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IT Outsourcing Oversees

I am a programmer analyst (VB6 VB.net, J2EE) in NY who graduated during the boom in 1996. Now things are very different obviously due to market conditions.

Although people are pointing to an economic recovery in the next year or so, I am getting a little scared about all of the articles being written about IT outsourcing to the 3rd world nations like India & China.

It seems like not too long ago there were all these stats in not having enough IT people to fill all of the current jobs as well as the jobs of the future. Many were imported here to fill those positions (many companies pay less $$ an sponser immigrants for permanent residency).

If companies start getting rid of internal IT and outsource to these other countries we'll have to immigrate there or start flipping burgers!!!!!!!!!

How does everyone feel about this?

KenB
Thursday, February 06, 2003

I feel that you should do a search in the archives for outsourcing and read all of the previous responses... (Enter outsourcing in the "search" box to your left).

Not another horse!
Thursday, February 06, 2003

Ken,

I think to sum up what alot of people have said, basically all of the 'shrink-box' software will eventually go to 3rd world countries.  I don't particularly like that term btw.  Consulting work will stick around because it's so hard to do a good job without face-to-face time with the client.  Example:  I work out of my home office (for a small consulting firm) and probably meet with customers once or twice a month and find it invaluable.  Customers generally don't know how to ask what they are looking to do and being onsite helps alot.  Until these companies like InfoSys have offices in every city (which raises their costs, and their prices, etc), you should not have to worry about consulting jobs going away. 

GiorgioG
Thursday, February 06, 2003

>> Many were imported here to fill those positions (many companies pay less $$ an sponser immigrants for permanent residency). <<

(This is a tangential point, but I'm irritated by this pervasive misconception.)

It is NOT CHEAPER for a company to sponsor immigrants. Employers are legally required to pay H-1 workers the same wage as they would local employees. As both an immigrant myself and a manager of other immigrant workers I've seen this in action and my employer takes their legal requirements very seriously. You can claim that the presence of migrant tech workers lowers salaries globally by increasing supply vs demand, but it's out-and-out illegal to pay a migrant worker less than their peers doing the same job. Beyond salary costs, the employer ends up paying out $10,000s of dollars on relocation, attorney's fees, etc.

Edwin
Thursday, February 06, 2003

>>Employers are legally required to pay H-1 workers the same wage as they would local employees. As both an immigrant myself and a manager of other immigrant workers I've seen this in action and my employer takes their legal requirements very seriously. You can claim that the presence of migrant tech workers lowers salaries globally by increasing supply vs demand, but it's out-and-out illegal to pay a migrant worker less than their peers doing the same job. Beyond salary costs, the employer ends up paying out $10,000s of dollars on relocation, attorney's fees, etc.

I'm glad *your* company is following the law - there are many (possibly a large majority) that either don't follow it or just barely meet the letter of the law (i.e. pay H-1's at the very lowest end of the scale). Just because it's illegal doesn't mean that it's not happening.

Also, I haven't seen any companies that pay H-1's for their relocation costs or attorney's fees - if your's does, it's in the minority.

I've actually been at several places that had H-1 contractors. From talking to them, it was obvious that the contracting company wasn't paying them anywhere near the going rate (even though the comtracting companies were owned by immigrants from the same country).

The last company I worked for had several H-1's and they were paid about the same as everyone else, but again no relocation, attorney's fees, whatever.

jeff
Thursday, February 06, 2003

All those who have problems with IT jobs moving offshore, or rather, with companies buying their IT solutions from providers living in other countries, should read the following articles.

http://bastiat.org/en/protectionism.html

http://bastiat.org/en/petition.html

They are both very short, entertaining, and far more succint on the matter than I can be. Would be interesting to find out what everyone else thinks about them.

tapiwa
Thursday, February 06, 2003

Pretty good articles, though the underlyings are a bit different in this case.

Prakash S
Thursday, February 06, 2003

"It seems like not too long ago there were all these stats in not having enough IT people to fill all of the current jobs as well as the jobs of the future. "

My dad has a Master's degree in Statistics, and this what he says about Stats: "You can make the numbers say what you want".

Basically do not go by the numbers. During the boom, a major shortfall was predicted, now all stats are about Outsourcing.

I don't mean to say don't look at the numbers, you should in order to know how wrong all those bozos are whatever they are talking about!

Prakash S
Thursday, February 06, 2003

Jeff, my experience was quite the opposite. I have a green card now, but I've been working on two H1 visas for 5 years and have many friends on H1. In every case, company covered all the attorney expences related to H1 preparation and, in many of cases, companies sponsor H1 holders to get green cards. Salary-wise, in 1998 the an official miniumum salary for software developer on H1 visa in California (San Mateo county) was around 80k. I know this exactly, because I hired a H1 guy in that year and still remember all the INS papers.

I don't know how companies could pay less than defined minimum wages to H1-s. Technically, it is illegal, so you can count these poor exploited people as illegal immigrants, not as H1 workers.

ia
Thursday, February 06, 2003

And I'd say there is still a shortage - but it ain't in the areas where everyone has the skills and experience.

Just a thought
Thursday, February 06, 2003

I too, have been on numerous work visas in the last 8 years.  All lawyer fees, application fees, relocation have been paid for by the companies doing the hiring.

cheapo
Thursday, February 06, 2003

The first article is not a good arguement because it falsly assumes that if Paris were to close off outside trade, the three "speculators" would be the only ones making ham,butter or wood and that is not true

Daniel Shchyokin
Thursday, February 06, 2003

Large companies that employ H-1Bs where the vast majority of employees are Americans - Intel, Microsoft, Oracle, Merrill Lynch, etc.  don't have separate pay scales for H-1B and Americans.  I've worked with enough of them and know enough personally to see that they are paid very well.  And their employers paid for their relocation costs from India, Canada, and the Caribbean (yes, I said Canada and the Caribbean. Contrary to popular belief, not all H-1B holders are from India and China!)

Where underpayment of H-1B workers exists, it occurs mainly in the the consulting companies that have their headquarters in a certain heavily populated Asian country and hire almost purely employees from their own country (or only their countrymen want to work for them).

T. Norman
Thursday, February 06, 2003

Daniel, I sort of agree with you. The article does begin by pointing out that Bastiat "was the master of the redutio ad absurdum. He used exaggeration to ridicule political ideas"

Taking the extreme case to prove the point. While other Parisians might also produce butter, pork or wood, the central argument remains, that protecting some industries ultimately hurts the populace.

Back of offshore outsourcing. The companies outsource, assume they produce software cheaper. They have money for
a. more software (good for all developers in the world)
b. more of some other goods or services (good for other industries)
c. more profits (good for their shareholders, who incidentally is Mr and Mrs J Blogg via pension funds etc)

Either way, all the parties here are engaging in voluntary exchange of services. Be is producing/buying cheap software, more of other goods, or shares in the companies.

In the alternative, where there is a state mandate to use local developers, the US developers benefit, and the rest of the population is *forced* to buy their services for more than they are worth on the market.

The degree of protectinism (ban vs tariffs) determines the level of coersion in the system, but the loss of freedom of the customers remains.

tapiwa
Friday, February 07, 2003

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