With the dollar so low, why not outsource to America?

[OhioChick]

Posted Mar 3rd 2008 2:12PM

My colleague, Aaron Katsman, and I have been discussing a web project recently. We decided to farm it out for bids on the web to a firm called Elance. Elance is an outsourcing marketplace bringing together people who need work done with service providers around the world. Participants are engaged in labor arbitrage, a practice of sending work where work is cheapest. We received one bid back from an Indian partner that was outrageous. It would have been cheaper to do the work locally in the U.S.

Which brings me to my point. With the dollar's decline and the growing affluence abroad, it's getting cheaper and cheaper to do the work domestically -- which might spell the end of Indian outsourcing.

Professor Mark Perry had an interesting post recently entitled just that, The Coming Death of Indian Outsourcing? While the title of the post ended in a question mark, Perry sounds pretty dour on the future of the disparity between Indian labor and that in the U.S.

The money line: "Assuming a 15% year-to-year salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, if U.S. wages remain constant, India's cost advantage disappears by 2015. Then what?"

While there will always be international labor arbitrage, the U.S. may be in the early stages of seeing some of the business it's lost to overseas providers the past couple of years come back to it.

Can you imagine Silicon Valley cheaper than Bangalore?

http://www.bloggingstocks.com/2008/03/03/with-the-dollar-so-low-why-not-outsource-to-america/

[jakem]

1. i have posted jobs on oDesk (like elance)

and had americans offer to work for under $5/hr, while increasing numbers of Filipinos and Indians are asking $12+

the scenario has arrived.

[DainBramaged]

2. If companies really cared about customer service

They would bring the jobs home. At least when you ask "do you know where New Jersey is" they would answer yes. But, as with the government, someone has his hands in the till, and outsourcing will continue untill the crooks in the White House are ousted .

[tomreedtoon]

3. Lazy, stupid, superstitious Americans? Are you crazy?

When you call up an American-run help desk, they try to fix your computer problem by praying to Jesus and having you write Oral Roberts a check. What good is that? And dealing with those phone people who don't even have a GED certificate is too much.

And no, I'm too poor to afford any sarcasm icons, thank you.

[OhioChick]

4. ....

"And no, I'm too poor to afford any sarcasm icons, thank you."

:rofl:

[Dave_Fl_50]

5. When the dollar drops to 1/3 of it's current value

things might come back to the US. Provided we're willing to work without health insurance, disability insurance, vacations or any worker protections from discrimination. Then there's the unlimited unpaid overetime we'll have to throw in.

[OhioChick]

6. I already

have the "unlimited upaid overtime." Had vaction time from last year that I was forced to give up, as well.

[Tandalayo_Scheisskopf]

7. Unpaid overtime...

For hourly workers, is illegal. The courts are now starting to frown on that same scam for salaried workers.

[OhioChick]

32. Companies Don't Give a Rat's Ass, Though.

They know you're damn desperate for that job and won't complain.

[Skittles]

16. that's pretty common, OhioChick

it's an employer's wet dream now

[OhioChick]

19. You're not kidding....

They're already pushing me to work weekends on a regular basis, as well. Sad thing is, there is nothing that I can do about it. Job-wise, there isn't jack shit here.

Edit: Morning spelling. :)

[Skittles]

22. how about those days off with a.....PAGER

WTF???? BEING ON-CALL IS NOT A DAY OFF. :o

[OhioChick]

23. A Pager?

Shit, They call me on my cell and if they can't get me that way......my home phone is ringing off of the hook and my email inbox is loaded.

I took my kid out of state for medical treatment....a one-day deal. (I made them aware where I was going and that I'd return later in the day) They called like hell while I was in this medical facility with my kid asking when in the hell I'd be back. I took a VACATION day to go there. Bastards. :mad:

[Skittles]

24. the pages come from all over the US and from overseas, dear

"they" be a whole LOT of folk :o

[OhioChick]

25. Oh.....Gotcha.

;-)

[foxer]

8. I'd keep american labor and outsource management

Far too much inbreeding among the "Elite"

[Dave_Fl_50]

9. That's true. Most of our waste here is in Royaly/Management

They should have been held responsible for productivity but since they're too busy doing lunch the workers have to be outsourced

[foxer]

11. Yep, can hire a whole lot of workers, for one "Golden Parachute"

[Dave_Fl_50]

12. All 100 of us techies together make less than our CEO

[Diclotican]

13. foxer

foxer

Why are you, and others like you, not starting trade unions of some sorts?.. I know that is "un-american" to have trade unions.. But that was doing the trick here in Europe... For the most part we have decent salary, and the companies have to treat us with some respect, or risk that we don't want to work for a while..

It can blow both ways, but for the most part, it have blowing for the working men and woman the last couple of hundred year or so...

Diclotican

Sorry my bad English, not my native language

[OhioChick]

14. If a Company Catches Wind of a Possible Union Forming...

You can kiss your job goodbye.

[Diclotican]

17. OhioChick

OhioChick

So in other words, the american working men and woman are in practice slaver under their masters... Well they have to feed Cloth, and shelter them self, but in practice they don't dare to start a trade union, because the owner of the company, if they win can just fire anyone who was part of the union.... What a wonderfully country US are:sarcasm: When I think about it, I almost emigrated to US in my younger days,...

Well, McDonald for some year ago, was taking a hard beating when they tried to fire a lot of workers there... Instead of almost free workers, they have to pay the same group alloust 100 million US dollar, because they had fired on wrong grounds. I don't know if the trade unions was coming back to work, but they get a "golden parachute" courtesy of McDonald Canada..

Diclotican

Sorry my bad English, not my native language

[OhioChick]

20. You got it, Diclotican.

The US workers are becoming slave laborers. The corporations are powerful here. Too powerful. Thank your lucky stars that you never came here, in this day and age, anyway. The US isn't as great as touted. I'd love to move elsewhere, but cannot afford to do so.

Quit apologizing for your English. You speak English quite well. :)

[Diclotican]

27. OhioChick

OhioChick

This corporations, don't they know their history?.. You know slave riots... Even a slave can just be pushed "so long" before the rebellion are on, and you either have to fight them, kill thousands, maybe ten of thousand, to set a example. Or to give way to reform.. Why you do think the Unions in Europe have the power they have?.. Because they who have the power when Trade Union first was made, they understand that either we suppress the labor to the brink where the labor forces can not be suppressed anymore and open revolt start. Or you give some way, and reform your habit.. And the fear of revolution are of the shart..

The revolution in 1917, where the Russian Empire was tumbled and broke was one of the MAIN reason the rest of Europe get what we take for granted today.. In every European country between WW1 and WW2 the start of the Welfare state as we know it today. It started because the conservative element understand that you either reform, or risk everything.. And it was better for the owner to get a educated, working class, then to let it go, and risk one day that the fabric stop working, and you have to run for your life... That is a lesson that worked well for the most part of the 20 century here in Europe.. And in many European country, like Germany, France and Italy the trade union are REALLY powerfull... They can topple the government if not treated right...

From the outside US look like a great place to live.. But if you look deeper, and more closely, it looks like something is really rotten in US.. And it have been that for a long time.. I know that many people who have prove the dark side of US have been accused of communism, even threatened with prison time.. In the 1950s it was a famous photograph who was picturing the dark underside of the US marble.. He was very good, and proved that the underbelly of US was not that good as it looks like on the outside.. He was arrested, and almost trowed into prison, because the government would not let that type of picture been known.. The truth was hurting as hell.. Even today the pictures from 50 year back, are hurting some american feelings.. And it is seldom shown inside US..
I dont know the name of the photographer, but he was werry famous for his time

I am sorry you don't have the money to travel outside US. And set up your life elsewhere. Europe need people with skills, so I guess if you have that, you would be welcome in many places.. For many on this side of the Pound, the US was the "fata-morgana" where you can live your life as you please.. Even my grandfather almost emigrate there in the 1920s.. But then the war came in 1939, and she meet my grandmother.. And that, was that... Now the case is the opposite.. American are traveling abroad, if they can afford it, to settle elswere... And that in just 100 year?:.

My apologizing is because when I first was writing here, I was meet by the "grammar police" who was giving My some hard time..So it is just a kind of warning to all, that my grammar are bad, and my English is not that good.. But thank you from your word about I manage your english. It is a difficult language to learn in the first place.. And maybe even more difficult when you have not used it for some time, and then use it again..

Diclotican

Sorry my bad English, not my native language

[OhioChick]

31. Diclotican

You make a good point but starting a trade union here would be useless.....like shooting yourself in the foot. There are many impoverished countries that would be willing to export their people here or to import our corporation's work there. Capitalism will always follow the path of least resistence and most profit. All this would do is push corporations to go to Congress stating that there is a shortage of IT workers and that they need more H1B visas and look for tax loopholes to outsource jobs overseas.

Here's a good example:
Gates to appear again before Congress on eve of H-1B visa rush

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x342665

[Diclotican]

34. OhioChick

OhioChick

How sad it is, when you can't get something doing, because if you start a trade union, it would just say that you are out of work... Very sad it is. Because I do believe that if you just say enough is enough, even rouge Capitalism must treat you with respect, some respect then... I believe some of the mechanism was the same in Europe in the 1800s but for the most part, the union case was the same in every nation where the industry was on the rice..

Maybe it is as Karl Marx for a hundred year ago say.. "Capitalism would kill itself, and we would give them the rope to hang itself in it" ?

Diclotican

Sorry my bad English, not my native language

[comtec]

18. And for a long time there WAS NO TECH UNION!

As I understand the IBEW took techs under their wing just before I left to Europe 4 years ago.
I was happy that they had, and mad that I didn't know about it sooner.
The main issue is what Ohio Lady said, if you even look cross eyed at our lords and masters, you're gone, et alone scurrilous rumors of unionizing. The is NO protection of the worker's right right now, and to be honest it's far too dangerous physically to push because of the corporate cock suckers in Washington right now, and I don't mean just *.

I'm about to join the labor union here (matter of paperwork I keep forgetting about), but pretty much I'm protected because they negotiated the laws that I work under.

I'm then going to put in a time of request to enjoy a couple of teh 5 weeks vacation I will accrue over the year :)

[OhioChick]

21. You Summed it up quite well. n/t

[Diclotican]

28. comtec

comtec

True, the fight against powerfully corporations are something everyone can agreed about is a hard way, when even the government of your state or the federal state are against it... But you are HUMANS, not "thing" to be treated as susch... And should have the right to give better pay for your work.

Is this the land of the free, where you are afraid that your CEO can be angry about you, and then fire you, just because you want better pay, or some more vacation?:. I hear you have 10 days paid vacation in the US?.. That is just silly... Here in Europe, as you pointed out, we have 4 or 5 weeks vacation, with pay...

If you don't fight this system, you would end up in bondage sooner or later.. The slavery of man are not something that is history it looks.. It took many form, but it is when everything come ot the point the same.. Slavery.. Literary or other means.. It is _still_ slavery of men... Before you know it you have to go to some barrack to get some sleep, and then some master are there to se that you get the work doing... With violence if nessesary...

Good you want to join labor union here.. It is the right thing to do;).. One by one the CEO can split et imperial.. But if you are together, you would be surprised how much power you really have..

Diclotican

Sorry my bad English, not my native language

[katty]

10. train, re-train, keep producing in America and bosses offshore

[JPZenger]

15. China is Losing Business to Indonesia and Vietnam

NPR had a series this week about China losing manufacturing to Indonesia and Vietnam, which have much lower costs.

Companies are complaining that wage rates are increasing at too fast a rate in India.

[lynnertic]

26. John Kerry would've ended outsourcing by making it more expensive for

us companies to do it, except he didn't get the White House so why am I wallowing in woulda coulda shouldas...
time to log out.
:toast:
bye

[OhioChick]

30. That's what I liked about him....

He wasn't afraid of going against corps. We all know how Ohio turned out......stolen. Money and the right connections will get you anything.

[AlertLurker]

29. Unless you can get US developers to work for $8000/yr, you are SOL.

It's a sad truth.

[OhioChick]

33. Sad but True. n/t