Offshore outsourcing and jobs overseas - Tilted Forum Project Discussion Community

maestro · 08-01-2003, 11:34 AM

Jobs these days (especially in the IT sector) are increasingly being shipped overseas to countries like India. Most companies do it because they find that they can pay much less (roughly $70,000 for an American engineer vs. $10,000 for an Indian engineer) for roughly the same price. To quote Business Week (full story here) ,

Quote:

Now, all kinds of knowledge work can be done almost anywhere. "You will see an explosion of work going overseas," says Forrester Research Inc. analyst John C. McCarthy. He goes so far as to predict at least 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to low-cost countries by 2015.

Here's another quote:

Quote:

The truth is, the rise of the global knowledge industry is so recent that most economists haven't begun to fathom the implications. For developing nations, the big beneficiaries will be those offering the speediest and cheapest telecom links, investor-friendly policies, and ample college grads. In the West, it's far less clear who will be the big winners and losers. But we'll soon find out.

What do you guys think will be the future of engineering (and in particular for the US and other western countries)?

dy156 · 08-01-2003, 12:04 PM

I read a Newsweek article about this. The same globalization advantages and disadvantages that have been effecting blue collar workers will now be effecting engineers, lawyers, and other white collar jobs. You can outsource huge document review projects and pay they well educated reviewers much less in India or the Phillipines. It will be interesting to see the differences in how politicians treat this phenomenon as opposed to how they enable companies to shut down American plants to open cheaper ones in other countries. I also know that large corporations have gotten around the immigration laws by having employees in foriegn offices come to work here, which has much the same effect. On the other hand, a hefty percentage of new doctors in rural areas are Indian or someother foriegn nationality, and it is because they are willing to work for less $$ and take the doctor positions that are less desireable. This has been helpful, because there is not as acute a shortage of rural doctors. Maybe similar patterns will emerge in the other professions.

The_Dude · 08-01-2003, 12:12 PM

as an indian, i definately want india to do well.

the 10k that an indian engineer gets is 450k rupees (which is a lot by indian standards).

anyway, i dont think the US govt should let the jobs migrate like this. this is definately not good for the american economy. i think they should offer tax incentives to companies that keep the jobs domestic.

obediah · 08-01-2003, 12:23 PM

The one thing I want to stop is the point that someone is going to bring up.

"It's good because it will mean a person in India will be able to eat while someone in America will have to give up their Mercedes".

Once you get out of school (that your parents are probably pay for), you'll realize that when you lose your job, and the jobs you are skilled for are cut, you don't just trade in your Mercedes for a Honda and get on with life.
You look for a job quickly, while you lose your savings if you have any, and then your mortgage (i.e. home), and most of your stuff, and you keep going down until you find a job that will keep you going at your current level.

The people that drive Mercedes will be the ones to get a big bonus for firing your ass, and will lose their Mercedes for a Rolls.

----------------

I don't think it's good (at least in the short term) for the US. It's certainly good for India, and is probably good for other parts of the world.

As a tech person, I'm certainly not happy about 10% of the jobs I could do being gone by 12/2004 and a much higher percentage in the years after. This means jobs will be a lot harder to get and pay a lot less once you get them.

As a person living in the US, any big blow to our economy like this is going to be bad. Hundreds of thousands to millions losing their jobs is bad news for all of us. When your neighbors are jobless, your life is affected.

What I don't know is if the the correct thing to do is to fight the movement or jobs, or just take the hit and look towards the future.

Rodney · 08-01-2003, 01:43 PM

Well, I've seen it in action. I worked in IT for a West Coast disk drive maker, and about every third guy was an employee of Wipro, one of the big Indian job shops. They'd work here for a few months on a project, then go home and continue working on it in Bangalore. The company had already moevd nearly all of its plants overseas, and half the IT work was taking place at those plants anyway already. It was all about profit and nothing else -- and that's great, but where are the new U.S. jobs coming from to replace the ones that have gone?

08-01-2003, 12:04 PM	#2 (permalink)
dy156 cookie Location: in the backwoods	I read a Newsweek article about this. The same globalization advantages and disadvantages that have been effecting blue collar workers will now be effecting engineers, lawyers, and other white collar jobs. You can outsource huge document review projects and pay they well educated reviewers much less in India or the Phillipines. It will be interesting to see the differences in how politicians treat this phenomenon as opposed to how they enable companies to shut down American plants to open cheaper ones in other countries. I also know that large corporations have gotten around the immigration laws by having employees in foriegn offices come to work here, which has much the same effect. On the other hand, a hefty percentage of new doctors in rural areas are Indian or someother foriegn nationality, and it is because they are willing to work for less $$ and take the doctor positions that are less desireable. This has been helpful, because there is not as acute a shortage of rural doctors. Maybe similar patterns will emerge in the other professions. Last edited by dy156; 08-01-2003 at 12:06 PM..

08-01-2003, 12:12 PM	#3 (permalink)
The_Dude The GrandDaddy of them all! Location: Austin, TX	as an indian, i definately want india to do well. the 10k that an indian engineer gets is 450k rupees (which is a lot by indian standards). anyway, i dont think the US govt should let the jobs migrate like this. this is definately not good for the american economy. i think they should offer tax incentives to companies that keep the jobs domestic. __________________ "Luck is what happens when preparation meets opportunity." - Darrel K Royal

08-01-2003, 12:23 PM	#4 (permalink)
obediah Crazy	The one thing I want to stop is the point that someone is going to bring up. "It's good because it will mean a person in India will be able to eat while someone in America will have to give up their Mercedes". Once you get out of school (that your parents are probably pay for), you'll realize that when you lose your job, and the jobs you are skilled for are cut, you don't just trade in your Mercedes for a Honda and get on with life. You look for a job quickly, while you lose your savings if you have any, and then your mortgage (i.e. home), and most of your stuff, and you keep going down until you find a job that will keep you going at your current level. The people that drive Mercedes will be the ones to get a big bonus for firing your ass, and will lose their Mercedes for a Rolls. ---------------- I don't think it's good (at least in the short term) for the US. It's certainly good for India, and is probably good for other parts of the world. As a tech person, I'm certainly not happy about 10% of the jobs I could do being gone by 12/2004 and a much higher percentage in the years after. This means jobs will be a lot harder to get and pay a lot less once you get them. As a person living in the US, any big blow to our economy like this is going to be bad. Hundreds of thousands to millions losing their jobs is bad news for all of us. When your neighbors are jobless, your life is affected. What I don't know is if the the correct thing to do is to fight the movement or jobs, or just take the hit and look towards the future.

08-01-2003, 01:43 PM	#5 (permalink)
Rodney Observant Ruminant Location: Rich Wannabe Hippie Town	Well, I've seen it in action. I worked in IT for a West Coast disk drive maker, and about every third guy was an employee of Wipro, one of the big Indian job shops. They'd work here for a few months on a project, then go home and continue working on it in Bangalore. The company had already moevd nearly all of its plants overseas, and half the IT work was taking place at those plants anyway already. It was all about profit and nothing else -- and that's great, but where are the new U.S. jobs coming from to replace the ones that have gone?