Growth in Indian Offshoring Slowing 584
quantumstream writes "CNN/Money is reporting that high wages are causing some software companies to look to other countries for outsourcing, including Eastern Europe and several other SE Asian countries. Gartner Research believes a drop of 45% in India's share could happen in the next two years. Is this the beginning of the end of the dominance of India in the tech offshoring market?"
gnaa (Score:2, Funny)
So... (Score:2, Funny)
Re:So... (Score:5, Insightful)
Re:So... (Score:3, Funny)
No, it's: Econironic!
Re:So... (Score:3, Funny)
In short... it's Enronic ?
Thomas-
Re:So... (Score:2)
Darn those neoliberal economists for bringing prosperity to undeveloped and semi-developed nations! Darn them all to hell!
</sarcasm>
Re:So... (Score:5, Funny)
Re:So... (Score:3, Informative)
They still work damn cheap... (Score:2, Informative)
"Four years ago, a typical call center employee would have earned between 5,000 to 6,000 rupees ($114- $136) a month. Now it may be up to between 7,000 to 9,000 rupees ($159 - $204) a month," he said. "The rise in labor costs isn't significant yet. What's more important is that these increases so far have not been passed on to clients in the U.S."
Re:They still work damn cheap... (Score:3, Interesting)
Well duh, after all we never saw the drop in prices thanks to switching from hiring people for $1000 a month to $120 a month. I'm sure they won't raise prices until they hit $500/mo.
Re:They still work damn cheap... (Score:2, Insightful)
Granted I am a firm opponent to outsourcing, but Dells have been getting much cheaper in the past few years. For 1500 two years ago, I got a 2.6GHz/512MB/17" LCD/Radeon 9800 Dell/CDR, and my mother just six months ago got a 3.2GHz/1G/19" LCD DVI/Radeon X300/DVR for significantly less, something like 1200. I don't think that's just because of the natural rate at which technology becomes cheaper.
Re:They still work damn cheap... (Score:3, Interesting)
Getting off topic here to your post but along the lines of the article.
I personally think the bottom level support systems of any large company are completely useless. They might as well hav
Re:They still work damn cheap... (Score:5, Insightful)
It's a fallacy that electronic hardware manufacturing does not require skilled labor. Sure the people running the machines don't require alot of skill. But essentially they are the equivalent of call center people. Those factories also need:
Technicians - Maintain equipment
Mechanical Engineers/ChemE/MatSci/EE - develop machine processes, techical documentation, troubleshoot complex problems
Industrial engineers - layouts, material flows, production improvements
Business educated people - manage supply lines
Other college educated - managerial, training, quality,etc.
Re:They still work damn cheap... (Score:5, Informative)
Re:They still work damn cheap... (Score:5, Informative)
As an Indian working in India, I've been screaming myself hoarse about this, and how America really doesn't have much to fear from outsourcing - because wages/costs/value of rupee is rising a lot faster than jobs/wages are falling in America. So eventually, say within the next 5 years, it won't be worth it to outsource to India. Now some people think that it just means things will be outsource to China or Kazakhstan or Sudan..but no.
1) China's GDP per capita is already much higher than India's. This means (in very inaccurate, general terms) that a chinese worker is ALREADY more expensive than an Indian one - coupled with a MUCH higher exchange rate - so the work will NOT be shipped to China.
2) It won't be sudan or wherever because India's main advantage is ENGLISH population. Sure they're not speaking as perfect as an American (debatable point actually), but there are more people speaking English in India, than in China, or the Philipines or wherever - in fact the World's largest selling English Daily is published in India - the Times of India (I'm not including a link to it because the f-ing site is bloated with spyware, and one of you poor souls might actually still be using IE!). There's that and the fact that India is 10-12 hours ahead of a US time zones. This is one reason for the efficiency - providing 24 hour customer service to Americans is easy if for 12 of those hours, your customer reps are actually just doing a regular 9-to-6 in their own country.
So again, there some particularly unique factors as to why India has been successful. Once our economy picks up, outsourcing on the *relatively* large scale will slow, or even drop greatly. Plus, in those 5 years, America will also move on in different ways (incomes won't rise or may even drop, yyou guys will find some alternative "growth" industry to keep you going, allowing retrenchment of unemployed software engineers/call centre workers, e.t.c).
good (Score:2, Funny)
Re:good (Score:2)
When they say "Southeast Asia," are they talking about Vietnam? I can't think of anywhere else where they have a large residue of English speakers.
Re:good (Score:2, Informative)
Re:good (Score:5, Informative)
The Philippines - not a residue, but native speakers along with Filipino(Tagalog).
Re:good (Score:2)
Re:good (Score:2)
That's the effect of a global economy. (Score:5, Interesting)
When price is no longer the main factor determining where to outsource a project to, the focus will shift back to quality, maintainability, and so forth. Indeed, it is quite possible that the future software industry will appear very similar to that of today's automotive industry in terms of multinational competition.
Re:That's the effect of a global economy. (Score:2, Insightful)
"Eventually a global economic equilibrium is reached, where the price is the same everwhere."
I am sick of hearing this nonsense. This fairy tale idea that capitalism will bring its fruit to everyone and all will be equal. It will never happen; capitalism creates inequality, not equality. Just look at the US and how the rich are getting richer and the poor poorer. It's no different on a global scale. As long as the rich are willing in their greed to screw up whole nations - as the US is doing right now
Re:That's the effect of a global economy. (Score:3, Insightful)
Re:That's the effect of a global economy. (Score:2, Informative)
Re:That's the effect of a global economy. (Score:3, Insightful)
Re:That's the effect of a global economy. (Score:5, Insightful)
Chances are you're wearing cheap, imported clothes made in the same sweatshops you're here speaking out again, bought at a WalMart owned by the rich people who you are blaming for poverty.
If you want results, you'll have to actually take a stand. Perhaps buy a sheep or a cotton tree, grow your own wool and cotton, and make your own clothes. Others would have to do the same. Bitching here will have very little, if any, effect.
Re:That's the effect of a global economy. (Score:3, Insightful)
Historically the wealthy or noble--whatever you want to call the actual or de facto ruling class in any society--force or effectively force the
Re:That's the effect of a global economy. (Score:3, Insightful)
The rich own and control the corporations. It used to be that America was a farm society where everyone was self-sufficient and didn't rely on anyone else. Good luck trying to live that lifestyle today. Now, everyone works for corporations. You do wh
Re:That's the effect of a global economy. (Score:3, Informative)
Actually, http://tiger.berkeley.edu/sohrab/politics/wealthdi st.html [berkeley.edu]
Looking at some real data rather than some made up data, we find the top 1% have 34% of the total wealth in America.
Also, there is a very interesting Stanford study that shows that these numbers massively overstate the wealth of the richest Americans because they are gross numbers. Bill Gates has $26bn of Microsoft stock. *But*, if he sold it he
Re:That's the effect of a global economy. (Score:2)
I would guess that most of the world's population dreams about one day becoming as insanely rich as America's poor people are. Aristocrats from previous centuries certainly would have.
Re:That's the effect of a global economy. (Score:3, Insightful)
Or did you think all poor people have a house, two cars, and satelite TV?
Re:That's the effect of a global economy. (Score:4, Informative)
I have also visited many countries in Asia. When most of the people in a city live in homes consisting of partial concrete walls and corrugated aluminum (conditions basically considered homeless in the US) you quickly get a sense of relative living conditions.
Re:That's the effect of a global economy. (Score:2, Informative)
Firstly, the poorer aren't getting poorer. They are getting richer in fact. It's just the richer are getting richer faster (but not fast enough to negate any increases from the poor due to inflation).
Secondly, the US is an ultra-liberal interpritation of capitalism. Most other capitalistic societies offer a decent welfare system and universal healthcare while managing to produce good growth. The UK is a very good example of this - with massive investment in the last 10 years into the universal hea
And it speeds up (Score:2)
So for every country that does well like India, there will be another one seeking to e
Re:That's the effect of a global economy. (Score:2)
I talked to somebody the other day who could get programmers for $40/day in eastern europe a year ago
Re:That's the effect of a global economy. (Score:2)
You can't make cars Free.
Re: (Score:2)
Re:Big Mistake (Score:5, Informative)
Canadian wood? I wish. The tariffs on Canadian lumber are massive. This is a blatant transfer of money from the American home owner (who has to pay more for lumber) to the American forestry industry. It's a fine example of hurting the many for the good of the few, and why trade restrictions both suck and blow.
Re:Big Mistake (Score:3, Insightful)
Re:Big Mistake (Score:2)
Re:Big Mistake (Score:2, Insightful)
Also, take the recent big articles in New York Times [csudh.edu] and Fortune [fortune.com], calling out for MORE subsidizing of fundamental technology, because corporations can't develop it themselves. It's so costly and unprofitable, the public must subsidize the costs and risk, so private companies can privatize the profit.
Normally it's not widely admitted, except when politicians like Bush start sh
Up with trade (Score:3, Insightful)
Re:Big Mistake (Score:3, Insightful)
Bingo. Economists still haven't figured out a good way to put externalities into the equation. If the goal of the country is to increase next year's GDP at all costs, then listen to the economists. The externalized expenses of increased unemployment numbers (the real unemployment numbers, not the crap the Labor Dept. puts out), stagnant wages, and increased costs of living have been largely absorbed by increased r
Re:Big Mistake (Score:4, Interesting)
Not all economists view max GDP as their goal. Some, and increasingly more, attempt to minimize the GINI coefficient (which also tends to maximize GDP as a secondary effect).
The externalized expenses of increased unemployment numbers (the real unemployment numbers, not the crap the Labor Dept. puts out), stagnant wages, and increased costs of living have been largely absorbed by increased reliance on credit (thanks in part to the housing bubble).
And economists have been warning about this for quite some time. What you failed to mention is our increasing trade imbalance. That's the biggest threat to our long run economy. As far as the housing bubble, read some economic journals for some positions on that. Reading economics as interpreted by the popular press/media tends to simplify positions to the point where it looks like economists think all of this is OK. In reality, it's the exact opposite.
have been largely absorbed by increased reliance on credit.
Economists have been concerned with the low American savings rate for decades. That does have far reaching negative impacts on the market, as does increased utilization of credit (read about the money multiplier and inflation). Even if the goal of every economist was to worship the market, as you put it, the points you've made and suggested that economists have ignored are entirely opposite of the truth. They're all valid concerns of every competent economist out there.
I have a feeling that when China decides to stop subsidizing us, we'll find out that our economy (and country) has been bankrupt for years.
This is an excellent point and I'm glad you brought it up. This is something most economists are very concerned about. The growing trade gap is everyone's concern, from Greenspan to Buffett, and seemingly to everyone BUT the current administration. I'm a republican (the true fiscally conservative kind, not the kind we have in office now. neoconservatism = liberal spending, oppressive social agenda), and I happen to be appalled by all of this. Fiscal responsibility should be the #1 concern of every administration, because that DOES trickle down in a sense. Want to keep the middle class afloat? Howbout not doing things that will raise inflation. The rich can take the hit, the middle and lower class sure can't. The first concern is the trade gap.
Anyway, I hope I was able to clear a few things up there. I have a degree in economics and a job as a programmer, I'm middle class, republican, and absolutely pissed off at the current state of affairs. Such a combination DOES exist, you know. Not all of us are concerned with the party line or pretending everything's OK because "our guys" are in office. I really hope a candidate runs in '08 who really has a handle on this, or at least the right advisors, because the last election gave us two candidates who were economically clueless, if not absolute liars. Whether your choice was "The economy couldn't be in better long term shape" Bush or "We can afford socialized healthcare" Kerry, the outlook for that 4 year term were awful. The problem is, none of these older-than-dirt politicians seem to understand the workings of a global economy because it didn't quite exist the way it does now for the majority of their lives.
Re:Big Mistake (Score:3, Insightful)
Honestly? (Score:3, Informative)
disclaimer: I work in the outsource call center industry. Although I am not fully opposed to offshore outsourcing... it's disheartening to see people you know getting laid off so that their job can be sent overseas for cheap labor.
Re:Honestly? (Score:2)
Is it actually profitable for companies to outsource their calls, given that many customers experience frustration with the quasi-language barrier? How much of a revenue hit do companies experience because of outsourced support?
Re:Honestly? (Score:4, Interesting)
If I had to make a blanket statement... I would say yes it is profitable for larger corporations and not so much for smaller companies.
I've listened to the complaints that come back from people about "speaking with India" and overall the general attitude has changed over the last few years. Customers have gotten "used to it" to the point they expect it. Anyone expect to call Dell support anymore and not get India? They gripe, they complain... but at the end of the day they keep consuming the same product from the same company.
Now from a personal standpoint.. man there are certain things that just shouldn't be in India... like our H.R. contact... *grumble*
and the next place is... (Score:5, Funny)
Given the plethora of 419 e-mails that evade my spam filter, how about Nigeria?
Re:and the next place is... (Score:2)
Re:and the next place is... (Score:2)
Interesting. I find Indian accents much easier to understand than Chinese. Not sure if that's due to differences in native language, British colonization, or what. I've only known one Nigerian, and she spoke good English, but she also came from a rather wealthy family. *shrug*
In Soviet Russia, Russian speaks YOU! (Score:3, Insightful)
India = Indo-European languages.
True, but the Slavic languages such as Russian are also Indo-European languages, and they can introduce just as much of an accent barrier as anything else. What matters is not the lineage of a language as much as how its phonology differs from that of English.
African and Semite languages are about as far from Indo-European as you can get...
Afroasiatic languages are more closely related to Indo-European languages than are, say, the Uralic-Altaic-Japanese-Korean super
Re:and the next place is... (Score:3, Funny)
Yeah, but it's ALL CAPS.
Re:and the next place is... (Score:2, Funny)
"Hello thank you for calling Dell technical support, my name is Major General Kimutsi, may I please have your Dell service tag and bank account number, may God bless you."
Re:and the next place is... (Score:4, Interesting)
I know of $large_banking_firm who outsourced lots of coding over there, and 6 months later, found there was a huuuge backdoor in the system. Their 'professional' coders wanted lots of cash to reveal where/what the backdoor was. The bank paid, as it would have taken them waaay too long to go through every line of code and figure it out themselves. I think the crooks got busted in the end (this was about 4-5 years ago), but hey - why risk it?
Did better than that (Score:2, Redundant)
You should'a got in when you had the chance, loser.
Not suprising... (Score:4, Interesting)
Jerry
http://www.cyvin.org/ [cyvin.org]
It was only a matter of time (Score:2, Insightful)
dot.bangalore bubble? (Score:2, Insightful)
Downsides. (Score:2)
While the original article was talking about relatively low-level stuff such as call centers, that has already happened there in the engineering outsourcing.
The insistance of venture capitaliasts on startups having an "offshoring story" led to the last round of startups building up with their archetectural core teams in the US and the bulk of their en
latin america - the new India (Score:5, Interesting)
Re:latin america - the new India (Score:4, Funny)
Huh? Does that mean all of the Spanish-only speakers came here to the US???
Re:latin america - the new India (Score:2)
2) In order to get a real job here, you have to speak a second language, and English is the obvious choice. Yes, unlike some people in other countries, we actually care to learn a foreign language.
Re:latin america - the new India (Score:4, Insightful)
Indivduals in Latin America who speak English usually can live a pretty good lifestyle on the income they make down there. Certainly a good number will immigrate, but they don't have to immigrate for economic survival reasons.
Many of the economic migrants are uneducated/undereducated, so they likely have little knowledge of English.
So, yes, a far greater percentage of non-English speakers come to the US than what are found as a percentage of the original country's population.
its not high wages.. you get what you pay for.. (Score:5, Insightful)
Lets not kid ourselves here, the poor developers in India are exploited. The average salary is around $390/month, the kids down at the local fast food joint here in the US make more money than that. Sure the cost of living is a little lower over there, but things like books, computers etc, still cost the same or more than they do here.
I've worked with several out-sourced Indian teams, and to be honest... you get what you pay for. Just like everywhere else, they have good programmers and bad programmers. Unfortunately, the nice people in India have a tendency to what to "please" you, so instead of giving you accurate, clear-cut information, they tend to tell you what you want to hear.
They also have very little motivation, unless they are working for a big company like IBM, which has a reputation for a solid career, most developers aren't going to pull the allnighter or get the job done to meet the deadline.
Out of about 30 code reviews I've done for Indian teams in the past month, I would say I've turned them all back for one coding mistake, bad design, or flat out not fixing the problem. The quality is poor.
I've also spent time building teams in India, and its been pretty much hit and miss. Some teams do great work and are very successful, other teams spend their time trying to negotiate to do less work and have longer times to complete projects, to the point where we've just dropped Indian teams and finished the work ourselves.
Outsourcing costs more than its worth, better off hiring some students and getting two or three good developers vs. 20 bad ones in a different time zone.
Re:its not high wages.. you get what you pay for.. (Score:2, Insightful)
to be fair, i understand that this is changing. indian software dev
Re:its not high wages.. you get what you pay for.. (Score:2)
You're wrong in your salary estimation (Score:5, Informative)
Not sure about the rest of your comment, but it sounds mostly like anecdotal evidence and opinions tend to be subjective. I disagree with this particular excerpt from your comment, though.
Convering salaries directly my multiplying/dividing by the exchange rate without taking into account the Purchasing Power Parity [wikipedia.org] is plain ridiculous. To sum it up for you, PPP is used because:
The PPP measures how much a currency can buy in terms of an international measure (usually dollars), since goods and services have different prices in some countries than in others.
Goods and services cost an order of magnitude less in India than they do in the US. For example, a loaf of bread costs about Rs. 10-20 (about 0.25 - 0.50 USD). Monthly rental for a pretty spacious house would approximate to Rs. 10000 (about $250). Those are rough figures, and will differ by region, but a single software engineer (for comparison purposes, since I'm single too) could live *comfortably* in a metro city like Bangalore for about Rs 15000 (including food/rent/groceries/booze/other_expenses). That works out to about 50% of his average salary of about Rs. 30000. Ofcourse when you convert his salary to USD, it comes to only about $750, (which wouldn't even cover the monthly rent in most areas in the US) and causes you to gasp, go hyper and claim "OMG, they're exploiting software engineers" or "OMG they're stealing our jaabs by working for less".
In the end, the major cost saving for companies is *not* the lower salary (as you claim fast food workers in the US get), but about the *Exchange Rate*. Poorer economies have a lower cost of living than more developed counterparts, and hence have a weaker currency against the US Dollar. This multiplication/division factor allows companies to earn in USDollars and pay in Rupees (or any other weaker currency) thus widening their profit margin. So please ponder over these finer points before spreading FUD/incorrect information and basing other (consequently erroneous) axioms on an incorrect assumption. Thank you.
New Trend (Score:2, Funny)
It's called greed (Score:5, Insightful)
Only one place those goddamn cost cuts are going. Into the CEO's pocket.
We need to cap CEO salaries to something like 4 times what their best people on the ground earn. Don't think it can work? Check out Korea's ship building industry.
Capitalism and a "free" market are all well and good but it's not a perfect system and there do need to be controls.
Won't work. Try this. (Score:3, Insightful)
It isn't necessarily a bright idea either. A hefty chunk of the really smart people overseas tend to emigrate to where they'll get paid nice wages. Managing projects on the other side of the world, through culture and time-zone barriers, isn't very easy. Clueless PHB types at big companies are torching resources by following this outsourcing fad but it's very difficult to outright sink a huge corporate ship, short of
Re:Won't work. Try this. (Score:4, Insightful)
So if you say "here do this work, otherwise you'll end up poor and starving" isn't enslavement? It isn't far from it if you ask me. The only decent option is to ask someone else for a job, but if everyone in a position of power is offering the same conditions, guess what you're back to the same conditions: work for me or die.
At the very least this is servitude. You do get some choice in who gets to be your master.but honestly I don't think it's that far off enslavement.
Re: (Score:3, Insightful)
Definition of enslavement (Score:4, Insightful)
Enslavement is when a person is owned by an other, and can be bought and sold as property, as well as raped, tortured or killed at will, just as you would be free to destroy any other property.
By contrast, offering someone a job is at worst pointless. If the prospective employee doesn't find the offer better than his current situation, he can always decline it. At best it can improve someone's life immensly. At the utter level of poverty many third worlders live in, a few cents more a day can be the difference between life and death.
Re:Definition of enslavement (Score:3, Insightful)
By contrast, offering someone a job is at worst pointless. If the prospective employee doesn't find the offer better than his current situation, he can always decline it. At best it can improve someone's life immensly. At the utter level of poverty many third
Re:Definition of enslavement (Score:3, Interesting)
First off, if your only alternative really is starving to death, then by offering you a terrible job, that company has saved your life. That crappy job is far better than not having that crappy job, so they are improving your situation. You then respond to that by bitching about it.
Secondly, that is almost never the only alternative. There are very few situations in which one particular job is the only one available to a p
Re:Its called you're an idiot (Score:2)
How you call this slavery boggles the mind. You'd personally throw them back into abject conditions, wouldn't you?
Oh yes this is a godsend. Work long hours with mediocre to bad conditions for one tenth of what they're worth. Now you have someone who's making you a ton of money and the only alternative to the crap you offer them is to go back to scratching in the dirt. What option is that? What choice do they have? How is this better than slavery?
Work is suppose to be about making money to provide for your f
Bound to happen... (Score:5, Interesting)
Argh! (Score:5, Funny)
This just in... (Score:3, Funny)
Water flows downhill...
Re:This just in... (Score:2)
RULE #2: IT AIN'T ALL WATER!!
will be interesting (Score:4, Interesting)
Re:will be interesting (Score:2)
Where you see collapse and disaster, I can see a stabilization and equlibrium of prices and work. People always assume that whatever the current trend is, it will last forever. If most people saw a puppy growing for the first month of its life, they would conclude that in a year it will be 400 feet tall.
$2B in 2004 to ONLY $13.8B in 2007 - Booh Hoo! (Score:4, Funny)
"the worldwide offshore BPO market will grow to about $24 billion by 2007 of which India will earn about $13.8 billion."
So with massive market growth India might slip below 50% market share if they don't watch their back.
But it's not like they're stocking up on pink slips in Bangalore.
Predicted by UserFriendly over 2 years ago (Score:3, Informative)
It Makes Me Wary... (Score:5, Insightful)
1. Some "consulting firm" is involved in a study instead of some non-profit organization.
2. When that firm is Gartner, who've been known to make all kinds of outrageous claims [theinquirer.net] to get publicity.
3. They come up with nice, easy numbers like "Gartner Research believes a drop of 45% in India's share could happen in the next two years." Anyone who've done any research or studies, knows that numbers ending in 5 or 0 don't have special meanings in reality. The only thing that it matters to are readers, especially PHBs. What this suggests is that Gartner just pulled some number out of a hand to get more publicity, again. 45% is much easier for a PHB to rattle off than 73% during a meeting.
I have no strong feelings about this "news" either especially coming from a source as unreliable as Gartner. The trend is probably true but the number is probably bogus.
Viva South America (Score:2, Informative)
Research into this topic (Score:2, Interesting)
1970's, redux (Score:5, Insightful)
The last great bout with price-inflation in the U.S. was in the late 1970's, after Nixon cut the dollar's theoretical gold-peg (theoretical, because only foreigners could redeem dollars for gold), and while the economy was absorbing all of the dollars that'd been "printed" to pay for the Vietnam war.
Paul A. Volcker, chairman of the Federal Reserve from 1979->1987, solved the Inflationary crisis of the early 1980's by hiking interest rates to obscenely high levels. His entry in the wikipedia says that inflation was reduced from 9% in 1980 to 3.5% in 1982. The cure wasn't easy, however, as it induced a recession and much joblessness. It was thought that Reagan was going to be a one-termer.
Anyways, today is like the 1970's all over again. We've had tons of newly printed money spewing out of the government since about 1995. First it fueled the dot-com bubble. The government opened the money-faucet even wider after 9/11. The effect of having more money in the economy is that prices go up for scarce items with high demand. Hence we have home prices that seems to grow without end, and the price of oil going through the roof.
The difference between the 2000's and the 1970's is that Giant Corporations seem to think they have a way out of paying American workers the increased wages price inflation forces them to demand: outsourcing.
Remember Little Boy George's hundred-billion $ economic stimulus package that got passed soon after 9/11? In decades past, Americans (er, USians) would've taken the money and gone out and bought products built buy other Americans (USians). Those producers would take their profits from all the sales and use them to invent new things to sale, and new American factories to build them in. Closed circuit, stimulus gets recycled in the economy over and over again.
In the new system, Americans take their economic stimulus to go out and buy stuff "made in china" And profits from that sale allows chinese entrepreneurs to go and build a new factory in China. Open circuit. So Georgie Boy's stimulus package went around once.
There's nothing wrong with trade, so long as it's a two-way street. But at least in the last 4 years, Americans have been buying goods from China, and the chinese have been lending the dollars they've made in the sale back to us, to pay for our illustrious leader's silly little jihad against self-induced terrorism (See Harry Browne's When Will We Learn [worldnetdaily.com] [part 2] [worldnetdaily.com], and his other 2001 articles [harrybrowne.org] for what I think is a lucid explanation of how the U.S.'s foreign policy has lead to the problems we face today).
Getting back to the subject at hand: the primary problem is not that there's a trade imbalance, but that the Federal Reserve's willy-nilly printing of money allows the imbalance to grow much much larger than it ever could otherwise. In hard-money times, if China accumulated an excess of dollars, those dollars would become worth less in world trade. Chinese products would become more expensive for Americans to buy, and American products would become cheaper for the Chinese.
But as it has been, the Chinese pegged their currency to the dollar (hence, no relative adjustment in the value of the two currencies), and that was just fine for Georgie, 'cause the chinese bought plenty of U.S. bonds to pay for his silly little war.
I think i'm rambling now, so I'll quit soon. My main point is that Giant Corporations are outsourcing today to hide rampant 1970's-style inflation from their customers.
Outsourcing is also done to prevent the natural "leveling of the playing field." In a closed-circuit economy, if no one want
Re:1970's, redux-- CPI explained (Score:3, Interesting)
The real problem here is trying to get "all gain with no pain". The recession has been buried with paper-printing and off balance sheet spending. While growing the government to huge proportions has propped up some of the unemployment -- the rest is covered by simply changing how we compute the data.
The way we compute unemployment now and inflation is different from the 1970s. Plus, the new phenomenon of both parents working and people working more than one job have skewed everythin
Comment removed (Score:5, Interesting)
How long can the Indian IT Industry survive? (Score:3, Interesting)
Poverty Round-Robin (Score:3, Insightful)
No- it's the beginning of the "poverty as a comparitive advantage" economic model. Just like we've been predicting for years.
These corporations were getting high off of the fact that they had an easy way to undermine American labor and trade standards- India was the perfect "fertile ground" for that; They had the education system of a developed nation (skilled workers), but the labor standards of a third-world nation. Now that they are actually establishing some standards for themselves, they are losing their "poverty advantage".
Welcome to the new World Economy- a "round robin" game where your nation wins when your standards of living have eroded to a point less than everyone else's; and you lose as soon as you try to start making them better.
Re:Eastern Europe = Big Mistake (Score:2, Interesting)
I was in Romania and Bulgaria recently. There are very few if any computer laws there at all. I remember my hostel in Bulgaria. They had a computer in the room for internet access. The internet itself was so slow, you could have almost considered it dialup. However, it didn't come over phone or cable, but cat5. I don't know how they get ethernet service to each appartment building, but I immagine it would involve WAP's on the roof.
Anyways, while browsing was slow, you could get any sing
Re:Eastern Europe = Big Mistake (Score:2)
Ya, that's right. Every programmer in Eastern Europe is a crook.
Re:Eastern Europe = Big Mistake (Score:2)
Yeah, outsource back to the United States, where there aren't any hackers, virus writers, spammers and bot ne.........ahhh, never mind.
Comment removed (Score:4, Insightful)
Re:Stop looking down at Indians (Score:5, Insightful)
Okay, I have to address this one. I have quite a bit of experience with Indians and their somewhat limited mastery of spoken English, both from tech support as well as a TA I had at an American university.
First, I'll say this: often their grammar is superior to the average American's. I have no doubt their written English would exceed that of many American's. And I fully understand that English is probably not their primary language. You ask how many languages I speak without accent. Just one...English. I can speak broken Spanish with what I would assume is a horrendous accent. But do you want to know something important? I do not try to offer technical support to Spanish speakers, or try to teach at a Latin American university.
To be fair, most English-speaking Indians speak much better English than I do Spanish, so the comparison is not absolutely fair. But if I cannot understand them, the effect is the same. I am actually impressed by the number of languages many non-Americans speak. But if you are trying to teach a class at a university in the US, or trying to offer tech support for a US company, and you cannot be understood, you are not accomplishing the job you are being paid to do. This actually bothers me less in the tech-support example, because I can always just call back later and try to get a better representative who I can understand. But in the education example, it is often a choice of staying in the class and hoping you just don't even need any help from the instructor (or ever need to understand what they are asking/telling you), or dropping it and hoping you can pick it up later. And hoping that you aren't in the same boat later. And you're paying a lot more for those credits than you are for tech support.
And it isn't necessarily racism. I've had a white European (German, specifically) TA I could barely understand as well. And if companies switch to Eastern European call centers, the problem will likely be the same. I cannot tell the color of your skin over the phone. But I CAN tell if I can understand you.
And yes, if I went to a street in Bangalore and rounded up 10 guys, I'm sure 9 of them would be smarter than our president. Hell, one or two might even be more effective speakers (in English) than our president (ever heard the guy talk?) Most of us are not trying to say than Indians, or anybody else from the countries being outsourced to, are stupid. Just that their English is damn near incomprehensible.
Re:Skilled labor offshoring temporary... (Score:5, Interesting)
1. Most cheap goods in Japan are produced in China or Korea nowadays, and most lower-level work is done by Korean and Chinese immigrants who don't have citizenship, even though their families have been there for generations. These people have been moving up in the economic food chain, but lack the solid ties to Japanese society that citizenship would help bring.
2. Japanese secondary schools are rapidly going to shit; teachers get assaulted, students don't pay any attention, and other than the entrance exams, the material covered is not terribly difficult. Japan needs a major dose of education reform.
3. Japanese workers used to have employment for life in the 80s; now, the only lifetime workers are government employees. This has caused mounds of social problems, doubly so because everything in Japanese society is based on seniority.
4. Better educated and more competent? Japanese work twelve-hour days, getting eight hours of work done, because their culture demands it, and afterwards, those Tokyo salarymen go out and drink and smoke as if cancer and liver failure were going out of style. Even if a younger employee has good ideas, they are overlooked because of their age, and the amount of pure ass-kissing that happens is beyond belief. How would you like it if you *had* to go to your boss' house and fix his bratty son's computer, for no pay, and you can sleep on the couch because the trains stop running at eleven.
Don't get me wrong. Japan's not a horrible place, but it's no paradise either. Their big advantage over the U.S. is that the younger generation is disgusted by most of the things I've listed, and fortunately, Japanese education is still very science-centric (unlike the American school system). So Japan stands a better chance of reinventing themselves; but make no mistake, they are not in a happy position right now.
Apologies about my English, as got back from Japan a few weeks ago, and I'm still not quite adapted to being home.