OT: U.S. firms move IT overseas

Wed Dec 11 20:26:50 CST 2002

This is pure labor economics.  There is no reason for a company to spend
more for exactly the same work.  The only way that these jobs will be kept
here is if it is more expensive to move them than it is to keep them.
Companies only care about people as much as they have to (aside from some
rare exceptions).  History can show you that.

FWIW, unemployment is now hovering around 6%, and was much worse in the
early 80's and in the early 90's:

http://www.cdrpc.org/rte_usa.gif

Aside from that, though, I'm not disagreeing with you at all.  I think that
this job migration is awful too.  Really, it's just an aftershock from the
bubble economy, IMHO.  Salaries skyrocketed, and firms began to look
elsewhere for cheaper labor.  The thing that they realized was that for a
lot of IT work (especially programming), it didn't really matter where the
work was being done, and that it was hence very easy to locate operations
offshore.  They still needed some talented pros domestically to keep
everything running smoothly, but most of the gruntwork could be sent where
grunts could be hired cheaply.

The auto industry has been doing this for decades, and so have most other
manufacturing industries as well.  I remember talking to a friend that
worked for Ashley Furniture about their processes.  He said that what they
would do was ship American oak overseas to China for millwork, and then
ship the tooled pieces back here for final assembly.  Because of the cheap
labor overseas, this was the cheapest way to get the most expensive work
done, despite the fact that most of the wood in a given item had "logged"
over 20,000 miles before it ever got assembled.  As a bonus, they could
still market the stuff as "Made in the USA" and "made of American Oak",
because it really was.

So, IT finally caught up with manufacturing.  Big deal.  There will still
be a market for "premium" domestic IT services that other countries simply
cannot provide, the industry will survive, and the economy will recover.
The workers will get trampled on, and the companies will continue to get
richer.  The main thing is just to stay ahead of the curve.

- Kevin

                    "Jeremy Fowler"                                                                 

                    <jfowler at westrope.com>       To:     "Kclug at Kclug. Org" <kclug at kclug.org>       

                    Sent by:                     cc:                                                

                    owner-kclug at marauder.i       Subject:     OT: U.S. firms move IT overseas       

                    lliana.net                                                                      

                    12/11/2002 01:54 PM                                                             

U.S. firms move IT overseas
http://news.com.com/2100-1001-976828.html

<rant>
This just makes me sick. "By 2015, a total of 3.3 million U.S. jobs and
$136
billion in wages will transfer offshore to countries such as India, Russia,
China and the Philippines, according to Forrester." We're in a major
recession!
Unemployment is at an all time high! What the hell are these US companies
doing?
Outsourcing to other countries! Are they out of their friggen minds? Do
they
realize what this will do to our already dismal economy? "as much as 40
percent
to 50 percent of U.S. IT services work could be done overseas in the next
five
to 10 years" What's sad is that our government probably won't do anything
like
set tariffs because these same companies have our congressmen in their
pockets.
This is bad, very, very bad.
</rant>

PS> Sorry about the non-Linux post. -Jeremy