See You in Beijing

To American IT workers, “offshoring” has become synonymous with “unpatriotic” and “unemployment.” But for people in China, India, Singapore, and other countries where the corporations are moving their operations, “outsourcing” and “offshoring” are good news. “If it’s the case that you’re still in a developing country, you are one lucky person and should just stay right where you are.”


Many times throughout the summer, I flipped channels. Although the quality of programming on television warrants flipping with the digitus impudicus, I merely flipped with the remote. I would often stumble upon Lou Dobbs’s show on CNN, I would watch his continuing report on “The Out-Sourcing of America.” In case you’ve been in a developing country with no television or access to American media, the outsourcing of America began just before the dot-com crash and has continued for the past several years. If it’s the case that you are still in a developing country, you are one lucky person and should just stay right where you are.

The last time I checked, America was still a capitalist society. In fact, we Americans pride ourselves on that fact, and everyone knows it. If a company based in America can profit an extra million dollars a year by shipping 100 jobs to China they will do it. It’s basic accounting for companies. However, people like Lou Dobbs and the 100,000 workers of SBC, the huge cable company that has a history of shipping jobs overseas, are all up-in-arms about how anti-American it is to put jobs — which are apparently “owed” to Americans — in the hands of workers in developing countries. The workers of SBC claimed that the same company who claimed to need to cut costs by shipping jobs offshore profited 8.5 billion American dollars in the same year. Their argument was essentially that as long as the company was in the black, any and all jobs should be in the hands of Americans because, by God, any American company should be looking out for their own. As one worker put it, “We take pride in what we do in our hometowns. We work for our communities. We work for our taxes. We work here. This is where the jobs should be.” I hope they weren’t saying that to Wall Street because Wall Street doesn’t care about his community. As Hewlett Packard chairman Carly Fiorina has emphatically stated, “there is no job that is America’s God given right anymore.”

The situation with SBC stood out because they employ so many workers and when they went on strike, it was big news. (After all, the media loves nothing more than to report news about themselves.) But the situation at SBC represents the common practice of most large, American based-companies: offshoring.

{mospagebreak title=The McDonaldization of the IT Industry}

It started in the late 1990’s, when IT work was still exploding. And of course, there was also the Y2K issue scaring the pants off of the government and every major corporation, as well as the common citizen. Since there was a shortage of skilled workers in the country and the gloom and doom of the millennium clock was clicking away at light speed, companies had to ship jobs overseas in order to prevent a major catastrophe. At the same time, one and two-year IT schools were popping up like McDonald’s, aiming to churn out as many domestic IT workers as possible to handle to explosive growth in the industry and deal with the Y2K bug.

A perfect example of how desperate the country was to create IT workers relates to a fellow from my childhood days. There was a guy in town who was usually drunk and rowdy, getting into fights, and wrecking his car after a night of binge drinking. For the sake of this story let’s call him Danny Cooperton. One morning I was leaving the coffee shop heading to work where I managed a web services company. I see a guy staggering across the street at 8 am. Once I made it to the crosswalk, I realized it was Danny.

“Danny, how are you?” I asked.

“Oh, hungover man. I’m messed up,” said Danny, his eyes sloshing around in his head.

“What are you doing these days?” I asked.

“I’m an IT worker. I just got out of school,” he said.

“Oh.”

America had built up an IT work force consisting of a sizable portion of people like Danny. Many were unemployed people being retrained with government funding to take on the needs of the IT demands of the future. Too bad the bureaucrats didn’t see what was just around the corner.

Boom! Crack! Pow! As soon as the country had created a McDonald’s IT workforce, the whole thing exploded. When stocks declined in the beginning of this century, CEO’s had to make moves to get shareholders back in the game. All that was required to create a mass exodus of high-tech jobs was for one major player to save millions by shipping those jobs to people in developing countries, like China and India. (For the Americans reading this, people from those countries were the people in your computer science and math classes in college that would typically score 110 points on the test in which  you scored a 72.)

{mospagebreak title=How Wall Street Discovered Offshoring}

After one big company starts exporting high-tech jobs, so do all of their competitors, at least if they plan to stay in the game. And that’s what happened. That’s what the country has to deal with today. We voted for the congress that created laws allowing free trade between American companies and workers in developing countries. We are a capitalist society, so when the accountants proved that American-owned companies could earn billions in profits by exporting, the government stepped in to make it legal.

The total annual cost of a programmer in China is $15,000 dollars. That’s right, those guys in CS and Calculus class whose class average was 110, who left their families behind and traveled thousands of miles to come to America, to get an American diploma and start working for an American company just to make something of themselves, only cost $15,000 a year for an American company to employ as long as they are in China or India.

It’s common knowledge that education in America is lacking (at least in its public education system). Vast portions of the populace can’t pinpoint the Pacific Ocean. Some of these people are the ‘smart’ Americans. While America is dumbing-down education since America is more concerned with entertainment and status, China is increasing education. In 1999, China graduated three times as many engineers as America.

As if that isn’t enough of a glaring statistic that some American’s should be wiping the smug look off their faces, the engineering graduates accounted for almost half of all undergraduate degrees in China. What about America? Engineering graduates made up 5 percent of all undergraduate degrees. The number of graduates in the US with “smart people” degrees is dropping yearly. China is generating a swarm of workers capable of creating and inventing the Tommy Hilfiger pants off of the United States. If Americans still aren’t worried, consider that only 2.2% of China’s twenty-four-year-old population earned a bachelor’s degree in 1999. When those 2.2% start cashing their paychecks from American companies and handing the loot over to their brothers and sisters to go to school as opposed to let’s say, spending $100 on a pair of pants, that number will increase quickly. With only 2.2% of the population receiving undergraduate degrees, China still produces three times as many smart people as America with 35.3% of the population receiving degrees. – http://lieberman.senate.gov/newsroom/whitepapers/Offshoring.pdf

{mospagebreak title=The Full Impact}

So what is going to happen to Americans once the full impact of the global high-tech shift occurs? Think back to when you started college and showed up to Calculus and half of the class originated from India or China. If you ever spoke to any of them you may have learned that they made huge sacrifices in order to come to America for an education and a good job. You may have learned that there weren’t opportunities in their country. You may have learned that for decades they focused with laser-like concentration on learning and mastering the details of their future trade just to have a shot at being one of the few to make it. From the time that many of those people were born, everyday, was lived to fulfill one objective.

Now look at the modern American teenager. Look at the situation we have in this country when the majority of teens are more concerned with their favorite celebrity than with learning about — well, just about anything. How many of America’s youth would have the motivation or even the basic skills to go to another country for an education or a job?

Not only has the intelligence of the average American deteriorated, the level of character has deteriorated with it. Not only are skills lacking, so is motivation.

In a short period of time, every company on Wall Street will realize that for 10% of the cost, they can receive 500% productivity by giving a high-tech job to someone in India or China instead of an American. The money going back into those economies will create the means to educate even more high-tech workers who are banging on the doors to have an education while Americans are banging on the doors of Starbucks. Instead of seeing math and computer science classes in American universities filled up with people from India and China, there will just be a sign on the door that says, “Class Cancelled. See You in Beijing.”

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