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Study Claims Offshoring Doesn't Cost US Jobs

kdawson posted more than 7 years ago | from the uh-huh dept.

United States 830

SwashbucklingCowboy writes "Infoworld has an article up about a survey by the Software & Information Industry Association claiming that offshoring doesn't cost American jobs. The article quotes the executive director of the SIIA as saying, '[Offshoring] was used almost entirely as a form of expansion, not as a replacement.' Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

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830 comments

Speaking as someone who's lost opportunies (1, Insightful)

rsilvergun (571051) | more than 7 years ago | (#17560270)

I can say this study is wholly and completely inaccurate. Well, that's the diplomatic way to say it anyway ;).

Re:Speaking as someone who's lost opportunies (1)

Orig_Club_Soda (983823) | more than 7 years ago | (#17560604)

Last time I heard this claim was an article in Wired. The jobs growing in the US are services jobs. Lower wages, lesser skills.

Re:Speaking as someone who's lost opportunies (1)

Bloke down the pub (861787) | more than 7 years ago | (#17560728)

The jobs growing in the US are services jobs. Lower wages, lesser skills.
Service jobs such as lawyer, marketing consultant, SOX commpliancy officer and did I mention lawyer? I wouldn't mind being a few bob poorer than most of them. But re the lower skills, you're probably right on that front.

That depends upon what they're measuring. (4, Insightful)

khasim (1285) | more than 7 years ago | (#17560724)

I can say this study is wholly and completely inaccurate.

It depends upon what they are measuring.

From TFA:
The biggest challenge for software companies was they could not build development teams fast enough in the United States because of a shortage of both engineers and H-1B visas, Thomas said. Offshoring provided a way to leverage existing developer teams, he said.

Notice the usage of "H-1B visas" in that statement? That tells you what they're actually looking for. Cheap labour. The cheaper, the better.

The question isn't whether there are enough H-1B visas available.

The question is how many programmers are there in the US vs how many programming jobs there are in the US.

I'm not seeing that question being asked. All I'm seeing is stuff on savings and such. If they're measuring cost savings, then they're not going to find any lost jobs, are they?

who's saying that? (4, Insightful)

User 956 (568564) | more than 7 years ago | (#17560302)

Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?

Who's saying the job could have been created in the U.S.?

Re:who's saying that? (4, Funny)

Jason Earl (1894) | more than 7 years ago | (#17560460)

Everyone knows that the only jobs that count are the jobs in the United States. The rest of the folks in the world don't need jobs, they just need government cheese.

Re:who's saying that? (0, Troll)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560644)

Everyone knows that the only jobs that count are the jobs in the United States. The rest of the folks in the world don't need jobs, they just need government cheese.

Wrong. What we're really saying is that instead of being parasites on American businesses, maybe they should create an industry of their own and compete with us fairly instead of stealing jobs.

Re:who's saying that? (1, Interesting)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560464)

Anybody to whom patriotism means more than profit. I realize that patriotism may be an entirely foreign concept to free traitors, but that's the difference between somebody who takes a college graduate and trains them to do the job and somebody who just offshores the job.

Re:who's saying that? (1)

Wandering Wombat (531833) | more than 7 years ago | (#17560824)

I'm glad that profit means more to me than patriotism, because patriotism is one of the greatest evils perpetuated in the world (profit is still a great evil, but behind patriotism by a few places!)

"He is a poor patriot whose patriotism does not enable him to understand how all men everywhere feel about their altars and their hearthstones, their flag and their fatherland." --Harry Emerson Fosdick

"'My country, right or wrong' is a thing that no true patriot would think of saying, except in a desperate case. It is like saying, 'My mother, drunk or sober'." - Gilbert Keith Chesterton

Re:who's saying that? (1)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560896)

I'm glad that profit means more to me than patriotism, because patriotism is one of the greatest evils perpetuated in the world (profit is still a great evil, but behind patriotism by a few places!)

Where I completely reverse that. For without patriotism, there would be no profit!

Protectionism (1)

paladinwannabe2 (889776) | more than 7 years ago | (#17560908)

I'm not entirely sure why so many people believe that hiring an American is somehow more virtuous than hiring a foreigner. Is it just thinly disguised racism? A belief that Americans are more worthy of a job because of where they happened to be born? Or is it just a fear that they aren't as qualified for their own job as someone else could be?

Re:who's saying that? (3, Insightful)

onecheapgeek (964280) | more than 7 years ago | (#17560500)

Looking beyond, isn't that the same argument the **AA uses regarding theft?

"If you download it from someone, that's a sale we aren't making."

Because (1)

Travoltus (110240) | more than 7 years ago | (#17560746)

the work apparently had to be done by someone, for American customers.

Offshoring is racist - because jobs and resources can go across borders, but not American workers.

This is easy to expose as bulls (clap) hit. (1)

cHiphead (17854) | more than 7 years ago | (#17560794)

AMERICA ONLINE. Thats all the evidence you need. Almost all of the AOL tech support call center functions were offshored. The Jacksonville, FL call center was shutdown rather suddenly. Phoenix, Dulles all had layoffs as well. The layoffs began well before AOL was on its final slide to its current insignifigance in the online world. (sorry AOL, but its the sad truth of it)

Cheers.

Re:who's saying that? (3, Informative)

bcharr2 (1046322) | more than 7 years ago | (#17560826)

I remember awhile back reading an article about how IBM was opening a new center in India and "creating" 1000 new jobs, and IN A COMPLETELY UNRELATED MOVE closing a center in the U.S., where they would be cutting 1000 jobs.

The report did correctly state at least one factor in outsourcing: "Seventy-three percent of respondents report a positive impact on profits".

Re:who's saying that? (1, Interesting)

slughead (592713) | more than 7 years ago | (#17560868)

Who's saying the job could have been created in the U.S.?

Exactly! Especially with the upcoming minimum wage increase, there are many jobs being created oversees that would not exist in the United States even if there was more protectionism.

Instead of Mattel opening a factory in China to make its stupid toys, they would buy them direct from a Chinese company.

As far as tech jobs, I think American companies like Google will be focusing on new technology rather than engineering implementation of old tech. Abroad, companies will be paying engineers to make custom software applications, which simply require one to know the language, not have big ideas.

Programming is a large field broken into 2 groups: The Art/Science, and the commodity. There's no need for overpaid American geeks to waste time making custom data management software for American corporations. The market for that got too big and the economy of scale on producing new programmers got cheap. As a programmer myself, I'm sad to say I didn't see it coming.

Also, there's no correlation between the loss of American jobs and offshoring. In fact, far more offshoring went on during the 90's than the 2000's and nobody can say the US had fewer jobs afterwards.

The nature of trade is quite simple: each party places a higher value on the good/service they're getting than the good/service they're giving. Therefore, American companies who outsource oversees have more capital at the end of the day, which they generally use to create more wealth.

Somewhere in there it trickles down, but you can take an economics class to learn about that.

Re:who's saying that? (2, Insightful)

Chyeld (713439) | more than 7 years ago | (#17560968)

Do you work for the RIAA?

Just curious....

They seem to think the same thing about sales...

In other news... (0)

Anonymous Coward | more than 7 years ago | (#17560314)

...the US is winning in Iraq.

Film at 11!

No. (2, Insightful)

wwwojtek (246402) | more than 7 years ago | (#17560318)

Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?

No. Another job can be created here instead.

Indeed (3, Insightful)

Travoltus (110240) | more than 7 years ago | (#17560870)

a Wal Mart job, for the most part.

Offshoring IT means new people will never get into the industry at all.

IT now demands high level network administrators and accomplished programmers. Americans cannot reach that level of expertise without starting out as a lower level programmer, software tester, sysadmin, tech support person, etc. - and those jobs have gone overseas.

The higher level jobs can't be filled because no new qualified workers are coming into the US workforce, and the qualified people are entrenched in jobs they won't leave, or are afraid to leave. And yes, before you say otherwise, I know this. I am a data center manager and I see our ads go unfilled constantly. Which is why since before this data center came up, I kept our jobs from going overseas and made sure we grow our talent right here, in house. My lead network administratress started out as our receptionist and then a tech support rep, then a tester, then a sysadmin, then a network admin. At other companies, that ain't gonna happen. Ever.

So no, another job was not created here - except low paying service jobs like Wal Mart cashiers, and super high end jobs that newcomer Americans can never qualify for.

Oh yeah (1)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560320)

Yet another insult from the damned CxO class to the Programmer's Guild. I wonder how many Americans they have to insult before people start shooting CIOs?

Re:Oh yeah (0)

Anonymous Coward | more than 7 years ago | (#17560496)

Pres Bush insults this nation every day and yet somehow manages to stay unharmed.

nice, another study (1)

asapien (582847) | more than 7 years ago | (#17560326)

Forgetting the fact that I've had to get a new job nearly once a year since 2001 due to outsourcing, not necessarily to India, but to Canada and Vietnam.

Re:nice, another study (1)

maxume (22995) | more than 7 years ago | (#17560734)

How many of the positions that you moved into were newly created? Are you more productive or receiving better compensation?

Churn is unfortunate, but on a policy level, it makes sense, some jobs do occasionally become unnecessary or whatever, and keeping them around is only good for the person holding the job.

RIAA? (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17560334)

A song pirated is a lost revenue song!

yeah, right (1)

Psyberian (240815) | more than 7 years ago | (#17560338)

Ok, off shoring does cost american jobs. I had a friend who worked for HP a few years ago in their customer service department. Guess where his job went.

Re:yeah, right (-1, Flamebait)

Anonymous Coward | more than 7 years ago | (#17560470)

If your friend is a dumbass who couldnt make anything of himself and had to resort to calling me during dinner...then I'm glad he lost his job. Give your friend the middle finger from me would you.

Re:yeah, right (1)

chrismcdirty (677039) | more than 7 years ago | (#17560736)

Customer service generally doesn't call you during dinner to make sure your HP product is working correctly, retard.

Uh-huh - Ask the Intel employees that lost jobs (5, Insightful)

stevew (4845) | more than 7 years ago | (#17560344)

Well - that may be what the study says, but that simply doesn't jive with Silicon Valley's experience. The valley (read US Semiconductor Industry) has never really recovered from the Dot-Bomb downturn. We lost around 200K jobs here in Silicon Valley after the downturn, and they have never really come back. What happened was Bangalore.

Just to highlight this - there was an entire division of Intel that was closed down and re-opened in India a few years ago. You could relocate to India or loose your job. Real simple choice. Speak Hindi??

Re:Uh-huh - Ask the Intel employees that lost jobs (1, Insightful)

UbuntuDupe (970646) | more than 7 years ago | (#17560526)

Yeah, but what about the three jobs that were created in Northwest LA because a dry cleaner could now afford the IT support he needed to open more offices, or the six jobs in the interior decorating firm that got a surge in business because it could now afford to mechanize some of their operations and get more clients who can now afford them, or the construction firm that now needs more labor because they could the design for a larger building cheaper... x1000

Those little victories don't make the news.

Re:Uh-huh - Ask the Intel employees that lost jobs (4, Insightful)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560704)

None of those "little victories" are victories. They're all substandard pay jobs at smaller companies.

Re:Uh-huh - Ask the Intel employees that lost jobs (2, Insightful)

UbuntuDupe (970646) | more than 7 years ago | (#17560808)

Okay, sorry, I probably shouldn't have made two of the three examples dead-end jobs.

I was just trying to make the point that the efficiency gain in shifting to Bangalore -- to the extent it exists -- simply frees up those Americans to satisfy some other demand. And, that the new jobs will come in bits and pieces that don't make the news.

Re:Uh-huh - Ask the Intel employees that lost jobs (4, Insightful)

the_humeister (922869) | more than 7 years ago | (#17560580)

No, what really happened were idiots with too much money funding stupid ideas just because it was related to the internet somehow. If more rational heads had prevailed, those 200k jobs that you guys lost wouldn't have been there in the first place.

Re:Uh-huh - Ask the Intel employees that lost jobs (1)

Yold (473518) | more than 7 years ago | (#17560940)

The dot-com boom was the largest creation (and destruction) of wealth in human history. Of course jobs were lost because there isn't the artifically created wealth (think highly overvalued stock prices) to support it.

Unfortunately the number of people able to provide IT support is growing in foreign countries where the standard of living (cost is lower). Learning to configure networks doesn't require a ton of learning. A lot of people are capable of managing networks, hell I was doing it for $7.50 an hour when I was 16 (at a larger hotel). I worked technical support for an ISP for $6.50 an hour. IT work just isn't as valuable as it used to be. Admins can manage more computers with less training nowadays. On the other hand, demand for U.S. computer engineers/programmers continues to rise. This skill is highly math-centric

Lets face it, the decline of the IT industry is like any other. It is creative destruction, lower-paying jobs are outsourced to make room for new ones that require more human (or other) capital. A four-year degree ain't what it used to be.

In related news, study claims Moon is Green Cheese (2, Insightful)

WillAffleckUW (858324) | more than 7 years ago | (#17560362)

Just because it's a study doesn't mean it's scientifically valid or correct.

Reality is based on observation.

Who lost it? (0)

Anonymous Coward | more than 7 years ago | (#17560380)

Nope. If it was just a matter of location it'd be silly to put your employees far from reach. It's a matter of money. Those jobs created overseas could not exist in the US since they simply don't pay enough to be legal or worthwhile for someone seeking employment would take.

Under 5% unemployment is termed "full employment". New jobs created here have to be worthwhile or else they'll stay open for ever. This isn't the late 1800 - early 1900's, after all.

Re:Who lost it? (1, Insightful)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560550)

Under 5% unemployment is termed "full employment".

The only idiots to claim that are class warriors attacking the middle class. One day the middle class will figure out that they're being attacked, and bullets will be flying in the economics departments of major colleges for insults such as this.

Hint to idiots: "Full Employment" to most people means 0% unemployment, not moving 20% of the labor force to disability to create an artificial 5% unemployment rate.

Offshoring cost me my job (5, Interesting)

JavaManJim (946878) | more than 7 years ago | (#17560414)

I worked for a major retailer for 17 years, then Feb 18 2005 wammo! My job was replaced by offshoring. The person now at my desk is a figurehead (or project manager) for a programming group in Bangalore.

Thanks,
Jim

Re:Offshoring cost me my job (1)

JeanBaptiste (537955) | more than 7 years ago | (#17560586)

Unemployment in the 00's is lower than unemployment was in the 90s. or 80s. or 70s.

I do not understand all the whining about lost jobs due to offshoring.

Sure it sucks in your case, but that is one anecdote, where the statistics at large paint a different picture.

Re:Offshoring cost me my job (1)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560744)

Unemployment in the 00's is lower than unemployment was in the 90s. or 80s. or 70s.

Only if you don't add in the 20% loss in the labor force due to the DOL illegally reclassifying people as disabled.

I do not understand all the whining about lost jobs due to offshoring.

Of course you don't if you're profiting from it- in other words are a traitor.

Sure it sucks in your case, but that is one anecdote, where the statistics at large paint a different picture.

Not the real statistics- only the fakes put out by the DOL to make Bush look good.

Re:Offshoring cost me my job (1)

JavaManJim (946878) | more than 7 years ago | (#17560876)

I agree Jean, my anecdotal comment is but one tiny grain of sand on the beach.

Regarding other's bitter comments, it hurts when your life is turned upside down. I am fine because of my solid faith. But those who work endless 14 hour days (including commute time) and who are devoted to their jobs, they suffer the most when their dedication is rejected. Its a rejection of their core being.

I think a deeper economic analysis needs to be made of the situation. Thats what I am studying right now. Its more tricky today. In the past when farming went to manufacturing that took fifty years with plenty of time to adjust. Same when manufacturing went to information technology\services. But when information services vanish, what's left?

Thanks for your great comment,
Jim

Flawed Logic (5, Insightful)

jarrettwold2002 (601633) | more than 7 years ago | (#17560436)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

Answer: No, the job isn't lost. There are a whole lot of jobs that could be created here, but aren't.

That same flawed logic is what drives RIAA and the MPAA to massive lawsuits. "If a cd is not purchased that could have been purchased isn't that a lost sale?"

No, no it's not.

I'm not a fan of outsourcing, but at least use some logic here.

Re:Flawed Logic (1)

Hoi Polloi (522990) | more than 7 years ago | (#17560676)

The logic isn't completely off. If the job could've been made here (though at more cost which they could still afford) then it is a lost job. The RIAA/MPAA assume you would've made the purchase without any proof. These jobs however were planned and definate so they were going to be generated. If you purchased the CD then returned it and downloaded a copy instead then that would be a better comparison.

I agree though that just saying it is a lost job without checking the requirements isn't correct. You can't create a job for handling local on-site customer support in Madras India by creating the job in Omaha Nebraska.

Re:Flawed Logic (1)

ect5150 (700619) | more than 7 years ago | (#17560860)

Another argument (in addition to yours) is to consider at what cost. If it pays less than half to hire someone overseas as opposed to inside the US, its going to happen over there and never over here. Most people seem to forget that. Those jobs would NEVER be created here is they have to pay someone twice as much. Simply put, quantity supplied of people wanting that job far exceed the demand of those workers.

How reasuring... (1)

dbzero (64544) | more than 7 years ago | (#17560468)

I'll have to let my brother know. He'll feel good to know that the 6 figure IT job he was just laid off from so it can be shipped offshore didn't really happen.

every job lost is a job gained. (5, Funny)

bunions (970377) | more than 7 years ago | (#17560482)

Sure, we lose a 40 hour/week programmer position to [india|china|vietnam|swaziland], but we generate 40 hours/week worth of bugfixing and project management work, so it's really a wash.

Duh (1, Insightful)

cavemanf16 (303184) | more than 7 years ago | (#17560486)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"


Wow, that is some astoundingly simplistic logic there. Good work!


Temporarily it may be a job lost, but cutting costs allows for further expansion of a business. (if the business is intent on growing, which 99.9% of businesses in the US ARE interested in doing I think.) I've been of this opinion all along that off-shoring was no great threat to jobs in America, just like buying Japanese cars or clothing made in Taiwan and China posed any major threat back in the 80's. It's the stifling of expansion and growth (like the stifling of 3G, wireless, and broadband spectrum use in the US) that poses a serious threat to jobs in America. Freedom is risky, but risk produces hefty rewards. No freedom, no risks, no rewards. If you don't want the risks of losing your job due to IT off-shoring, go move to France. I'm sure you'll find the rewards there are in much less frequent supply than here in the U.S.

Re:Duh (5, Insightful)

dr_dank (472072) | more than 7 years ago | (#17560762)

Temporarily it may be a job lost, but cutting costs allows for further expansion of a business.

Expansion to where? Third world countries may benefit from having a pool of low-cost labor with little regulation, but that doesn't help the labor at home. Even if they are lower level IT/support jobs that are typically affected by outsourcing. How can you expect to train the next generation of workers if theres no bottom rung for them to start from? Take a look at Monster.com postings and see the experience demanded for jobs. A system where the entry level really doesn't exist cannot sustain itself for the long term.

If you don't want the risks of losing your job due to IT off-shoring, go move to France. I'm sure you'll find the rewards there are in much less frequent supply than here in the U.S.

I know France is used as an insult, but if they protect their middle class rather than let the greedheads in corporate management gut their job base for their short term gain before ejecting with their golden parachutes onto their next abomination, maybe its not so bad.

Re:Duh (1)

GodfatherofSoul (174979) | more than 7 years ago | (#17560792)

Hmmm, so I guess the flood of outsourced jobs and the severe depression of new job wages are just coincidental? You're using more of that Libertarian pipe-smoking non sequitor logic. Just because a business cuts costs does NOT mean that money is trickling down to the US workforce. Hell, now there's a move away from even doling out stock dividends. Now which brokerage is handing out $10s million bonuses to executives? Freedom != Open Markets

Not necessarily (0)

Anonymous Coward | more than 7 years ago | (#17560488)

Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?

Or the job may not have been created at all if not for the economic advantages, perceived or otherwise. It is like the MPAA/RIAA arguing that piracy costs them billions a year in lost sales when in fact the so-called pirates may never have intended to purchase the item in the first place.

No, Because there wasn't an American to fill it (1)

mandelbr0t (1015855) | more than 7 years ago | (#17560502)

I expected to find an article filled with made-up numbers and logical fallacies. There wasn't much in the line of reasoning, so no fallacies, and the numbers are comprehensive and cited. The claim is that there aren't any Americans to fill the job anyway. Three quarters of businesses were happy with the work that was done off-shore. I read that to mean that they're not just looking for a warm body but someone who can do the job to an acceptable standard.

Is there really a skilled labour shortage? Everyone who works in HR at an IT company or a company with an IT department seems to think so. If companies are really choosing offshoring because they can't find an equally qualified person onshore, than Americans aren't losing jobs. To compete with the offshore candidate, they'd need to receive further education. Perhaps the real problem isn't that Americans are losing jobs, but that they lack enough education to compete with skilled professions in a global market.

mandelbr0t

Re:No, Because there wasn't an American to fill it (0)

Anonymous Coward | more than 7 years ago | (#17560668)

If companies are really choosing offshoring because they can't find an equally qualified person onshore, than Americans aren't losing jobs.

Get your head out of the sand. Companies are redefining their qualifications for positions in order to make it impossible to hire workers at American wages.

Re:No, Because there wasn't an American to fill it (1)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560800)

Is there really a skilled labour shortage? Everyone who works in HR at an IT company or a company with an IT department seems to think so.

That's because the real skilled labor shortage is in HR departments who know NOTHING about IT to begin with and wouldn't know a skilled worker if they hacked in and stole the HR person's bank account information. HR people are idiots who couldn't program their way out of a paper bag and can't be counted on as a valid source of information in IT skills.

Re:No, Because there wasn't an American to fill it (1)

theglassishalf (216497) | more than 7 years ago | (#17560842)

First of all, this is one of the worst "studies" I've ever seen. It was a survey, by an industry group, asking its members "are you costing American jobs?"

Of course everyone is going to answer "No, we didn't bleed any American jobs, we just added-on to current numbers." I would imagine that the companies that fired large numbers of American programmers just didn't respond. And of course a survey by an industry group is going to come to exactly the conclusion that the industry group wants to put forward: that we need more H1-B visas, rather then "companies need to spend more money on training." Total rubbish.

Re:No, Because there wasn't an American to fill it (1)

ohearn (969704) | more than 7 years ago | (#17560846)

Tell that to the 600 people I worked with at a call center several years back (main job working through undergrad) when Gateway decided to close that call center and move it and all 600 positions to India. Remember that outsourcing happens to existing jobs as well as new ones all the time.

Re:No, Because there wasn't an American to fill it (1)

Eli Gottlieb (917758) | more than 7 years ago | (#17560926)

OR.... the Americans lack 5 years experience in Windows Vista C# programming and the Indians have no qualms about faking resumes.

Yeah but (3, Insightful)

tsotha (720379) | more than 7 years ago | (#17560506)

'[Offshoring] was used almost entirely as a form of expansion, not as a replacement.'

Yeah but when the economy turns down, who are they gonna lay off, the guy in California making $50/hour or the guy in Mumbai making $9/hour? Sure, everyone's happy when things are humming along, but the cracks will show later.

Double Standard (0)

Anonymous Coward | more than 7 years ago | (#17560510)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

Well, if a song is downloaded from the internet that could have been purchased, isn't that a lost sale?

Re:Double Standard (0)

Anonymous Coward | more than 7 years ago | (#17560630)

Considering the costs of finding out if I like it or not (download: free, album: $15), I might not be willing to buy something to just check it out.

I lost mine (1)

Texodore (56174) | more than 7 years ago | (#17560514)

I will say that even though I lost a former job to outsourcing and cost-cutting measures, my impression having worked for 2 companies that outsource is that companies are willing to hire more employees than necessary in outsourcing operations just because they cost less. That may factor into the numbers. If I lay off 8 people in the states and hire 10-12 replacements, I have created jobs kind of but not really. I've seen this many times in the efforts to get a group in India up and running.

Not that I've ever seen it successful yet...

No. Learn arithmetic. (0)

Anonymous Coward | more than 7 years ago | (#17560518)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

I learned in elementary school that 2+0=2. Therefore the answer to your question is "no." This simple mathematical skill, known as "arithmetic," is difficult to remember when participating in political discourse mostly because it's so rare, but is absolutely vital in making public policy that isn't simply all wrong.

Re:No. Learn arithmetic. (3, Insightful)

Marxist Hacker 42 (638312) | more than 7 years ago | (#17560592)

The equation isn't 2+0=2 to the middle class. The equation is 2-1=1 to the Middle Class. You can lie with artithmetic as easily as any other language.

Economy is Dynamic & Hard to Quantify These Th (2, Insightful)

geoffrobinson (109879) | more than 7 years ago | (#17560566)

If Company A is struggling and they outsource and save money, they may lose 100 jobs but save 1000.

Another company could become more competive and grow here as well as overseas. Different jobs that better utilize American talents may be created here.

Or a company may just slash jobs that go overseas.

Life and economics doesn't have a Tivo attached to it.

offshoring sucks, it takes away jobs (0, Flamebait)

MrJerryNormandinSir (197432) | more than 7 years ago | (#17560582)

hmm... If you believe in outsourcing then you are no better than a drug dealer.
Your willing to sell out your country's future just to make a buck.

I was an Systems Engineer at Welch Foods. The CIO that was in place retired, a bean
couting soon of a bitch was promoted to be the new CIO. Under his direction the company decided to outsource IT. I was asked to teach the "offshore" team about my code and
Linux / Oracle Cluster layout. I put it off for 6 months and ecouraged my colleges to
get thier resumes out. They did, and so did I. I did not teach the remote team. I
left for my new position somewhere else, and gave myself a little vacation in between.
I touched base with some of the non techies that were my friends, they said it's not the
same without me and my friends. It not takes weeks, not hours to get get some custom coding done. It takes a several weeks to get Oracle patches in, the remote team has a high
employee rollover rate. Welchs deals with new people every 4 months.
hey... no love lost here. If they were willing to sell me and my friends out, then
too bad.

Don't Indians believe in Karma? Didn't it originate there?
hmm.. pretty soon it's payback time!

correction (1)

Bloke down the pub (861787) | more than 7 years ago | (#17560594)

Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"
s/could/would/

(yes, there's probably a more efficient regexp to do that. No doubt someone will point it out).

Slight twist (yeah, a bit OT) (1)

goldspider (445116) | more than 7 years ago | (#17560606)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

If a movie is downloaded that could have been purchased, isn't that a sale lost?

expansion, not replacement.. wth? (2, Insightful)

yagu (721525) | more than 7 years ago | (#17560616)

From the article:

[Offshoring] was used almost entirely as a form of expansion, not as a replacement," Thomas said.

So, how is hiring someone out of the United States be it expansion or replacement anything but fewer jobs for the United States?!?

Above was going to be my original post, but it's pretty clear many others beat me to the punch, and it's (in my opinion) also seemingly clear there is a lot of opinion and sentiment the article is talking out its private parts.

It's interesting to me the ones making decisions to do the outsourcing are the ones funding the studies to somehow assuage their collective guilt. There's lots of empirical evidence jobs have been and continue to be lost through outsourcing.

It won't happen right away (4, Insightful)

MikeRT (947531) | more than 7 years ago | (#17560634)

The job market is a lot like demographics. When you cut the young out of the picture, you end up with a collapse over the horizon. Just as societies that have sub-replacement level birthrates get pummeled by other nations and immigrant groups that do in the long run, countries that cut off the supply of apprentice-level work to their young find that surprise, surprise, their young people never become older replacements for their field.

The problem is very complex. It's a cross between expensive regulation that makes Americans expensive, lack of foresight being called an asset by many business people and just general lack of concern about the future.

One day America will look around and say, there's so much opportunity for those that know where to go, but why aren't Americans filling these jobs? Then the displaced CS, EE, hard sciences, etc. students can say "you fuckers brought it on yourselves."

There is also a realpolitik aspect of it that should scare the hell out of our leadership. Capitalists of all stripes love to harp on human rationality, but humans are **rationalizing** not **rational** beings. Nations go to war at times for completely idiotic, abundantly obviously suicidal reasons. Witness Gulf War I and Iraq. Who actually thought that Iraq wasn't going to get pummeled into oblivion militarily? Yet they did it anyway!

See, the thing is, we might not always be allies with India, Pakistan, Taiwan, etc. We might actually end up at war with them in the future. It's slim, but who knows. The people who poo poo these concerns need to face up to the facts of history which is that nations have no permanent allies, only interests. One day, we may find that all of this regulation cost-imposed outsourcing has put America in dire threat of having not enough engineers to actually keep its economy strong, its military well-equipped, etc. We might find that some of these nations are also feeling stronger, and want to start doing things their way.

So your telling me... (1)

oxpecker (904374) | more than 7 years ago | (#17560670)

So your telling me that in 2004 when my job was outsourced to india and i was fired because they can pay some jack ass 30 cents an hour to do my job half way across the world that my job wasnt lost? Whoever worte this needs to be stabbed the crotch so his stupidity can spread out into the genepool.

Re:So your telling me... (0)

Anonymous Coward | more than 7 years ago | (#17560972)

Then you should ask yourself why your job description may be performed by some "jack ass" for "30 cents an hour".

If the outsourced IT produces crap, you can get paid more than before to fix their problems or get a job to be their boss/supervisor. If you are the weak link, you should be replaced.

elo (1, Funny)

Anonymous Coward | more than 7 years ago | (#17560680)

The data compiled for this study was composed in Bangalore India.

A few simple facts. (3, Insightful)

JesseL (107722) | more than 7 years ago | (#17560690)

1. You do not own 'your' job.
2. You are not entitled to a job.
3. If someone else is willing to do the same work for less money than you do, too damn bad for you.
4. Yes, it is a race to the bottom. No, that isn't necessarily a bad thing in the long run. When you want to fill a container you have to fill the bottom first.
5. If you think you're better than the people 'your' job was outsourced to, prove it.

/flame on

Study Correct (1)

Lord_Slepnir (585350) | more than 7 years ago | (#17560702)

Offshoring does not decrease US tech jobs. What it does do is increase the supply of IT workers available to a US company, thus lowering the price. Instead of having to dangle a $60,000 / year job to get a good candidate, a company can dangle a $50,000 / year job and have it filled.

The important information (1)

Guppy06 (410832) | more than 7 years ago | (#17560722)

Who paid for it:

"a survey by the Software & Information Industry Association"

True for us (0)

Anonymous Coward | more than 7 years ago | (#17560750)

Speaking for our company (a small startup software co.), we expanded offshore. We did not have the funds to expand within the US, and hiring offshore allowed us to thrive and grow where before we were at risk for failure and disolution. We have, as a result, been able to grow and actually do some hiring in the US. These new jobs would not exist if not for the fact that we offshored previously to survive.

That being said, any generalization one way or the other is going to be inaccurate. I have no doubt that people have lost their jobs to offshoring, but that doesn't mean it isn't beneficial in other situations.

Don't be Selfish (1)

logicnazi (169418) | more than 7 years ago | (#17560782)

People are no less morally worthy because they live in Bangalore India rather than Bangor Maine. Sure it might suck if you lose your job because it moved overseas to India but it doesn't suck anymore than if you lost your job because it moved to another state. There is no justification to be up in arms about India attracting tech jobs than there is to be up in arms because Virginia and other states with lower paid programmers are attracting tech jobs from Silicon Valley.

Moreover, the people in the third world benefit far more from these jobs than do Americans. The difference in lifestyle a good job makes in the US (where social services and other benefits provide a safety net) is a lot smaller than the difference it makes to someone in a third world country. Relative to the countries 'taking' our jobs we are the very wealthy and it is disgusting that we whine when they want even an unequal share of our prosperity. If you believe the we should tax the rich to provide benefits to the poor, or just don't believe in making laws/policies to keep the rich rich and the poor poor it is hypocritical to complain when the truly poorly off start making some money by working harder for less money than people in the US do.

In the long run (and perhaps medium or even short term) I think outsourcing will benefit us, not only by making the world a richer and thus safer place but also by cheaper goods and economies of scale but even if this wasn't true it wouldn't be good grounds for complaining about outsourcing.

Bitching about outsourcing is just selfish pouting because someone else wants a poor version of the opportunities we enjoy!

Say it with me: "The economy is not zero-sum" (4, Informative)

Jerf (17166) | more than 7 years ago | (#17560786)

The idea that the economy is a zero-sum affair is so abundantly contradicted by readily available evidence that I find it almost amusing that it holds such sway over people.

No, a job created elsewhere instead of here does not automatically mean that it "costs" us a job here. Jobs aren't a resource that is mined from the Earth, jobs are created by the economy. If that overseas person does well enough, it may "create" two jobs here.

It's not even right to speak of jobs being "created"; a more appropriate verb might be funded. There's a "job" that involves you being my personal punchmonkey, but there's no way we're going to come to mutually beneficial agreement about that "job", so it isn't funded.

But the flip side holds; the net impact could be more than one job "destroyed". It's not zero-sum.

The whole thing is very complicated, because even if off-shoring a developer creates/funds five jobs over here, it may be the case that none of them are development work. Or one off-shored developer may well create three more development jobs, but not in Silicon Valley. (No, you don't get to say all three of those jobs are cleaning up after the off-shore guy; if off-shoring is a net negative value, the economy will eventually cut off the off-shoring, even if that means driving a particularly stubborn company that refuses to see it as a negative value bankrupt.)

But one thing it's not is "zero-sum".

(Even if you don't "like" capitalism, it's vital to come to understand what capital is and why capital produces more capital. Communism, and to a lesser extent socialism, can be seen as starting with the assumption the economy is a zero-sum game, and they end up creating a self-fulfilling prophecy on that front as in their zeal to make sure capital/wealth is evenly distributed, they destroy the mechanisms of capital/wealth creation. Actually, they end up with a negative-sum game. I'm not defending any particular instantiation of capitalism at this time, I'm just saying you damn well need to understand why it does what it does if you want to understand how economies work.)

Re:Say it with me: "The economy is not zero-sum" (1)

magical_mystery_meat (1042950) | more than 7 years ago | (#17560946)

So please explain to us how economics is the only science that is not subject to the First Law of Thermodynamics.

Not necessarily (2, Interesting)

proxima (165692) | more than 7 years ago | (#17560806)

Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?

Not necessarily. It's entirely conceivable that a firm cannot profitably expand operations and pay the wage required to hire a U.S. worker. However, the firm might be able to expand by hiring labor in another country (for a lower wage). In that case, the owners of the U.S. company (which often includes the company's own employees) would benefit. Keep in mind that foreign labor is not necessarily a perfect (or even very good) substitute for domestic labor.

This is not a zero-sum game, and it's very easy to oversimplify matters. I'm not saying that U.S. workers are not or cannot be replaced by foreign workers, I'm just saying that it's possible that foreign workers could be employed where otherwise there would be no job.

A similar argument has sometimes been made regarding investment outside of the U.S. After all, if you invest money in China, you're giving up investment in the U.S, right? Well, it's not that simple. One paper [ssrn.com], for example, claims that a 10% increase in foreign investment will lead to a 2.2% increase in domestic investment.

The point is, outsourcing/offshoring is a complex issue. Since it's such a new phenomenon, it will take some time for researchers to come to a consensus about its general effects.

Different study, different opinions (1)

jaytirth (304470) | more than 7 years ago | (#17560814)

Examining the source of funding is very important in studies. Not that the study has no value but that they have their own inherent perspectives (biases). Every manager you ask today talks about the difficulty to hire good talent... irrespective of the country they are in. But then what is "good" talent? .. we always want better than what we have now.

The bottom line is: The 'globalization' of industries and labor pools is going to cause upheavals in certain areas. No one complained when local industries in developing countries were destroyed due to the manufacturing and market power exerted by large western conglomerates. Similarly we are not going to see too much sympathy for programmers here that do run of the mill jobs that can be done anywhere else in the world. How many HTML programmers do we see today? I think the US has always been creative and must remain so in order to draw the wages they do today. If you stagnate, you lose.

Here is a report about another study conducted at Duke University about outsourcing:
http://www.businessweek.com/smallbiz/content/dec20 05/sb20051212_623922.htm [businessweek.com]

Easy to say... (1)

MatrixCubed (583402) | more than 7 years ago | (#17560818)

FTFA: "There's a lot of negative talk, that is particularly political, about offshoring costing American jobs", Thomas said. "That's not really the case."

It's easy to decree such 'truths' when done from an untouchable crystal throne. North America's going to the shitter, one outsourced job at a time.

Software Offshoring (0)

Anonymous Coward | more than 7 years ago | (#17560836)

From a software perspective, for every project that is offshored you need several people in the US to remove the bugs and actually make it work. The more software is contracted out, the more jobs are created here to manage that and to fix it afterwards.

Results 6 years after Lou Dobbs (0, Flamebait)

heroine (1220) | more than 7 years ago | (#17560858)

6 years after Lou Dobbs brought this issue back from the grave, we have better anecdotes. Most of our positions are management. Development is almost entirely in India. Out of 20-30 managers there are only 4 permanent developers. A lot of money is spent on travel to get the Indians on site. A lot of time is spent waiting for time differences and code drops from India.

Indians are better educated, more practical, less political. Through a strong Rupee, they are motivated by the prospect of becoming wealthy and owning a house in India. Americans are uneducated, political, and no matter how long they work, they can never become wealthy or own houses.

My experience with offshoring says otherwise (5, Insightful)

gillbates (106458) | more than 7 years ago | (#17560862)

"[Offshoring] was used almost entirely as a form of expansion, not as a replacement," Thomas said.

So, IOW, while we aren't actively replacing American workers, there are jobs that would otherwise have gone to American workers had they not offshored.

In economics, this is called opportunity cost.

The bottom line is the same, though: Instead of hiring American workers, they are paying foreign contractors

Now on to my experience. I was part of a team doing embedded development for a consumer electronics platform. We were under tremendous time pressure to get the product to market, so management decided to offshore the development of drivers which I had been working on. When I handed over my drivers to the offshore team:

  • The driver was responding to interrupts, and used an interrupt driven model.
  • The framework for using DMA was setup.
  • The framework to work with the kernel's block specific device driver interface was setup.
  • I estimated that it would have taken me another 4 to 6 weeks to complete the driver. The only things I had left to do were to write the routines which actually transferred the data to and from the device.
Now, 6 months and several deadlines go by, and we haven't heard anything regarding the drivers. Finally, we get our code back:
  • The interrupt code has been removed. The driver now works on a polling basis. Keep in mind how acceptable this would be in a real time system.
  • The DMA code has likewise been removed.
  • The driver doesn't interface at all with the kernel's specific device driver interface - instead, it uses a hack by which it talks to the block layer, bypassing the development track of every other said kind of device.
  • Oh, did I mention that the driver didn't work?
So, not only are we now behind schedule, we ended up shipping a broken driver to the customer. Several of our customers missed the Christmas selling season because our code wasn't delivered in a timely manner; worse, it's now 6 months late and doesn't work.

We had to spend several months of engineering time to debug/redo the driver to get it to a working state. Here's what offshoring cost my company:

  • We lost goodwill with almost all of our customers.
  • The licensing revenue for these customers was delayed by two quarters. We're lucky they paid us at all...
  • We lost the royalty revenues for the Christmas selling season for all our customers whose products were delayed.

In the end, offshoring was a net loss for everyone involved:

  • There are our customers, who lost potential revenue.
  • There is the American engineer who didn't get hired.
  • There are the overseas engineers, who were paid substandard wages.
  • There is the company, who may lose marketshare because of the reputation damage...

The only people who are getting rich from offshoring are the offshoring companies. The only reason why this fraud is allowed to continue is because it's hard to prosecute across national boundaries.

And, if anyone is wondering, we later learned that the engineers who wrote the broken code were formerly Java developers who had no experience writing embedded code. My company would not ever have hired these guys had they interviewed with us, yet we saw no problem in contracting a critical part of product to them.

Take a lesson from Spinal Tap (3, Funny)

maynard (3337) | more than 7 years ago | (#17560866)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?"

No... No: This one goes up to eleven.

American Jobs Lost Value (1)

SandwhichMaster (1044184) | more than 7 years ago | (#17560886)

As a consultant I've been around numerous corporate offices. At each of them I've noticed that half the people working there speak terrible english, and much of the work is offshored. Why is this? If I had to guess, I wouldn't say its because these people do a better job. Most likely they its because they do the work cheaper. Maybe we haven't lost jobs, but I'd say there's a good chance we've lost money.

Slashdot losses. (0)

Anonymous Coward | more than 7 years ago | (#17560922)

"Well, if a job is created elsewhere that could have been created in the US, isn't that a job lost?""

Same as if a sale not made because of piracy is a loss.

Very informing but wrong (0)

Anonymous Coward | more than 7 years ago | (#17560938)

Who were the idiots behind this study? The whole point of offshoring is to save money. You don't save money if you hire people offshore and don't eliminate jobs onshore. Or, if you hire offshore for NEW jobs, you eliminate positions you would have HAD to hire onshore for.

Its just a bunch of nonsense. If we put a brick wall around the country and you couldn't leave for anything, you can't tell me that the jobs that are being offshored wouldn't be taken up by someone in the country. Thats just ludicrous.

Overall vs Anecdotal (2, Informative)

govtpiggy (978532) | more than 7 years ago | (#17560956)

Sure you might have lost your job to outsourcing but why is it hard to believe that the money the company saves by firing you will be used to expand the companies operations? Eventually expansion involves hiring more local (US) workers. Companies that stay in business tend not to make irrational decisions. They have their best interests in mind which in turn means they have the US economies best interests in mind. Economy goes up, unemployment goes down. Not immediately but given time it happens.

Globalization = communist economics (0, Flamebait)

v3xt0r (799856) | more than 7 years ago | (#17560958)

1) keep buying walmart/target 'made in china' products.

2) keep selling out your country for a short-term reward by offshoring/outsourcing.

3) watch your country's economy fall apart and while you learn to speak mandarin.

4) profit!!

Globalization is bad for Americans. Don't let these elitist conglomerates misinform you. Do the math.
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