Very useful, but an added dimension would have been more useful. How many of the non-offshored jobs were "saved" by lower than average wage growth? The same question will be relevant to the automation question?
46
I work in a high-tech company with personnel scattered all over the country and in some other countries as well but we go into the office in downtown SF to work and have periodic all-hands meetings at centralized locations.
Why? Because there are two things that computers can't do, that require human interaction and many times in person interaction: the creative and the political. Creative is anything where you are inventing something for the first time. Political is where success depends not on being right or logical but on being the most persuasive or somehow managing to get your way vs other viewpoints.
Jobs that hinge on the creative and the political are the safest from automation. You're best off if your job combines both.
39
Last spring my son graduated with a degree in computer science. It took months to get a good job but he managed to get one as a software engineer with one of the largest American companies. He replaced an H1B visa holder that couldn't get his visa renewed. The entire department is over 80% visa holders mostly from India. While in college, I discouraged him from computer science because as a 35 year developer myself, I've watched my peers train their H1B visa holder replacement, get a severance package and never find a job again in tech. The excuse: your skills are outdated. What, your ability to learn a new language or tool suddenly ceased to exist? It's just a big lie.
101
Ohio IS practically a foreign country from the perspective of Boston, NYC, or D.C. Capitalism has created great economic differences WITHIN the U.S. Who needs the rest of the world to arbitrage wages to rock bottom?
33
In the 20th century the crisis of material abundance caused devastating economic consequences, and the second world war. The belated and mostly inadequate response to this crisis was some redistribution of wealth. We apparently still do not understand that the enemy is not efficiency and productivity. It is the failure to redistribute the wealth they creates. The turmoil we now see in western representative states is all to reminiscent of the 1930's. The solution to the crisis of abundance is as obvious and it is improbable.
22
@ALLEN GILLMAN
Not quite. There was also a peace diffident within the construct of capitalism. China, an egregious enemy, integrated some free market and trade aspects to its economy and produced one of the most remarkable turnabout in history. Russia and India to somewhat different extents. Granted there are downsides but nuclear armageddon was at far higher risk just short decades ago. When people trade they talk to each other.
6
Interesting, but the study also raises questions about the future of U.S. incomes. Is it better to lose a job altogether or just to endure wage-stagnation?
The distinction between jobs "off-shored" to other countries and "remote" jobs relocated to other regions of this country is pretty clear. But the definition of "remote" covers a variety of work situations and therefore a variety of results for income.
If a company moves workers to a satellite office in a different region, it presumably takes advantage of the lower cost of living by paying lower wages. It may be a wash for workers' real incomes, though it may require personal disruption. If they work at home full-time for a company with salary and benefits (like my daughter's partner) the company saves on the cost of office space and equipment. But if a worker freelances or works through a contractor, they are usually part-time, receiving lower incomes, fewer benefits, and virtually no job protection.
Upwork, for which Mr. Ozimek is chief economist, bills itself as an online platform for hiring freelancers: the "growing share of workers...now working from home." Like contracting for part-time workers, freelancing places the burden of economic change on workers. There may be perceived benefits of leisure, family time, recreation, etc. Or there may just be necessity.
Implicit is the fact that your freelance or contract job could be off-shored. So the result in practice is U.S. income stagnation, if not job loss.
24
People: you MUST unionize your trade or skill set. If you don’t, there is no bottom.
41
I often see complaints about immigrants in technology, or offshoring, and I can understand some of what drives that, but I have been fortunate. Even then, I live in Manhattan, and in New York, 40% of the population is foreign-born. They come here to work, for a better life. I can't complain, since in fact, it is why NYC is so safe, why it is still a thriving capital of commerce.
Immigrants are more likely to aim toward the money-making professions, while people from long-standing families head toward the humanities, social sciences, or sometimes the professions. Would we have enough doctors or medical staff if it wasn't for immigrants? For technology, the growth has been so much that offshoring barely hurts the total volume of employed. Even then, I've seen studies that shows H-1B's increase the salaries of native Americans.
15
@James Igoe
We would not have enough doctors because the AMA and its subsidiaries restrict the number of places for medical students and for post-graduate training (residents & fellows).
22
Not mentioned is the desire to protect jobs by managers. Yes, there are drivers to reduce costs, expand work hours, but not everyone is looking at the balance sheet, even if the CFO's are.
I've been working as a software developer for 15+ years, and I have seen attempts at offshoring, but for myself managing offshore teams has gone quite well. As part of divestment, we recieved an offshore team, selling the assets but keeping the staff. The team was good, and I did not expect to review their code, just the product. I could tell the team what I wanted in our 9 AM ET call, 8 PM for them, and the next day I came in the work would be done and ready for me to evaluate. The difference is that our expectations were in line. Was their code perfect? No, and we stepped in to correct elements when they did not work, but the value was enormous, freeing me to lead other projects, all the while costing us 1/5 the price of an onshore coder, and getting us product while we slept.
7
My daughter worked in the tech. sector for a large American company which tried offshoring jobs to India.They found that although it was less costly,the Indian programmers were less skilled and collaborative.This is not to say they aren't skilled....just not at the level of their American counterparts.Most of the jobs were moved back to the US.
Manufacturing tangible products is a different story.The Chinese for example are not only cheaper but of higher quality.I own a company that has imported this type of product from China.But only after looking for someone in the US who could make comparable products.I had little success in this effort.Face it...the nature of the US workforce has changed.We have moved toward jobs which require a different kind of skill.We have invented high tech. and the products that go along with it.The danger is that China is not far behind and has a consumer class that dwarfs ours.
15
@Iamcynic1 If you want a safe job, pick one that is creative or political (in the broad sense of being dependent on your persuasive skills). Those are the two areas where you really need to foster close collaboration between human beings. You can't delegate those skills to computers and any kind of language, culture, or even geographic differences will be a problem that they are not, in jobs that are more cut and dried. For best results, aim for a job that is both creative and political. Very hard to offshore jobs like those.
7
So, the element of truth that is missing is that all this takes place because of financial greed and the absence of patriotism. It is all about money. Now why is it so cheap overseas for companies? Because our companies aren't regulated properly. If you want to outsource your jobs and put Americans out of work there should be a severe financial cost. After all, those now unemployed workers are taking money from our government to survive. Slap huge taxes on companies like Microsoft, Apple, and the like so that it will not profit them to destroy the US economy in search of more money.
For example, if you hire people overseas to do business for your allegedly US company the tax code should eliminate your ability to deduct the wages of the overseas workers unless you collect US taxes from them along with self employment taxes; Social Security and Medicare. Make the companies pay to play out of this country.
Or change the Tax Code to make all income made anywhere in the world by a US company taxable like ordinary income, even if they must pay foreign taxes.
Some of this may happen if we get the slime out of the Congress and put Americans in their place. Lets start at the top and then move to the Senate and the House.
Since its all about the money, take it back from them. See how fast people in the USA find those jobs have come back home.
27
@Joel Friedlander I agree with you 100% Joel, however this is not just an Apple, Microsoft thing this is a Ralph Lauren, Calvin Klein, Amazon thing, there were millions employed in clothing manufacturing, small business ownership as well as sales reps when the jobs were here: it wasn’t until it potentially became a white collar problem that the problem received attention, and btw millions of lesser paid white collar jobs have been sent abroad already, just not those jobs affecting people with “ a voice”, examples being call centers for American Express( thanks Sandy Weill, enjoying your vineyards in Napa I hope), most of the time when you call about credit cards etc you are talking to someone in India or the Philippines, it used to be in rural areas. Everyone of these companies in clothing should be hit with huge tariffs on their Asian goods, in this I agree with a Trump, it’s the only way to correct the problem, through the owners pocketbooks. I noticed many commenters saying tech didn’t leave because American workers are better, that may be the case but the same would apply to manufacturing, except at the very high end which the French and Italians own in clothing and the Germans own in engineering: it is disingenuous to stick up for some of our citizens while throwing the less likely to complain under a bus. Four examples of American Made clothing that was the best: Levi’s jeans, Brooks Brothers original button down shirts, Johnson Hosiery Mills socks, Pendleton shirts.
11
@Joel Friedlander Joel BTW Your “ pay to play “ suggestions are all excellent, I would add to that any executives for companies off shoring jobs lose all their rights to personal protection as well as corporate and legal protection supplied by U.S. taxpayers, your factories are overseas, you’re on your own baby, don’t expect any help from us.
13
@Joel Friedlander I dont think it is a clever idea. You want US companies (Apple for example) to have an access to foreing markets and generate profit there without bringing employment? You do understand where it leads, right? Ban for US companies (in extreme). Or tariffs for US products. There must be a balance, you can not have it all.
4
Companies can increase profits the most by automating the role of CEO along with the rest of the C suite. They're all overpaid and are easily outperformed by a computer analyzing the business and making unbiased decisions.
31
Workers of the world unite. If only people doing x,y,z jobs abroad could, would strike for better wages, frankly, far fewer jobs would leave the USA and some might even come back.
Is this article meant to imply that income inequality is decreasing?
The issues are very complicated and frankly it might be best to pay people NOT to work.. esp. in certain taxpayer supported jobs with the current taxpayer supported pensions. (There already are many who prefer what is now called an investment economy -- where other people seem to generate their dividends!)
Good article except for one glaring mistake, which may have been headline writers not author. I recall well when A.Blinder’s piece came out. I once worked as an Ex Pat internationally and wrote internal analysis reports about economic trends in Europe, Africa and the Pacific Rim. I tended to agree with Mr Blinder’s basic premise that but felt it was way overstated. Moreover, I recall that while some economists agreed, many did not and most it seemed were generally like me, a nod to his thinking but it was not time to pick up and move our back offices to Bombay or Shanghai. So perhaps, the lead into the article should have said, “ A prominent Economist” singular not plural.
2
Oh don't worry, it will happen, but with automation..
3
“... and the simple challenge of coordinating work half a world away.”
Anyone who has done that job will tell you its anything but simple.
The author, most likely unknowingly, sounds ignorant by suggesting this.
2
@M
You missed the point, he is saying what you are if you read the whole thing.
It would have been clearer if he said “basic” or “fundamental “ instead of “simple.” But that is what he meant.
5
Hmmm
Has the writer ever been to Bangalore?
Doesn’t sound like it
4
Anyone who has spent time on an Indian Helpline knows better.
6
Call Centers are not lucrative jobs
Engineering jobs are
So lets talk about engineering jobs for US graduating engineers
IBM has now more employees in India than in the US
https://www.nytimes.com/2017/09/28/technology/ibm-india.html
So much for jobs with IBM
"Cummins Opens New, State-of-the-Art Technical Center in India"
"The four-story building is impressive with seating capacity for 2,500 professional engineering staff"
That is 2 500 fewer jobs for US graduates
https://www.cummins.com/news/releases/2018/03/01/cummins-opens-new-state-art-technical-center-india
"Pushing pedal to the metal for more self-driving cars on roads"
"General Motors is one of the first carmakers to develop the V2X technology in China.
Together with Tsinghua University and China's Changan Automobile, it helped compile the country's first standard designed for the application layer"
http://www.chinadaily.com.cn/a/201901/07/WS5c32b8fba31068606745f38b.html
GM has moved its self drving car research to China . Not only ido Chinese engineers work for less - if your self driving vehicle over a pedestrian there will be no law suit. The Chinese government will see to that
Most importantly these moves have been essential"to contain" costs as the IBM spokes person expalined, that is to lower salaries for engineers to what they would be otherwise
15
@talesofgenji Are you claiming that software engineering jobs in the USA are not in high demand?
I work in the industry and there are few jobs that have the employer demand and security of software engineering. Companies like Google, Amazon and Facebook have huge unmet demand for employees.
One reason that they open offices overseas is that they cannot find enough employees in the United States.
A related problem that the industry is trying to deal with now is the steady increase of software engineering salaries in India. For various reasons the world economy has an amazing desire for theses skills.
6
I have seen a ton of white collar jobs shifted over to China and India around the engineering industry. Companies tend to hire them on as contractors where they can pay them 1/10 the rate an American citizen would make.
Yet somehow these companies executives and our POTUS wonder how China "stole" our Intellectual Patients or how India gained access to American citizens confidential information that led to mass scammers of tax refunds and credit card information.
13
Most of the work that I do has gone offshore. There are a few like me that can still work in the U.S. but our salaries will never be able to go up because it constantly gets thrown in our face that they (the company) can get it done cheaper (India, China etc.) if push (raise request) comes to shove (laid off).
41
Kind of history giving a rebuttal of sorts to Jack Welch's 70/70/70 rule (with that last 70 at least).
3
The famous economist confesses that economists don't know much about anything.
3
Dispiriting how greed has so many 'operational' words. 'Offshoring' means disrupting lives, families. Many of these are paying lip-service to loyalty + patriotism.
It also means that the companies leave their consumers without a financial base to buy (as many of) their products.
So, short-sighted greed it is!
27
This piece is informative, balanced and based on facts. The Times may consider the journalist to lead her political section.
6
We assume "white-collar" means something irreplaceable, never redundant, forever relevant to the business mission... In fact, today's digital world of work means that anyone who stares at a computer screen all day (which is most of us) can essentially be replicated and "spun up" by connecting anybody else with equivalent skills to the cloud through a high-speed internet connection, literally in seconds, and from anywhere in the world.... The geography of jobs, skills, labors and workers has become largely irrelevant. It's the next wave of automation that we should be considering -- things like robotic process automation (RPA) and other similar forms of machine learning (ML) technology that can "learn" to perform virtually any human task by simply watching while humans perform them. Early application are even now performing tasks like scanning medical records with results vastly better than a team of experts -- with far errors and "false positives."
It's always interesting to see how the commentariat reacts when the numbers don't back the doom and gloom they'd been told to expect.
2
How did you research this article? I have worked for over a decade at of this country's largest IT companies and have witnessed the ceaseless migrations of jobs to whatever the third-world flavor of the month was. This American company now admits it employs more Indian nationals than Americans. I watched job role after job role get outsourced - from the most predictable casualties (development) to even the technical writing teams and project managers. I repeatedly witnessed entire teams replaced by foreign nationals (working remotely). This is going on more than ever over time. If you think a foreigner can't write publications in English as well as a native, you are right. That doesn't stop them - the cost savings is too great. Funny how we worry about immigrants taking low skills jobs, when these highly skilled ones (most IT work can be done remote) are being outsourced overseas in numbers you can't imagine without any immigration required.
51
The rise of the phone and the relative decline in the importance of desktop technology caused a structural shift. It's like most of my generation was put out to pasture along with our old technology and mindset. Replaced with a wireless hyper-mobile hyper-connected, subscription oriented, no-human touch required, world. Luckily, we have golf.
2
Economists fail to take into account the value of soft skills.
Image if a health insurance company expected you to travel to a hospital in Thailand for knee surgery because the surgical cost was lower than a US hospital (including the cost of travel)
Globalization has it’s limits.
1
I think it is coming, it's just happening slower than expected and HR Depts are trying to figure out how to handle the mass layoffs when the jobs are sent to India. It's coming IMHO in the next 24 months.
10
This is a perfect example of using information to present a conclusion that is completely misleading. Millions of white collar workers were let go in favor of alternative sourcing or just plain cost reduction. All of these people had to scramble for new jobs. The fact of their Resilience and eventually finding work is used in the study to make it sound like the impact was minimal. Nothing could be further from the truth. It would be more accurate to say that white-collar jobs were largely decimated and white-collar workers were forced to scramble, sometimes into completely new occupations and new locations. From a statistical perspective the end result looks rosy, but in reality it was a great upheaval.
60
@MR Exactly. And moving the jobs to lower cost areas didn't improve the financial lots of those cities. Wages were adjusted to pay the going rate in the area.
11
Yesterday's digital Washington Post (09/26/2019), contained a short article by Taylor Telford entitled: "U.S. income inequality has never been greater, Census data shows." It contains the following citation by Brielle Bryan of Rice University: "Systematic inequality is actually starkest in the top tier of the economic ladder which is populated primarily by white men... Women in the 95th percentile of earners make around 68 cents on the dollar compared with their male counterparts." The quote ends: ".... what's happening at the top end is really symbolic of what's happening throughout the system."
This wage discrimination based on sex, may actually be a form of insulation or a buffer to protect workers in these jobs, if they are filled mostly by women earning a much lower wage.
[09/27/2019 Friday 11:40 am Greenville NC]
8
"Customer service and other call-center work like tech support often require a more nuanced understanding of the customer experience"
Underappreciated is the fact that these jobs require good expressive and receptive language skills - not something that we can assume every native speaker of English has. Ever have a conversation with the customer service person who didn't seem to "get" your problem? Or one whose explanation felt partial, jumbled or difficult to understand? Or they kept saying the same thing over and over, in exactly the same way, and seemed to lack the linguistic flexibility to explain it differently?
18
Any job that an algorithm can be designed for will disappear eventually. Ask a stock broker, investment analyst, mortgage broker, or insurance underwriter how they feel about job security these days. The apocalypse is really coming, like a bankruptcy, slowly at first, then all at once.
17
@TOM, What about an architect, salesman, piping designer, project manager, construction manager. Anyone who deals in too many variables. Someone, maybe a team of people have to manage the AI, right.
3
50 living and working as a Business Analyst in Ohio. I am and have been gainfully employed in hybrid IT-Operations roles for 20 years. While I have been laid off twice in my career, the key for me has been to translate and communicate skill set and experience across multiple industries - financial tech, consumer goods, healthcare, banking, and transportation.
I make great $ for cost of living here in Midwest. Starting to wind down from the daily grind of corporate life and seeking gigs that will span 4-6 months then enjoy semiretirement the rest of year- I get multiple emails and calls each week offering potential opportunities.
Not trying to toot a horn - believe me I’ve been thru rough spots when laid off as single mom and when fighting cancer- we make our own ‘luck’ in this world!
19
@Elizabeth
We make own luck sure, but I'll bet you were also born with some of your "luck". People with low-average intelligence or communication disabilities or a impaired ability to acquire good social skills do not have the kind of "luck" that you do in high-paying industries.
8
I understand what you are saying and appreciate the comment - I am not unaware of the fact that the body, place and family we are born into have enormous impact on the trajectory of happiness and success of our lives.
That said- this article is referencing white collar jobs and in that segment of work I have had my share of struggle and overcoming.
7
Part of the problem facing both managers and economists is understanding the whole range of costs. Labor costs are easy to calculate if you assume that worker is an interchangeable commodity like an ear of corn or a barrel of oil and the cost is the contract hourly wage. But workers in different countries are different, have different work cultures and vocabularies, and require tending, watching, coordinating, and other so called transactions which also cost money. The tenders often have high salaries consistent with their knowledge and skills. So companies do not save money overall. They discover this later when they pay for foreign travel to send their experts to fix problems caused by miscommunication or other issues. Such costs are often buried in "overhead" and thus not directly traced to the reason they were necessary. Lots of outsourcing disasters could have been prevented if deeper knowledge of how work is actually done had been taken into account. To repeat: workers are not interchangeable commodities and their wages are not the only cost.
26
This is a thoughtful piece, and it is worth remembering that economics is hardly a “science,” predicting human behavior from an academic office is perilous, and when this is mixed with politics the value of the discipline in predicting behavior and trends is minimal.
6
Just off the top of my head...
White collar jobs are generally more vulnerable than manufacturing jobs, because there are minimal logistics costs or up-front facility costs to move work across borders. Furthermore, the more automated a manufacturing facility gets, the less incentive there is to shop for cheaper labor, while that incentive does not diminish as much for most white collar work.
The constraint that exists in a white collar job is often proficiency in English and other necessary skills that will tend to only be common in at least somewhat more highly educated residents of a poor country, so wages for these relatively few highly educated overseas workers will have risen fairly quickly in the medium term as the same wages decrease in the USA from the newfound competition.
As time goes on, however, the education level will rise in other countries (more, bigger and better universities, for example, cannot materialize overnight) and likely outweigh additional wage effects of increased demand from the USA. We may only be in a medium-term lull until more of these these other, newly-wealthier countries ramp up their rates of college attendance, strong English proficiency and other relevant training. In contrast, expect a larger share of manufacturing jobs to come back to the USA as each product requires less and less labor to produce - this might mean net domestic manufacturing jobs will remain approximately flat for a very long time.
4
I have yet to meet an AI program that has not left me screaming into the phone. It amuses me that "artificial intelligence" is under development when "natural intelligence" is still a mystery. How about figuring out how the human brain works before dabbling in AI?
18
Many of the companies probably realized that most customers would rather not deal with their foreign employees over the phone because of communication challenges.
5
The article doesn't consider the brutality of this shift or the impact of ageism. In short, it doesn't begin to tell the whole story.
In the call center, and tech industry, workers have lost jobs wholesale as firms shift IT work overseas. The government's temporary visa, H-1B, facilitated this shift of jobs overseas.
The older workers who lose their jobs face trouble. STEM hiring is biased toward younger workers. Their next job probably pays less, and their health insurance coverage is at risk.
The problem with this study and this reporting is it will put wind in the sails of lobbyists to argue for increasing temporary visa holders. It will be used by firms to revisit ethics of shipping jobs overseas, not there were many restraints to begin with.
Trump won support from workers brutalized by globalization. It might have been enough to help him win. IT workers who trained visa holding replacements spoke at his election rallies. The Democrats, but in particular Hillary Clinton, ignored the problem and paid for it. Clinton did not want to hurt her Silicon Valley support.
If the Democrats want to win, they need to recognize that the Trump campaign did get a few things right.
61
@K.Kong
I agree with everything you said. Also as a New Yorker with no desire to move to the midwest I am just crossing my fingers that I can stay employed at a reasonable rate until I retire. I love learning new skills and software. but nobody really cares about your experience, if your job can move to a cheaper place, you better be able to adapt.
7
The story is a bit misleading: 1) wages in places like India have gone up from rates around 2000; so, it’s not quite as economical. 2) How many of these jobs are long-term temporary/ consulting, which is another way of corporate money saving - no benefits, no paid vacation, no security, lower wages. From lawyers to teachers and everything in between, everyone is impacted. With self checking platforms at retail outlets, accountants run the risk of being faced out, that we know and is a greater danger, for instance.
10
The greatest transfer of wealth and income from workers to the c-suite and shareholders.
Pay, bonus and benefits greater than $500k should not be deductible
Stock buybacks should be heavily taxed
Layoffs for workers over 45 should come with lifetime subsidized healthcare.
105
Think again and more deeply. The lack of universal health care plus the linking of health insurance to employment has been systematically debilitating US workers. Add that to the extreme high prices of University education and crooked system of young people going into unforgivable debt and the US has been chipping away at its future. Here in Guadalajara, Jalisco we have now 2 or 3 generations of tech grads who are being actively recruited by ATT and Silicon Valley companies, not just for call centers and entry level jobs, but for US based positions in design and engineering tech. Here we have since 2000 really on a mass scale universal health care that is really good and multilevel as in the Swiss/German models and free and highly subsidized public and private university and high level graduate, medical and dental schools. Most educated Mexicans are at least bilingual English. They understand US and Western culture being the same age as the internet and many having family in the US. Until my country of birth reforms drastically its health care and education systems as Warren suggests this opinion piece is skewed off. US young people are simply not competitive due to no fault of their own - smartest people are not those super wealthy.
55
The American laissez-faire system of capitalism and de-regulation is suicidally myopic. On a farm they call it eating your seed corn. Actually, this is gorging on our seed corn and letting the rest rot in a few well-heeled tyrants’ barns.
23
In an economy with 3 pct unemployment people with masters degrees and 30 years of experience can’t get an interview - why is that? Almost everyone I know has been downsized and now earns 50pct less if they can find a job at all.
110
@Deirdre Where is that? And what kind of masters? Maybe age-ism is at play here? However, the economy from a hiring perspective is booming. And its ~7% with the U-6 - which is low.
6
Since the 90's companies have been all about stock price. It helped the the CEO's personal fortunes as well as the 401K balance of millions of Americans.
Helped along by lower and lower interest rates and inflation so low it has bordered on deflation, we are seeing the obvious downsides of globalization; the race to the bottom on competitive labor markets.
17
The jobs being off-shored are the entry level jobs recent college graduates used to fill which helps explain the chronic levels of under-employment among young people.
33
@Kohl
I think you're right. Another pitfall of offshoring all the entry level jobs is that it creates a hole where the next generation of American tech leaders should be growing. The young woman you see in the photo in this article is a recent graduate whom Nexient has trained up in the latest Salesforce skills.
This kind of investment in our youth is essential if we want America to play a driving force in innovation.
8
@Kohl I find this opinion piece ridiculously pollyanna. When young people in college and summers and just get out do not get those entry level jobs, or when their parents are forced to subsidise ridiculous lo-paid to free internships they never get the first boost into employment we all need to learn the basics.
8
It did happen and currently is happening (where are you looking?). Walk into any government or corporate IT office and you will see outsourcing and insourcing, the key being the majority of staff are from India and are on our shores and/or leveraging their offices in India. The main culprit is H1B Visas which allows 85,000 (for decades) of Indians (they hold the vast majority of H1B) to be on our shores not only for an assignment but for a decade as they wait for greencards.
This is the result of collusion between the US government and US Corporations (shout out to Silicon Valley) who propagate the myth that they can't fill jobs because Americans either don't want them or are not qualified. They flood the market with unicorn jobs (insane requirements) which won't be filled and that allows them, without auditing to hire H1Bs.
THIS IS NO COVERED BY ANY PRESS/MEDIA. Please look at the multi-billion dollar Indian consulting firms whom are on our shores (e.g, Tata Consulting). They have had a direct negative affect on American IT consulting/software firms who pay taxes for decades here.
We need opportunities for Americans to work and grow our IT businesses. We are trained and able and willing to do the work.
The end result has been lower wages and less opportunities for Americans. As a die hard liberal it's been extremely frustrating that both sides of the aisle embrace H1B Visas and out/insourcing.
157
@How Much Is Enough? I'm confused about the problem. I've happily worked with many people on H1B visas. If they are here instead of India (or elsewhere), they get the same wages as me. What benefit would the US companies be getting besides skilled workers?
6
I have worked with many H1-B visa workers who made significantly less than i was (and the other US citizens). Then all of the US workers are laid off. This happens at software companies and big pharma IT departments.
51
@How Much Is Enough?
I work at a US company that only hires US citizens in a range of technical jobs, including Information Technology. We engage with Universities in joint programs for research using graduate students. However, we often find very few US citizens who can participate. I don't agree that we have sufficient numbers of US citizens to fill our most advanced technical jobs. We need to educate more US citizens.
15
A few years back customer service representatives for airlines, tech companies such as apple and Adobe, etc were in other countries, mostly India. I have traveled widely and am pretty good at understanding English spoken with a foreign accent, but when you combine the accent with phone transmission understanding is more difficult. When I have to use an agent to make a plane reservation I always ask where they are located. These days it is always a US city and the agent is easy to understand so my transaction gets done quickly and easily. But for tech help with my computer it is too often someone from India and the scammers are too often in India so last year I ended up with a fake Apple Tech person and had to scramble to get the virus off of my computer, using my retired tech professor friend, A best Buy Geek and finally a real Apple person. Interestingly that virus came from Tel Aviv!
The there is the frustration of using technology to make an appointment for something local. Call a doctor or dentist's office and one first has to listen the the "If this is an emergency call..." then all sorts of other prompts before being able to talk to a real person. To make an appointment to get a new battery for my four year old iPhone, I had to listen to all sorts of robot questions and then when I finally got a real person spent a ridiculous amount of time giving details about my phone before being able to schedule the appointment. Had to go over it again at the Apple Store.
33
@Susan in NH Call centers advertise on every light pole in my neighborhood in Guadalajara. Kids learn English here from birth or first day of school. Your help desk is around the corner from my house now, not in India.
5
“The companies that started the offshoring trend were largely based in Manhattan or the West Coast, in the very high-cost places, and they realized that, hey, there are a lot of other places in the U.S.”
Amazing that they figured that out! Reminds me of a story in The Onion:
"A U.S. Geological Survey expeditionary force announced Tuesday that it has discovered a previously unknown and unexplored land mass between the New York and California coasts known as the 'Midwest.'"
https://www.theonion.com/midwest-discovered-between-east-and-west-coasts-1819567923
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This is probably what they told the textile workers of CT, MA and other states in the early 1900s.
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This article is misleading as an entirely ignores the fact that automation and artificial intelligence are taking over telemarketing and will soon be able to do most of these calls without human intervention
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This is where it’s going. Algorithms will soon (yeah, I acknowledge that it always seems to be five years away) be able to handle most remote customer service issues with true efficiency and accuracy. While some may enjoy chatting with others or solving problems as their livelihood, I believe most would rather not while their time away on one end of a computer terminal.
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@Dave
Who cares, I'll be happy if telemarketing dies as a profession.
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This is one of the most one sided articles I have read in a long time, and scratched on bleeding wound-Does the author know that many engineering consulting companies have a mandatory 70:30 split for their project work force? The 70 per cent is “work share” with their cheaper Global Execution Partners”. The 30 per cent is limited to managing and coordinating from the US. Is there any wonder that kids now do not want to become traditional engineers any more? It does not end there-Radiology as a specialization is going down - why you might ask? You can find cheaper radiologists overseas to read your X-Rays! Law firms outsource work done by junior lawyers to cheaper nations.
These jobs mentioned here are all white collar jobs, and the apocalypse did happen. Your author just missed out on the research.
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True story.
Graduated in 2007 and ended up as a paralegal making $11 per hour for a job that paid $50,000 in the 1980’s.
Well done greedy boomers.
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Yeah sure. All boomers are greedy.
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@American
If you could distinguish between the ~75M Americans born 1946-to-64 and the ~75k piling up 8-to-12-figure fortunes from corporate profits, I would have more respect for you. Notice I'm characterizing you personally based on your words, not your entire generation, whatever that is.
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Lots of the easier tech work, for example the kind of stuff done during the dot com boom, has been sent overseas. The more difficult stuff by and large remains in the US. I call the reason why "The Boeing Effect". Companies try and outsource advanced difficult engineering to contractors making 5 dollars an hour, and just like the old adage, you get what you pay for. Problems with communication, never ending bugs, and extremely poor code quality. This eventually ends up in needing to hire back the American engineers to rewrite the project and do it correctly, costing far more time and money than if they had just done it right the first time. More and more companies are realizing this. If you just want a simple website, sure send it to India, but software for a plane? It's cheaper to pay the 200k a year guys to do it
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There used to exist a grand bargain for US middle class. By functioning as both consumer and producer, the middle class (or labor class) share the profit of their own consumption through wage and salary.
This balance has been broken by outsourcing, both of manufacturing and services. In effect, middle class are still the consumers but their jobs have been sold by multinational companies to the low cost countries, with the increased profit margins divided between multinational companies and labor/capital of low cost countries.
The US middle class has been trying to adapt to globalization through education, resulting in trillion dollars of student loans and still no great prospect. And the only ways to address this seems to be trade barriers and tariffs. Hence, the "economic populism" and election of Trump.
Just like democracy needs a strong middle class, any democracy system won't sustain itself if it does not take care (and prioritize) its own constituents. It's about time that we as a country and democracy to look into this.
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@Roy
I agree with your position that the grand bargain has been broken. I disagree, however, that tariffs and trade barriers are the most logical tools as they are paid by the consumer who as you point out has already drawn the short straw. They are a tool to be used along with tax policy changes, immigration reforms and infrastructure investment as well as education investment and healthcare reform. Not a simple problem, no simple solutions.
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Economists are so emerged in the magic of statistics that they often cannot see what they are doing. Economists presume that in industrial economic systems all workers are equal and are interchangeable.
If one ever has a problem with an order at Amazon and customer service is one of those call centers in India, it becomes obvious why the office jobs don’t go to India. Office work involves communicating with people. When people have no context in common, their communications becomes awkward and often leads to misunderstandings.
Americans and people who have lived a long time in America have a lot of common experiences and a context of understanding which facilitates communications.
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@Casual Observer As a former doctoral candidate in Economics, I agree with you. The "human factor" part was always missing in the study of Economics.
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@Joan Hence, the advent of Behavioral Economics.
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I work for a large professional services firm. We have a large presence in India and recently it was announced that the company plans to doubt the work force there which already numbers in the tens of thousands. The employees there earn a fraction of the US equivalent and while we work long hours they work many more.
It’s definitely happening. It may not quite mirror blue collar jobs just yet but it seems to be well on its way from where I’m sitting.
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Has Mr. Casselman applied for any office administrative jobs lately? Didn’t think so. The jobs aren’t here. Even the temp agencies where once you could walk in and walk out with white collar employment now offer only warehouse and other blue collar work. That’s alright — unless you’re over 50 and never drove a forklift. Employment statistics aren’t telling the whole story.
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But you don’t note - the pressure of offshoring PLUS the hundreds of thousands H1B’s have suppressed wages.
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I have worked in corporate functions for large banks in NYC for nearly 20 years, and this article doesn't quite capture the long-term trend. Moving bank jobs out of Manhattan started in earnest in the decade after 9/11. At first, the priority was to move the non-revenue producing jobs to NJ and outer boroughs. Only in the last five years or so has that priority shifted to moving these jobs entirely out of NYC, which is killing lifelong careers in compliance, finance, legal, and other critical functions that used to be considered lucrative. It would be foolish for the midwestern and southern states cashing in on this trend to think it stops there. This is merely a mid-point on the way to further reduce costs through the development of AI. Some functions are already being performed by AI. Unless you're a banker, trader, or executive, your job isn't safe. It's only a matter of time before the banks do to the midwest what they are actively doing to middle class New Yorkers.
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A.I. is not intelligent nor is it aware of anything. Sorry it’s automation applied to digitized data, a tool not an actor. It can it do regular and well defined things, which makes it a very useful tool for handling a lot more of some kinds of information than the human mind evolved to do. The idea that it can act like a person like the character Data in Star Trek the Second Generation is magical thinking.
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For 35 plus years, our manufacturing base has been moving offshore. From the depression forward, we were the world leaders in technological advances, manufacturing innovation, and "we were smokin'." We rebuilt Japan, and much of Europe after WWII, and gave up plenty of technology to our former enemies, to move the world forward. All was well. Then our products started getting copied, either counterfeit goods, or blatantly copied and stolen technology, but we let it slide, those $1.00 towels at WalMart were mighty tempting, not to mention the profit margin was wonderful, and we didn't want to upset the people in Beijing. So nothing was done, it was swept under the carpet. At first, they made junk.....but things improved in their materials and processes. Now a fake Chinese IPhone is reportedly as good or better than the real deal, probably made in the same factory and going out the back door. Child labor? Environmental disasters? Indentured Servitude? But I've got $1.00 Walmart towels, who cares about those guys, I don't know them.
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"Mr. Kincaid’s current employer, Nexient, develops software for companies on a contract basis — work that is a prime candidate for outsourcing. But all of Nexient’s employees are in the United States, which the company uses as a selling point with its clients."
I read a blog from one programmer who was employed but outsourced his own job to someone in Indonesia, I think. So he reduced his work to adjusting formatting and proofing of the coding that he had contracted out himself.
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If cost is the only reason to offshore, then the solution isn't to offshore.
The solution is to pay the lowest wages possible while touting your company's "commitment" to Made In The USA.
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@Matt B Silicon Valley, Disney, ATT and many companies have learned that lobbying for more H1b visa workers is all you need to do to lower programmer salaries 20% or more and make more profit. And all it takes is a nice bribe or vacay to your congressperson.
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For the past twenty years I have witnessed a dramatic decline in American workers in IT. For the past 10 years I have been the only American born person in the department. I don't know the resident status of everyone but there are many H1B employees/contractors. Today 99% of our team is from China or India or in India.
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@bill
In some departments, it’s hard to find any native born American workers at all. Apart from the H-1B phenomenon you’re describing, people educated in foreign countries don’t carry the humongous loads of debt that younger American born employees do. It’s for this reason as well that foreign educated workers in the United States tend to be cheaper and, therefore, more appealing to hire.
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@bill While IT has been hard hit, the point of the article is that Wall Street and Silicon Valley haven't gone the way Lowell and Buffalo did a century ago. A few narrow job categories have been reduced, but that's pretty different from an entire top-level category of economic activity outright disappearing (as happened with manufacturing).
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@bill
Not true here in flyover country.
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I think the point we can conclude is that the more educated and skilled you are, the less likely your job will be "off-shored". If you have a college degree in CS, you can get a job, even in Ann Arbor (a top engineering school is there lol) or Columbus. If you are an actuary (actually a very challenge field of study), you are employed. The reality is that most people don't have those skills or education and their jobs are indeed lost.
Also, certain tech jobs (like QA or low level IT) are considered bad jobs. It's both cheaper to go to India and few people in N America want them. Almost every new grad from a quality CS or computer engineering program is warned not to go into QA or IT troubleshooting as it will pigeonhole you for future opportunities.
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The headline is misleading. The apocalypse DID happen, however, the job migration was intranational and regional, rather than international.
For example, in financial services back and middle office jobs, as well as other support functions, have been flowing out of New York and London for years. What remains in the high-cost locations are revenue-producing positions such as sales and trading. And, yes, more recent trends have these jobs going to Florida and Texas, rather than India. But it matters little to the victims of this trend. Often they are not offered the option of relocating, as companies are reluctant to ask employees to take salary cuts and would prefer to simply rehire at a lower cost. And even if relocation is offered, it is quite a different thing to offer someone a chance to move to New York from Tampa, (or to London from Belfast,) than vice versa. The first is an opportunity, the second an exile.
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@Squidge Bailey
I am in Charlotte, and a lot of financial services jobs have relocated here. The workers in many cases came down from NYC. If they feel that they had been "exiled" to some kind of a second tier location, they sure don't show it. I had a friend who was "exiled" here from Boston from a tech company and enjoyed buying a McMansion on a lake and a boat; if he is suffering, you would not know it.
There is not enough salary to be offered that would make me move to NYC or any of the coastal centers.
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New York jobmarket isn’t exactly static.
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Plenty of technology IT/Dev/Qa jobs are off-shored. I disagree with this article. Pick a big tech company. Then tell us how many of their employees are in the US and how many of their employees are not in the US.
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@swazendo not to mention H1-B technology visas here in the US. I was surprised this was not touched upon.
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@Ben Casselman Could we get the number of employees in OECD countries for all US based Fortune 500 companies?
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@swazendo And how many are imported on H1b visas.
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One thing we always forget is that businesses have always moved production to the best (most times it is the least expensive places) for centuries. The mills of New England went South, then they moved to the west to the mid-west then to other countries.
Regardless of whether the move is from New England to South Carolina or to Mexico, the impact on New England communities is the same.
Unfortunately, our focus is not the same. We should put the same concern, emphasis and polices in place for the cities and towns that lose a factory regardless of whether it moves within the US or moves off shore.
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