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In a Symbolic Shift, IBM's India Workforce Likely Exceeds That In US

timothy posted about a year ago | from the rising-tide-lifting-boats dept.

IBM 491

dcblogs writes "IBM has 112,000 employees in India, up from 6,000 in 2002, with an average wage of about $17,000, according to an internal company document. That wage level may seem shockingly low to U.S. IT workers, but it is in alignment with IT wages in India.The Everest Group said the annual wages generally in India for a software engineer range from $8,000 to $10,000; for a senior software engineer, $12,000 to $15,000, and between $18,000 and $20,000 for a team lead. A project manager may make as much as $31,000. IBM employs about 430,000 globally. According to the Alliance at IBM, the U.S. staff is at about 92,000. It was at 121,000 at the end of 2007, and more in previous years. It has been widely expected over the past year or two that IBM's India workforce was on track to exceed its U.S. workforce, if it hadn't exceeded it already."

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491 comments

What happems (5, Insightful)

colinrichardday (768814) | about a year ago | (#42130401)

What happens when corporations can no longer exploit global wage differences?

Re:What happems (4, Insightful)

h4rr4r (612664) | about a year ago | (#42130447)

What does that matter?
By then we will think $17k/year is a good wage.

Re:What happems (4, Insightful)

colinrichardday (768814) | about a year ago | (#42130517)

But if most people make $17k/year, how are corporations going to threaten workers with outsourcing?

Re:What happems (1)

h4rr4r (612664) | about a year ago | (#42130693)

By keeping the wage at $17k/year, ask for a raise and your job gets outsourced.

Re:What happems (5, Interesting)

Creepy (93888) | about a year ago | (#42131055)

Actually, we've seen some of that at my job - in India we either get job attrition or requesting raises. This has caused a lot of jobs to be outsourced again, to China, where we get 4-5 workers for each US worker instead of 3-4. And the best part about it is the US was paying us to do it when US employees get replaced. Not sure about the current situation, as my company is now owned by Germans (we probably don't get as much US help to outsource anymore).

Re:What happems (1)

zrelativity (963547) | about a year ago | (#42131061)

Because there will always be some one capable and willing to do the work for less.

You only have to hang around /. and see attitude of multitude of people to unionized workforce.

Re:What happems (1)

HaZardman27 (1521119) | about a year ago | (#42131137)

A week or two ago there was a discussion about software engineer unions, and from my perspective it seemed that more comments were against unionizing than were for it.

Re:What happems (3, Insightful)

h4rr4r (612664) | about a year ago | (#42131201)

Yeah, FSM forbid people want to be paid a reasonable wage and be able to survive not only now, but retire sometime in the future and even have healthcare. The gall of some folks to be expected to be treated like humans. Everyone knows only C level executives should get those sort of benefits.

Re:What happems (5, Insightful)

bobthesungeek76036 (2697689) | about a year ago | (#42130551)

And who will IBM sell computers to when everyone is making $17K/year???

Re:What happems (1)

The Moof (859402) | about a year ago | (#42130619)

Big business. IBM got out of the retail computer industry when they sold off that part of the business to Lenovo.

Re:What happems (2)

saleenS281 (859657) | about a year ago | (#42131095)

I don't think you understand. What business is going to be able to afford IBM's computers? Who are those businesses going to sell their wares to when everyone is making $17,000/year? Expendable income will essentially drop to nothing with wages that low.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42130631)

IBM doesn't sell workstations and laptops anymore (only servers), they sold that division to Lenovo. And I'd love to see how much a Thinkpad goes for in India compared to North America.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42130737)

The point is who will buy from IBM's customers? 17K is good enough, only if living conditions are sub par.

Re:What happems (1)

slim (1652) | about a year ago | (#42131023)

The point is who will buy from IBM's customers? 17K is good enough, only if living conditions are sub par.

Everyone buys food. Food retailers use IBM POS systems, IBM payroll systems, IBM stock control...

Re:What happems (1)

zrelativity (963547) | about a year ago | (#42131107)

Which computers do IBM today sell into the consumer market?

IBM is primarily a service company today, and the hardware they are selling is to the corporate and govt market,

Re:What happems (0)

Anonymous Coward | about a year ago | (#42130487)

The crisis you are having now.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42130637)

What happens is the cost of a good home comes down to 25k.
The cost of a new car 3k.

Re:What happems (1)

h4rr4r (612664) | about a year ago | (#42130709)

Not a chance in hell.

What will really happen is a shitty apartment will be all you can afford. Houses will rot as banks own them. You can forget about any car much less a new one. Hope your city has decent public transit.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42131035)

No, silly. This is where the Tata Nano comes in.

Re:What happems (0)

Archangel Michael (180766) | about a year ago | (#42131239)

I know how to fix this. Raise taxes, increase regulation, increase spending and ..... yeah, that will work!

Re:What happems (2)

aeortiz (1498977) | about a year ago | (#42130653)

We we all sing kumbaya round the campfire and world peace will be achieved :)

Re:What happems (5, Insightful)

MyLongNickName (822545) | about a year ago | (#42130657)

It will be similar to the events that happened in the United States. Basically, we used to have a wild difference in median incomes by state. There is still quite a difference, but nothing like existed before the interstate highway system. State importance decreased and more people viewed their identity in terms of country than state.

I see the same thing happening on a global scale. There will be rich countries and poor. Folks in the US are going to have to get used to not being the prima donna by default. Other countries will get much richer. We'll get a much more stable world, and one where country doesn't matter as much as it does today.

Is it painful? yes. Will there be losers? Yes. But I think there will be many more winners than losers.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42130967)

Who cares one way or the other as long as your in the winner camp? lol

Re:What happems (0)

Anonymous Coward | about a year ago | (#42131017)

The problem is that those of us in the 'west' who aren't in the ruling class (CEOs, politians) can only lose.

Yes - maybe. (3, Insightful)

Anonymous Coward | about a year ago | (#42131125)

But I think there will be many more winners than losers.

Maybe.

But here's the thing, the economists say that the pie gets bigger and as a result, everyone's living standards increase.

Yes?

But, in the US, our living standards have been decreasing for over a decade.

What the economists seem to miss is that at least in the near term, the World's economy can't grow fast enough to compensate for all the billions of people entering the World's economy. In other words, wages have nowhere to go but down. Add in technology - like communications being dirt cheap - and we're headed for not a very good place in the US - for the average person. The 1% elite (sorry about the '1%' but it's a quick approximation of who I'm talking about) who have money all over the World will do very well and hence; the rich will get even richer.

Am I advocating protectionism? NFW!

Do I have a solution? Nope - I'm not smart enough. I'm just smart enough to see that the economic groupthink is wrong - at least for a few decades. Maybe in a 100 years, we'll all be living at standards that will make Bill gates look like a pauper, but until then, we're headed for some troubling times.

Re:Yes - maybe. (5, Insightful)

MyLongNickName (822545) | about a year ago | (#42131235)

But, in the US, our living standards have been decreasing for over a decade.

Yup. Basically we don't invest in our infrastructure, spend idiotically on wars instead of on our own people and expect our lifestyle to stay the same. We deemphasize education, performing below our peer group and expect our lifestyle to stay the same. I'd argue that the fact our lifestyle is dropping is proof that globalization is working as it should.

We have real problems in the United States that were masked by the fact that we were the world superpower and came out of WW II relatively unscathed. Global competition is showing that we have some things to fix.

Re:What happems (4, Insightful)

ranton (36917) | about a year ago | (#42130713)

Just take a look at manufacturing jobs that have stayed in the United States to see the result of manufacturing done in an area with high wages. [Almost] Everything is done by robotics. The only reason they use less robotics in third world and developing countries is because their labor is still cheaper than machines. Robotics keeps improving while global wages keep equalizing, and at some point the use of robotics will be even cheaper than cheap labor is today.

Developing countries know they need to take advantage of this period in time, and use the money they are funneling from developed countries to improve their workforce so they can perform more skilled labor once this shift takes place. The US and other developed countries took advantage of the 1900s to do the same thing, and developing country's have much less time to advance than we did (but they have the advantage of riding our coattails). Unskilled laborers making decent wages will be a thing of the past on a global scale in the near future, just like what is happening in the US right now.

Re:What happems (0)

Anonymous Coward | about a year ago | (#42131101)

Are you saying that robotics engineering is the path to job security?

Re:What happems (1)

ShanghaiBill (739463) | about a year ago | (#42130991)

What happens when corporations can no longer exploit global wage differences?

The same thing that happened when 19th century England exported jobs to a poor third world country called "Germany". The wages in poor countries rise as their productivity increases. When their wages and productivity reach first-world levels, then they are no longer poor.

Consumers exploit by proxy (1)

Shivetya (243324) | about a year ago | (#42131105)

We enjoy a higher standard of living because of global wage differences. Many countries do this. Let alone, having worked with individuals from said country, many found it easier to live on their home wages at home that supposedly equivalent wages here. Most of that came from expectations, I guess.

So your going to have to alter their society to increase their costs, one way to do that would be to keep pushing their wages up but that would introduce social instability as inflation would follow the new buying power of all those earners.

Then you would need to work on the country providing them..... well eventually as you raise one country up another comes up to take its place and the guy at the top hopefully kicks themselves up another notch starting the whole.

Time for a union (2)

Anonymous Coward | about a year ago | (#42130403)

Time for a union

Re:Time for a union (2, Informative)

Anonymous Coward | about a year ago | (#42130537)

Then watch IBM move to China to get ore cheap labor! American workers need to stop feeling so entitled to large wages and outrageous benefits. Then feel entitled to cheap products and services. Any company can't pay out money to employees in tons, then sell products cheaply and expect to succeed and make profit. Only when Americans change will they actually be able to find jobs.

Re:Time for a union (1)

adewolf (524919) | about a year ago | (#42130833)

Then watch IBM move to China to get ore cheap labor! American workers need to stop feeling so entitled to large wages and outrageous benefits. Then feel entitled to cheap products and services. Any company can't pay out money to employees in tons, then sell products cheaply and expect to succeed and make profit. Only when Americans change will they actually be able to find jobs.

None of us feel entitled to anything. Your attitude is why companies are outsourcing. All we ask for is a job and a reasonable living. We hav no benefits. We do not feel entitled to cheam anything. Grow up. Eventually India and China will page liveable wages, and American companies will move back, unless the forign competition does not shut them down. So Short sighted.

Re:Time for a union (0)

Anonymous Coward | about a year ago | (#42131117)

A lot of jobs in India that are outsourced are paying livable wages.
The Cost of Living in India is simply low enough that $17,000 is pretty good for the job, unlike the majority of places in the US.

It's still true that viewing all American workers are having 'entitlement' issues is incorrect as the pay that is expected has to take in account CoL for that area.
Benefits vary but I'm yet to see anything outstanding. I work for a production company that requires goggles on the production floor but provides no Vision benefits.
All other statements made by adewolf are more than reasonably true, in my experience and understanding, for the majority of American workers so require no further clarification.

Re:Time for a union (0)

Anonymous Coward | about a year ago | (#42131051)

American workers need to stop feeling so entitled to large wages and outrageous benefits.

Wow, shill more, please.

Try to find an apartment for less than $1500 a month in the U.S. that isn't in a drug zone or slum. Then try to get a decent used (forget new, thats expensive) car that won't break on you all the time.

Or you could try to live in a city, so you can walk/bike to work. But get ready to pay 2k+ for a decent apartment. And it will be noisy too so I hope you have good earplugs.

When the cost of living is high, the salaries paid need to rise in response. This has not been happening for years. It is NOT an issue of "entitlement", as you so foolishly put it. It's an issue of employer GREED.

Everyone gainfully employed deserves a fair and honest living without having to constant scrimp and save for basic needs. Luxuries are a different matter, but having a roof over one's head is NOT a luxury in the civilized world.

Re:Time for a union (0)

Anonymous Coward | about a year ago | (#42130585)

Sounds like a great idea for them to do that in India. That way IBM shuts down IBM India and comes back to the right-to-work states!

You're smart!

If that is what you call symbolic what is reality? (3, Insightful)

h4rr4r (612664) | about a year ago | (#42130425)

I would say having most of your workforce in India, especially when we are talking about decent jobs not factory slave, is far more than a symbolic change.

If this keeps going the only jobs in the USA will be retail, CEO and no job.

Re:If that is what you call symbolic what is reali (1)

Anonymous Coward | about a year ago | (#42130553)

No, what's going to happen is that most Americans will give up on corporate jobs and turn to small businesses instead (the way it was back before WWII, when everyone outside the cities ran a small business or a farm).

Enabled by the internet, small businesses will be able to sell their wares anywhere. This is the future of the American workforce. Millions of small businesses, selling stuff all over the world. That, and blue collar workers like plumbers and mechanics, who'll always be needed.

If we manage to put together a true national healthcare plan, there won't be any reason for ANYBODY to work for a corporation.

Re:If that is what you call symbolic what is reali (1)

rickb928 (945187) | about a year ago | (#42130661)

In that scenerio, UPS/FedEx/DHL are the key components. Shipping product is much easier than ever, I can buy stuff from HK on eBay and get it in a week if they care to mail it out the same day. I no longer have to wait for my buddy to come back from Japan and his traditional trip to the Akihabara to see the latest gumstick sized IDE/SATA/Firewire/USB gizmo for USD22. I can probably browse their page and get it mailed. If they are with it, I can chat and avoid the Jinglish, mostly.

Re:If that is what you call symbolic what is reali (0)

Anonymous Coward | about a year ago | (#42130827)

Have you ever tried to to sell stuff on an international scale? F***. I got a very successful business and it ain't easy. If I use two hands you can count all the countries which are “easy” to deal with.

You have: language barriers, perception issues (overcharged because of VAT/taxes/duties/etc or branding issues), shipping issues (ohh USPS won't ship electronics internationally now? Woops there goes your business- yes it was a real issue), web site development issues (currencies, shipping companies which charge more than the profits, shipping companies that don't provide the APIs that would allow integration so you can't easily quote customers a price, product specific issues like getting demand high enough to make the cost of production worth it in a time frame for which the item isn't 'out of date', etc etc).

Long story short I don't think your small business is coming back. Mega corporations control production and they can best utilize the labor in China, India, and Africa. There is no way to compete and retain the financials of yesteryear unless your well equipped to navigate a niche market that is difficult to navigate and yet has the potential to explode mainstream. :) I run that kind of business luckily and plan to retire in a few years once we have our act together.

Re:If that is what you call symbolic what is reali (0)

Anonymous Coward | about a year ago | (#42130735)

Except that companies like Walmart supplant many classic small business

Re:If that is what you call symbolic what is reali (0)

Anonymous Coward | about a year ago | (#42130887)

And Obamacare makes it more difficult for small businesses to hire.

Re:If that is what you call symbolic what is reali (2)

h4rr4r (612664) | about a year ago | (#42130903)

Are you stupid or a liar?

Companies with less than 50 employees are totally exempt.

Re:If that is what you call symbolic what is reali (0)

Anonymous Coward | about a year ago | (#42130627)

:) Thank god I'm the CEO!

Yea- I really am. I started a company which has global operations and is doing REALLY well.

Re:If that is what you call symbolic what is reali (1)

Nyder (754090) | about a year ago | (#42130787)

I would say having most of your workforce in India, especially when we are talking about decent jobs not factory slave, is far more than a symbolic change.

If this keeps going the only jobs in the USA will be retail, CEO and no job.

Always be service industry jobs until robots get better.

Re:If that is what you call symbolic what is reali (1)

jonbryce (703250) | about a year ago | (#42130981)

Well last time I looked a couple of years ago, the typical salary was more like $8,000. If this keeps going, Indian wages will probably reach parity with US wages in about 5 to 10 years time.

Yawn (0)

Anonymous Coward | about a year ago | (#42130433)

IBM all but stopped hiring in the us ten years ago. This isn't surprising. This is IBM's long term plan coming to fruition. Hire as many people as possible everywhere but the US.

Re:Yawn (1)

interval1066 (668936) | about a year ago | (#42130865)

Canada too. Good friend of mine in Toronto worked for IBM Canada for years and lost his to our good friends in India.

News flash, US (-1)

Anonymous Coward | about a year ago | (#42130471)

In the global economy, desk job programmers don't make $80K/year. You want companies like IBM to keep employees in the states? Stop expecting exorbitant wages simply because the bank conned you into buying a half million dollar home.

Re:News flash, US (1, Informative)

Anonymous Coward | about a year ago | (#42130591)

You must be pretty poor if you think $80K/year is good money in most/any American city.

Re:News flash, US (2)

bobstreo (1320787) | about a year ago | (#42130773)

You must be pretty poor if you think $80K/year is good money in most/any American city.

Probably not in the Bay area, NYC, Boston...

In smaller cities with lower costs for housing, shorter commutes, lower taxes, it's probably fine.

Partly why IBM Moved out of Boston (0)

Anonymous Coward | about a year ago | (#42131047)

IBM used to have several major sites in and around Boston. Over the past 5-10 years they closed those (and others in MA/NH) and consolidated most cubes to Littleton. That makes them the big fish in a small pond, which gives them a lot more leverage with the local government, cuts their $-per-square-foot costs, and justifies lower salaries...which is now compared against the more rural job market.

India? Don't forget IBM China's doing major hiring too...

Re:News flash, US (0)

Anonymous Coward | about a year ago | (#42130801)

80K/year is good money in most of fly-over country.

Re:News flash, US (2)

cyberchondriac (456626) | about a year ago | (#42130815)

Still depends on the state you're in. In New York, $80k is indeed a pittance, but in, say, Georgia, or Kansas, both of which have large cities, that would probably be a really nice wage. It's definitely more than I make; I'm a network/systems/SAN administrator in a very densely populated mid-atlantic/northeastern state, we have over 50 servers and around 4,000 users or more, point being, it's not a ma and pa shop I work for. Then again, most of my peers do make more, they bargained better than I did when they got hired; promotions are virtually nonexistent here.

Re:News flash, US (1)

h4rr4r (612664) | about a year ago | (#42130891)

Only if you want to drive over an hour to work. Try pricing housing near the job centers in those states. Decent housing near Atlanta or Augusta is not going to be cheap.

Re:News flash, US (3, Insightful)

nedlohs (1335013) | about a year ago | (#42131011)

90% of Americans have a personal income of less than $80K/year. So no, you have to be pretty rich to think $80K/year isn't good money.

Re:News flash, US (4, Insightful)

afidel (530433) | about a year ago | (#42131151)

The median wage in NYC is $35k, anyone who looks down on 230% of the median wage is an entitled fool.

Re:News flash, US (0)

Anonymous Coward | about a year ago | (#42130667)

> In the global economy, desk job programmers don't make $80K/year

All the people I graduated with 4 years ago are making that or more for programming gigs. Heck even the MSFT India people I know make 2-3 times what IBM pays. Maybe the real solution here is to not work for IBM.

Re:News flash, US (0)

Anonymous Coward | about a year ago | (#42130797)

Indeed. When are you riff-raff going to realize that you should work for a pittance without ridiculous things like healthcare so that the top executives can continue to live in the luxury that they believe they merit without being exposed to any negative media noise about jobs going overseas.

Re:News flash, US (4, Insightful)

HarrySquatter (1698416) | about a year ago | (#42130825)

As opposed to the CEO who pulls in $1.5 million after her pay doubled along with her $3.5 million cash incentive target? Maybe she should be taking a paycut first?

The USA exports labor because of unnecessary cost. (0, Troll)

concealment (2447304) | about a year ago | (#42130479)

Not surprising, when you consider that the USA has systematically raised the costs of doing business here, including labor costs, through well-intentioned social justice and wealth redistribution efforts.

Every law that's made, every committee that meets, every rule that must be followed, every union... they all increase our costs. Other places are more competitive, until they decide to implement the same systems (and it's not certain they will, even if they're not Ron Paul(tm)-styled libertarians).

Re:The USA exports labor because of unnecessary co (2, Insightful)

Anonymous Coward | about a year ago | (#42130573)

Cheaper labor doesn't get you the same amount or quality of work. Replacing one coder with three coders 12 timezones away doesn't get the job done 3 times faster either.

Re:The USA exports labor because of unnecessary co (1, Interesting)

Anonymous Coward | about a year ago | (#42130731)

As someone who works with ibm's india support on a daily basis... They are worse than terrible...

Re:The USA exports labor because of unnecessary co (0)

Anonymous Coward | about a year ago | (#42130795)

M$ had been rolling out very efficient code in Windows for the last 20 years with American programmers.

Re:The USA exports labor because of unnecessary co (0)

Anonymous Coward | about a year ago | (#42130911)

Nope. I'm a CEO. What does get your job done faster though is hiring that really bright coder 12 timezones away with good English skills at local prices that are "sky high". Intelligence isn't limited to the USA and grabbing that talent before it fleas to a country with better conditions can pay off big time! I'm paying $25 USD / hour for what I was paying $80 USD / hour for. My current guy whose working for $25 USD / hour is doing a F*** ton better job than the guy I was paying $80 USD / hour. Now the trick is how to keep him. * got to keep him from realizing he is a god *. Can't let him escape my employment.

Different quality of individuals (2)

concealment (2447304) | about a year ago | (#42131257)

I'm a CEO. What does get your job done faster though is hiring that really bright coder 12 timezones away with good English skills at local prices that are "sky high".

Exactly. Individuals differ, and price differences allow you to buy higher in the market overseas.

I think the Slashdot hivemind would like to think that all coders are the same, but... in my experience, looking at the individual's abilities and qualities is the most important criterion for hiring.

All other stuff, like degrees and experience, are proxies for that. How good of a coder is this person?

There's also a lot of obscuring this scale through trendy knowledge, like the huge influx of people who are good at PHP or Ruby but not very good at practical problems outside the web.

Unnecessary costs (1)

concealment (2447304) | about a year ago | (#42131207)

Cheaper labor doesn't get you the same amount or quality of work. Replacing one coder with three coders 12 timezones away doesn't get the job done 3 times faster either.

Very true, even here within the USA. However, that's not the point. The point is all that degrees of quality of our labor have become more expensive through over-regulation.

Re:The USA exports labor because of unnecessary co (2, Insightful)

Krneki (1192201) | about a year ago | (#42130601)

Yet those laws made everyone's life better and increased the buying power.

Who are you going to sell your goods if no one has enough money to buy fancy stuff?

Re:The USA exports labor because of unnecessary co (1)

lister king of smeg (2481612) | about a year ago | (#42131005)

Yet those laws made everyone's life better and increased the buying power.

it did so temporarily, now we are going to loose it all because there aren't/won't be any jobs left here

Who are you going to sell your goods if no one has enough money to buy fancy stuff?

You have it backwards. They have stolen all of the US's manufacturing and are stealing our intellectual jobs, so no jobs for us in the US. In the mean time we bought all of their crap and none of our own supplying them with all of our money. So we have no source of income and we continue to lose money because we are sending it all to China and India. Our economy is now collapsing, they have all of the money manufacturing, as well as a market that dwarfs ours by a order of magnitude that own practically squat and want stuff. Those same people in China and India are now getting money from the manufacturing jobs they have taken from us so they will start being able to buy the stuff they are making their economy will be self-supporting.

They have sucked our economy dry and will now simply sell to their own people. They will do just fine without us.
As for us in the US what will happen? Lets take a look at Detroit now stretch that across the country. The worst part is there is not much we can do about it, or let me correct that... there is not much we are willing to do about it. We can't declare war they have more people and make all of our equipment, we cant cease all foreign imports because of free trade agreements and treaties. We could apply tax's and tariffs on all foreign goods but much of that is baned by those trade treaties anyway and we don't have the facilities to supply the demand and it would cost us a whole hell of alot more. We could try breaking unions and lower the pay for pretty much all jobs essentially do exactly what china has done to us but the unions have lots and lots of money which they ca pay the people in power to keep form happening. So we are pretty much screwed

Re:The USA exports labor because of unnecessary co (1)

gestalt_n_pepper (991155) | about a year ago | (#42130705)

Um... No. Or at least, not exactly.

This didn't happen because of regulation alone. It happened because banks were encouraged to loan (i.e. create) money by issuing more and more debt (i.e. loans). The economic "growth" since the 1970s has been almost entirely debt-driven. This is obviously not sustainable and will one day lead to massive defaults at all socioeconomic levels.

At that point, things change. Personal wealth is defined largely by the wage/price structure ratio. If prices in the USA approximated those in India, India would lose that competitive advantage. What will undoubtedly happen after the next, inevitable economic crash, is a normalization of wage and price structures, particularly as regards real estate, professional services and capital equipment prices. At that point, the wage differential between the USA and India won't be worth mentioning.

The convergent model of state capitalism the world seems to be converging on should be able to handle this until we run out of affordable, energy-positive, hydrocarbon-based energy supplies. After that, all bets are off.

Re:The USA exports labor because of unnecessary co (0)

Anonymous Coward | about a year ago | (#42130733)

No. One can never compete as citizens of a free country with, say, slave labor from totalitarian states. That is precisely the soundness of the logic of American business in doing business with China. It is reprehensible that the citizens are living under the control of communism--unless that system has debilitated the workers and their options such that it gets U.S. cheap labor costs.

That China's economic system is now quasi-market driven, is irrelevant to this. They are cheaper -by definition- because of that history. U.S. companies want it both ways--defend us by dying for freedom, so we can profit from that lack of freedom.

Likewise, India's poverty is actually caused itself by an overabundance of "red tape": https://en.wikipedia.org/wiki/Poverty_in_India

So they are not "better" in terms of your unregulated market ideology, and aren't "winning" on that basis. They're simply available for predatory exploitation, with Business As Usual meaning that the most-exploited, wherever they may be due to whatever present and historical circumstances, just means--more people available to exploit more and cheaper.

So explain the Costco story then? (5, Insightful)

SmallFurryCreature (593017) | about a year ago | (#42130741)

If high wages are such a problem, how come Costco can do it?

Wallstreet doesn't like it, they want Costco to lower the wages to the minimum to maximize short-term profits because just growing and making a decent profit ain't enough for shareholders... except Costco shares have gone up despite warnings from Wallstreet.

Wallstreet loves to squeeze everything to generate the max profit for shareholders this quarter... next quarter? They will will find another company to squeeze.

IBM can well outsource all the work but what happens to the knowledge? What stops an Indian company hiring IBM workers and creating Indian Business Machines? That is after all what Japan did with car production? First you make the parts, then you put the parts together and then you make your own parts and put them together and how is Detroit doing again?

Americans love blaming unions but North-West european countries (UK does not count) have strong unions and no problems with them. The Dutch Polder model was widely praised until right-wing POLITICIANS destroyed it, much to the chagrin of the supposed right wing business owners who just want to make a deal they can count them even if it costs a bit because uncertainty is WORSE for business then knowing a deal is going to cost you a fraction of a percent more in salaries.

The US needs to get over its love for Wallstreet, it is a leech and NOT a job creator.

You know the really funny thing? In Season 22 of the Simpsons we learn that he makes 70k a year... yet he is often shown in the series as a "poor" man who can't afford health care... 70k that is what its writers consider a low wage on which you can barely survive and are always struggling.

It shows you just how big the divide is. Wallmart workers make 24k a year if they are lucky. Costco make 50k. Both companies turn a profit. Which one do you shop at?

Re:So explain the Costco story then? (1)

h4rr4r (612664) | about a year ago | (#42130847)

In much of the country $70k a year will put you in Homer Simpsons shoes.

Depending on your employer healthcare may well be out of reach at the wage, or at least a very big chunk of it. A few years ago I almost switched jobs for a rather large pay increase, tens of thousands, the increase in healthcare costs made the raise nearly pointless so I did not change jobs. I would have come out maybe a couple thousand a head, but would have gone from 19 days vacation to 5.

Re:So explain the Costco story then? (0)

Anonymous Coward | about a year ago | (#42131025)

You state a very good point. They (Wallstreet) says that a company should not exist to provide employment. Okay, in the rawest sense, I buy that - a company only exists to provide a product or service. However, that does not preclude having a sufficient number of employees to a) get the job done well b) at least break even, though a profit is preferable and c) maintain those staffing levels through rough quarters (which requires some profit to be earned and retained). Why can it not be sufficient for a company to roll on and allow its staff to simply earn a living? Why the (misguided) focus on perpetual growth (and the resulting panic + kneejerk reactions when there's a quarter or few of stagnation)?

Frankly, I see the stock market as one of the biggest problems with the corporate world. Sure it makes some rich, but it introduces so much volatility into the lives of, well, everyone. I'm normally a conservative, but I think much more regulation of the stock market, specifically traders, analysts and speculators, is required.

Re:The USA exports labor because of unnecessary co (0)

Anonymous Coward | about a year ago | (#42130781)

Not surprising, when you consider that the USA has systematically raised the costs of doing business here, including labor costs, through well-intentioned social justice and wealth redistribution efforts.

Yeah. Obamacare is costing me an additional $12,000 next year in health care costs, on top of what I was already paying. And that's just my share of the bill.

Re:The USA exports labor because of unnecessary co (1)

fuzznutz (789413) | about a year ago | (#42130979)

Amen brother! Let go back to the good old days when an employee that lost a hand in a machine could be shown the door and children were allowed to work 60 hours a week. Ahh... Even the the good old days of the 1950s where life expectancy was 20 years less so there was no need to take care of those useless old folks. No do-gooder social justice freaks trying to make sure people could eat once a day. Let's go back to the days when business was allowed to dump TCE and dioxins into aquifers and people had no recourse. Let's all wax nostalgic over the days when the Cuyahoga river could support a good fire.

Fuck all those Social Security leeches that paid in over their lifetimes. They don't deserve shit from us job creators that need our taxes cut. Ramen noodles and cat food are good enough for them if they have the poor sense to stay alive past their usefulness.

IBM (5, Funny)

UncleWilly (1128141) | about a year ago | (#42130489)

India Business Machines!

Re:IBM (1)

cyberchondriac (456626) | about a year ago | (#42130843)

Aw man, I'd have modded you up but I already posted in here.

Re:IBM (0)

Anonymous Coward | about a year ago | (#42131247)

India Business Machines!

Actually,

International Bangalore Machines

More to follow (0)

Anonymous Coward | about a year ago | (#42130491)

Wait to see for microsoft, google etc

Its America cost of living is high. (0)

Anonymous Coward | about a year ago | (#42130647)

The problem with the US is that is a self-feeding cycle, higher-wages = higher prices=higher living costs=repeat. The problem is eventually workers run out of pricing power, and while we still may have a few good years left. The truth is with globalization and automation the US workforce is in for a rude awkening.. The reason the US worker struggles is the cost of living is just too damm high.. housing and other basics of modern living are out of whack.. the law of supply and demand will eventually equalize this but there will be a lot of pain in the interim.

Re:Its America cost of living is high. (0)

Anonymous Coward | about a year ago | (#42131131)

Also, laziness. Anyone reading this comment during working hours shouldn't be surprised when their job moves to a country where employees show up at work to work.

us govt should drop ibm (0)

Anonymous Coward | about a year ago | (#42130663)

No reason to spend all that money propping up India. Givethe money to the home team.

Now is the time... (1)

Anonymous Coward | about a year ago | (#42130707)

For India and Pakistan to go to war.. That will help the U.S Economy. CIA go to work!!!!

Now its Indian Business Machines (0)

Anonymous Coward | about a year ago | (#42130723)

No longer American

Re:Now its Indian Business Machines (4, Informative)

slim (1652) | about a year ago | (#42130897)

The I always stood for "international".

When I worked for IBM UK, I collaborated with colleagues in the USA, Canada, Japan, India, mainland Europe...

Re:Now its Indian Business Machines (0)

Anonymous Coward | about a year ago | (#42130959)

I agree, even if this is the way that business (Corporate, high-end) works to stay compeditive in a international market that "cheats" with cheaper labor.

Personally, I would love to see any company that off-shores majority of its work force beyond the US Borders, that they should lose its status as American Company and any product they sell is treated as Importer or whatever they classified getting no tax benefits. Maybe it will discourage them from leaving, but in reality it wouldn't. US cost of living isn't changing, you need big bucks in many place to simply survive, never mind thrive.

Soon to be ex-employees (1)

bobstreo (1320787) | about a year ago | (#42130739)

Most people working in India change jobs for better money much more frequently than in the US.

Going forward, technologies like Watson will probably eliminate all the level 1 (Help Desk, Support) jobs worldwide.

17k/yr (1)

zeroryoko1974 (2634611) | about a year ago | (#42130749)

That's barely above Wal Mart or Mcdonalds.

Re:17k/yr (3, Informative)

ShanghaiBill (739463) | about a year ago | (#42131149)

That's barely above Wal Mart or Mcdonalds.

Except that a rupee buys five times as much in India as the exchange rate suggests. So it is more like making $85k. Manufactured products tend to cost the same in either country, but labor-intensive goods can be ten times cheaper or even more. It is common for an Indian to ride a bicycle, because they cannot afford a car, but they can still afford to pay a household servant to clean/cook/babysit.

Product Quality change? (1)

parallel_prankster (1455313) | about a year ago | (#42130803)

I understand that IBM wants to cut costs but with this scale work force migration to India, is that going to affect product quality ? I have worked with a ton of folks from India and I have absolutely nothing against Indians but I do see a difference in skill levels between American engineering grads and Indians (apart from those who come from the top institutions in India like IIT etc.) Most folks from India I have worked with are very sincere but they do not have a good understand of underlying concepts. Dont get me wrong, they are always willing to pick up, but there is always a ramp up time. My gut feeling is that since most guys in India opt for Engineering/Science backgrounds, sometimes we get folks that do not have their hearts genuinely in it.(I am sure there are folks who will show me that I am wrong about this.) The thing that is great about them is that they are willing to work night and day to get things done, but again that leads to patch work kind of solutions. Coming back to the main topic, has IBM had to undergo changes in its management style for India? Has quality been affected adversely or has it been better lately? There is also another thing about India. As good as the workers are in India, the government and the process itself can be a big hurdle. When you have to bribe 15 officials for every little expansion project, things can very easily get tied up in the bureaucratic process. How long is this effort going to be sustainable?

Its all true i work there (1)

mcbain942 (806450) | about a year ago | (#42130885)

I want to resign, I mean i am the only "white" person in the developer group (1 out of 300+). Thats only because they couldnt provide any reason during the technical interview to say hes not good enough. I dont blame them, because they are very very hard workers, but at what cost? Their mental health? They also do this because its cheaper to higher such a worker. But this is a shame, all the chiefs are caucasions and the little Indians are are at work.

Population (1)

grumpyman (849537) | about a year ago | (#42130907)

India: 1.2B; USA: 300M

job based health care kills us jobs (1)

Anonymous Coward | about a year ago | (#42130993)

job based health care kills us jobs

QOS shift? (3, Informative)

AuralityKev (1356747) | about a year ago | (#42131001)

I'd love to see an objective measurement of IBM's quality of service from 2002 to now, mapped against the shift to a majorly offshore work model. I work for a subsidy of a very large consulting competitor of IBM's, and are witnessing the same phenomenon - more and more offshore workers tacked on to project teams that just drag everything down. The more offshore we're shackled with (and I really mean that - we're given no choice by service line leadership) the worse we are able to deliver on our projects. The biggest issue for me is that once we've been able to identify the offshore rockstars - the fabled guys you can actually work well with, trust, and receive good quality work product from, they either get instapromoted to management or realize they can get more than just the 17k/year salary or whatever it is they're getting and GTFO. Either way you don't get to work with them for long. Then you get whoever's free in the pool when you're building a project team - no calling "dibs" on the right guys for the job. Quite often you just get a warm body who isn't familiar with the tech you're working with, the processes of project delivery, or will refuse to perform any work unless you have mapped it out to the click.

US: Waste and managment incompetence raise costs (1)

pudknocker (516571) | about a year ago | (#42131013)

Everyone knows that large corporations (all that I have worked for anyway, including IBM) have so much bureaucracy and obstacles that it raises costs. Probably true in India, too, but at least the wasted time doesn't cost as much. Sometimes, Dilbert is too true to be funny. Make that most times.

WORKERS OF THE WORLD UNITE! (2)

For a Free Internet (1594621) | about a year ago | (#42131041)

We have nothing to lose but our chains!

Beware of India's Coders (4, Informative)

scorp1us (235526) | about a year ago | (#42131169)

By decree, we are ordered to use outsourced programming. Our core competencies are seen by our company as industry specific and coding talent is seen as general talent, like a secretary. So we end up outsourcing a lot to a firm in India.

And what we got was crap. Now the fault is not entirely theirs. But in speaking in areas where they are at fault... The code is crap. I am in charge of audting the code we get back from them and it is mind boggling bad. To understand this more, I inquired to what schooling the "engineers" had gone through. It was about trade-school level, above high school but AA degree at most, which is not sufficient given the liabilities in our industry. Still 5 coders for the price of one domestically should still have some benefit? Well a lot of that got eaten away by the QA procedures that had to be put in place. Now the code we get is tolerable, and the Indian business is on track to (if they take additional clients) become an actual Indian Business Machines. Still there are enormous challenges. After going through all the effort we did to get usable code form the relationship, I'd rather have just hired a couple domestic coders. But we would not have the QA team that they now do. True, we would not have needed it, but now that it exists it is reusable. I am not allowed to see how much internal strife there is, I only get to see what their approved output (after QA) is so I don't know how much churn there is. What I do know is 5 $20k Indians still do not equal one $100k domestic engineer.

Unless your company can weather a rocky start of a relationship like this (who can these days, especially when things are outsourced to be done faster) I don't recommend outsourcing. We still won't let them in our core code base because we need expert code, but they are free to write extensions to the core.

more, because cheap or because good/better? (0)

Anonymous Coward | about a year ago | (#42131203)

so, Indian engineers tell me of India's higher numbers at IBM,
but - since it's -so- cheap to hire IT professionals in India -
there would seem to be -less- glitter on that statistic.

when IT salaries are the -same- (or nearly) across the planet,
then we'll agree that the land that has more IBMers (or name
the company you prefer over IBM) working in that land, will
win fairly & honorably.

Artifical Earnings (0)

Anonymous Coward | about a year ago | (#42131213)

Its the indians that are getting shafted cause you're really not seeing price drops in IBM products to reflect production savings. The demand is there for the products, they deserve a bigger cut of the pie but until they speak up for themselves and stop trying to cheat the system, they will continue to get shafted in a country that desperatly needs sources of income.

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