> Companies did move millions of office jobs to India, the Philippines and other places where they could pay workers less. But those job losses were more than balanced by growth elsewhere in the economy.
That's like saying there will be an apple shortage but ignoring it because we grew more oranges.
> But many companies discovered that labor savings were offset by other factors: time differences, language barriers, legal hurdles and the simple challenge of coordinating work half a world away. In some cases, companies decided they were better off moving jobs to less expensive parts of the United States rather than out of the country.
The thing is, rents and expenses continued to grow where these jobs used to be but wages stagnated. Offshoring is a contributor to wage stagnation, which would be acceptable if rents and expenses ebbed and flowed at the same pace. But wealth inequality and rent-seekers continue to squeeze the average person. The result is people who are underemployed or working multiple jobs.
> Ms. Lund said she saw parallels between offshoring and automation: Both trends threaten one set of jobs but should make the overall American economy more productive, creating new job opportunities, albeit ones requiring different skills. And she said the pace of change should allow workers, companies and governments to adapt.
Learning new skills isn't free. It will harm workers who have their jobs automated. Our employment system isn't worker-friendly in this instance. Those displaced workers will still need to pay rent and buy food ALONG with buying new skills. They will probably end up underemployed.
But sure those of us in tech are good.
So i tend to believe these observations are largely made up. There is no "squeeze" in the sense that economy-wide, cyclically adjusted, rents do not grow faster than GDP per capita does.
I was recently talking to an Uber driver from Kenya who was saying rents in Nairobi, an African tech hub, aren't that much cheaper than, say, Cleveland. So we're past outsourcing...but Cleveland...
The truth is that good third world employees aren't exorbitantly cheaper than their counterparts in the US. Cheaper, yes, but not enough that it would completely offset the cost of communication lapses, legal issues, and collaboration problems.
The way I've put it in conversation is this: while the equalization will balance out in many ways, pulling "third-world" countries up closer to "first-world" standards of living, the reality is it is highly likely that first-world standards will actually decrease... for the first time in quite a long time. Now, one can argue this is a good thing because we first-worlders are overconsumers, polluters, and many other reasons, but I don't think it's fair to hate on people wanting to protect their own standard of living.
I have theorized, perhaps wrongly, that this is part of the real, behind closed doors, push for brexit in the UK, especially seeing as currency is the great entangler and now that Europe are all on the Euro, the UK wants to get out before the Euro starts having major issues, and they probably saw that coming which is why they never left the pound. So ignoring the more unsavory reasons being touted for brexit, I think it shows a certain amount of people intuitively understand globalism might reduce their standard of living which is why we are seeing an increase in protectionism in much of the first-world.
Note: I hate the terms first-world and third-world... any better suggestions on that are welcome.
you want "developed" and "developing."
There are models where you could still have uplift without those issues but they are not what we are doing.
Our trade deals exclude environmental, labour, and other non-goods protections. So As a result we end up with the race to the bottom that you mentioned.
The fix is trade agreements that enshrine protections for more than just the goods being produced.
China is going to destroy their environment with or without incoming US capital. They will also continue to employ children, etc.
Globalization puts more demand on their system so their people get higher wages, better conditions, cleaner work environments, etc.
Competition for their labor pool and their environment in general means they don’t have to give it up under bad terms.
The problem your math teacher has is that there are significantly more people qualified and willing to teach math at that level than there are people qualified to do your job.
That's an easily falsifiable assertion.
Here's an apartment in Nairobi that's $62.50 USD per month.
Cheapest apartments in Cleveland, OH meanwhile found here are $400 per month and there are 4 of them.
So there's a ~6:1 difference in rental price between the two, on the low end as listed online. Presumably there are even cheaper deals to be had which are not listed online. Food, labor, transportation and other expenses in Kenya are going to be similarly less expensive, perhaps by even greater multiples.
So no...outsourcing is definitely cheaper in the short run, and for simpler tasks.
I'm not going to tell you how to outsource or not outsource, and when it is and is not appropriate but labor can definitely be had for much cheaper than in the US. The US is now the richest country in the world per capita, more so than Luxembourg and the other traditionally richer countries because the USD is so strong.
Of course this will fluctuate over time, but that's the present status as we have this discussion.
"Yeah but outsourcing is dumb and people don't know how to code."
It's dumb? They don't know how to code? Could it be that some people don't know how to manage projects remotely and across cultures? Could it be that some projects can be outsourced while others can't?
I should research this; I was told $800 for two bedrooms.
This one's $430 (1 bedroom). So I have no idea, but there's probably a massive range. Could be neighborhood, could be having security and power. I'm not sure.
Rent was cheaper for me in Beijing than in Seattle, but whenever I looked for anything that I would have rented in Seattle, the gap disappeared and even increased in Beijing. Yes, I paid less rent, but I lived at a much less standard as well.
There are other things to consider worn outsourcing: logistics are often more costly in the developing world than developed world, which can eat away at your savings pretty quickly.
What did happen were waves of outsourcing, followed by insourcing. My theory is that whenever there's a new generation of managers, we flip around, because they haven't learned from the previous one.
My first degree was in a foreign language; I was taking it for my own reasons but one of the professors I was close to knew I was very involved in technology and linguistics. She asked in, maybe in 1992, whether I thought computers would eliminate the jobs of translators "soon."
I remember looking at her and saying that no, not until the mid-2000s or so, because of the twin problems of voice recognition and OCR: in both cases, you need both a corpus for translation and to build it you need to get the data into machine form.
I was off by maybe 6-10 years but machine translation really did start making inroads for professional writing around then (and maybe a little sooner). Now, though, the job is totally transformed. Live translation is still a real job but a hard one to land and with fewer opportunities, and media translation while it is still a career (especially for science and technology papers, etc.) it is dramatically changed and is now more of an editing job than a translation job. That happened in a few years, tops, once the tools arrived.
So .. maybe we're whistling in the dark. A lot of what we do cannot really ever be practically done by AI, but I think a lot could be. The demise of the CASE market probably delayed a lot of what's coming for a long time, and a lot of things likely will be automated. I think UI design is ripe since so many UIs basically look exactly the same.
Preventing them from following through on the really bad ideas is the salient part here :)
This holds, AFAICT, for translation too. Yes, you can get the gist via machine translation, for some language pairs. You cannot preserve imagery, intention, subtlety without a human int the loop.
AI is good at looking things up and beats us there. It is entirely insufficient at context & wisdom (and I don't see that changing anytime soon). Sure, the industry might choose to collectively ignore that and jump off a cliff. It's not going to end well, so I hope saner heads prevail.
This uncle indeed lost his job because he worked in operation of a mainframe and didn't bother to learn PC or even UNIX workstation programming. He resorted to teach math in a primary school to complete time for retirement.
I was telling him about the experience of the terror of mid-2002 - layoffs everywhere and a really tough job market, stock market post-collapse, massive rise of offshoring in actuality but more importantly the nearly-universal assumption among business leaders and investors that eliminating US employees was the way forward, the entire career looking incredibly iffy, etc.
He was in highschool at the time, he says. The highschool guidance counselor was doing their thing and he was interested in computers, softwarer, etc. She told him that programming was all going to India so he should do something else like law school or business.
And then sometime after 2008 the bottom dropped out of the legal industry and the big corporate firms started laying people off.
Aside from making me feel tragically old (I'd been working professionally for years at that point), it was just interesting to hear someone recount a totally different view of the cataclysm.
I think the biggest takeaway from gig economy "gig brokerage" platforms is that many people would rather take direction from an app than a human manager (conjecturally, for psychological reasons). If more traditional companies (retailers, businesses with other large output-oriented workforces, etc.) figured out a way to introduce this sort of algorithmic management model that works for them to either hide or replace management while also augmenting it, I feel like a great deal of middle-management bureaucracy could end up eliminated.
Unlocking raises with hours invested or good reviews earned or a combination of metrics.
Making in-app purchases to join a union or buy into additional benefits.
Integrating these gig economy apps with places like LinkedIn (shudder) to help you find temporary work quickly without ever talking to a human.
This is something specific to the millennials, who have an aversion to anything and everything that is not app-intermediated. They even socialise with apps.
It's a lot of churn. One result is that I see with my enterprise customers is that they end up with a lot of the more expensive, experienced people getting thinned out in each of these cycles - IBM is one that is somewhat infamous for this.
The other that I see is a death of specialization. There aren't really dedicated network engineers, or ops specialists, or DBAs, or security experts in most companies anymore; everybody is a short-timer that is thrown into the mix and making things up on the fly. And these are Fortune 500 companies, not fly-by-night SMBs.
Why is an interesting question.
The fastest growing list on the other hand, https://www.bls.gov/ooh/fastest-growing.htm , has some office jobs, but it's dominated by healthcare jobs that some of which are kind of office-like.
There's also some weirdness, with Computer Programmer listed on the decline list, while Software developers, applications is on the fastest growing list.
I’ve heard this distinction arose partly because most/many early programmers were women, a relic from the days of the human computer
I'd speculate that office workers are often interacting with things that can't easily be outsourced or don't make sense to outsource fully. Billing, HR, support, legal, accounting, marketing, advertising, PR, and dozens of other things.
The wealthiest (and many of the largest by employee count as well) US corporations today are largely software companies. Facebook is software, its ad network is software. Google's search engine is software, its ad network is software. Most of the value in AWS is in the software services. Software has comically fat margins typically. It affords staff bloat that most any other type of business does not. It's also incredibly hard to undercut via simple industrial methods like dumping (as in the steel or aluminum industries).
If you look at the ways you can beat a US manufacturer on making a pair of shoes for Nike or steel or an electric fan or office chair or toaster, those methods will not work well against Google, Microsoft, Facebook, Salesforce, Oracle, AWS, Adobe, Workday, Intuit, ServiceNow, et al. I'm not putting my data in China's cloud with their version of AWS, Azure, DigitalOcean or Linode even if it costs 1/4 as much. I'm not using their Cloudflare. I'm not running my CRM software in their cloud. And so on.
Wealthy, yes; high employee count, no. Facebook has about 35,000 employees. Alphabet/Google, 103,549. Amazon is huge, at 650,000, but they have a warehouse and trucking operation. That's not software.
WalMart has about 2.2 million employees. Ford, about 200,000. Boeing, 153,000.
The biggest "tech" company is IBM, with 366,000 employees.
(What does Alphabet/Google need 103,000 people for? They don't build much hardware themselves. They don't do customer support. They backed off on doing network outside plant, as Google Fiber. What part of the operation is labor-intensive? Ad sales?)
White collar jobs usually involve more meetings, knowledge of business culture and language. This is much more difficult to outsource to countries that don't share any of the same culture and language.
This is also why outsourcing development jobs has been mostly a disaster for US companies.
Outsourcing in the sense of sending to offshore body shops. Somewhat true.
But a lot of companies distribute development around the world in various ways. It's not only about taking advantage of lower costs, but some of it is.
I'm just a devops person. Would it be considered a majorly huge faux pas if I mentioned any details about Nexient's careers? If so, I'll edit and remove that previous sentence.