Techies Left Behind
January 16, 2004 9:18 AM   Subscribe

Techies Left Behind James Pace Jr. used to work as a steamfitter in a General Electric plant in Bridgeport. That was back in the early '70s, when the grapevine was alive with warnings: These jobs are going overseas. Go back to school. There's no future here. Pace left the plant, enrolled in computer school, studied information technology and never looked back. That is, not until 23 years later, on the day he was told his $100,000-a-year job as an IT (information technology) consultant had been sent to India
posted by Postroad (80 comments total)
 
Anyone who has a high-paying tech job for 23 years is damn lucky most of us can't hold one for 10 before the company is sold and downsized or obsolete. That is why the tech industry pays so well you have to keep changing and evolving with it, it moves fast.
posted by stbalbach at 9:28 AM on January 16, 2004


At least he has a trade to fall back on.
posted by yerfatma at 9:55 AM on January 16, 2004


nasty little coloured people (that smell) steal big white man's job. more at 11. (there was a meta thread on this a while back...)
posted by andrew cooke at 9:59 AM on January 16, 2004


nasty little coloured people

Was any of that actually implied in the post?
posted by ao4047 at 10:10 AM on January 16, 2004


So, Andrew, if we're concerned about permanent job loss in our field, we're racist?

If we're worried about our country losing its edge in creativity, technology, and economic stability, we're racist?

I have to admit, I don't understand your attack.
posted by pandaharma at 10:12 AM on January 16, 2004


Try not to think of them as job losses but job gains.
posted by biffa at 10:21 AM on January 16, 2004


I'm really pissed off, Bauman said. We were told years ago, Manufacturing is going away; get trained in IT and you'll find a good job.'

Welcome to the free market.

News to Bauman: industry does not care about you. Don't get me wrong, I do sympathize with him, but this thing is going to happen, for good or for evil, as long as companies have an opportunity to reduce labor costs by offshoring.

I have very mixed emotions about this, as I think the eventual result of the offshoring craze will be a brain drain on technological talent in the US, and a resulting "what the hell do they make in the US anymore, anyway?" incredulity. By the same token, I'm not sure the protectionist measures are the answer.

If it's done right, companies can and should reduce costs on the things that are not core to their product development and operations practices. They should still retain the software and other engineering operations where they can innovate and develop new methods and products. They can just offshore the lesser value tedious stuff (support, call center ops, logistics tracking or other lower level or disposable software development), to recoup expense and invest the savings elsewhere in the business.

But the cynical side of me doesn't think that's going to happen. I suspect that a lot of the savings generated by offshoring will be used to pay higher executive compensation. It would be a pity, in this case, because the company that chooses to do it this way will become less technologically competitive (as losing control over ANY of its engineering results in a loss of employee training opportunities and other unseen benefits) and have its treasury looted at the same time, will result in everyone (execs, rank and file, and even the outsourced dev group in New Delhi) losing his/her job.
posted by psmealey at 10:21 AM on January 16, 2004


Was any of that actually implied in the post?

Indirectly, by bringing up that it had been sent to India. That implies that its being sent to India -- as opposed to Texas (or any other "right-to-work" state) or Appalachia or to an American Indian reservation or Ireland -- is important.

I don't think people would object nearly as much if a firm noticed that they could get the same IT work done in a depressed Appalachian area or by an Amerind tribe for less than it costs to keep Mr. Pace in Bridgeport, and going for it. Indeed, it might be seen as a useful step in ameliorating the widespread poverty there, and we might be talking about what it was that that part of Appalachia or that tribe were doing right.

But when the jobs are being shipped across an entirely artificial line called "nationality" to people who look different from Mr. Pace and talk funny, it's suddenly objectionable.
posted by ROU_Xenophobe at 10:30 AM on January 16, 2004


At least those minimum wage service jobs won't get off-shored. They'll have to staff them the old-fashioned way: with illegal immigrants. It is, after all, a free market.
posted by tommasz at 10:32 AM on January 16, 2004


So IT of today is the steamfitter of yesterday. Time to re-train to another field? Get another 23 years out of it.

When a company can cut costs 40-60% I can't see why they wouldn't move operations to India. From the bean counter point of view it is win-win.

I don't like it, but there it is. How many beans over there versus over here.

Soon we will all be taking soma anyway.
posted by a3matrix at 10:33 AM on January 16, 2004


nasty little coloured people (that smell) steal big white man's job. more at 11. (there was a meta thread on this a while back...)

A guy is upset at losing his job to cheaper labor overseas. So naturally that makes him a racist. Never mind that a lot of American "coloured people" are losing their jobs to this, too. But why let reality cloud your chance at a cheap snark.

Attitudes like yours are why the left loses votes among many Americans. They have honest concerns about their livelihood and are told that they're nothing but bigots. Despite the fact that when they vote Republican, they're voting for the party that allows the CEO of their company to do this in the first place.

The smart move would be for the Democrats to shed light on the fact that Bush's economic policies allow this to happen. But cheap shots like andrew cooke's are more satisfying to some people I suppose.

I realize it's a small but mouthy minority that think this way, but it's depressing to see that kind of self-defeating stupidity.

I don't think people would object nearly as much if a firm noticed that they could get the same IT work done in a depressed Appalachian area or by an Amerind tribe for less than it costs to keep Mr. Pace in Bridgeport, and going for it.

I imagine the people in Bridgeport (my birthplace) would be upset. And never mind that the "savings" in any case go to upper management compensation, which is the real problem.
posted by jonmc at 10:34 AM on January 16, 2004


Btw, by "free market", I feel I should clarify. I forget who said it, but I do believe that in the US we do have capitalism for the average Joe, but socialism for corporate executives. So, free market is a purely subject term.
posted by psmealey at 10:38 AM on January 16, 2004


When a company can cut costs 40-60% I can't see why they wouldn't move operations to India. From the bean counter point of view it is win-win.

Of course this will allow them to lower prices and yet still make a profit, right?

Or does it just disappear into some corporate officer's pocket?
posted by tommasz at 10:39 AM on January 16, 2004


I agree with jonmc about the racism accusation. I think Mr. Pace would still be pretty fed up about losing his job to anyone. Perhaps though the media wouldn't be covering it if the job was going elsewhere, but this way that can make out its some big evil trend that the government should do something about just as they did with Japan in the 1980's. There's no attempt at any kind of economic analysis, just some half-spun theory left hanging so the journalist can pretend they're uncovering some important far-reaching issue.
posted by biffa at 10:43 AM on January 16, 2004


From a recent tv news source.
450,000+ jobs lost to India.

At least those minimum wage service jobs won't get off-shored.
They're being paid $3,000 a year, adding a ride to work and a meal.

The solution, talk to Dell(previous post on this same subject). Yet, some componies won't see the whole picture until their customers drop them.
posted by thomcatspike at 10:45 AM on January 16, 2004


andrew's being sarcastic, folks. move along.

notice how everybody is an "IT consultant"? that's part of the problem....they get paid too much in the first place, and the companies that hired them never had a lot of control over them in the first place.

i don't feel pity, and i'm a programmer. get a real job with a real company....become an actuary or something...plenty of people are employed still.
posted by taumeson at 10:48 AM on January 16, 2004


There is no racism involved in these complaints.

I've worked with Indians, Africans, Norwegians, Germans, Brasilians, etc. Never had a problem with any of them. But, they were either American citizens or were working towards becoming American. They had the same ultimate vested interest I did in this country and made the same contributions to its economy.

And, for the person who mentioned: "entirely artificial line called 'nationality'": this line still matters. If the job was shipped internally from a prosperous part of the US to an economically disadvantaged part, that job is potentially available to me or Mr. Pace. Once it crosses that line, it is not.
posted by pandaharma at 10:59 AM on January 16, 2004


When a company can cut costs 40-60% I can't see why they wouldn't move operations to India. From the bean counter point of view it is win-win.

I don't think it's really going to be that much savings in the long run. thomcatspike alluded to Dell's troubles--I think we'll see the outsourcing bandwagon slow down in the next couple of years.
posted by whatnot at 10:59 AM on January 16, 2004


thomcatspike alluded to Dell's troubles--I think we'll see the outsourcing bandwagon slow down in the next couple of years.
One can only hope...

And this is the thread andrew was talking about--according to him, it's racist to be concerned about jobs leaving the country. He's wrong, btw.

They can just offshore the lesser value tedious stuff (support, call center ops, logistics tracking or other lower level or disposable software development), to recoup expense and invest the savings elsewhere in the business.
Less value to who? All of those jobs are very important to the people who hold them. (and those "lesser value" jobs make up the majority in most tech companies, no?)
posted by amberglow at 11:13 AM on January 16, 2004


Something's Got to Give (~2.5 min. Real Audio). Here's a link to the host page.
posted by squirrel at 11:24 AM on January 16, 2004


So where is all this heading? If the menial labour jobs are taken by illegal immigrants, manufacturing done in various third world nations, and as much customer service as possible done in former British colonies, what jobs are left? Aside from CEOs and the like, I guess. Where exactly is this all heading?

It's a good thing all these jobs going overseas is allowing these companies to produce their wares for a much lower cost, otherwise the unemployed workers left behind wouldn't be able to afford anything.

Perhaps the pendulum is finally swinging the other way. The first world developed by taking raw materials from the third world... now those third world nations will develop by taking jobs from the first world. Maybe in 50 or 100 years prosperity in the first world and poverty in the third world will both fall to an equitable level.
posted by GhostintheMachine at 11:25 AM on January 16, 2004


Regarding Andrew's snark and Xenophobe's comments - I think U.S. jobs going elsewhere is a huge deal. Nationality is not an artificial line - I am an American because I have a stake in this thing called America. I may not always be happy with the decisions made, but I get a vote. I don't get a vote with the U.N. I don't get a vote with India. So I naturally care more about the area I have a stake in.

If the jobs were moving to some other state in America, it would still be a bummer for the region that was losing the jobs. But losing them to a foreign county hurts more, because despite the whole globalization idea, I like my country more than other countries. I'd feel the same way if the jobs were going to Britain.
posted by Happydaz at 11:27 AM on January 16, 2004


Here's something else to consider: When Japan "dumps" cheap VCRs on our market, the feds slap a tariff on them to offset the difference. Same with oranges and steel, etc. But not labor. Why not?

Don't get me wrong, I'm not a card-carrying protectionist. I believe that free markets drive innovation and demand efficiency. But the market for labor should be handled with at least the same protections provided to other resources.

Until there is a global labor movement, through which workers everywhere can cooperate to leverage their rightful power, the multinational corporations will continue to play us against each other.

BTW, drop the racism crap, already. You can't play that card every time. I'm a graduate student in the humanities in freaking San Francisco, so no one's not more PC creds than I do, and I say this issue is about class power.
posted by squirrel at 11:36 AM on January 16, 2004


I like my country more than other countries.

That's the key to so many troubles in the world, right there.
posted by majcher at 11:53 AM on January 16, 2004


Outsourcing certainly isn't the panacea some think. (Wasn't there a Business Week piece on this about a month ago?)

I outsourced a web project a couple of years ago and found it was far more trouble than it was worth. As a small company, I would much rather outsource to someone I could call on the phone than someone I could only email every 12 hours. The spec work and overhead involved in managing the relationship with programmers on the other side of the world just wasn't worth it.

So is this again the story of big company screws labor, small companies create jobs?
posted by ednopantz at 11:58 AM on January 16, 2004


I think it's sad that this gets twisted into being about racism. I didn't see James Pace Jr's race mentioned in the story at all. In fact, I think it's racist to assume that just because it's a white-collar job that a white man must be doing it.

But then, it wouldn't be as fun to snark about a "coloured" man stealing another "coloured" man's job, would it?
posted by mr_crash_davis at 11:59 AM on January 16, 2004


I imagine the people in Bridgeport (my birthplace) would be upset

Me too. The question is, would we be joining in their being upset, the way we all jump 'n' holler every time an Indian gets a white-collar job doing what Americans did before?

If the job was shipped internally from a prosperous part of the US to an economically disadvantaged part, that job is potentially available to me or Mr. Pace. Once it crosses that line, it is not.

That's simply nonsensical. If it were true, it would have been impossible for Indians to get those jobs in the first place, since they couldn't compete for jobs in America. The job remains potentially open to Mr. Pace if he can make it worth a company's while to hire him -- though he'd presumably have to show greater value-added or drop his requested pay, exactly as if the job had gone to Appalachian Kentucky or Tennessee.

BTW, drop the racism crap, already. You can't play that card every time.

I wouldn't say that it's direct racism. I think it reflects small-minded notions of community, that it reflects small-scale US versus THEM thinking. But there is no THEM, and never was -- THEM is a lie that we tell ourselves about people we don't know. If you expand that group of people you call "US" and contract that one you call "THEM" until we're all US, then this looks different and less threatening.
posted by ROU_Xenophobe at 12:02 PM on January 16, 2004


I don't see any racism here. They're being outsourced to India. That's just a fact for this particular case. Years ago many auto manufacturing jobs were outsourced to Mexico. Again, that's just a fact. An individual might make racist comments about the jobs going to India, Mexico or China like I did hear from some auto workers when I worked at General Motors and Fords for summer jobs but reporting the destination of the jobs isn't racist in itself.

So information technology jobs are moving overseas leaving American workers without jobs. Therefore companies that sell primarily to Americans (an American utility for instance doesn't sell a lot of electricity overseas) take jobs away from their potential customers and move them overseas. These potential customers now can't afford to buy from them so sales drop. Their cost of goods dropped at the same time so there's some point where a balance has to occur. If too many jobs are shipped overseas then they end up losing money. If some jobs are shipped overseas then there's a point where they might get less sales but the cost of goods is decreased enough that they come out ahead.

I don't really know what the situation is like at the moment. I'm not in the IT field. Even if I religiously read the news I don't know that I'd have an honest appraisal. More people will read if there are stories attributing job loss to overseas workers so that's the story that will be sold. There's also been a few years of a weak economy though so there's also the possibility that these people would be jobless regardless and countries overseas took advantage of this situation to train up inexpensive replacement workers. The company profits because it gets to keep up it's workforce but for a fraction of the cost. The local worker suffers because he's out of a job.


The problem is that even if this is true and the economy recovers it doesn't mean that the local IT workers get their jobs back. If the overseas workers prove that they can get the job done adequately and at a fraction of the cost then it would be a hard sell to rehire local workers at a higher cost.
posted by substrate at 12:07 PM on January 16, 2004


I like my country more than other countries.

That's the key to so many troubles in the world, right there.


OK, let's put it another way, majcher. I live in my country, more than others. If we lower our labor costs to the level of India's, we're going to end up with a standard of living like India's. That's what concerns us.

But then, it wouldn't be as fun to snark about a "coloured" man stealing another "coloured" man's job, would it?

Please, crash, you're interrupting their chance to display their moral superiority.

If you expand that group of people you call "US" and contract that one you call "THEM" until we're all US, then this looks different and less threatening.

That's a lovely platitude, but that dosen't pay Mr. Pace's bills. It's less threating how, exactly? His job isn't any less gone. Besides the whole racial angle in this case obscures the fact that both the Indian worker and the American worker are getting screwed so the CEO can buy a new solid gold toilet seat for his yacht.
posted by jonmc at 12:10 PM on January 16, 2004


That is, not until 23 years later, on the day he was told his $100,000-a-year job as an IT (information technology) consultant had been sent to India.


You are in the top 0.6% richest people in the world.
There are 5,963,992,435 people poorer than you.

posted by devon at 12:16 PM on January 16, 2004


But there is no THEM, and never was -- THEM is a lie that we tell ourselves about people we don't know.

I've got the One World One People bumpersticker on my SUV as well.

Okay, snark aside, I agree with this sentiment in a very general sense. The US and THEM perspective truly is an artificial construct that humanity should be moving beyond.

But in this specific case, there really is an US--those who need 20k+ annually just to feed and shelter ourselves--and a THEM--those can feed and shelter themselves for about a quarter of that amount.
posted by squirrel at 12:18 PM on January 16, 2004


All I have to say is this :

Why won't the companies keep the money on-shore, cut their developer's salaries in half and let them work from home? Better U.S. Economy, and you save money--or at least give the developers that option.

It's not going to happen, but there's something else behind all this.
posted by psychotic_venom at 12:19 PM on January 16, 2004


How is this news? The offsourcing has been well documented and this guy had a better and longer run than most.

And I may be wrong about Andrew Cooke's comments but I'm pretty sure he was being sarcastic and not racist. But maybe he is a racist jackhole, I don't know. I like to try and think people are above blatantly stupid racism.

I mean, if you're gonna hate a people, have a good reason at least. And yes, that was sarcasm.
posted by fenriq at 12:20 PM on January 16, 2004


And I may be wrong about Andrew Cooke's comments but I'm pretty sure he was being sarcastic and not racist. But maybe he is a racist jackhole, I don't know. I like to try and think people are above blatantly stupid racism.
Andrew's not being racist--he's calling us racist.
posted by amberglow at 12:25 PM on January 16, 2004


Devon, there are 6 billion people poorer than me, and none of them have to pay my mortgage. I lived in rural Thailand on a couple hundred dollars a month for two years. I actually saved money. The fact that other countries have different economic scales is merely mathematical. If there were 6 billion people poorer than me and all our lunches cost the same amount, I would say you have a point. God, I miss 15 cent lunches.
posted by squirrel at 12:31 PM on January 16, 2004


That's simply nonsensical. If it were true, it would have been impossible for Indians to get those jobs in the first place, since they couldn't compete for jobs in America. The job remains potentially open to Mr. Pace if he can make it worth a company's while to hire him -- though he'd presumably have to show greater value-added or drop his requested pay, exactly as if the job had gone to Appalachian Kentucky or Tennessee.

You're missing the point entirely. The job does not remain open to Mr. Pace. The job has been removed from the pool of US jobs and placed in the pool of Indian jobs because, for multinational companies, the borders are very transparent.

But, because of very stringent Indian immigration policies, even if Mr. Pace were motivated to go to Bangalore, he probably would not be allowed to go. So much for the lines being imaginary, eh? The lines are open but, for individuals, only in one direction.

As far as competing in the US goes, he cannot compete at the same price point. 20k a year will get you a large house with servants in India. 20k a year in most US cities will get you a tiny apartment and forget about supporting a family well. If we are to start competing at India's level, then there will be substantial drops in consumer spending, new houses being built, and eventually prices will drop substantially to match the drop in incomes and this will lead to a round of deflation and layoffs in unrelated sectors.

I'm sorry I'm not as selfless or as sacrificing as you are, but this does threaten me and threatens a field I care deeply about. If I'm on food stamps and unemployment, I'm not going to be happy that the Indians are doing well with a job that used to be mine.
posted by pandaharma at 12:34 PM on January 16, 2004


This totally freaked me out for about 2 seconds. James Pace Jr is my dad's name, and the fact that he was on Metafilter just sent my brain into overload.
posted by archimago at 12:42 PM on January 16, 2004


So wait, let me get this strait. A guy works for 23 years at a six figure salary and he's not prepared to retire at this point? I'd say that's pretty fricking bad planning and shows some miserable judgement, maybe he needs to get canned!
posted by Pollomacho at 12:47 PM on January 16, 2004


It's called change; get used to it.

Every country has a choice. It can go out there and compete with the best of them and create huge wealth for its citizens, like the US or the UK have done over the last 300 years. Or it can mope and shut itself off and send its economy into a tailspin, like the Soviet Union or Argentine.

I know which I prefer, even if that means James Pace has to change jobs every 23 years.
posted by Triplanetary at 12:50 PM on January 16, 2004


The end result of this capitalist dream of a vicious circle is, of course, Communism.

As wages go down, prices go down as well, both due to competition and reduced production costs as well as to the fact that your customers are getting, on average, poorer and poorer.

In the end, no one will be paid anything, but nothing will cost anything either. In order to allocate goods fairly in a world where everything is free, we of course have to have distribution principles based on need and labor expended. Thus capitalism doth sow the seeds of its own destruction and give way to its enemy.

(Tongue in cheek, for those who can't tell.)
posted by George_Spiggott at 12:54 PM on January 16, 2004


Squirrel: I do accept your point that economic scales vary greatly from country to country, but I don't think the differences can be entirely dismissed as merely mathematical.

I just find it hard to sympathise with people in the position of those from the initial link. Yes, their situation has worsened but it seems unlikely Mr Pace or Mr Bauman will suddenly find themselves on the breadline any time soon.
posted by devon at 12:59 PM on January 16, 2004


Yeah, change is inevitable. Doesn't mean the change is good or that it should be welcomed.
So Triplanetary, how are we to compete?

Every job which actually produces something is vunerable to outsourcing. Even R&D is facing job losses overseas.

The only relatively safe jobs are service jobs which range from a low end of wal-mart greeter to a high end of doctors and lawyers and such.

So, what do you recommend we do? Do we all become lawyers? Do we accept jobs at India levels, thus making no one rich but our corporate masters? Do we tell our families to stop eating for a few years while we go back to school to learn the hottest new thing so that we can have a few years of income before its outsourced.

Do we just smile and wave as the forces, which fuelled our innovation and growth and wealth, march into the sunset, never to return?
posted by pandaharma at 1:10 PM on January 16, 2004


But, because of very stringent Indian immigration policies, even if Mr. Pace were motivated to go to Bangalore, he probably would not be allowed to go. So much for the lines being imaginary, eh?

Obviously he can't compete at the same price point as an Indian worker, since human labor remains relatively cheap there. But he's entirely free to point out that he can do the work that it takes 5 Indian coders to do, for only twice the price, or that his work is demonstrably more reliable for critical applications and results in much less future bug-fixing work and sales lost to bad programming, or that his work involves much less in the way of management overhead.

Right now he probably won't get a job doing that, because, like most of us (me included), most business managers are short-term-thinking idiots. But, as ednopantz notes, companies are already beginning to note that there are substantial startup and management costs for outsourcing in addition to potential gains.

I think you also fail to see that when more people in India get good white-collar jobs, that's how they eventually get standards of living and labor costs more like ours. Assuming that they're not supposed to just stay dirt-farmers forever.
posted by ROU_Xenophobe at 1:16 PM on January 16, 2004


Devon, I didn't mean to imply that statements like "6 billion poorer than you" don't mean anything at all, but the amount of bluster such declarations create is out of proportion with what it really does mean.

This tactic is big on flash and low on substance, which may startle some of the less-experienced, but will turn-off many more who know better.
posted by squirrel at 1:22 PM on January 16, 2004


Actually, George, you're sort of close to the Iron Law of Wages, which is the part of the Free Market manifesto that often gets overlooked. It says that, in the long run, wages will settle to subsistence levels for laborers, regardless of skill levels. The end result of all this free market-globalization hullaballoo is that we're all working just as hard as we would be back on the farm, and for just about the same level of livelihood. On the bright side, we probably get to have electricity and running water. On the down side, we waste an incredible portion of our lives jumping through the hoops of bureaucracy and technology. But we don't, as a rule, talk about this when selling the glories of globalization off to the laborers as such a great thing. (as the linked article notes, there are off-setting factors, such as the communication and transit costs between worlds one and three, but this doesn't raise the minimum on wages a great deal, as we see from, say, Nike, who has been big on 'outsourcing' for years. I think the Dell tech support example is a very special case, which won't be replicated often.)

Every country has a choice. It can go out there and compete with the best of them and create huge wealth for its citizens, like the US or the UK have done over the last 300 years. Or it can mope and shut itself off and send its economy into a tailspin, like the Soviet Union or Argentine.

Look, it all comes down to resources, and what you're willing to do to get them. That 'competition' you're talking about equates to the outright theft of resources from large portions of the world and widespread environmental destruction and massive human degradation, all to make sure we in the First World can drive our cars to work every day. As an example, Africa didn't have hunger problems before off-shore interests started 'industrializing' the land, making it next-to-impossible for families to grow and catch food for themselves. Declining animal populations and the privatization of farm lands, worsened by the spread of the deserts thanks to 'agri-business' techniques of farming, combined to make it impossible to survive without industrializing your family. Which generally means sending the males off to the city to work, cutting them off from the family and tribal units, encouraging the spread of disease, etc. etc. etc. But let's not talk about Africa. After all, it's their desire to shut themselves off and not 'compete' that really hurt them.
posted by kaibutsu at 1:26 PM on January 16, 2004


I don't want the Indians to remain dirt-poor farmers. I never said that.

I would love to see the Indians in the workforce and would love to see their standards of living increase.

I just don't want to see it come at the expense of my country and at my expense.

Is that hard to understand?
posted by pandaharma at 1:41 PM on January 16, 2004


So let me get this straight: this guy had a $100,000-a-year job because he worked in a staggeringly prosperous economy fuelled by a globalizing trade regime that was being led by his country, and in some cases was being forced down the throats of people in places like India against their wills, massively disrupting and reconfiguring their lives. And then when the Indians who were shocked into this new global economy adjust and start seeking out competitive advantages and such and this guy loses his job to the same process he'd been profiting hugely off of for 23 years, it's somehow tragic?

This reeks of the same hypocrisy that's all over Lou "Go Free Market Go!" Dobbs' "Exporting America" series that's been airing recently on CNN. Lou's "outrage" on behalf of average American Joes and Janes makes me want to puke. And though I can sympathize a bit with James Pace Jr. here at least insofar as his government never really explained to him honestly the full consequences of its economic policies, the impoverished folks in India (and China and so on) who are stitching his Gap khakis and punching out the little plastic toys in his kids' Happy Meals that wind up in the garbage three days later still strike me as having somewhat more tragic tales to tell.
posted by gompa at 1:56 PM on January 16, 2004


Well said, gompa. I'm sure that on a day-to-day level, you feel more compassion for the US locals than some might infer from the focus of your explanation, so I don't think the jingoistic yahoos need call you out for unpatriotism. Your points are valid. US job flight is the inevitable product of the way we developed international economies in the last century. The hashing-out of imbalances is painful for the workers, though, no doubt about it.
posted by squirrel at 2:20 PM on January 16, 2004


kaibutsu: But let's not talk about Africa. After all, it's their desire to shut themselves off and not 'compete' that really hurt them.

Actually, most African countries want to compete. It's the agricultural subsidies of the European Union and the US that keep them from doing so successfully and thereby raising their standards of living.

The current WTO trade negotiation round is failing because in the last round, we in the West promised we would scrap our farm subsidies if the developing countries adopted our intellectual property rules. Well, they kept their end of the bargain, but we reneged on ours.
posted by Triplanetary at 2:22 PM on January 16, 2004


You are in the top 0.6% richest people in the world.
There are 5,963,992,435 people poorer than you.


Don't you mean "were"?
posted by Steve_at_Linnwood at 2:29 PM on January 16, 2004


It's not about this 100,000-a-year guy, but about all the guys and gals (of all colors and ethnicities) whose jobs are leaving--never to return. (Dell is the only instance I've heard of, of a company actually coming back after outsourcing) We can't follow the jobs, like we could if they were staying in the US, and there are no new jobs being created in any field (none for the past 3 years and counting).
posted by amberglow at 2:32 PM on January 16, 2004


kaibutsu: But let's not talk about Africa. After all, it's their desire to shut themselves off and not 'compete' that really hurt them.

Actually, most African countries want to compete.


um, yeah. That was sarcasm; I agree completely. (stupid technology and its inability to convey tone...)
posted by kaibutsu at 2:39 PM on January 16, 2004


pandaharma: So Triplanetary, how are we to compete? [...] The only relatively safe jobs are service jobs which range from a low end of wal-mart greeter to a high end of doctors and lawyers and such.

People in Britain had the same question 200 years ago. It turns out even if India produces everything cheaper than we do, it will still be worthwhile for us to produce some stuff, as long as we are not uniformly worse.

Economists call this comparative advantage. Check out the link, it's a fairly concise description of the theory. History seems to support the theory. After all, Britain isn't a poor country even after centuries of vicious, low-wage competition.

Even so, I would argue there are things we are still much better at than India or China. Making movies, designing cars, marketing products, investment banking, processing foodstuffs, designing new types of software spring to mind.
posted by Triplanetary at 2:41 PM on January 16, 2004


um, yeah. That was sarcasm; I agree completely.

Sorry for misreading your earlier comment, kaibatsu. But on the other hand, you gave me a chance to rile against our stupid farm subsidies, for which I am always grateful :-)
posted by Triplanetary at 2:44 PM on January 16, 2004


In related news: First-Generation American's Job Taken By His Father

READING, PA — Miguel Martinez, 48, who immigrated to the U.S. 30 years ago, last week lost his leather-cutting job at GST AutoLeather, Inc. to his 66-year-old father Roberto. "I came to this country in 1974 to make a better life for my family," Martinez said Monday. "But in December, they moved the factory where I've been working for 22 years down to Nuevo Laredo, Mexico. I love my father, but that goddamn beaner stole my job." Martinez's $18-an-hour duties will now be performed by his father for $7 a day.
posted by moonbiter at 3:45 PM on January 16, 2004


People in Britain had the same question 200 years ago. It turns out even if India produces everything cheaper than we do, it will still be worthwhile for us to produce some stuff, as long as we are not uniformly worse.

Didn't Britain end up banning the importation of Indian calico and cotton to protect their own textile industries?
posted by amberglow at 3:49 PM on January 16, 2004


We can't follow the jobs, like we could if they were staying in the US, and there are no new jobs being created in any field

What, because there's nothing new to go and do? Has everything been done? All prosperity driven out?

Look -- there's no question that the IT field got HUGELY bloated by dotcom. People who were programmers &c. had been styling hair weeks before.

Some of those people feel they deserve jobs in the new economy and, frankly, some of them don't. Consultants, as a general rule, take it in the shorts first when times are tight and I don't really cry too many tears for a guy making ten times the poverty level.

Think programmers would take a cut to keep the jobs onshore? Think again -- the standard IT income for Indian programmers is ~11K.

So, lemme see. One consultant (after taxes, unemployment, insurance, etc) or ten offshores?

That being said, I don't even marginally envision all the jobs going down the export hole. Outsourcing small jobs is rather impractical and even larger jobs need local management.

Times are tough kids, but we as a nation will get through this.

In the interim, go and do something great. Follow what you love. Maybe it'll be The Next Big Thing.
posted by Ogre Lawless at 3:55 PM on January 16, 2004


"Follow what you love. Maybe it'll be The Next Big Thing."

Frankly I don't see a lot of call for drunken snarky masturbation, but I'm keeping my fingers crossed.
posted by mr_crash_davis at 4:01 PM on January 16, 2004


You know, I'm an IT-ish person who's been out of work for almost four months, and yet from what I can tell I still live a better quality of life than a majority of people in the Third World. I'm probably going to have to get a job next week in the service industry -- and even on that kind of income I'll still probably live a better quality of life than a majority of the people in the Third World.

As far as I can tell, this will end up with Americans getting a little poorer, and everyone else getting a little richer. I guess it's a sad thing that Americans won't be the rich lords of the world any more, but it'll all balance out eventually (as long as we don't kill ourselves, which is probably what will happen in any event).
posted by moonbiter at 4:10 PM on January 16, 2004


Didn't Britain end up banning the importation of Indian calico and cotton to protect their own textile industries?

amberglow, I didn't know this, but a bit of web research suggests you are right. Thanks for pointing out this fact. However, the other major powers back then (France, Spain, Turkey et al) had even worse tariffs and import bans. And their industries suffered as a result.

Let's imagine there was a machine which would convert the stuff you're good at making (movies, car designs etc) into things you're bad at making (flip-flop sandals, plastic toys etc).

Then imagine politicians trying to ban that machine. There would be an uproar. But when that machine is called "free trade" people don't seem to mind it being dismantled for some reason.
posted by Triplanetary at 4:34 PM on January 16, 2004


Lou Dobbs on CNN has been keeping a list, but I don't know how many times he checks it.
posted by john at 4:48 PM on January 16, 2004


Triplanetary, I think the stuff we're good at making doesn't employ enough of us to make up for these losses...We can't all design cars, or make movies, or be investment bankers or design software (investment banking jobs are going overseas too btw)---We need a wide range of industries providing a wide range of jobs for as many of us (100 million adults?) as possible.
posted by amberglow at 4:54 PM on January 16, 2004


It's hard to figure out what's the left-wing and what's the right-wing position on this. The anti-globalisation movement says globalisation and free trade are bad because they're weighted toward making developed countries richer and keeping developing countries poor (a mistaken belief, in my opinion). But when globalisation and free trade help a third-world country build an IT industry and create lots of good middle-class jobs, that's bad too because the competition will make the USA poorer (also mistaken) and because any downside for an American automatically outweighs any benefit for an Indian (a distasteful belief, in my opinion).

Why exactly should I side with the Connecticut guy losing his job rather than the Indian guy getting a good job? As someone pointed out, the guy making $100,000 and steadily employed for the last 20+ years is among the richest 1% of people in the world. So now he has to write a resume and look for a new job or go freelance. Boo hoo.
posted by Daze at 7:36 PM on January 16, 2004


The problem is not that jobs are being transfered to China and India. The problem is that the economy is not creating new jobs to replace them. We lost tons of jobs during the late 90s. No one cared; there were plenty of jobs to replace them.

The Bush administration have deliberately chosen to stimulate the economy in the least efficient way possible because they don't want the labor market to improve. Of course they can't say that, so they blame China and India instead.
posted by electro at 8:59 PM on January 16, 2004


The Bush administration have deliberately chosen to stimulate the economy in the least efficient way possible because they don't want the labor market to improve.

Do you really think that? Why wouldn't the administration want the labor market to improve?
posted by trharlan at 7:05 AM on January 17, 2004


Perhaps another perspective might be welcomed? (And please do try to keep the personal attacks to a minimum, eh?).

I run my own company now, and was working for a global financial services firm prior to that, and use considerable numbers of IT resources. The current trend towards sending IT overseas is (from my perspective), a pendulum swinging as far towards one extreme as it had swung towards the other a few years ago. It is, in some sense, payback.

During the late 90's tech boom, the labor market was extremely skewed towards IT workers in the US. The economy was booming, companies were investing billions in IT, and there was a shortage of skilled IT talent. And the IT sector took full advantage of this, believe me.

25 year old intermediate Java programmers on Wall Street were demanding (and getting) salaries equal to those of senior attorneys and accountants at the peak of their careers. They had to be coddled, got away with all sorts of behavior that no one else would have in corporate America, and acted as though any company was privileged to have them (and in truth, the state of the market was such that if they were fired, they would have three job offers at other firms within a few days). Kids right out of college with IT degrees were hiring in at rates equal to mid-level managers in any other division of firms. Senior IT people (who had significant technical skills and knowledge of the financial services business) were getting $2K - $2.5K per day. (I know this, because I had to hire and pay these people).

Even before the April 2000 bloodbath on the NASDAQ (that started the collapse of the tech boom), there was serious resentment building up in corporations - because IT workers had become the spoiled brats of corporate America. It was not just senior management, it was the rank-and-file in other divisions that thought IT had reached the point of being way overpriced in relation to other skills. When a 35 year old with an advanced mathematics degree, who's job was developing models to predict options and futures prices (wicked complex stuff) saw a 28 year old VB programmer with a 2-year tech degree commanding an equal salary ... it did not go down well.

Thing is, however, it did not matter whether staff and management thought IT was way overpriced - because prices are set by the labor market. So corporations simply had to pay those rates to get the skills they needed. Note that IT workers were NOT complaining about capitalism and the free market when it was working in a somewhat extreme way in their favor.

And I know exactly why corporations are now thundering offshore. (I was present in the discussions about doing so at the firm I was with): The recession was taking hold, revenues were way down, and the enormous amount of money spent on IT simply became unsustainable. IT costs came to be perceived as something of a crisis. Alternatives had to be found. And three separate trends kind of coalesced:

1. Globalization. Many firms expanded greatly internationally during the 90's. At first they were looking primarily at markets for their products, but it also exposed them to many alternatives for the supply of raw materials. They also got accustomed to staffing foreign branches with local workers (and worked through all the legal and accounting processes required to so so).

2. IT Commodification. During the late 90's, IT was considered to be cutting edge, innovative, market-making stuff. It is now ubiquitous, and largely considered one of several cost centers within Operations. It will still be used to attempt to gain a competitive edge, but senior executives saw a lot of broken promises during the late 90's, a lot of hype, a lot of ROI that never materialized. They are far more realistic about the possible bottom-line results of IT spending.

3. The emergence of significant IT industries in other nations (the one that gets all the press is India, but it isn't the only place).

Thing is, the decision to outsource is not an easy one. Labor rates are much cheaper in India, but project management is a bitch, and there are a number of risks involved that just don't exist when work is done locally. Corporations are still learning how to outsource. Not every project is a candidate for outsourcing overseas. And US labor rates for IT work are now beginning to drop. Ultimately I believe a new equilibrium will be achieved. Some jobs will go permanently offshore, but in the case of others, the current corporate experimentation will conclude that the cost/benefit just isn't there.

And by the way, as a final note, none of this has anything to do with Bush. Like it or not, 21st century businessmen and businesswomen are increasingly global in mentality. They live in a particular country, but consider the world to be their market for products, and the source for materials and labor. I do business with firms in the US, Europe, South America, and will move into Asia later this year. The notion of "onshore" vs. "offshore" doesn't have any meaning. Everything is "onshore" if you consider the world to be your residence. Furthermore, I don't see anything wrong with that.

I do think the previously pampered US IT workers will whine and complain - and are still, to some degree, acting like they are entitled to anything they want. But if I hire people in Mexico, or Asia, I consider that both in my own interest, and positive for the world as well. (People can complain about world poverty all they want, but government programs will not end it ... businesspeople hiring and paying workers will).

While people on this board seem to obsessively discuss American "hegemony", from the perspective of the business community, it is merely another country. It certainly has a huge market ... but ... there is a limit to what it can do to try to stop businesses from outsourcing "offshore". Every country creates a business environment that either invites, or discourages, business. (My European operations are headquartered in Ireland - and would never be headquartered in France - because Ireland is going out of its way to cultivate business creation, and France appears goes out of its way to make even its existing business almost impossible to operate).

The biggest point is that businesspeople now have options. And a growing number of countries are going out of their way to invite business to open up operations.

That is what the world is today.

People certainly are free to complain about it to their governments, and try to use public policy and regulation to force businesses to (for instance) use onshore resources, or pay "their fair share" of taxes to support someone's notion of "equality". But businesspeople - entrepreneurs with capital to invest - also have freedom ... and while they are largely either cursed in the public arena in the US (simply saying the words "he's a corporate executive at a multinational corporation" is a derogatory accusation), there are an increasing number of countries that seem to actually value them.

It does not matter whether Bush is in office, or Dean. They are quite limited in what they could do - and grow more limited as the days pass. So long as it makes rational sense to keep corporate headquarters in the US, businesspeople will do so. But the fact that corporations now see the whole world as their market also means that they've got a whole world of competitors. And if the US government tries to tell them that they have to hire a $90/hr US prima donna to write the same EJB's that a fully qualified programmer in India or China will write for $25/hr ... then they may not immediately move headquarters offshore, but the next subsidiary they incorporate won't be in the US, and in the long run, they probably will move offshore.

Businesspeople are pretty much like everyone else. They go where they're welcomed and valued, and leave those places where its clear they are not.

And regardless of what one's personal opinons are, the reality is that the number of places where they are welcomed is growing, and the number of places where they're condemned is shrinking.
posted by MidasMulligan at 9:24 AM on January 17, 2004


Midas, what about companies that don't sell any of their products or services overseas and are totally dependent on revenue earned here who still outsource jobs? What about the state governments who are doing that too?
posted by amberglow at 9:35 AM on January 17, 2004


Midas, what about companies that don't sell any of their products or services overseas and are totally dependent on revenue earned here who still outsource jobs? What about the state governments who are doing that too?


Ah ... I think you've hit a real issue there - one that I've thought about, but just don't seem to be able to arrive at a conclusion for. I will mention the various angles of vision though ...

First, this issue is more political than economic - as from the perspective of public and private expenditures most US firms, and even state and local governments have, in fact, been "outsourcing jobs" for quite awhile. Its just that the jobs they are outsourcing are no longer public issues. State workers that wear uniforms of some sort are probably wearing clothes made in China. US firms and governments that operate car fleets either use imports (sometimes) or buy American cars - which on average have parts built in a couple of dozen countries. Probably a majority of office supplies and equipment are either bought from firms headquartered outside the US, or bought from US firms that get the stuff manufactured overseas. Even the buildings themselves - the plumbing, wiring, and etc. - are at least partly built from imported materials.

This, however, is no longer a public issue (though it was in the past) ... and so is not even noticed. In fact, if a State government was to plan a new building, and insist that everything from the materials to build it to the supplies required to run its operations had to be US made, the total cost of the project would increase far beyond the cost taxpayers would be willing to pay. In other words, if you actually look at the numbers, I'd be willing to bet that the amount of money that already finds its way overseas due to these kinds of purchases significantly surpasses the expenditures on offshore IT.

And this brings up what I believe is the the essential trade-off between two equally compelling perspectives - especially in the case of State and local governments.

State governments run mostly on money collected, through various means, from businesses and citizens (who are largely, though not wholly, residents of that State). With that money, they are obligated to produce services for those residents - the economic and ethical justification for taxes being that by spending money on some things collectively, we'll all be better off individually.

And this is, indeed, true ... if each household in a neighborhood was responsible for finding and hiring contractors, and arranging to get the portion of street in front of their own house built, the result would be a neighborhood street both far inferior to, and far more expensive than, the street that gets built when we all contribute money to a government, who contracts to get the entire street built as one project.

What this also implies, however, is that government officials have a responsibility to use those tax revenues as effectively as possible - to deliver the greatest possible benefits for each tax dollar collected. (Obviously this is an ideal - and certainly not always true in practice ... but stay with me here ...).

So then, on the one hand, if a State has allocated $2 million, during some given time period, to spend on enhancements of the services offered to State residents via the internet, the project managers (usually bureaucrats) and elected officials (that make the funding decisions) will find themselves faced with the following fundamental choice:

They can decide they need to support local IT workers, and insist that all enhancements budgeted for be conceived, and built, by a combination of State government employees (if the State has a decent IT staff), and private sector IT firms that are resident of the State. That will, however, mean that they will be paying more for IT than they would if they went offshore. (And it isn't just a little - Indian labor rates, for similar skills levels, are between 50% and 70% cheaper than US rates).

This means that while a definate gain has been achieved by keeping the expenditure of tax dollars within the state, it is also true that the original $2 million allocated for the enhancements of internet services for state residents will produce significantly fewer enhancements than could have been delivered using offshore resources.

Now those who to argue for keeping things internal (correctly) point out that it is not just IT workers that will be helped - government expenditures have an economic multiplier attached to them (since the IT firm in the state will have a project that lets them hire more staff, who will spend the money on local businesses, etc. - i.e., the ultimate contribution to the state economy will be greater than just the initial amount spent).

On the other hand, if three projects could have been done for the same amount of money - using offshore developers - that only produces one when you keep everything internal, a good number of state residents are receiving far less benefit for that $2 million that they otherwise might have. (Internet services also have a multiplier effect ... i.e., if a state decides to permit people to complete some normal yearly function online - paying for auto licensing or something - it not only benefits those with access to the internet, it also shortens the lines at the DMV for those that don't have internet access ... etc., etc.).

In the case of either choice, some state residents will benefit, and others will not. Figuring out which option delivers the greatest benefit to the most people is by no means a cut and dried metric ... the answer one gets depends largely on subjective initial assumptions.

There's no easy answer to this.
posted by MidasMulligan at 11:24 AM on January 17, 2004


Thanks Midas...I think the easy answer comes down to one question: is it people or profits that are most important? In the government situation, it has to be the people, first and foremost--It's why the government programs exist in the first place. Just as we now have city and local laws requiring domestic partner benefits or non-discrimination policies etc, for companies doing business with that locality, we're going to see requirements for domestic employment and subcontracting, and that's how it should be, in my opinion.

For corporations, i think the people are starting to make their voices heard (in the Dell situation and elsewhere), and do not want their communities hurt by the moving of jobs to other countries. It's hitting a much wider swath of the country now that it's service jobs and not just factories. And when it's a service being outsourced and not a product, consumers don't see any savings or reduction in fees. Cable service, telephone service, ISP fees etc, aren't reduced when a company outsources, as opposed to the price of clothing and hard goods, which is.
posted by amberglow at 12:05 PM on January 17, 2004




I'm still finding it hard to feel sorry for IT consultants. There's been a lot of fat to trim in that sector for a long time now.
posted by inpHilltr8r at 2:04 PM on January 17, 2004


I think the easy answer comes down to one question: is it people or profits that are most important?

And what Midas is saying is that it's not actually that simple. Which people are the most important -- the people who get to keep their jobs without outsourcing, or the people who get more services (or lower taxes) with outsourcing? "People or profits" is a false dichotomy, because profits go to people -- that is, when you choose profits, you're simply choosing another group of people.

In the case of a for-profit corporation, it's even thornier, since many middle-class Americans own stock, and what's good for the company may be good for them as well. I expect I'll own a lot of stock myself by the time I retire. To take another tack, what if outsourcing is the difference between closing down the company entirely, thereby throwing all its employees out of work, and saving 50% of its U.S. jobs? To take a local issue, I'm sure Boeing's employees would love to have the whole 7E7 made in Everett, but key parts will be made in other countries, with only final assembly being done in Everett. The choice, I'm sure, was between making the plane that way and not making it at all, because there's no reason to build a plane that nobody buys because it's too expensive.

Like Midas said, no easy answer.
posted by kindall at 3:05 PM on January 17, 2004


Interesting comments Midas, this problem demonstrates potential for globalisation to be a double edged sword for most people.
For instance, most people cannot take advantage of tax havens like Ireland. Most people in Ireland do not see any benefits from the tax breaks enjoyed by the corporations. What they do see is a weakening of their economy as the major players are all companies who have their headquarters off-shore, they are at the whim of events beyond their control.
The increased profits enjoyed by the corporations are not neccessarily transfered to the clients or workers, who continue to pay and earn the same as they did before the corporation got the tax break.
For the majority of the working population it makes little difference what goes on in board rooms and executive lounges, they work hard and get paid little.
Most people seem to work as many hours as they would if they were working and living on a farm in a self-sufficient way. But without the sense of satisfaction.

Whilst it is obvious that the tech boom in the US was unsustainable, it is concevable that the massive shift to off-shore staffing is in part motivated by revenge on the IT industry for it's over inflated wages (set by the labour market) in the '90s.

Maybe people have to retrain, however outsourcing entire skills areas from one country to another without warning will leave large numbers of people in trouble.

The same will happen in India and Ireland when the corporations move on to the next cheap fix to their unsustainable growth.

Will there ever be another time when the US stock market gets as high as it did in the tech boom? What can the US economy do now to compete on a global scale? Is there another boom waiting to happen, which actually is sustainable?

The one thing that strikes me about globalisation is the reliance on fossil fuels to transport goods. If fuel were sold at a price that reflected the damage that it's burning has on the global environment and the cost of cleaning up the atmosphere, then transport would be charged at a realistic rate.
This does not apply directly to telecommunications, but I feel that it is an issue that is not peripheral to the whole globalisation debate.

For the majority of the population of the planet, the best option is often to think globally and act locally. Corporations that do not have any motivation other than maintaining profit margins are living in a fanatasy land, relying on an ecomomic view that shuns the social reality of humanity.
posted by asok at 3:55 AM on January 18, 2004


Why wouldn't the administration want the labor market to improve?

To "starve the beast," trharlan. Don't you know your Grover Norquist by now? How about supply and demand? Ring a bell?
posted by squirrel at 6:09 PM on January 18, 2004


BTW, homunculus, that Kristof piece was WHACK. Anyone interested in establishing global labor standards is forcing 3rd world children to scavenge through filth? Thanks for that bracing slap of reality, I must have dozed off into a daydream of cause-and-effect and human dignity. Thanks for returning me to Bizarroworld.
posted by squirrel at 6:15 PM on January 18, 2004


I must have dozed off into a daydream of cause-and-effect and human dignity.

Well don't let it happen again!
posted by homunculus at 8:05 PM on January 18, 2004




I think the easy answer comes down to one question: is it people or profits that are most important.

The Indians getting good jobs via outsourcing are people too. And the Indians who would lose (or not get) good jobs due to American protectionist legislation and nativist hiring practices are people too. The question is more like "all people or just our people".

Outsourcing is free trade and fair trade. Liberals should be pushing in the opposite direction: cut subsidies and tariffs, open our markets, give workers and business and local industries in developing countries a fair chance to compete and grow. The rise of the Indian tech industry is a good thing; blocking trade and cooperation with that industry makes no sense on economic or humanitarian grounds. "Screw the developing world, Americans come first" is not a progressive policy.
posted by Daze at 9:25 PM on January 18, 2004


Daze, the corporations doing this aren't at all concerned about the people overseas who are going to be doing the work--they're concerned about showing a bigger profit.

And it's not free and fair when some countries have labor laws and worker safety laws and others don't.
posted by amberglow at 9:19 AM on January 19, 2004


Hence the need for foreign labor tariffs.
posted by squirrel at 5:35 PM on January 19, 2004


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