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Real qualified labour shortage ?

Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi all !

I recently came on an interesting discussion entitled "Do you think the job market is improving ?", and posts were really bitter. The overall conclusion looked like there is no qualified labour shortage, but instead a course at both lower cost at any price and best immediate skills (without training) at lowest wages, even by employing aliens rather than US natives, which causes unemployment booming with much threat to US wealth at short term by destroying middle class.

Extract drawn from this discussion which shows the whole idea :

........................
Most significantly, we are devaluing craftsmanship and quality by sending jobs overseas. We purchase cheaper-made disposable products from China to replace items that were once made by craftsmen to last for years. This devaluing of quality and the worth of a job well done is already having an impact on our work force and will continue to snowball in years to come. The wealthy class in this country is evolving into a class of parasites -- people who do pretty much nothing but suck the life out of the potential of the economy by keeping too large a portion of the money that other people worked to create. If the balance of wealth doesn't shift dramatically in the next few years, America will soon resemble a third-world country.
........................

Full discussion : http://discussions.careerjournal.com/WebX?50@128.biKIat7FtiO.0@.ee8ddc0/0

Best regards.


Eric LEMAITRE
CNAM IT Engineer, MS/CS (RHCE, RHCX, SCJA, SCJP, SCJD, SCWCD, SCBCD, SCEA, Net+)
Free Online Tutorials: http://www.free-tutorials-online.net/
Homer Phillips
Ranch Hand

Joined: May 26, 2004
Posts: 311
According to the pundits at the Rand Corp. the US IT market appeared to have surplus workers in 2003. I doubt this has changed. The shortage is in what the industry wants to pay or in how much profit they can make.

I read a quote by one of the Forbes guys in Forbes Magazine some years ago - The best is always in short supply. People for sure only want to hire above average IT workers. Probably only the top twenty percent are above average :roll: .

I heard a NPR show a few weeks back that claimed people don't want quality or products that last a lifetime anymore. Every few years they like to get a new version with the latest technology. It does not explain to me why Sears has cheapened up on life time warranty tools, but it explains why kitchen appliances are the way they are.
Mark Herschberg
Sheriff

Joined: Dec 04, 2000
Posts: 6037
You know, everyone keeps complaining how companies are hiring incompetant people to produce low quality work. The great thing about the US is that anyone can start a business with a couple of hours of prep time (maybe a couple of days if you want to get all the legal stuff done right, at the start). If all these other companies are screwing up and hiring incompetant people, someone be going around hiring the qualified, experienced, albeit slightly more expensive people, and then blowing the competition out of the water with faster development cycles and better quality software. As for me, I prefer gloating to whining.

--Mark
Don Stadler
Ranch Hand

Joined: Feb 10, 2004
Posts: 451
I'm not sure I'd attach too much significance to that discussion, as many or most of the posters are persons with time on their hands - the unemployed. Unemployed are on balance going to be more angry than people with jobs. Many of them seem to be young people who seem to think they were promised something because of the ridiculous web boom a few years back. Some of them are employd but not highly paid enough.

I wonder what the employed are thinking right now? It't not necessarily a lot better. Many of us have taken pay cuts and are in poorer working conditions. I am working away from home and at a low rate. Some days I'm angry about it, sometimes feel I'm fortunate to be working at all. At least I'm learning Oracle really well on this gig - which ought to be worth something.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Mark said:
If all these other companies are screwing up and hiring incompetant people, someone be going around hiring the qualified, experienced, albeit slightly more expensive people, and then blowing the competition out of the water with faster development cycles and better quality software.

Mark, if you are going to repeat your argument, I will repeat my rebuttal.

The issue with the policy of US companies hiring H1B workers who acquired their experience overseas instead of new or retrained US residents is not that it doesn't work economically for the individual employers - clearly, it does.

The issues are:
1. It violates the spirit and evades the letter of the immigration laws and the age discrimination laws.

2. It will result in the near elimination of American computer programmers as the existing professionals retire and fewer and fewer American students invest four years in college to face the catch-22 of "3-5 years of paid Java or .net experience required for an interview". The ultimate result will be the elimination of the US as a major player in the software field.

Our only hope is to get the feds to enforce the laws. This is a work in progress. The resultant domestic demand will restore the abundance of entry level jobs that existed from before 1964 to 2001. Luckily, it doesn't take long for a talented programmer trainee to become productive, so the recovery should be pretty fast.

BTW, the threat of offshoring more US jobs is nonsense. Whatever will be off-shored has been off-shored. The remaining US jobs stayed here for specific reasons.


Mike Gershman
SCJP 1.4, SCWCD in process
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Mike Gershman:
Mark said:

BTW, the threat of offshoring more US jobs is nonsense. Whatever will be off-shored has been off-shored. The remaining US jobs stayed here for specific reasons.


I consider this as a surprising remark. You have any details to substantiate that?

I will repeat your proof to the big firms that are outsourcing or setting up shops outside US. They will also be surprised, if you have some proof.


Kishore
SCJP, blog
Steven Bell
Ranch Hand

Joined: Dec 29, 2004
Posts: 1071
The numbers I've seen (I'd have to go find them again) haven't shown a significant amount of increased offshoring. It's been going on for years and it's staying at a fairly steady percentage.

I could be missing something, just what I've seen, haven't really done any research into it.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Kishore said:

"the threat of offshoring more US jobs is nonsense. Whatever will be off-shored has been off-shored. The remaining US jobs stayed here for specific reasons."
I consider this as a surprising remark. You have any details to substantiate that?

Comprehensive statistics on off-shoring are not being collected by the US government (what a surprise), but I have had some serious discussions with people on the US end and they are in agreement that few major projects are being initiated in the US.

The reasons I have heard for why some work stays in the US:
1. The need to continually evolve the system in close partnership with the user, such as trading floor programming.
2. With small projects, the cost of developing a really bullet-proof spec exceeds the cost savings of contracting the work out.
3. There is little protection of intellectual property, etc., in the global marketplace.
4. The knowledge of a complex existing system resides with people who have no desire to reside in India.
5. National security projects.
6. And, of course, the user-interface roles in an off-shored project must be in the user's country.

I'm not an authority, I'm sure there are other reasons, but as Steven Bell noted, the proportion of off-shored work has stabilized.

So, Kishore, since you like to ask for proof (not a bad rhetorical trick, by the way), what proof do you have that off-shoring has not stabilized?
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Mike Gershman:
Kishore said:

Comprehensive statistics on off-shoring are not being collected by the US government (what a surprise), but I have had some serious discussions with people on the US end and they are in agreement that few major projects are being initiated in the US.

The reasons I have heard for why some work stays in the US:
1. The need to continually evolve the system in close partnership with the user, such as trading floor programming.
2. With small projects, the cost of developing a really bullet-proof spec exceeds the cost savings of contracting the work out.
3. There is little protection of intellectual property, etc., in the global marketplace.
4. The knowledge of a complex existing system resides with people who have no desire to reside in India.
5. National security projects.
6. And, of course, the user-interface roles in an off-shored project must be in the user's country.

I'm not an authority, I'm sure there are other reasons, but as Steven Bell noted, the proportion of off-shored work has stabilized.

So, Kishore, since you like to ask for proof (not a bad rhetorical trick, by the way), what proof do you have that off-shoring has not stabilized?



I can give example of IBM, Accenture and Deloitte consulting. They hired 3 times the freshers in India compared to in USA. So, do you want some more numbers???
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Mike Gershman:
Mark said:

Our only hope is to get the feds to enforce the laws. This is a work in progress. The resultant domestic demand will restore the abundance of entry level jobs that existed from before 1964 to 2001. Luckily, it doesn't take long for a talented programmer trainee to become productive, so the recovery should be pretty fast.



It is not easy for fed to enforce the laws. It is a ideal conclusion, that everybody hopes, but hardly achievable. So, the talented folks will keep waiting for that first break. It is really disheartening.
Jeroen Wenting
Ranch Hand

Joined: Oct 12, 2000
Posts: 5093
Eric, that piece reads like the communist manifesto... "wealthy class of rich parasites sucking the life out of the economy by exploiting the workers"...

While I agree with the conclusion that the continuing trend of moving the entire skilled labour force of the EU and north America to cheap labour countries in Asia and eastern Europe will have the effect of destroying our economies and turning our countries into impoverished nations, the reason is different.
In my experience it's the wealthy people who choose to buy local. The small man buys the cheapest he can get whereever it comes from.
So you'll see the Detroit auto worker in a Chrysler Neon factory buy a Hyunday, then complain that his factory is being closed because sales of the Neon are too low to keep the factory open.
The assembly worker in a GE factory will have Japanese and Korean home electrical appliances, and complain that his job is being scrapped because of declining sales.
Their bosses have American cars and electrical equipment, they buy where their money is, at home.

Offshoring isn't declining. If the labour lines are shorter it's because people have given up in getting a job in their field of choice and are either retraining for something else or have accepted unskilled labour.
At the same time the educational system sees a sharp decline in students in the affected fields.


42
Axel Janssen
Ranch Hand

Joined: Jan 08, 2001
Posts: 2164
The line of argumentation of our hardcore free-market-economies economists is the following:
1. To produce something, you need labour and capital (maschines, buildings and stuff).
2. In our time we have a huge tendency that more and more places on our planet become eligible for production of well products (knowledge intensive or not).
3. 2) is due to the fact that communication costs are much lower now. So people in "lower developed" regions can adquire the necesary skills.
4. Because of 2) there is a much more numerous workforce to compete for investment capital.
5. Capital doen't grow as fast as the workforce eligible to do a more or less knowledge intensive job. Capital is acumulated through saving in a longer process.
6. Consequence: In allready "developed countries" the relative price of knowledge intensive labour (compared to capital) diminishes, because there is more knowledge intensive labour available for the slowly growing capital for investment. In "not so developed countries" the workforce does gain, because they are now able to offer their skills on a global market (higher profit than local market).

In the long run, more capital will be accumulated and there will be high earnings for everyone. If environment survives average indians and chinese embracing a lifestyle of average europeans or americans.
I personally think there are chances even in the "traditionally more developed" countries and it makes no sense to cry about things we cannot change. Also the globalization puts pressure on our politicians to come up with more efficient ideas for allways needed reforms which is a good thing.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Kishore said:
I can give example of IBM, Accenture and Deloitte consulting. They hired 3 times the freshers in India compared to in USA. So, do you want some more numbers???

IBM, Accenture and Deloitte have been committed to offshoring for years. I don't doubt the 3 to 1 ratio, but I don't think it is new news.

However, you could prove your point by showing how new categories of work are being offshored. I have not seen that trend.
Jay Ashar
Ranch Hand

Joined: Oct 13, 2002
Posts: 208
Originally posted by Mike Gershman:

Our only hope is to get the feds to enforce the laws. This is a work in progress. The resultant domestic demand will restore the abundance of entry level jobs that existed from before 1964 to 2001. Luckily, it doesn't take long for a talented programmer trainee to become productive, so the recovery should be pretty fast.


Here is an example of work in progress, look at this article from
Washington Post. Department of homeland security accidently issued 10000 more H1s for this fiscal year. Thats 65000 + 10000 and they say its a mistake, makes me wonder since how many years they have been making this mistake.

Although they say it was accidental, I have my doubts.


SCJP 1.4<br />SCWCD 1.3
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Mike Gershman:
Kishore said:

IBM, Accenture and Deloitte have been committed to offshoring for years. I don't doubt the 3 to 1 ratio, but I don't think it is new news.

However, you could prove your point by showing how new categories of work are being offshored. I have not seen that trend.


New categories of work often come from new fields. My example for this is: funding provided to Indian Nanotech, Bioscience startups from bay area based venture capitalists.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Kishore said:
New categories of work often come from new fields. My example for this is: funding provided to Indian Nanotech, Bioscience startups from bay area based venture capitalists.


Those are certainly Indian technology jobs, but are they offshoring? If the only US role is funding, I would say not.

These are certainly not jobs whose location is influenced by the US H1B policy. In fact, I would call any US component of these projects to be a case of offshoring.

I hold an expired green card, permitting me to work in Mexico. When I was down there, was that offshoring, reverse offshoring, or what, by your definition?
Homer Phillips
Ranch Hand

Joined: May 26, 2004
Posts: 311
Yesterday in the NYT.
HAS the technology industry - a big and undeniably important slice of the economy - become a business whose best days are behind it?

In other words, is Silicon Valley turning into Detroit?

That is certainly the way things look now to some industry observers. They believe that Silicon Valley is destined to see its competitive stature erode, as new global rivals undercut American technology companies on price and increasingly wrest the lead from the United States in innovation.


Read the Article - it digresses
Tim Holloway
Saloon Keeper

Joined: Jun 25, 2001
Posts: 15662
    
  15

Originally posted by Mark Herschberg:
You know, everyone keeps complaining how companies are hiring incompetant people to produce low quality work. The great thing about the US is that anyone can start a business with a couple of hours of prep time (maybe a couple of days if you want to get all the legal stuff done right, at the start). If all these other companies are screwing up and hiring incompetant people, someone be going around hiring the qualified, experienced, albeit slightly more expensive people, and then blowing the competition out of the water with faster development cycles and better quality software. As for me, I prefer gloating to whining.

--Mark


The quickest way to make me scream is start a sentence with "All you have to do ...". I wish that there was a way to produce a worthwhile product in the constraints of an "all you have to do" time, cost and labor frame, but the closest I ever got to that was when I paid AT&T to license their time, sweat and development expense to go into the C++ business.

Sure you can do the paperwork to start a business in an afternoon. But even a pizzaria requires more than that. Since you never seem to mention co-operative efforts, I'm presuming you're going to have to get ahold of enough cash to pay for staff, premises and equipment, invest the time to design and develop a product, spend more time money and effort on marketing it, spend more on customer support (for many products anyway) and so forth. And, of course, if you want premium employees, expect to pay premium prices.

Then you can worry about whether your efforts will be brought to naught going against established competitors who probably have the advantages of an established customer base and funding. And to top it all off, 2 out of 3 businesses fail within the first 3 years. Even some of the most successful entrepreneurs around can claim more failures than successes - they just keep failing time after time until an attempt succeeds.

Edison said that "Genius is 1% inspiration and 99% perspiration", and I've no doubt he meant that in the business sense as much (or more) as in the scientific sense.

The only quick roads I know to success involve selling your soul.


Customer surveys are for companies who didn't pay proper attention to begin with.
Mark Herschberg
Sheriff

Joined: Dec 04, 2000
Posts: 6037
Originally posted by Tim Holloway:


The quickest way to make me scream is start a sentence with "All you have to do ..."

Sure you can do the paperwork to start a business in an afternoon. But even a pizzaria requires more than that. Since you never seem to mention co-operative efforts, I'm presuming you're going to have to get ahold of enough cash to pay for staff, premises and equipment, invest the time to design and develop a product, spend more time money and effort on marketing it, spend more on customer support (for many products anyway) and so forth. And, of course, if you want premium employees, expect to pay premium prices.

Then you can worry about whether your efforts will be brought to naught going against established competitors who probably have the advantages of an established customer base and funding. And to top it all off, 2 out of 3 businesses fail within the first 3 years. Even some of the most successful entrepreneurs around can claim more failures than successes - they just keep failing time after time until an attempt succeeds.


Thank you, you made my point.

Commercial success is not just about the best technical product. It's about doing a whole bunch of things right, only one of which is technical. The claim that "Most significantly, we are devaluing craftsmanship and quality by sending jobs overseas" is very obtuse. It suggests that quality of work (in this case the technical product) is the only important factor. As you rightly point out, it is not; that is just one part of it. Even if you assume that products developed offshore are of lower quality (for the record I am making no claim here one way or another), the company as a whole is making an economically beneficial decision. If you can't compete soley on better quality software, then you need to compete in other areas (perhaps financing, marketing, sales, logistics, etc) and that a company is outsourcing one part does not mean that the "soul" of the company has been hollowed out in the name of money. It doesn't mean the company said, "let do everything as cheapily and crappily as possible." Some comapnies compete with marketing, some with sales, some with quality, some with pricing, etc. That the company says the quality of our software is not our competitive advantage is making business decision not a quality decision.

Otherwise we should be criticing people buying American cars because for years they've gotten lower quality ratings (in terms of repairs needed) than European and Asian cars. If you buy American cars, you're cheapening the value of car quality. Surely no one considers anything other than need for repairs when buying a car, right?

--Mark
Steven Bell
Ranch Hand

Joined: Dec 29, 2004
Posts: 1071
Originally posted by Tim Holloway:

And to top it all off, 2 out of 3 businesses fail within the first 3 years.


That's a pretty rosy number. I've seen some reports closer to 9 out of 10 in 3 years. Although it depends on how you start the business. A large number of businesses are ideas people get, find some funding, and go for it hoping there will be a market. Most of these fail. The more common success is those that are able to take a hobby and grow it into a business (my dad started his own business this way and has been at it for about 7-8 years). Unfortunaly in some industries this is just not possible.

P.S. I would like to point out that the purpose of a company is to make money. Not to create jobs, grow the economy, better the world, or whatever. However in order to make money they usually do those things, have to have employees to make X product or service. By making money they grow, hire more employees, spend more money, improve the overall economy. Individuals are no different. It's just that our product/service is our abilities. A company cannot make money unless it proves itself to be a value to it's customers, we cannot make money unless we prove to be a value to an employer.
[ March 29, 2005: Message edited by: Steven Bell ]
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Mike Gershman:
Kishore said:

IBM, Accenture and Deloitte have been committed to offshoring for years. I don't doubt the 3 to 1 ratio, but I don't think it is new news.

However, you could prove your point by showing how new categories of work are being offshored. I have not seen that trend.


I was sitting next to some folks from Texas Instruments, India this afternoon during lunch. You can add TI as one company with 4 to 1 hiring in India compared to US for core R&D development(DSP, wireless chips etc) according to their understanding.
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi Jeroen !

Eric, that piece reads like the communist manifesto... "wealthy class of rich parasites sucking the life out of the economy by exploiting the workers"...

Please note I didn't express any opinion as topic starter, except that link was "interesting", which it must be with about 20 answers. Of course I have an opinion about it too (just below), but I prefer let comments come because they are really interesting too.
Don't be misleaded about my feelings about this "communist manifesto" as you say : France was quite adequately qualified of "Soviet Union which succeeded", so I want to get away in a country where an enterprener cub like me will have a chance to realize something, I am an H1B candidate too.

While I agree with the conclusion that the continuing trend of moving the entire skilled labour force of the EU and north America to cheap labour countries in Asia and eastern Europe will have the effect of destroying our economies and turning our countries into impoverished nations, the reason is different. In my experience it's the wealthy people who choose to buy local. The small man buys the cheapest he can get whereever it comes from.
......At the same time the educational system sees a sharp decline in students in the affected fields.


I totally agree with you, this is not new, always been quite the same.

But I feel today something has changed. Another guy stated companies were there only to make profits, which indirectly allowed jobs and fair whealth for all because it was business interest too (well paid workers were most optimally productive, and so on...). This time all looks like if only short term profits are targeted, perhaps to artificially sustain internet bubble era profits at any cost, so business seems to want best profits at any cost even if it threatens its long term interests.

The real strength and whealth of a nation is not some rich people, even quite numerous, it is middle class only which is the backbone of society. These last times middle class whealth shrinked much and had much harder time, which is deadly on long term. When a significatively large amount of middle class goes bad, they buy much less and go for cheaper stuff, which provokes new laidoffs to compensate activity shrink, and so on. Everyone looses at this game, even the rich become less rich. So I feel that what has broken right now in US is the hope of getting whealthier through one's work. Many lost their jobs and had to take lower grade an paid ones, the others don't take any risk to keep their own, but everyone works for keeping up his standard, no longer undertake any risk or innovation. This is the real risk on long term. The most visible example of such excess to me is US health system, which is becoming unaffordable to too many people (we heard in Europe some 30% of population), and looks like a real prime importance political concern.

Best regards.
Kishore Dandu
Ranch Hand

Joined: Jul 10, 2001
Posts: 1934
Originally posted by Eric Lemaitre:
This is the real risk on long term. The most visible example of such excess to me is US health system, which is becoming unaffordable to too many people (we heard in Europe some 30% of population), and looks like a real prime importance political concern.

Best regards.


Many high quality hospitals in India are waiting for customers from US( they are already getting tons from UK).

Don't blame India for this. They are just catering to customers who are neglected by present system.
 
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