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  • #2248508

    How can American IT Professionals Compete with asian workers?

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    by kveratis ·

    With all of the outsourcing that is going on in the IT industry, especially in software development how can American IT professionals effectivly compete with IT people from India and China. It is not possible to live in America making the slave wages these people work for, so we can’t compete on price. I read a very good report on “Fair Globalization” http://www.ilo.org/public/english/wcsdg/docs/report.pdf which outlines a lot of the problems that this issue is causing, but I’m not sure if the solution is feasible. The only thing I have been able to come up with is finding jobs in small businesses where it is impractical to outsource at this point, but how long will that last?

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    • #3138538

      One point

      by onbliss ·

      In reply to How can American IT Professionals Compete with asian workers?

      When you say “slave wages”, I would like to draw attention that the wages needed to be looked relative to the countries. So a $30,000 would be something like Rs. 12,90,000 (that is almost 13 lakhs), in India. Even after taxes, that is a ridiculously rich amount for an Indian, living in India, when compared to a Indian working in a non-IT area. It increases his/her purchasing power enormously.

      • #3138531

        onbliss: Question for you

        by techexec2 ·

        In reply to One point

        You’re a good person to ask this.

        I understand that software engineers in India make about 20% of what those in America do. And, the reason for this is because of the currency exchange rate, cost of living, and current market differences (i.e. supply vs. demand). I understand it’s changing (wages rising due to changing market) and some work is moving from India to China. How correct is this right now?

        How does the cost of living compare between America and India?

        Food? Gas? Clothing? Computers? Housing?

        Thanks for your insight!

        • #3138507

          Just a thought.

          by tonythetiger ·

          In reply to onbliss: Question for you

          The cost of living varies greatly even within the U.S., and many people use that to their advantage.

          What, if any, influence should the cost of living have on wages?

          Actually, there’s probably an argument in there against setting a fixed-dollar amount minimum wage…. Do you set it so city folk can barely survive, or do you set it so that country folk live like kings (relatively speaking)? Shouldn’t we apply the measurements involved to the variance within our own country before we start applying it to other countries?

          Not complaining, just wondering others’ thoughts.

        • #3138486

          Good Point

          by kveratis ·

          In reply to Just a thought.

          I think that minimum wage should be determined by getting an accurate estimate of cost of living in the area the person lives and factoring in the ability to save a little so that they can get ahead in life. This would also increase a persons disposable income which helps fuel economic growth. Ulimately our economy is dependent on cash flow. The taxes that are necessary for government to fund itself are collected from scenarios where cash is flowing through the economy (Sales Taxes, Income Taxes, Capital Gains, etc). Hence, the more people you have with disposable income the better off your economy is, and the better able your government is to fund itself and not require deficit spending.

        • #3138439

          Accurate estimate

          by tonythetiger ·

          In reply to Good Point

          for what? A single person – single job?, married couple – no children – two jobs?, Maried couple, 4 children – single job?, single mother – one child – single job?

          So what are we going to measure? Are we to require employers to pay based on family situation/other income?

          Sounds scary to me.

        • #3138428

          Exactly

          by kveratis ·

          In reply to Accurate estimate

          That is the exact problem that I have not been able to figure out either. Getting a fair estimate without creating a nightmare for the businesses. Most of the real growth in our economy is fueled by small businesses, and you don’t want to create a situation that makes it almost impossible for them to operate in a profitable manner which would prevent them from growing. At the same time businesses must realize that their customers and their employees are coming from the same population, by paying their employees as little as possible they are also limiting how much they can sell to their customers. This was what Henry Ford figured out a long time ago, when he dramatically increased the pay of his employees so that they could afford to purchase the cars they were building. Everyone thought he was crazy, until it worked. It’s a very difficult balancing act. I learned in macroeconomics that raising the minimum wage really doesn’t help since it doesn’t create true economic growth, but it does cause inflation which erodes everyone else’s purchasing power. The idea I mentioned in my previous post was just that, an idea. Maybe it wasn’t even a good one, but it was worth a look.

        • #3138987

          Part of the problem that’s part of the problem.

          by tonythetiger ·

          In reply to Exactly

          Big government proponents absolutely despise small businesses, because they are the absolute proof that big government is not needed. By raising the minimum wage, they are, in effect, attempting to kill off their competition!

        • #3138498

          My thoughts

          by onbliss ·

          In reply to onbliss: Question for you

          I am not sure how to compare the cost of living between the two countries. The culture and lifestyle being different, it is little difficult to glean much from a straight comparison.

          The people working in IT are a special breed onto themselves. Their purchasing power is different from others. So food, gas, clothing etc are still inexpensive for them.

          But for the poor and others, those items are expensive. It is universal, if you have money you could buy anything.

          Let me know if you need me to elaborate.

        • #3140134

          Cost of Living – Thailand

          by wayne m. ·

          In reply to onbliss: Question for you

          I can’t speak about India, but I am familiar with the cost of living in Thailand. The exchange rate when I visited last summer was 42 – 43 Baht to the US Dollar; currently it is trading at 37+ Baht to the dollar.

          One needs to distinguish the costs of local items, i.e., food and housing, from imported or globally traded items such as cars and gasoline.

          For lunch, we could typically have a sit down meal of some kind of noodles for about 20 Baht with the range from 10 – 30 Baht. Pizza Hut or Dunkin Donuts were quite a bit more; Pizza Hut was considered a fancy restaurant. Upscale housing, consisting of a detatched house larger than a typical US townhouse and on about 1/8 acre in a gated community ran about 1,500,000 – 2,000,000 Baht (about $50,000). Nice, shore side hotels with swimming pool and breakfast would run 80 Baht per night (not Phucket!), while we stayed in some of the nicest hotels in the north for 150 Baht per night.

          I paid less attention to car prices, but I seem to recall that a Honda City (1.5 liter engine, smaller than a Civic) cost over 500,000 Baht (over $12,500). Last summer, I calculated the price of gas at about $2.25 per gallon; slightly higher than the price in the US at the time.

          I hope this illustrates how the price of local goods is not necessarily indicated by exchange rates. This can drastically skew labor costs to the outside world.

      • #3138523

        Great for India, not good for America.

        by kveratis ·

        In reply to One point

        Those wages might be good for a person in india, but not in the U.S. Here in America, that same amount of money is infeasible to live off of. Consequently, while the person in India is living the high life on those wages the person in America can’t put food on the table. When I say “slave wages” I am referring to the fact that it is impractical for an American to live off of the same amount that a person in India can live off of for the same type of work. If the sole basis for India and China’s competitive advantage is their lower cost of living, it doesn’t help the industry or world economy in the long run. When Japan was kicking Detroit’s butt in building cars, it was because they were producing a higher quality product in a more efficient manner. That method of competing is perfectly acceptable because nothing stops the automakers in Detroit from adopting the same methods or even developing better ones. Either way it moves the industry forward.

        Another reason why this kind of economic situation is not good for America is that by driving down the wages of educated American workers, the government will not be able to collect as much in taxes from them. This obviously causes a problem when you have a massive debt (8 trillion at last count I saw) and are fighting a war at the same time. Furthermore, histroy has shown that when people can’t find work they start getting desperate things get rather dangerous.

        • #3138509

          True

          by onbliss ·

          In reply to Great for India, not good for America.

          People make hay when the sun shines; and, the sun sets and rises again.

        • #3138319

          So what did you think was going to happen?

          by the smoking man ·

          In reply to Great for India, not good for America.

          In a world of finite resources, when they came up with the idea of globalization every Westerner thought that the developing world would go up to their level.

          Well, the world can’t handle that.

          Good for India and China and good for the USA would mean India and China consuming on a level the same as the USA.

          Do you want that?

          Per capita, a US citizen consumes 6 time that of a Chinese citizen … So what would happen if everyone in China came up to the same consumption of just oil for instance?

          No … Equalizing the economies means the US and the rest of the countries in the west will have to drop down a bit or the world economy implodes.

          How do you deal with it?

          I am a westerner now living in China and I live pretty high on the hog as far as the local economy goes.

    • #3138454

      Revive Customer Service

      by maevinn ·

      In reply to How can American IT Professionals Compete with asian workers?

      Provide good, in person customer service with all that entails. Code is going to be much the same the world over, but customer service? That’s what sells, and what will keep selling.

      • #3138425

        Good Point

        by kveratis ·

        In reply to Revive Customer Service

        You make a good point, customer service is very important.

      • #3138399

        Yeah

        by cely ·

        In reply to Revive Customer Service

        I have to say as a customer I’m sick to death of calling support lines and getting an Indian called “John” on the line. It would be nice to get someone whose accent I could understand.

        • #3138317

          LOL

          by the smoking man ·

          In reply to Yeah

          Ask to speak to Shiniqua then.

          She’s John’s supervisor in Columbus, OH. She lives in the poor section of town beside German Village and earns minimum wage … still 4X John’s salary.

          Have a nice day, ya’ll.

    • #3138438

      By working as hard as Asian workers work.

      by absolutely ·

      In reply to How can American IT Professionals Compete with asian workers?

      It will always be impractical for American companies to move any but the most routine tasks overseas. Quit fretting and devote the time you spend obsessing about competition on learning more skills, if what you really want is to compete.

      • #3138427

        Not true!

        by kveratis ·

        In reply to By working as hard as Asian workers work.

        Outsourcing is no longer stuck in the “most routine tasks” category. We are losing real high value analysis and design jobs, I’ve seen it happen with some of my friends. The old cliche of “Climbing the Value Chain” doesn’t hold since China and India can climb that same “Value Chain” just as quickly. This is outlined in the report on “Fair Globalization” I orginally posted.

        • #3138314

          Too True …

          by the smoking man ·

          In reply to Not true!

          One byproduct of making China conform to international standards to join the WTO was that they were forced to produce software domestically that performed the same functions as are expected the world over.

          What this means is that they are capable of just localizing screens on their domestic products and undercutting the west.

          Familiar with Agile??? It’s produced across the hall from where I worked in Suzhou.

        • #3139157

          Where is that report?

          by absolutely ·

          In reply to Not true!

          “… outlined in the report on “Fair Globalization” I orginally posted.”

          ???

        • #3139112

          You’re busted, dude!

          by techexec2 ·

          In reply to Where is that report?

          [i]”Where is that report? “… outlined in the report on “Fair Globalization” I orginally posted.” ???”[/i]

          You’re busted, dude!

          The report is mentioned in the original post of this discussion:

          [i]”With all of the outsourcing that is going on in the IT industry, especially in software development how can American IT professionals effectivly compete with IT people from India and China. It is not possible to live in America making the slave wages these people work for, so we can’t compete on price. I read a very good report on [b]”Fair Globalization” http://www.ilo.org/public/english/wcsdg/docs/report.pdf%5B/b%5D which outlines a lot of the problems that this issue is causing, but I’m not sure if the solution is feasible. The only thing I have been able to come up with is finding jobs in small businesses where it is impractical to outsource at this point, but how long will that last?”[/i]

        • #3224878

          You’re pathetic, dude!

          by absolutely ·

          In reply to You’re busted, dude!

          This is a pastime, not my job. I pay attention according to my interest, mood, digestion and other factors that are none of your business. You want me to put any [i]effort[/i] into this, you pay me, loser.

        • #3224867

          Easy boy…

          by techexec2 ·

          In reply to You’re pathetic, dude!

          Clearly, I was being flip and humor was intended.

          Today must have been another bad digestion day for you?

          :^0

        • #3138970

          The First Posting of this thread

          by kveratis ·

          In reply to Where is that report?

          Look at the very first post of the thread, that is where you will find the link.

        • #3141315

          Thank you.

          by absolutely ·

          In reply to The First Posting of this thread

          It wasn’t blue and I’ve gotten hooked on hyperlinks. Bloody hell!

    • #3138310

      Same way as you compete with each other.

      by tony hopkinson ·

      In reply to How can American IT Professionals Compete with asian workers?

      Value for money.

      If you are market driven that’s all there is.

      • #3139151

        Good idea, let’s give it a try!

        by absolutely ·

        In reply to Same way as you compete with each other.

        “Value for money.”

      • #3139059

        This is an excellent answer

        by techexec2 ·

        In reply to Same way as you compete with each other.

        That’s an excellent concise answer, Tony.

        I just realized that you’re a great person to ask this of:

        All western nations are affected by IT offshoring to India and China. But, does the U.K. bring in hundreds of thousands of cheap foreign software engineers on work visas like the USA does with the H-1B and L-1?

        —–

        We have about 300,000 of them working right now (software engineers that is, about 500,000 total H-1Bs) and bring in roughly 100,000 more every year. Their rates are supposed to be the “prevailing market rate”, but their mere presence lowers the rates. What’s insidious about this is that these guys are not really “in” the market. Corporations don’t compete to hire them by offering higher rates to attract them. They merely compete with each other to get the visas allocated to the “unfilled positions” by the U.S. govt department overseeing this corporate welfare. The engineers cannot easily shop for better jobs. If they just quit, they would have to return home. It’s like a high-tech indentured servitude, and clearly a more desirable employee. Nice deal, huh?

        Corporations actively seek these highly skilled lower-rate guys by advertising rates that are too low. When Americans do not apply, they are entitled to hire the foreign software engineer at the lower rate on the H-1B visa. They all deny it, but there is ample evidence they are gaming this.

        Does this happen with corporations and software engineers in the U.K.?

        Thanks.

        P.S. In America, the easy software money is essentially gone forever. If your software engineering job primarily sits in front of a computer in a cube somewhere, you are at very high risk for: 1. Layoff, 2. Pay rate reduction, 3. Outsourcing (and layoff), 4. Job/department moving offshore, 5. Being replaced by an H-1B, etc.

        Of course, this is not the complete end of software engineering for Americans. There are still things talented American software engineers can do to help themselves. It requires getting out of the cube, building additional skills, and working a little harder. Not so bad really. It’s not good to spend your life in a cube anyway.

        • #3139004

          I’m not aware of it being a big thing over here

          by tony hopkinson ·

          In reply to This is an excellent answer

          Part of that might be I don’t compete with them, and the bulk of them don’t have a hope in hell of competing with me. I’m still good value, but I’m not cheap.
          One of the things that never took off over here is cublicle farms. What did was team working and quality processes, both of which the US introduced into Japan and we learnt them off them. Note they are both inherrent value for money propositions.

          To work as a software developer I had to have business knowledge, communications skills etc. Having no cubicle, meant there was nowhere to hide such a deficiency.
          This of course could easily be a reason why outsourced developers haven’t taken off. The only firm I’ve ever worked for that had dedicated business analysts for instance was an american one. We haven’t evolved the mechanisms to cope with developers who don’t have these tools in their box. Analysts tend to be domain experts in the UK, like chartered accountants or engineers.

          I talk to customers, deal with sales, management PMs, support, even marketing. If I couldn’t do that I would never have got in to IT, never mind stayed in it for twenty years.
          Course lots of people do this, but I’ve never been management and before I went in to IT (87) I was doing data entry and clerking.

          The other reason of course is the UK’s socialist mentality. ‘Free’ health care is payed for by the tax payer, so if you increase the number of people on welfare while reducing the total tax take, what happens ? You get voted out.

          For raising taxes

          For taking away health care provision

          Or for ruining the economy by massive deficit spending (ooher)

    • #3139254

      Outsourching is now a part

      by zlitocook ·

      In reply to How can American IT Professionals Compete with asian workers?

      Of IT and the way to stay in the field is to provide more of a service or better service then they can get by outsourcing. I am not a programmer but can do it if I have to, I do Java, C++, XML and a little of other things. I am the Admin, desk side support, helpdesk, network support (I can run and make cables) and other things like training.
      Not much in IT pays as well as it use to and you have to learn as much as possible to stay ahead. The advantage we have is we are more communicative then some others. We ask or say what is wrong even if it not what the boss wants to hear.
      Allot of other folk?s just do what they are told and only what is asked of them. The idea is to do more then they expect but just enough because you could start working over your head.

    • #3138724

      They can’t.

      by jkameleon ·

      In reply to How can American IT Professionals Compete with asian workers?

      The competiotion is not fair in the 1st place. Among others, Indian & Chinese IT professionals had their education paid by the state. Americans have to pay their college tuition by themselves.

      Competition makes no sense here anyway. Why would anyone want to go and win the world “Working for Peanuts” championship?

      There’s another, more general problem here. Globalization, fair or unfair, means drastic decrease of demand for IT work. It doesn’t matter, whether a certain application is sold in a couple of 10 copies for local market, or couple of million copies for global market- in any case, it has to be developed only once. There’s no need for routine work in IT either. Computers are doing it.

      IT jobs cut because of mergers & acquisitions, are not going to India or China. They are gone for good.

    • #3280506

      Bring them here.

      by absolutely ·

      In reply to How can American IT Professionals Compete with asian workers?

      If your competition had to pay the same prices you pay for everything, maybe they would be less able to work for a lower wage. Either we allow more Asian workers to immigrate within 5 years, or we’ll all be competing with each other for the best available jobs: flipping lamburgers in India 10 years from now.

      Seriously, what the American worker needs more than anything else, is to become more competitive and less whiny. The rest of the world has already put you to shame, and will soon put you out of work, unless you develop some work ethic.

      • #3224511

        It is dollar parity

        by james55555 ·

        In reply to Bring them here.

        We Americans have to realize from what is happening around us without waiting for politicians to tell us.
        …WE ARE GETTING POORER EACH DAY…

        The globalization was ill conceived idea which has boomeranged on the western world. Well end of the day it is the dollar / Euro parity. Dollar is definitely coming down and so would the edge of cheap labour. With dollar depreciating we would have to leave with less although we would have something to work for. That is jobs.
        We cannot live large like good old days. The world has changed faster than it appears on our television. We would have to tie that belt harder and work together to achieve the goal which our previous generations did. Work harder it is that simple.
        Our current generation has reaped what the previous generations strived for but did not sow enough for us in our thirtees to sit back and relax. This is the wake up call.

        However all is not lost as I see it. There are worse problems in developing nations and specifically in Asia and Middle east and you know where I am going. The uncertainty and religious chaos in the 3rd world needs leader ship from western nations. If we can provide this we can still have an edge.
        The need is to secure this edge as we did in 2nd world war. There would be new world ties and relationships and agreements never heard about.
        The opportunity is there for the developed world to lead but it is certainly not clear to leaderships as to how.

        • #3224456

          “Work harder it is that simple.”

          by absolutely ·

          In reply to It is dollar parity

          I’m all for driving the proles harder, but international tariffs are also tilted against us. We should tax every type of import from every country at the same rate that country taxes us on that type of export. Our elected “representatives” are selling us out every day.

        • #3224217

          Elected Representatives

          by james55555 ·

          In reply to “Work harder it is that simple.”

          Yup, that is the 800 lb gorilla. I am glad that you brought this up.
          When I said this is a wake up call, it is a call to be awake on all fronts including politics.
          Voter turn around in country like USA is pathetic it shows that people are not in the loop and not generally interested. It is so heartbreaking to see so many people do not want to participate in electoral process.

          If you look around, Education, Health care, Social Security, Energy / Transportation, everywhere we are falling behind.
          Unless something is done drastically in next couple of years, it is going to be very difficult once you are playing catch up game 10 years from now.

          Yet our elected representative for last few elections have given importance to petty issues which made them win elections. We have raise ourselves up from abortion and guy rights issues just to name a few and look at bigger problems that are eroding our country as we write this…

          What would you expect from some one who either supports or is against abortion well he would do just that for the most part when their the bill comes up !!

          But the reason these people are elected over and over again is because there is lack of more people like us who can make the difference.
          We have see that we send right people to Washington.

    • #2876369

      TeamWork

      by vetfourpeace ·

      In reply to How can American IT Professionals Compete with asian workers?

      We’ll have to better than the Asian’s by bieng like the Asians. Asian companies tend to bring larger teams together to accomplish their mission. I worked in a DataCenter once that was soooo crippled by POLITICS! There were soooo many chiefs, I was the Indian, and the SALARIES!?! They were through the roof. And to top it off, no one really worked. If there ever were major problems, then they called in outside help. Asian’s arent afraid to work together in teams. Same with Mexican’s in construction they work for less, but they are always working, because jobs get done.

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