Stop Offshoring
Tuesday, April 27, 2004
I'm seeing an increasing number of articles that claim offshoring will benefit the US economy. Interestingly, none of them have statistical evidence that prove offshoring creates more jobs for Americans -- the unemployment figures and anecdotal evidence still point to a weak job market and more jobs going abroad. Rather, what these articles put forth are theories of why offshoring shouldn't have as negative an effect as offshore outsourcing opponents suggest.
The first and most common argument compares the number of jobs moving offshore with the number of jobs the US economy is projected to create. By saying that more jobs are created than are offshored, these studies claim that offshoring is beneficial. There are two major flaws with this line of reasoning. The first is the quality of jobs being created versus the jobs going offshore, which I've mentioned before. If I lose my job as an IT programmer to someone in India, would I be pleased that there are now 2 new low-paying jobs at the local coffee shop that I can take instead? Clearly not. The second flaw in their argument is that any net job creation is a sign that offshoring is good. What if job creation would have been even greater without offshoring? Even if less jobs are created, but even fewer jobs move offshore, that is still a net benefit to Americans.
Another argument used by these studies is that global free trade will result in hiring of Americans by foreign companies, making up for the loss of jobs offshore. I see anecdotal evidence that this will not turn out the way offshoring proponents think it will. While American companies hire citizens of India when they open an office there, an Indian company in the U.S. is more likely to hire Indian immigrants than Americans. My experience at my last three jobs have all been similar in that respect -- whenever we deal with an Indian-run company, a significant majority of the employees of that company are Indian. This in no way helps the displaced American worker looking for a job.
Finally, the articles argue that the cost-savings benefits of offshoring will translate into more profitable American companies that will hire more American workers. This argument is only half correct. These companies will hire more workers. However, they are more likely to expand their offshore operations than hire more Americans. Even pro-offshore articles have noted that companies have been hiring more offshore workers and keeping their American workforce stagnant.
Saturday, April 17, 2004
I was looking for a new job on HotJobs, and I came across a posting for a software engineer position from a recruiting company called Modicom. One of the qualifications listed was "We are looking for top 20 schools such as IIT. " This was for a job in California, U.S., and they specifically listed an INDIAN school?!? No mention of MIT, Stanford, Berkeley, or any Ivy Leagues here. The only school named was IIT. What the heck is going on?? Are we trying to sabotage our country's future on purpose?!? I'm surprised Modicom didn't title their listing, "Looking for an Indian to do the job of an American" -- at least they'd be honest about their intentions! Needless to say, I won't be applying for any jobs from Modicom.
Monday, April 12, 2004
Over the weekend, one of my relatives told me about his problems with Dell. He called their tech support and got someone in India. After spending 45 frustrating minutes trying to explain what the problem was, he's going to call again and hope to get someone in the U.S. Looks like Dell needs to bring back more tech support jobs from India if they don't want to anger more customers!
Here's yet another bad experience I'm having with Indian programmers. At the last status meeting for our project, there were over 250 bugs that still needed to be fixed, with our next deadline approaching in a week! As if that wasn't bad enough, in the last two QA builds, half of the bugs that were allegedly resolved were kicked back because they really weren't. (None of those bugs belonged to me, I must say.) In listening to the Indian developers' explanations, it seemed like some of the re-opened bugs were caused by their misuderstanding of what the bug was, and some were because they just didn't test adequately. Either way, I find that level of quality inexcusable. I didn't understand why we hired them in the first place. I certainly don't understand why we haven't replaced them given their history of poor work. In the end, we all suffer because I have to work long hours to make up for their incompetence if we are to reach are deadline (which has already been extended by a month), and this company will end up with a crappy product that's overdue.
Friday, April 02, 2004
I read about two studies recently that purport offshoring will lead to more jobs in the U.S. They estimate the number of jobs lost and number of new jobs gained as a result of offshoring, showing that more jobs will be created than lost. I have to question whether the new jobs are equivalent to the jobs shipped overseas. Creating 120 low-paying jobs while losing 100 well-paying white collar jobs does not translate into an overall benefit for the U.S. Additionally, one of the studies was done by an Indian -- hardly the most objective source of pro-offshoring sentiment, in my opinion.
The studies also propose the same old solution to combating offshoring - education. As if lack of education is the reason why American jobs are being outsourced to other countries. I personally see educated Americans being replaced by less-educated Indians all the time.
Presidential candidate John Kerry proposed tax changes that would discourage offshoring. (See here and here.) Thus far, he is proving to be the far better choice for those who care about the threat of offshoring.
Here's a good quote from Kerry regarding his proposal.
"If a company is torn between creating jobs here or overseas, we now have a tax code that tells you to go overseas," he said. "That's crazy, and if I am president, it will end."
