Media13.com is a source of free to republish or reprint articles, writers may submit your articles in our database as long so you agree that your article will be freely republish or reprint by other.

Submit Article

Search our database

Received article from us.

Name

Email Address

Friends

Bollywood News
Link building
Article submission service
Freelance Writers
Laser hair removal

We have been looking for freelance writers. Contact us

What happened to the `Giant Sucking Sound` of Outsourcing? by Ian Ippolito

The conventional wisdom is that outsourcing has been very bad for the U.S. Information Technology workforce. After all, now that a company can transfer the work of a $50/hour U.S. programmer to an equally skilled programmer in India or Romania and pay only $5/hour for the same job, what are U.S. workers to do? Ross Perot once famously described the result of job loss as the “Giant Sucking Sound”…from the movement of the jobs overseas. Virtually every newsgroup, blog and magazine editorial quotes anecdotal evidence of someone who has lost a job in the recent down turn as validation of this theory. Almost all make dire predictions of the end of U.S. I.T. dominance .

It’s too bad that none of these people took the time to notice that the U.S. Bureau of Labor and Statistics survey last month showed the number of jobs in U.S. IT has rebounded to the highs of 2001. (see “Reliving the summer of 2001” in InformationWeek) If they had, we would have heard a completely different type of “Giant Sucking Sound”… a whole lot of people holding their breaths while forced to ask themsleves “If outsourcing is the awful bogey man I believe it to be…then WHY ARE THE JOBS STILL HERE?”

U.S. IT moves in cycles. 2001 was the height of the excesses of the dot com bubble (remember when people wouldn’t take a new job unless they got a 50% raise AND could bring their pet in to work?). And what goes up unfortunately must always come down. But when people lose jobs, the pain is real, and human nature is such that we need to blame something or someone for the injustice. And who is a more convenient and defenseless scapegoat than foreigners who can’t speak for themselves or defend themselves?

You’d think we’d know better about foreigner scape-goating. Remember when the Japanese were buying up marquis U.S. properties in the 1990s like Rockefeller Center? Everyone predicted they were going to own the country. That never happened. Their real-estate bubble busted, they had to leave town and haven’t been sighted since. And you’d think we’d know better from history about making simple assumption. In the 1700’s, the English gave themselves premature coronaries, because they obsessed over the fact that they couldn’t grow enough trees to power the wood power plants. The invention of the coal based steam engine propelled England into the industrial age, and reduced the dreaded “wood shortage” to a historical footnote.

Outsourcing HAS had an effect on U.S. I.T. but it has NOT been what the convention wisdom predicted. And understanding it is the key to having a real understanding of outsourcing.

The survey data shows that there are about 16% less programming jobs than in 2001. Everyone knew that heads-down coders would be affected by outsourcing (although that isn`t exactly true either...something we`ll examine further in another blog). On the other side of the ledger, I.T. management jobs have skyrocketed about 20% (70,000). Almost no one realized that those jobs would explode and practically offset the loss in programmers. And a person managing work tends to be paid higher than the people actually doing the work.

Where did these management jobs come from? I call it “Affordability Magnification”. Say you’re a typical IT manager in a small to midsize company with a budget of $1,000,000 for programming. Before outsourcing you ran 4-5 projects a year. Now those projects are just 1/10th the cost. If you still run 4-5 projects, you are going to have a ton of money unspent at the end of the year. The CFO would be more than happy to take it from you and give it to some other department next year…so you can’t do that. Instead, you’ll of course spend every last dime. And you’ll run 40 projects and hire a bunch of new project managers to manage them. And that is what we are seeing.

To those who think this is a surprising idea…I recommend a trip to library (or Wikiopedia) and a quick read of economics 101. Outsourcing is based on free-trade, and free trade predicts that when 2 countries trade…BOTH benefit, not just one. This is counter intuitive for all the reasons mentioned earlier. But free-trade predicts that people in each country will realign from jobs that the country can do less efficiently, to jobs the country can do more efficiently. And that makes both countries stronger. And that is what we’re seeing.

Yes, this does mean pain and problems for those affected…some of whom have invested years of training. And as a society we should be helping those people with benefits and retraining. But we also need perspective as well. Just like the economic cycle we talked about earlier…this is a cycle and not a novel thing at all. Disruptive technology is constantly displacing old industries as it creates newer and better ones. How many 8-track cassette engineers do you know of? Are any groups pushing for a ban on CDs to protect this specialized profession? And this cycle isn’t even unique to our century. For centuries, scribes (people who could write) were prestigious and highly paid for their advanced skills. But when the printing press was invented and took off in the 15th century, the scribe felt the pain of sudden unemployment. The cost of books dropped by a factor of 300, scribes made the shift to other professions, and society as a whole is more literate and better off than it was before. Today, there is no “scribe in America” program that advocates the banning of printing presses to protect the health of U.S. scribes.

So anyone that says that outsourcing has caused some unemployment is correct…and some heads-down coding jobs have left the U.S. for good. But anyone who says that outsourcing hasn`t also created new jobs, and is somehow unpatriotic because of it...is simply uninformed.

Author Info:

Ian Ippolito is the the creator of http://www.RentACoder.com , an open marketplace for computer programming where 2/3rd of the parties choose to outsource internationally. It has been studied by universities such as American University to learn more about outsourcing.

Latest 20 articles

Why Should I Hire a Seattle Real Estate Attorney? In every real estate transaction there are a wide variety of legal issues that must be taken care of. Contracts should always be reviewed by an attorney who understands the nuances of real estate law. But there are also state specific State laws to contend with. A Seattle real estate lawyer deals with a large number of State legal issues related to acquiring, financing, developing, managing, co

California IT Professionals – In Need of California Class Action Attorneys! It is hard to miss the wave of California wage and hour litigation related to California IT professionals and Computer employee overtime that has been sweeping California recently. Even the largest software and computer companies have paid out millions of dollars to employees wrongfully classified as “exempt”, or in other words, not entitled to overtime. A layperson would believe that with pr

Protect Your Mental Health With A Payday Loan Just when you thought that things couldn’t get any worse, more banks went under. More countries are declaring economic crisis. It seems that the world’s financial problems are bound to get worse. Even if you do not have considerable investments in various banks, I am sure that you are feeling the stress that results from these economic upheavals. I sure am. I am just an average person, with a

Free Bulk SMS services People are getting very busy these days without having enough time to talk unless it is very important. Mobile SMS have supported this need to contemporary times as now people do not want to call and enter in the unproductive conversation before coming up to the actual issue. SMS provides you the benefit to come straight to the point and also saves money. What if you get this totally free?

HELP – I Have IRS Levy Problems! If IRS collection notices are ignored, the IRS is forced to collect from taxpayers by force. They do this with their dreaded IRS levy. By law, the IRS has the right to levy bank accounts (IRS bank levy), garnish your paychecks (IRS wage levy), or even seize your assets. But you do not have to let the IRS bully you or your family. There are ways to stop an IRS levy. The first step is to know the

Why Use Professional Tax Debt Help? Good IRS tax relief is hard to find and for people with complicated tax issues, it is an absolute necessity. But how do you know which tax reduction firm is the best one to try? How can you be sure you're going to get the tax debt help that you need? And why is it so vital to receive help from professionals? Settling Your IRS Tax Debt For Less When your IRS tax debt is spiraling out

IRS Settlement – Can You Really Settle Your IRS Tax Debt for Less? It's possible to settle your IRS tax debt, but it presents a challenge. Proving you can settle your tax debt for less is a daunting experience. You have to contend with pages of IRS paperwork rife with technical terms. Settling tax debt is indeed a reality and it can be done. However, there's a lot you need to know before you attempt to settle your IRS tax debt. Rebuking the Lies - The

IRS Tax Relief – The Most Popular IRS Tax Relief Solutions Tax law provides many solutions for resolving tax debt. But if you were to contact the IRS directly, they would only alert you to one solution, and that's paying the tax debt in full. Here are five popular IRS tax relief solutions you should know about to be more informed. IRS Tax Settlement It is possible to settle your IRS tax debt. But there are some pitfalls you need to know. Fi

Hire the California Labor Board or California Labor Law Attorneys - You Decide With a downturn in the economy, many employers are cutting back on payroll. Unfortunately, some employers are reducing payroll costs by violating the California overtime laws. When this occurs, employees have essentially two options to recover their California overtime pay: the California labor board, or hiring California labor law attorneys. Although the California Labor Board is a commonly

Hiring a Car At Bangalore - Is More of Necessity Than A Luxury Your sedan is probably the best materialistic thing that you own and while going to a new place, that is what you ought to miss the most but if you are going to Bangalore then you probably have a option of getting a replacement so that you don’t miss it all that most because it will be as comfortable and as obedient as your own car and the Bangalor

How to Choose a Car Rental Company in Bangalore Bangalore is a place that lists one of the best as far as infrastructure is considered in India as it is the IT hub of India and thus the roads to drive is atmost pleasure and thus if Bangalore is the destination that you are planning for next then the best way to move around is by hiring a car. To hire is car is very simple if it is in Bangalore because there are some very good car rental compani

Car Rental Companies in Bangalore If you are travelling to Bangalore and hiring a car is what worrying you then you can be relaxed because this is one service that you will easily get in Bangalore and that too at very affordable and economic prices. Basically there are really good car rental companies in Bangalore available for renting the cars and you can either book in advance or go there and hire a car for yourself. Also, you h

Tips to Hire a Car in Bangalore One thing that most of us agree is that the fact that the most comfortable way to move around at any place is by your own vehicle but what if you are going to a new place, it is not possible to carry your vehicle along with you and you actually cannot trust too much on the public transportation system and at such situation the best possible option is to hire a car for yourself, at some places it c

Hire a Car: Comfortable Way to explore Bangalore If you are out to a new place than the first thing that comes into your mind is a comfortable accommodation and then the second one on the priority list is a comfortable way to move around in the city and if Bangalore is your preferred location, than you’ll be having options for both of the facilities, but if we specifically speak about the second one that is moving comfortably than the best opti

Car Rental – A convenient mode of transport in Bangalore Bangalore, a place which probably is considered one of the best places in India as far as infrastructure is considered and reasons are many for that, one is because of the IT hub that it is and also because it is one of very good places if you are considering holidays and because of this very good facility provided for the people visiting Bangalore is that you have many options in case if you are

Rent a Car in Bangalore: Take the Right Decision In today’s world, time is money; the more you save it better it is for you. And in that case if you are going to another place where you are not too familiar with the surroundings, then instead of wasting time on travelling by locating and travelling by public transport is to hire a vehicle for yourself. This helps in many ways, one it saves on time and also it moves at your pace so you don’t have

Bangalore Car Rental: Save Your Time When you are at an unknown place or for that matter known place and time is your major factor of concern then, the best way to save on time is by having your own vehicle for conveyance. This gives you freedom to move at your own pace and wish. And for that matter if you are at a place like Bangalore where the roads are so beautiful that it is a sheer pleasure to travel through your own rented vehi

Best Package Tours to Kerala Kerala – God’s own country which means heaven for those who appreciate the real untouched, naïve beauty of nature and if you are one of those than consider Kerala as the option for you next holiday. Kerala gives an option to explore the nature to the fullest because it has all the places where you can explore the nature be it scenic beaches or the hill stations or the ethnic culture, just everythi

Kerala Tour: A Getaway from Regular Stress If you are tired of daily stress and meetings and looking for a getaway so that you snatch some time for yourself with your loved one’s than Kerala holidays is the perfect is the perfect thing for you. Its calmness and closeness to nature would give you that much needed peace of mind that you always wanted. Also along with enjoying the beauty of this scenic place on your holidays to Kerala you can

Kerala Tour Packages: Have A Look If holidays are on your mind, then Kerala is one option that you cannot choose to neglect. Because Kerala is one place that offers you all from calm and serene natural places to exciting sports to exotic beaches and also beautiful hill stations, everything provided at one place which is also known as god’s own country. And obviously such wide range of activities would make it a tough job to cover