My experience with outsourcing over 20+ years (Russia, Romania, India, South America) is that you just move money around when you do it.
It takes more planning, more specification, more coordination, more QA. The quality is almost always worse, and remediation takes forever. So your BA, QA and PM time goes way up and absorbs any cost savings.
I think a lot of companies have ineffective ways to measure productivity, poor management (e.g., people who were IC's then promoted to management but have no management training or experience), incentives aren't necessarily aligned between orgs and staff, so people end up with a perverse "more headcount" means I'm better than Sandy over there. Leadership and vision have been rare in my professional life (though the corporate-owned media celebrates mediocrity in leadership all the time with puff pieces).
Once you get to a certain size company, this means a lot of bloat. Heck, I've seen small(ish) companies that had as many managers and administrators as ICs.
But You're not wrong, I'm just pointing out how an org that has 4k people can lay off a few hundred with modest impact of the financials (though extensive impact on morale).
It’s quite possible you are correct, but since gen-ai is good at generating stuff, it is taking on busy work, which might bring the ROI back to ~zero. In my business I suspect that gen ai has provided a modest productivity boost (single digit) but, due to other factors, I can’t quantify the revenue impact.
Likely a combination of business-friendly policies (low tax, no employer payroll tax, etc.) and proximity to ports. Houston is the 6th [1] largest port in the USA.
Apple also managed to build a Houston factory quickly there, it was announced in Feb 2025 and was starting production by August which is pretty impressive.
I moved from TX to west coast a few years back. Property taxes down, all other taxes and expenses up; total cost of living much higher now. It's also business friendly enough to make deals on taxes as needed, I can't imagine that will be a problem. I get the hate on TX but tbh outside of the heat, it can be a pretty great place to live across many dimensions.
I think there's more to your sibling's taxes than property taxes. The data tell the opposite story - WI property taxes are higher than TX ones, at least if we look at the medians:
As someone living in Fort Worth and making good money as a Staff SWE, I got a tax refund this year. It was due to paying interest on my house, but still.
I'd recommend asking your sibling see if they qualify for the homestead exemption, it's significant. You or they can check if they're using it and see their exact property taxes here:
Texas property tax rates are some of the highest in the country. Should be higher than Wisconsin.
The difference here is really more of an indicator of property values in the respective areas. In major metros in Texas, you're looking at ~2%+ tax rates, which is infact higher than Wisconsin, even in the metros there.
> As someone living in Fort Worth and making good money as a Staff SWE, I got a tax refund this year. It was due to paying interest on my house, but still.
If you paid more in property taxes, that would indicate you can take a larger federal tax deduction... so, if anything, a tax refund implies you paid a lot in local property tax. Either that, or a boatload in interest (or, both). Neither is indicative of local property tax being low.
Isn't this something where there is clear and easy to obtain aggregate data. What is the average tax burden for someone in Wi vs Tx instead of comparing a single data point from each? I have a feeling it's going to contradict you
Indeed and surprised you are the first to mention it. The abatements these tech companies receive is quite substantial and will easily pay for flood damage.
This is the part that blows my mind. People seem to think the US is incapable of and does no manufacturing. It is the second largest manufacturer[1], and has a capacity about 65% of what China does. Which is 350% of the next largest manufacturing country.
What they stopped manufacturing was menial and low-end product; because it's not price-effective to have 100 Americans sit on an assembly line and solder SMT components for $7-18/hr. Instead, those potential workers pivoted into service jobs and office work.
There are synergies to having the high end stuff and the low end stuff in the same place. The story of IBM developing System 360 mentions the benefit from the ladies who wound the wire core memory and the guys who designed the computer on the same campus in New York. We gave that up when we outsourced the “menial” stuff abroad.
The point is that high end and low end manufacturing are intimately related. You can’t outsource your low end manufacturing without your high end eventually collapsing.
The U.S. still manufactures high end products in some fields. But in many areas we have lost the high end as well as the low end. E.g. we can’t compete with the Chinese in electric cars.
China at this point is hard in automation, beyond anything the US has. China is well past the peak of sweatshops.
As someone in the manufacturing space in the US, the biggest issue we have in the US is that manufacturing continues to die. Any manufacturing we have left is the old guard dying off. It comes from a range of issues from companies refusing to invest in younger employees, to the cost of real estate (both buy or rent) for commercial properties being absurd..
Incorrect. To reiterate, the closest near competitor below it does ~30% what the US does; and it only goes down from there. And, compared to China, they are doing 65% of their manufacturing capacity at 25% of their population. The US is doing fine.
The fact that China is diversified beyond low end manufacturing just shows that they have incentive + economic impetus to expand that field; and hardly disproves what I stated or shows any trend of US manufacturing "dying off".
This can only be correct in spreadsheets. In the material reality China outproduces the US by orders of magnitude. For example, China produces ten times more steel, 3 times more cars and in shipbuilding China manufactures literarily thousands of times more ships than the US.
Bingo US produces about ~1/2 of PRC by VALUE ADD not gross output.
And it's not all high value goods. US produces magnitude(s) less than PRC in nearly all industrial sectors, i.e somewhere between single digit times less to 100s less. Some of it might not matter, like trinkets, some of it does, like 500x more shipbuilding by tonnage. Of the magnitude less that US produces, some legit high value like aviation, some are spreadsheet value, i.e. US car worth 3x than a comparable Chinese car. For shipbuilding, PRC produces like 50m DWT per year, aka MORE than US total WW2 shipbuilding, all 4 years, and generate about 150b revenue. US produces 0.3m tons (round up), and generate about 40b.
A ton of US ship, even navy isn't worth except 50x premium over a PRC ton except in spread sheets. That 50x premium is rent/capture, it's what prevents US from actually industrializing vs spreadsheet industrializing. TLDR except in a some high value sectors, US is getting absolutely mogged even per capita in gross output.
The US manufacturing situation is much worse than you suggest, and is top heavy with low margin boring industrial stuff. Largest sector for US manufacturing is Chemicals, which includes fertilizer, petrochemicals, pesticides, and some pharma. The second largest sector is Tobacco, Food, and Beverages.
I think some more "low margin" computer and chip manufacturing would be healthy.
Common rhetoric says the US's grassroots economics and job market have been consistently sinking to the point that falling back to that kind of "low margin" manufacturing is back to being feasible. Is that false? Are US wages still too high for that?
It is apparently economic to do so in China and apparently any other place you want to outsource it to. Does smaller and one-off productions have as high of margins as high speed automated stamping machines running 24/7? No. But that doesn't mean it isn't profitable at all.
And quite frankly, who gives a fuck if top owners and investors get maximum returns, boo hoo they got 4% return instead of 8%, that is still far better than the average working class's deal. Our entire problem is a suffering middle and lower classes that need decent work, they will still be happy even if the product they make is a bit lower margin because they are paid hourly, not paid by dividends and stock options which is where all the higher margins profits go. Average citizens pay has not correlated with increased company profits, and increased company profits isn't what makes society stable, so the investor class is going to have to suck it up and take the hit unless they want their entire house of cards to collapse.
Yes you’ve hit on the reason. Very few people understand this.
The reason we don’t invest in manufacturing is because of requirements for return on capital.
Ask yourself why GM is doing massive stock buybacks in the era of global transition to electric cars. Why aren’t they using these huge sums of cash to invest in the next generation of products and instead literally just sending the money out the door?
So Texas also doesn’t have income tax but my siblings house (assessed at a lower value than mine) is assessed property tax almost triple wha mine is, dwarfing my state income tax plus property tax. Not sure about Florida - YMMV.
My property taxes are $3000 a year. They were around $7K a year before we moved. We also downsized to a two bedroom condo -1200 square feet - from a 3500 square foot house in the most expensive county in GA (Forsyth) after my step son graduated in 2020 and after Covid. We sold our house for twice what we had it built for 8 years earlier and bought our condo for the same price as we paid for our house in 2016.
Florida - especially when you live in the same county as DisneyWorld - is heavily subsidized by tourism
yeah that helps - smaller chunks means less surface area to audit and easier to spot when it goes wrong. trade-off is you spend more time on the prompting/task breakdown but at least you're not debugging a 500-line diff
Yea, I just get anxious when I am responsible for something I don't really "know".
I haven't been a full-time professional software developer for a while, but I was one for years and when someone noticed a problem with one of my apps, I could mentally walk through the code and and pretty much know where to look before I even got to my desk.
I can't imagine letting Gen-AI (that is flat out wrong ~30% of the time) write huge swathes of code that I am now responsible for.
But maybe that's just a "me" thing. In this new economy words and activity have replaced value and productivity.
that mental walk-through is honestly underrated - you didn't just know the code, you had a model in your head of why each piece was there. with AI output you know the spec, maybe reviewed it quickly, but there's no real internalization. usually fine until something breaks and then you're debugging code that's kind of foreign to you. I've started reading the diffs more carefully exactly because of that - takes more time but at least you have something to fall back on when it goes wrong
It takes more planning, more specification, more coordination, more QA. The quality is almost always worse, and remediation takes forever. So your BA, QA and PM time goes way up and absorbs any cost savings.
YMMV.
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