Hi MulhollandDrive,
Am getting caught up on some old posts here...
RE: "unintended consequence of the new legislation if passed is it could prompt even more corporate facility development offshore. "
Bingo.
The unintended consequences of legislation's tight labor pool back in 1998-2000 started offshore migration. I was educating some of the local VCs about how startups could go offshore to solve the tight labor supply problem all of us had back then.
A tight labor pool back in 1998-2000 had NCG's (new college graduate with no work experience) demanding $85,000 + $10k hiring bonus + $10k 3 month bonus during that period ($105k) and IT contractors were asking for $150 to $300/hr (i.e. 300,000 to 600,000/year) and at one point the HR firms were posting hiring salaries for every new NCG in nearly any position at $100k.
So folks, that is the cause of today's offshore migration for many companies - a lack of talent in the USA during the boom. And today's current continuation of this is in part probably due to the lesson we all learned - never trust Congress to supply the market with what you need. The other part of it is, some naturally maturing segments in high-tech as well as a very strong desire to learn about the growth markets.
Keep in mind, when Chelsea Clinton got her first job out of college, she made CNN's headlines because her high starting salary was $100,000. Well, 100k was what all high-tech college students with no work experience were demanding back then -- and that made headline news here too but no one seems to remember that now, that that's what got us here into offshoring in the first place. ( It's one thing if a person with experience demands more than $100,000, but another thing if an NCG with no experience demands it in their first year out of school.)
In 2000, one CEO in Texas asked a NCG (who was negotiating his position) if he (the NCG) wanted a plane too - the NCG apparently thought the CEO's subtle joke was a serious question.
When unrealistic demands get placed on businesses, they must do what it takes to maintain their budgets. The H1Bs and L1-As are legitimate visas that are needed. (These are not to be confused with L1-B which is abused by Tata/Siemens.)
Offshore migration is a result of NCG's demanding a net of $100,000 in their first year out of school.
Companies have fixed budgets. Money doesn't grow on trees.
Unfortunately, it's not particularly obvious the big picture connection between cause and effect, on this item of the tight labor pool we had and the resulting offshoring.
On another note, someone said India is 1/8th our costs. This is untrue.
World-wide offshoring costs for large companies are 50% of USA costs per Microsoft --- at the entry level (not advanced levels which continue to have worldwide labor pricing pressures).
India is a bit less than 50% at entry level, but their costs are absolutely not 1/8th. They are not $5,000 in India. Some of the non-mainstream media loves to sensationalize things to the point of inaccuracy or miscomparisons. $60k here is around $25k to $28k there, and then their cost of living is a lot lower.
Also, the reason why the salaries are so low in Canada isn't because an equivalent engineer is paid less. The engineer in Canada is statistically more likely to do things like technical support as oppose to higher-paid technical inventing/architecting. (Because they don't have access to the VC money that we have here.)
Salaries are higher around invention centers, not support centers.
Regards,
Amy J |
