<p>Then why are you complaining about Infosys and Tata? Complain about IBM and Cisco. But then again, why are you even complaining about that? Don’t you have work to do? A life to attend to? Something more important than spreading your version of reality across these boards?</p>
<p>Fact: outsourcing happens.</p>
<p>Myth: it is the end of the world for electrical and computer engineers and scientists in America.</p>
<p>
</p>
<p>First of all, these companies are not experts with engineering but are very skilled with software and business process outsourcing. I had an internship at a company that employs offshoring/outsourcing extensively. BTW, India is far behind the US (and China) in terms of engineering but not at programming/services. </p>
<p>As for outsourcing, companies either establish a facility in India/China (offshoring) or they can contract the services to known offshore outsourcing giants such as Tata, Infosys, IBM, and Accenture (yes, not all of them are Indian firms). </p>
<p>Secondly, how these firms work is that they are contracting companies. They sometimes completely the US team. However, what is more common is that a lot of permanent workers are laid off and some are retained in core functions. These firms do both “offshore” and “onshore” delivery. Offshore = have people in India do the work at night. Onshore = import H1B workers at lower wages. Companies can also opt to have a smaller US team that works on day to day operations and to import workers when there is a spike in project work to be done. Either way, US workers are displaced and talent is not the reason. </p>
<p>I talked to my manager and he put it clearly that cutting costs, not talent, is the reason. However, people in India are certainly capable of getting the work done. Economics is drivng the unemployment rate, not a lack of US talent (though this is also a problem at some level).</p>
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</p>
<p>True but it marks the beginning of much tougher competition for US workers and a reduction in the standard of living for those in the US, who (for those who have jobs – still the majority) now work much longer hours with fewer benefits and far less job security and possibly lower wages. It is especially bad for those over the age of 50.</p>
<p>Also, WIPRO and INFOSYS are not really sweatshops. People are paid 1/3 of the US counterparts but considering the cost of living in India (excluding real estate in prime areas), they live much more luxurious lives than their US counterparts. They can afford to have several servants to take care of household tasks, a driver to drive them around, to eat out every day (if that is what they want), and to even fly on their own money to Europe and the US. </p>
<p>Infosys is quite selective though, especially for freshers. They get people from top engineering colleges in India and provide training far superior to what any US company (or most educational institutions for that matter) provides. Look up Infosys University for example.</p>
<p>Also, these companies provide perks to their employees unimaginable in the US (largely due to cheap labor) such as extensive free corporate training and several chauffeured cars to drive them from home to work. </p>
<p>This is not like Nike or Reebok outsourcing to the Honduras. These workers are well compensated and live quite good lives.</p>
<p>Fortunately, pendulums swing back. ;)</p>
<p>
</p>
<p>This is not a pendulum. This is more like a very heavy ball rolling down a hill :-P. The ball has too much momentum so it isn’t really possible to push it back up. </p>
<p>But maybe the economy as a whole is a pendulum. Every automation has led to new jobs. Perhaps we must look to outsourcing as the automation of skilled tasks.</p>
<p>The economy is actually a mechanical system. Energy is constantly flowing back and forth; energy is constantly being transformed. The thing is this mechanical system is so huge it takes years before any significant change is observed (e.g. China began its current boom a bit over 20 years ago; the US was a debtor nation prior to 1914 and a creditor nation after 1918). At some point, the heat contained within those higher temperature areas will flow back to the lower temp. ones. </p>
<p>Want to make things move faster within the machine? Start a world war and make sure you win.</p>
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</p>
<p>That is not how economies typically work.</p>
<br>
<br>
<p>Competition has been around since I started in engineering. We’ve hired
many engineers that went the IIT -> US Graduate school route. We hire
many US citizens both out of college and from industry.</p>
<p>Working much longer hours is not a big deal though I worked far longer
hours in my 30s than I do now in my 50s. 80-hour weeks were common back
then but that was due to the position that I held.</p>
<p>I disagree on the age comment to some extent; we’ve hired many people
in their 40s and 50s in the last three years. If you have the skills
and a track record on delivering projects on time, then you have
options.</p>
<br>
<br>
<p>We have a lot of regulations on paying servants that other countries
don’t have making it easier to hire household or other help. Same
thing with Singapore.</p>
<br>
<br>
<p>What would happen if we devalued the US dollar by 70%?</p>
<br>
<br>
<p>IBM is hiring in the Boston area for software engineering work. IBM
is a big company and they do engineering work as well as consulting.
I imagine that a lot of the consulting work that can get outsourced
does get outsourced.</p>
<p>BTW, work can get insourced too if it makes sense.</p>
<br>
<br>
<p>Let’s say that you are an engineer in a world-class organization working
on a world-class product. Are you going to want to give access to your
source code, product plans, business plans and marketing plans to a
third party that also works for your competition?</p>
<br>
<br>
<p>I prefer H1b workers, then workers in the US working for other
countries, then outsourced workers. Keep the business here if
possible.</p>
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</p>
<p>Ah, okay then. He’s bitter because he switched majors, graduated, and can’t find work. And resents that he did so. He’d feel better if more company joined his misery. </p>
<p>It makes no sense that someone who left engineering and therefore has distanced himself from it…still has this obsession. I’m just trying to figure out why he cares so much. This is much more about Homer than the industry.</p>
<p>
Not arguing that economies work this way. By the way, I am by no means an expert in any sort of economic theory (though my brother is an econ major at a certain well-known midwestern university) There are two driving economic factors to outsourcing.</p>
<ol>
<li><p>By the law of comparative advantage in a free market, tradeable services — such as business process outsourcing, programming, certain types of engineering, research, etc — will migrate to countries which have a comparative advantage in providing them. Since there is the internet, there is no real “cost” to exchange these goods from one country to another so (from the company’s perspective) the main criteria would be cost and quality. India and China compete effectively with the US in both of these domains.</p></li>
<li><p>Object oriented computer science emphasizes modularity so each component of the office acts as a module; one module of a company can be substituted with another as long as the substitution causes an acceptable change in quality/convenience. Some times outsourcing doesn’t work out but as companies are more comfortable with outsourcing and know how to deal with external vendors, the equation shifts towards outsourcing being feasible for more types of work. Now even the highest level research work can be carried out by companies, as they have access to Ph.D. graduates from top American Universities in India/China (and are willing to train others without that bckgd). </p></li>
<li><p>Given the costs of healthcare, higher education, housing, and labor in the United States, the US cannot compete in price with other countries (at least given the current situation). Things are more expensive at the base level because our minimum wage is high. So higher base labor costs trickles down to higher salaries for everybody (to be able to afford these services) and ultimately to the US prices not being competitive with the rest of the world. If engineering salaries decrease, everybody’s salaries will decrease (or more unemployment will happen) and the overall standard of living in the US will drop (since engineers pay into the rest of the system) until we are in equilibria with the rest of the world (this will take a very long time but I believe it will certainly happen). There is already a net outflow of wealth from the US to the rest of the world.</p></li>
<li><p>Given a certain level of talent/ability, people with that level of ability, all things being relatively equal, will choose the field that pays the best. Over time, all fields requiring similar talent and with similar demand will pay similarly. This is what happens to IT/CS. However, as more people move to the field, the advantage of working in that field diminishes for obvious reasons. The only things which keep engineering salaries high are high demand for the work and a limited supply of sufficiently talented and interested people. Now with the internet and globalization that the supply of engineers has been vastly expanded relative to the supply of workers in other occupations requiring similar talent, the relative benefits of engineering over other fields has diminished slightly.</p></li>
</ol>
<p>The main problem with outsourcing in the current environment is that, because jobs, especially decent paying ones, are so scare, outsourcing just a small percentage of jobs can have major consequences. It’s not like we are in the middle of a big boom and jobs are plentiful, like they were back during the housing and tech bubbles. </p>
<p>Most of the info you hear and read about H1B visas in the media (and to a small extent, on these forums) are complete lies. H1Bs the “best and brighest”? No, they are the “cheapest and youngest.” A shortage of engineers? No, totally debunked. Engineering the highest paying? Sure, IF you have a job. But there are many engneers out there with no jobs or who are stuck working low paying jobs that only require a HS diploma, many of which have been documented by the media. </p>
<p>Education always pays in the long run? Nope. Pursuing an engineering PhD decreases the lifetime earning potential of an engineer. </p>
<p>“Outsourcing” is part of life? No, totally not true. I can think of over a dozen professions in my head that cannot be outsourced. I come from a healthcare dominated family: 6 doctors, 2 pharmacists, and 3 registered nurses. Every single one of them is employed. The lone engineer in my family? Under-employed the last time I checked.</p>
<p>“If engineering salaries decrease, everybody’s salaries will decrease and the overall standard of living in the US will drop until we are in equilibria with the rest of the world (this will take a very long time but I believe it will certainly happen).”</p>
<p>But if that starts to happen, then nobody will pursue engineering anymore. Currently, enrollment in computer science has fallen significantly because people are not confident about the future of CS related jobs. But enrollment in other engineerng areas can just as easily fall if salaries continue to decline. And right now, engineering salaries adjusted for inflation are falling… falling by double digits.</p>
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</p>
<p>Service sector jobs that require physical presence (healthcare, government, logistics, transportation, retail, landscaping) cannot be outsourced. Unfortunately, leaving politics, medicine, nursing, pharmacy, most of them aren’t particularly challenging or well-paying. </p>
<p>Knowledge based jobs can always be outsourced since we have the Internet. Not all will be outsourced since a significant fraction of the best talent available in the world is still in the United States (I hope this remains the case) and some people are unwilling to outsource this work for a variety of reasons. Manufacturing can also be outsourced as long as the cost of producing is less than the cost of shipment and tariffs and whatever being produced is not sufficiently sensitive. </p>
<p>But if these jobs are eliminated, there are fewer people to pay into the service sector and those jobs will also be simply be cut. State budgets are being cut since fewer people pay into the tax pool and teachers (who cannot be outsourced) are being laid off. Small businesses are closing. Medicine is different since the supply of doctors is strictly limited by the American Medical Association (only so many people get into medical schools/residency programs so those who make it can find a job). The only alternatives to layoffs is to either reduce the minimum wage (increase the supply of labor) or to reduce the wages of engineers. Either way, somebody’s standard of living will decrease.</p>
<p>Well whoever say PhD is great for getting a job probably receives the same misleading information from the society - seriously you don’t need PhD unless your work requires that sophistication(serious research), or your intended field is academia. Getting a MS/ME is sufficient along with work experiences. I’d say get PhD along the way - if anyone wish to pursue it. Being on this forum for quite a few months - that’s what I learned. I always thought I needed one - I am convinced I was dumb in the past.</p>
<p>
No no no, Homer. You used the wrong examples to compare. How do you source a doctor? When you outsource you give the job to someone else outside the country. When you have H1B visa you live in the State, and you paid taxes. </p>
<p>Moreover, you can’t outsource medical practitioner. How do you outsource it!? It’s a local thing. Other majority fields can be outsource because they NEED NOT to be locally done. That’s the difference.</p>
<p>Outsourcing is not part of life. It’s part of the 21th century economy model, when numbers of countries are eager to boost their own economies. </p>
<p>Even though I am an immigrant, I am in favor of reducing the H1B visa, as almost anyone can attend a college already. I am also in favor of rewarding those hiring more local employees per H1B (if any at all) for a certain ration. That is, let say Google, hire 250 new employee for every 100 H1B? Fine! </p>
<p>I don’t think most H1B are able to convenience their employers to fill out green card paper for them.</p>
<p>
</p>
<p>No, I disagree. THere are alot of people who have been adversely affected w/ the symptoms that Homer describes. Myself and about 1,600-2,000 others from my company alone, and this is just what I know from firsthand experience. I just saw an engineer in the grocery store that other day, during the day. Get a job. Of course I’d get a job if there were one available. Thanks, Homer for keeping this conversation going. The youth who are in engineering, software, hardware , and the other fields, will get older and will be thrown to the side by the powers that be. So it is incumbent for people to be aware of what is going on.</p>
<p>
</p>
<p>The worst part is that most who are unemployed are either graduating college students or those who are 50+. For college students, being unemployed or underemployed means that your career growth potential has been significantly diminished since 60% of career growth is in the first ten years. Plus, they are the future of the job market and as one is unemployed for a period of time, his/her skills decay. A full 16% of the graduating class of my above-average engineering school was unemployed upon a year after graduation. This is reality.</p>
<p>As for those over 50, they are often the first to get pink slips since they have more senior positions and larger salaries (outsourcing is about reducing costs). These are the people who have outstanding mortgages, kids who are in college/will be entering college, health insurance needs for an entire family, and less confidence/energy to switch or retrain. They may have lost much of their 401k savings in the bad stock market as well and have very little of a safety net and have probably dedicated a large part of their lives to the company. I find this very unfair and I agree that people should be warned that as they get older and are paid more, they are more likely to be “disposed”. </p>
<p>There is a lot of age discrimination as well and so those who are older (50+) have a much tougher time finding a job that is commensurate with their talent/ability (even if there are jobs available). And the reality is that there are just more layoffs than new hires. Not everybody who is laid off can find another job.</p>
<p>That being said, I am still still in CS/ECE because I enjoy it so much and am relatively good at it. I hope myself good luck but am cognizant of the reality.</p>
<p>that’s a pretty accurate summation, PowerDude, even replete with the lifelong loyalty to the company that I gave AND the mortgage AND the kids -in college. So are you under 50? Sure enough, I am 52. The guy I saw in the store - engineering degree circa 1980. A large portion of the ones let go , at least in the initial wave , were all the people with traditional pensions, too. Later they axed the whole IT dept. for , I think it was Tata - as in ba-bye (appropriately named outsourcing firm).</p>
<p>A former co worker told me it reminded her of the steel industry (she lives in NE indiana).</p>
<p>
Yes I am actually 19. But I know many who have been affected by outsourcing and the vast majority have been 50+ and have worked at the same company for several years and have been performing adequetely. </p>
<p>
</p>
<p>Yep. Tata Consultancy Services is the largest of the Indian outsourcing firms. And it’s not only the “dumb” who are being outsourced. Certainly being incompetent makes you an easy target to lay off but working well doesn’t guarantee that you get to stay. Nor do elite degrees. A close relative, who has an masters degree, was laid off during a 3000-person layoff (fortunately he found another job). One of his colleagues, who is an MIT graduate, was recently laid off due to a “budget cut”.</p>
<p>At a company where I worked, there was a cut in 9000 jobs in the US. But at the same time, almost the same number of jobs emerged in India. It is a zero-sum game. One job outsourced roughly correlates with one less person the company needs in the US. And these jobs will likely never come back to the US.</p>
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<br>
<p>Why do you continue to post your lies then?</p>
<br>
<br>
<p>I’m sorry that you haven’t been able to work in a very
high-performance environment. It is quite stimulating.</p>
<br>
<br>
<p>I was at the office last night at 9:00. One of my coworkers was there
working late. He was in a staff meeting during the day and doing his
regular work late at night. Our group has projects approved going out
almost two years and we’re busy doing specs and our regular work which
has been pretty heavy. We’ve hired a few people to replace those that
have left for other jobs, some in India and some locally. We certainly
have more work than we can do with our current staff and I know that
other groups have the same issue. We have about double the number of
employees compared to ten years ago.</p>
<br>
<br>
<p>Who said this?</p>
<p>Engineering has high starting salaries but they level off. You have
to manage your career if you want more and more money.</p>
<br>
<br>
<p>What’s the level of unemployment of engineers compared with other
occupations?</p>
<p>The unemployment rate in my state is 5.7%. My friends that lost their
jobs a few years ago generally found employment within six to twelve
months. One of the guys I play tennis with found a great job with a
company that works with the NSA and other law enforcement agencies and
I don’t think that he has to worry about his job getting outsourced.</p>
<br>
<br>
<p>You’re a good example of education not paying in the long run. It’s
hard to imagine success with your attitude.</p>
<p>Our last local hire was a CS Phd. Our group likes Phds and there are
many Phds that go into management because you naturally learn
management skills as a researcher. You may not get rich but it isn’t
a bad life.</p>
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<br>
<p>You’ve never heard of medical tourism?</p>
<p>Take a look at a chart of isrg. Why is it cratering?</p>
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<br>
<p>You’re behind the times. Enrollments dropped about 50% from 2000
levels to 2004/2005 and they have been rebounding since. CS
enrollments are up 60% at my son’s school from last year. Of course
only about one-third actually get the CS degree as the weed-out rate
is brutal in the first year.</p>
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<br>
<p>I used to work for a company that no longer exists. At its peak it
employed over 140,000 with many thousands (perhaps over 10,000)
engineers. It made money hand over fist for many, many years and that
success jaded it to technological changes that it wouldn’t adapt
to. There were rounds and rounds and rounds of layoffs. Many
employees went to other companies, some started their own companies,
and some just wallowed in dispair. Adversity happens. People of my
generation grew up in the hard times of the 60s and 70s and there were
no guarantees of jobs or social services or food back then. The 80s,
90s and 00s were times of prosperity and the younger generation grew
up with high expectations. It’s as if the young expect that there will
be jobs out there for them and that they deserve those jobs.</p>
<p>I think that it’s wise to understand the marketplace, your company,
your products, the financials of your company and where the jobs are.
It’s pretty easy to see the writing on the wall by looking at the
financial statements. I was in a job many years ago where business was
declining because of technological improvements. The division was
doing well but the five-year projections were dire. I started looking
around for jobs and, in most cases, didn’t get the interview because I
didn’t have a degree. I did find an opening as a support engineer, got
my degrees and have been there for a long time. Don’t let life control
you, especially if you have the support structure of a job.</p>
<br>
<br>
<p>Well, it’s always good to stay employed. Skills, networks, health
insurance, the social benefits. This isn’t broken out by type of job
but in November 2009, the jobless rate for those over 45 was 6.3%. 15
to 24 was 16.7% and 25 to 44 was 8.2%. I work with a lot of people
over 50. We have a massive code base with workers in many geographies
and it takes a long time to learn that code base, the environment, the
politics and the contacts that you need to be successful in projects.
Experience is an asset.</p>
<p>[The</a> Jobless Rate for People Like You - Interactive Graphic - NYTimes.com](<a href=“The Jobless Rate for People Like You - Interactive Graphic - NYTimes.com”>The Jobless Rate for People Like You - Interactive Graphic - NYTimes.com)</p>
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<br>
<p>In engineering, salaries usually level off at some point compared to
many other types of work with higher earnings potential over time.</p>
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<br>
<p>Did you read the articles about the Wall St bankers, mortgage brokers,
real estate agents, construction workers, etc. that had these
problems? There were lots of posts on parents losing their jobs in
these forums. There were relatively few, that I recall, that lost
engineering jobs. It seems that many more were in the financial
industry. I guess that makes sense as a lot of people with higher
educational levels and the means to afford full-pay privates come
from industries with very high salaries and bonuses. And that doesn’t
describe engineering.</p>
<p>I used to work with an engineer (he’s since gone to Microsoft) that
had a fair number of financial problems. He knew that I was a trader
and that I also had a financial background. One time he asked me about
car insurance. He was paying about $3,000 a year on two cars, one
about ten years old and the other about three years old. There were
two recent accidents. I was paying about $700 a year. I suggested that
he look into two other companies and that he try to negotiate prices
on the accidents. He did this and cut his insurance costs to $1,600 in
the first year and then $1,300 for the following year. He was pretty
annoyed as he had been paying pretty high rates for several years when
he could have saved a fair chunk of change with some comparison
shopping. We also got into a discussion of managing finances where I
thought that this is something that everyone should know. He was your
typical engineer that got killed in the internet bubble and he had no
real clue on how to select stocks and to determine the timing of
getting in and getting out. I explained my approach to investing and
trading and also suggested that he take a course or two so that he
could learn how to read financial statements. To my surprise, he took
a graduate course. Now the course was also useful to his work but I
was surprised that he actually put in the effort to take a
course. Most people ignore you when you make a suggestion to improve
their life that has a significant cost.</p>
<p>In the last decade, the $COMPQ fell from 3,500 to a bit over 1,000,
then rose to 2,900, thendropped to about 1,250, rose to 2,500 and
we’re around there now. So you had one opportunity to triple your
money and another opportunity to double it, all in one year. And
that’s just if you’re playing the long side of the market. A lot of
engineers don’t succeed at the stock market because they tend to be a
rational lot and the stock market isn’t rational, at least with the
level of information generally available to the public. Of course
there are many engineers that get rich because of company options
despite not being particularly good at choosing companies or the
buy/sell timing.</p>
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<br>
<p>You know yourself and you know the externalities. That’s being
well-armed for the market.</p>
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<p>Those last two words speak volumes.</p>
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<br>
<p>The US dollar index has was around 122 about ten years ago. Today it
sits at 77.18. So it’s lost about a third of its value relative to our
major trading partners. The Federal Reserve is talking about a
trillion dollar quantitative easing which explains the dollar’s recent
drop back into the 70s. Perhaps the Federal Reserve has already
started. Would those jobs come back if the US dollar fell to the 50s?
How about the 30s?</p>
<p>
</p>
<p>Homer is not spouting lies, but expressing a point of view that is quite valid, accurate and that I see sorely lacking in the media. The lead story in the news the last two years has been JOBS JOBS JOBS - even when our finest citizens are laying their lives on the line across the globe for us - and it has been frustrating as heck to me when I witnessed floors of american middle IT workers being cut and being replaced by floors of Indian workers AND not seeing this in the media. I am glad Homer is saying this here at least. At least it is being said somewhere.</p>
<p>I have written to Obama Inc, and have recvd no responses.</p>
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</p>
<p>The unemployment rate in my state is close to double that. I would argue that your state is exceptionally better off than most in these times. I believe ‘Homer’s truth’ can be more accurately extrapolated across the land.</p>
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</p>
<p>The quote was talking pink slips and not a off leveling off of salary. There is quite a difference. I had already had the leveling off. Incidently, when the pinkslip happens, especially at 50 something, all sorts of chaotic unintended effects occur, espcially emotionally, that make it that much harder to get back in . You have to have the confidence and salesmanship of a Harold blanking Hill when my primary skill set is analysis, data mining, and systems development. But in the end, “it’s the macroeconomy, stupid”.</p>