Lee Gomes of the WSJ got quite a bit of feedback on the article you cited. Here are some excerpts:
Readers Ponder the Economics Of Global Programmer Market
online.wsj.com
Lee writes: To say the latest column touched a nerve would be an understatement; in fact, it seems to have exposed a huge world of pain.
The piece was something of a meditation on my hiring a programmer in India over the Internet to do a little project for me, and what that portended for future labor markets -- especially for workers in various computer-related fields, the same ones who had rushed to embrace the Internet and who had previously seen it as something of a friend. I wondered whether what happened to many manufacturing workers during the 1980s would soon start happening to computer programmers, people presumed to have the sorts of "future-proof" jobs everyone had been told to get during the last 10 or so years.
In fact, this employment exodus seems to be already happening, and in spades, as several of the following letters make clear.
At the same time, many readers took the column to be a critique of "free trade" and the like. Most of these readers suggested that the phenomena I was seeing and describing was a solution and not a problem -- as well as something that in the end was ultimately in everyone's best interests. Several of their letters are below, as well.
I'll have a few concluding thoughts after all the letters. The last word, though, will go to my friend Mani, who helped start it all.
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<snip.....>
As a retired software engineer with about 40 years of experience, I taught, in 1997-98, programming (C and C++ languages) to a class of 12-13 students for a period of three months. These courses were part of a nine-month sequence of courses designed to prepare students who had earned high-school diplomas but had not gone to college for entry-level positions programming computer software. This full-time program cost the students over $15,000; they usually took out loans to finance it. Even though it was a full-time program, most of the students worked in addition at part-time jobs to support themselves.
I was impressed with the outstanding ability of many of the students who had no college to grasp programming concepts and to write meaningful, valuable computer programs, given the proper instruction. So it was with no small amazement that I found that even the very best ones (with only one exception) were unable to obtain a single job offer after they had completed their nine months of study. I can certify on the basis of a successful software career myself that many of them were without peer among qualified entry-level professionals. One of the very best of my students kept looking for a job for a full year before she finally found one.
You article indicates, quite correctly, that Mr. Ellison (and most likely, Mr. Gates and a great many other very rich men who head American software providers) have "grown" their companies by hiring people under such conditions as you were able to hire Mr. Kumar, as a conscious strategy. It seems to me we may confidently assume that Mr. Ellison and others of his ilk have significantly lowered the average salary of programmers in their companies relative to professionals doing similar work who cannot be replaced by foreigners; and with equal confidence we may also assume that Mr. Ellison's own salary is in no way lower than those of other executives in American companies.
This kind of strategy was a significant factor in preventing the outstanding software professionals in my class from obtaining jobs for which they were outstandingly qualified.
You mention "the sight of a young father trying to put food on his table by promising to do a day of back-breaking work for even less money than the young father right next to him"; I think I have a similarly disheartening thing to think about: The situation of a young father (or mother) who will be working as a salesperson in McDonald's or a shoe store for 5-10 years to pay off a $15,000 loan which went to waste (not to mention the nine months of a young life which also went to waste) because the U.S. is no longer a land of opportunity.
John D. Robinson
<snip.....>
You've certainly identified the focus of extreme anxiety on the part of every U.S. IT worker. It's no coincidence that hundreds of thousands of IT workers have lost their jobs over the past few years, far beyond any contraction due to Y2K build-down (the reductions due to the dismantling of extensive Y2K efforts) or the implosion of the dot-com bubble.
I can assure you that American businesses are dumping their domestic workers as fast as possible (but not so fast as to seem greedy -- it looks like about 10%-20% year after year) in their rush to lower expenses. Of course there is no similar rush to trade our high-priced domestic top management for a lower-priced foreign brand.
A similar thing occurred a few decades back, when America's blue-collar workers found their jobs moving south of the border in droves. One difference between then and now is that many (but not all) of the blue- collar workers had unions to prevent entire industries from moving outside the U.S. . No such similarity exists in the case of IT workers. About the only guarantee that any IT jobs will exist in this country will be the positions that require U.S. citizenship (the FBI is not likely to recruit foreign nationals to rebuild its IT infrastructure), and they represent only a tiny fraction of all the IT work performed for U.S. entities.
Is this a good thing for U.S. businesses? In the absence of regulatory strictures (ugly as they are), yes. The competitive advantages cannot be denied, and the financial incentives are enormous. I question how strong a domestic IT capability we will have in a very few years, in exchange for a significantly higher level of corporate profitability and commensurate loss of control.
A similar threat is ongoing in the hardware end of things -- EE and computer engineering is moving quite rapidly to the Far East, with domestic computer manufacturers merely bolting together components designed and built offshore.
There are certainly extenuating factors beyond the discrepancy in wage rates, such as the failing American educational system. Nonetheless, the major driving force in this is profit, and not superior capabilities elsewhere.
With all of these displaced workers -- blue collar, IT, engineering talent -- they eventually find replacement jobs, but always at significantly lower pay levels. Since we rely on our work force to provide the funding for our many social programs, it becomes increasingly difficult to see how we will be able to prevent the collapse of Social Security (if anyone really believes that they will get anything out of that particular pipeline), or even sustain our economy. If that part of the American workforce responsible for producing products moves outside the U.S., can we survive as a nation of people in customer support?
David Lentz
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When I started Rent A Coder (only nine months ago), I had no idea that it would become a global marketplace. I had envisioned it as a way for programmers like myself to be able to pick up jobs and get rid of their day jobs. However, within a week of turning the site 'on', I quickly saw that I simply couldn't compete economically with the Indian and Romanian coders.
What to do? There was quite a backlash at the time as well. I received lots of angry e-mails from U.S. coders sold on the same idea I originally had ... that they could get rid of their day jobs. People told me I should ban non-U.S. coders, put surcharges on coders from certain countries, etc. This would result in higher profits for Rent A Coder, they argued, because bid prices would rise 10-12 times, to U.S. rates.
It took another week for me to decide not to go the "protectionist" route and go with the flow of the "invisible hand" you mentioned ... which drew a lot of criticism. So it was, in a way, gratifying to read your article and think that I had been able to correctly tap into a global trend (even if that trend has both negative and positive aspects as you pointed out) .
Ian Ippolito
Creator of RentACoder.com
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Lee writes: After the column ran, I was chatting (using IM, over the Internet, naturally) with Mani. I told him, somewhat apologetically, that the piece had very definitely been written from an American point of view. I was, after all, worried about what effect the Internet, globalization and the like would have on the standard of living of me and my friends. From our point of view, it all seems like a threat. From Mani's, though, it sure looks like an opportunity.
At least for the time being, that is. Banagalore, where Mani lives, is one of the most prosperous cities in India. I can't help but wonder how long it will take for programmers in other parts of India, or in China, to begin underbidding Mani and his friends, all of whom are already somewhat yuppified.
Great for them, of course. In fact, a number of readers thought I somehow had something against Mani doing what he was doing. Hardly; who can oppose a rising global standard of living?
I think the issue, though, is the extent to which there is Full Disclosure about who is winning and who is losing from all this. This doesn't involve Mani; it involves American companies. It is very clear from the letters that many Americans don't think the burdens of this new round of globalization are being shared equally. Manufacturing workers from the 1980s were often heard to say that when plants were closed, the bosses always made out OK while working people always paid the price. Now, it's the turn of white-collar workers to make the same observation. One wonders what the social and political fallout of all this might be; one of the nice things about free capitalist economies is that people can band together to work on behalf of their best interests.
One other point, about the workers on Cesar Chavez Street. I don't doubt that they are probably better off here than they were in Mexico, something many readers pointed out. That doesn't mean, though, that one can't also wish for an even better situation for them, one that treated them with more dignity and allowed them a fair, livable wage for all their hard work.
Finally, I wanted to give Mani the last word in all this. I told him to think about anything he'd like to say to Journal readers, and to send it to me in an e-mail. This is what he sent:
Hi,
I spent some time thinking what to say ... I do not know what to say ... What I understood from my interactions with people from the U.S. is:
• Respect for others
• Expect perfectness and promptness
• Never hesitate to appreciate good work
What I learned in my life: Patience and perseverance are the path to success.
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