote from a Seattle Times article last week, that sums the point up rather nicely:
The companies fret that not enough young Americans are studying science and technology. Well, cutting the pay in those fields isn't much of an incentive, is it?
This statement is never qualified (Score:5, Insightful)
Every article about outsourcing or jobs in general has a quote along these lines. And they never qualify it with "for the rates they are willing to pay." Unless a company is doing some serious, way-out, pie-in-the-sky research, there are people that can and will do the job for the right price. Employers just don't want to pay it. If a company really wants a CCIE with 20 years experience in networking for a position in New York City, they just might have to pay a premium rate. I didn't take Econ 101, but it seems like simple supply and demand to me. How come limited supply increasing demand is good when companies want to sell products, but bad when they are hiring?
Blame TV, it shapes kids' interests (Score:5, Interesting)
When you sow the message that the path to gleaming limos and the high life is through thug culture and pimping out your women, and not through intellectual pursuits or even good old-fashioned productivity and invention, then that's the kind of youngsters you breed. And the effect on the nation's future in advanced technology is then 100% predictable.
Cool high tech doesn't appear by magic out of nowhere. You have to be highly educated (or at least self-taught and highly motivated) to work at the advancing edge of technology, and that requires a large amount of skill and deep interest in the topic. The message delivered by the telly is that those things are extremely uncool, unhip, and frankly "really dull, man".
But it's a free country, right? So people can broadcast whatever they want, even messages that are contrary to our self-interest?
Sure. But eventually you lose that precious freedom if you forget that real wealth (not just money) comes from progress and invention, because you'll end up in servitude to those nations that understand that you have to safeguard your future freedoms too, not just your current-day ones. And that means making education and technology and being intelligent cool in the public eye.
There is a solution, and it's compatible with our current concepts of daily freedom. We need special interest group and lobbying corporations and a whole raft of think tanks to be giving the message of "tech and education is damn cool, and very profitable" to media, business, politicians, the to blessed public too, alongside the output of MTV and the RIAA delivering the message of self-destruction.
It *is* possible. But it will require some effort on our part.
Simple explanation (Score:5, Interesting)
I am a highly skilled IT person. I used to make a lot of money but have settled for less than a third of what I used to make simply to avoid being on call, working 18 hours a day and putting up with management that doesn't manage anything other than their own checkbooks. I would rather have a life, some self respect and dignity. Fuck IT. I'll never ever do that professionally again.
Bullsh*t (Score:5, Insightful)
Wages have been generally flat since 2000. (disclaimer; mine have been going up but that's what the paper said today-- interesting that multiple sources are pushing this slant today with non-identical articles-- astroturf campaign??)
Our company has over 200 indian nationals working for us from infosys INSTEAD of Americans.
And there are rumors they plan to offshore the rest of our jobs in the next two to three years. It is really a race against inflation and appreciation of the rupee (18% combined inflation and appreciation means indian workers will be *double* the cost in only four years).
While I hope these companies fry in the pan they made by destroying so many american IT people's lives that the students all got the correct idea that you didnt' want to spend $50,000 to train for a field where you might get 3-5 years of work before being laid off for a year- lose your house- your insurance- etc.
I understand that indians are cheaper and speak english. I have nothing against them and obviously work on a lot of projects with them. They can take these wages and live like kings back home for now.
But I don't understand and agree with paying $5.50 a pill for my BP medicine that sells there for $.10. I don't understand paying $20.00 for the same DVD that sells there for $2.49. I dont' understand microsoft GIVING AWAY
And I understand but burn with the hippocracy of laying off a $80k programmer but not laying off a $800,000 executive (whose job could easily be done by a competant indian executive).
Re:In what universe? (Score:5, Interesting)
There's your problem. Most employers don't want to hire entry-level engineers. They figure they're just training you for your next job. It really sucks searching Monster and finding hundreds of 3-5 years-of-experience listings and zero entry-level listings.
The good news is that once you land your first gig, within a couple years you'll be sitting pretty. I haven't updated my resume in about a year and I get interview requests on a weekly basis. If you live in a good market, those same companies that stiffed you in the past will be all over you like stink on a monkey.
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Re:In what universe? (Score:5, Insightful)
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Re:In what universe? (Score:4, Insightful)
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