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Home -> Community -> Mailing Lists -> Oracle-L -> Outsourcing's dirty secret - Bigger Picture
I think that's intentional. After the .com craze, IT salaries went through
the roof, and Corporate America came to the conclusion that it just wasn't
going to pay a lot for that muffler anymore... and the huge supply of low
wage labor in the "Third World" provided a hedge by which Corporate America
could play "Global Wage Arbitrage". They had already played that game with
factory workers, whom Corporate America thought were grossly overpaid, and
suffered slim ill affects. Now, they see no reason not to do it with IT,
and when big companies play that game, little companies benefit by the
increased labor pool (due to corporate layoffs) and therefore lower wages
(due to increased competition). It's only the workers who suffer, and, as
they learned when factory jobs went to Mexico and then to China (because
Mexico's workers had become too expensive), no one really cares.
You can see that same trend in that article (we went to India, but now *they're* too expensive, so now we're going to Argentina). This could go on indefinitely until every last IT job is in China (the final resting place for all cheapness as the government ensures that workers are paid very little and there's just *gobs* of people there to snarf up every job that comes in). Except.
We in the "high wage markets" have a natural advantage because this technology was invented in our backyard and we have boodles of experience with it. IT is not like pushing a button and letting a machine do the work. Once *that's* in place, we'll all be screwed. But in the meantime, we can offer something in exchange for our high salaries (by global standards)... our expertise. Does that matter? I hope so. Time will tell.
If not, who's next? Engineers? Sure. Architects? Definitely. Lawyers? No, they have to be here to argue cases. Doctors? MMMMMaybeee...
Over time, costs continue to "flatten" on a global scale. Once China sees full employment, the rest of the "Third World" countries around the world will see their standard of living increase... while in America and Europe and other "high wage markets" (Israel and Japan), the standard of living will tank for most of the middle class... until we meet a global wage equilibrium, probably some time in the middle of the next century. Now, I'm not saying this is a bad thing. In fact, apart from the fact that I am directly hit by this, I think it's a good thing in terms of the evolution of human development.
However, each of us on this list will be affected by this in one way or another sooner or later, unless this game ends. The end of this game is delimited by the answers to two fundamental questions which Corporate America must answer on its own. The first is "how can the players in Corporate America maintain a huge percentage increase in profits year after year without sacrificing quality, thus impacting profits?" (see article), and second, and more fundamentally, "if Corporate America destroys Middle Class America (the consumers of last resort), who will buy their products, thus guaranteeing their profits?". If "China" is not the answer to the last question, the whole game falls in on itself. This should be answered in the next 20 or 30 years.
In the meantime, the rest of us can ask "what service can I personally provide that someone in Guam can't do cheaper?".
Plumbing, anyone?
Bambi.
-----Original Message-----
Sent: Thursday, October 30, 2003 2:39 PM
To: Multiple recipients of list ORACLE-L
But sure as hell does drive salaries down over here.
On 10/30/2003 03:04:24 PM, Jared.Still_at_radisys.com wrote:
> The perception of outsourcing has been that you can send your work
> offshore,
> and get it done cheaper, with higher quality.
>
> I think that this article helps to dispel that as a myth. It may or may
> not be
> less expensive, it may or may not be better.
>
> Jared
>
>
>
>
>
> "Jamadagni, Rajendra" <Rajendra.Jamadagni_at_espn.com>
> Sent by: ml-errors_at_fatcity.com
> 10/30/2003 09:49 AM
> Please respond to ORACLE-L
>
>
> To: Multiple recipients of list ORACLE-L
<ORACLE-L_at_fatcity.com>
> cc:
> Subject: RE: Outsourcing's dirty secret
>
>
> What is also unfortunate that the company X which outsourced its project
> to India, didn't do its job right ... If you just want the cheapest Rolex,
> you can't complain about its quality later on. I am not saying this
> couldn't have happened, whatever happened is unfortunate, but I am just
> saying that the company didn't understand CYA sufficiently, it is just a
> blame game now.
>
> C'mon ... I think that article is one side of the coin.
> Raj
>
Mladen Gogala
Oracle DBA
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-- Please see the official ORACLE-L FAQ: http://www.orafaq.net -- Author: Mladen Gogala INET: mladen_at_wangtrading.com Fat City Network Services -- 858-538-5051 http://www.fatcity.com San Diego, California -- Mailing list and web hosting services --------------------------------------------------------------------- To REMOVE yourself from this mailing list, send an E-Mail message to: ListGuru_at_fatcity.com (note EXACT spelling of 'ListGuru') and in the message BODY, include a line containing: UNSUB ORACLE-L (or the name of mailing list you want to be removed from). You may also send the HELP command for other information (like subscribing). -- Please see the official ORACLE-L FAQ: http://www.orafaq.net -- Author: Bellow, Bambi INET: bbellow_at_chi.navtech.com Fat City Network Services -- 858-538-5051 http://www.fatcity.com San Diego, California -- Mailing list and web hosting services --------------------------------------------------------------------- To REMOVE yourself from this mailing list, send an E-Mail message to: ListGuru_at_fatcity.com (note EXACT spelling of 'ListGuru') and in the message BODY, include a line containing: UNSUB ORACLE-L (or the name of mailing list you want to be removed from). You may also send the HELP command for other information (like subscribing).Received on Thu Oct 30 2003 - 18:09:27 CST
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