Obama Says Offshoring Fears Are Unwarranted 763
alphadogg writes "The perception that Indian call centers and back office operations cost US jobs is an old stereotype that ignores today's reality that two-way trade between the US and India is helping create jobs and raise the standard of living in both countries, US President Barack Obama told a gathering of business executives in Mumbai on Saturday. President Obama's remarks come after some moves in the US that had Indian outsourcers worried that the US may get protectionist in the wake of job losses in the country. The state of Ohio, for example, banned earlier this year the expenditure of public funds for offshore purposes. US exports to India have quadrupled in recent years, and currently support tens of thousands of manufacturing jobs in the US, he said in a speech that was also streamed live. In addition, there are jobs supported by exports to India of agriculture products, travel and education services. President Obama, who is in India on a three-day visit, said that more than 20 deals worth about $10 billion were announced on the first day of his visit."
Here's todays reality: (Score:4, Informative)
He's absolutely correct (Score:3, Informative)
IBM & company (Score:5, Informative)
Obama should gather a little bit of data on the tech sector. IBM alone has hired 80,000 people in India in the last 8 years. Meanwhile, my colleagues and I have not had raises in the last 5 years. We aren't a group of chump manufacturing people putting tops on bottoms either. We develop a lot of the firmware in the high end systems, and do high level hardware design. We've been told no back fills in the US. The only new people are in cheaper regions.
I'm sure our friends at HP, Oracle, Dell, etc are up to the same nonsense.
Re:Automation versus offshoring (Score:5, Informative)
The canonical article on this topic, by the founder of HowStuffWorks:
http://www.marshallbrain.com/robotic-nation.htm [marshallbrain.com]
Re:Ten Billion? (Score:5, Informative)
Outsourcing just sucks (Score:5, Informative)
It is getting to the point where outsourcing will start costing US companies money. In my current employment situation, we outsource the management of the network infrastructure to AT&T. They manage the firewalls, load balancers and switches. However everything is managed from Singapore. Whenever I need to discuss network design decisions or changes with a real Cisco certified engineer, I have to do it on Singapore time. They don't have any engineers in America anymore. All of their project managers seem to be in India. They must be a getting a great discount, because my PM doesn't know jack. Every time I need a question answered, he has to ask someone else.
Anyone who has dealt with AT&T knows that getting change orders processed is a complete PITA. When you add a 12 hour time difference on top of it, it is amazing that anything gets done at all.
Our solution is that we are going to hire a network engineer here in America. AT&T can bugger off. We are an American company. We are hosting our servers in an American data center on US soil. Our vendor should have people who can work with us during our regular business hours. I'm all for having people on the other side of the world who can do things during a midnight (local time) maintenance window. I'm not all for having to wait until 9pm to have a conference call to discuss things. I'm even more put off by dealing with people who barely speak my language and don't have the technical competence to keep up.
25% US Unemployment (Score:4, Informative)
Re:Ten Billion? (Score:5, Informative)
Sure you can ask those questions. You'll just look stupid, because the answers are in the fucking article.
Larry Summers' legacy (Score:3, Informative)
The primary source of this entire argument that outsourcing everything to India or China is good for America is Larry Summers. Mr Summers served as Treasury Secretary under Bill Clinton, where he orchestrated NAFTA and the continued opening of the US market to China with the exact same arguments as now. During the Bush years, he served as the president of Harvard, where he supervised a massive drop in the endowment and massive annoyance to everybody who had to work with him, until he was booted out over some foolish remarks about the capabilities of women in science. And more recently under Obama, he served as the chair of the Council of Economic Advisers, which I'm positive is where Obama got the ideas that he's spewing here.
He's been wrong throughout his entire career, but because his mistakes make a small group of people very rich, he manages to get more and more power. Compare that to someone like Paul Krugman, who regularly gets his forecasts correct but is ignored because his policy responses would involve giving ordinary people a helping hand.
Re:yeah right (Score:2, Informative)
Commodity jobs are being exported...
All jobs are a commodity.
Re:yeah right (Score:5, Informative)
Re:How about holding them to one qualifcations std (Score:2, Informative)
You are correct. Some lawyers build their careers off the ability to create a job description that no American can meet. Usually the company knows the person they want to hire and so the lawyer writes a generic sounding job description but is really targeted. There are rules against this, but hey, who's checking?
Re:Apparently Obama knows not Grigsby & Cohen (Score:5, Informative)
The H1-b fraud is what kills it for most Americans that stumble upon offshoring's negative qualities.
You don't go to India for US jobs, especially when you're millions of US jobs in the hole.
Yeah, you might think that, but you'd be completely wrong.
The unemployment rate for college graduates is 4.7 percent [bls.gov] this year. That essentially means that, for college graduates, there is no recession: 5 percent unemployment is the national rate you see during boom years.
What's more, three years ago the unemployment rate for college graduates was two percent, which is far too low to be sustainable. In other words, the lack of college graduates--people with the qualifications to work the jobs this country was producing--was stifling growth in those areas.
The conclusion is clear: we need more highly educated college graduates in this country, and we need them three years ago. Long term that means education reform, which the President got done by putting it on a rider on the healthcare bill, but short term what it means is importing qualified workers from overseas, until we can legitimately produce them here. The idea that H-1B is robbing Americans of jobs is a myth: the data-driven facts say that we don't have enough highly educated Americans to do the jobs our economy is currently producing, and until we can legitimately make up the gap the H-1B visa program is a barely passable stopgap.
Re:Of course it ignores today's reality. (Score:3, Informative)
"Only" 60 or 70k???
Wow college grads expect a lot. My first Associate Engineer job only paid $15/hour or $30,000. Adjusting for inflation that's $40k. You can't expect to get high salary levels when you're a just-graduated student.
Re:Apparently Obama knows not Grigsby & Cohen (Score:5, Informative)
There are annual limits on the number of H-1Bs that the US hands out. That number is 65k plus an additional 20k for people with masters degrees.
Let's not forget that number was 195K, not long ago, and those workers are still here. Also, that 85K number does not include the unlimited OPT visas. That number also does not include the dozens of other visas such as L-1 and J-1.
Anyway, H-1Bs are good for 3 years, extendable up to an additional 2. This means that the theoretical maximum number of legal H-1Bs in the US at any one time is 5 * 85k = 425k. That's less than 0.2% of the population and seems unlikely to me to significantly affect the unemployment rate.
I think that's 3 years + an additional 3 years. Also, the cap used to be much higher. Also, don't forget about all the other visas. Also, don't forget that the H1B is hugely disproportionately targeted to US STEM jobs, especially IT. And let's not forget that in 2009, US IT jobs were absolutely slaughtered. Practically every major US IT employer announced major layoffs - i.e. 10,000 layoffs from IBM, 6,000 layoffs from MS, etc.
Another point is that H-1B workers are required, by law, to be paid at least the "prevailing wage" based on their work and geographical location. While this is by no means perfect, it does provide some protection against wage depression.
"Less the perfect" hardly describes the situation. In some career fields, jobs are very well defined, in IT it is just the opposite, i.e. a sysadmin may also be the DBA and/or a developer; or a developer may work as an admin, or a network engineer. In IT, the phrase "prevailing wage" is completely meaningless.
And there are more undocumented workers than H-1B holders, too. Lots more.
It is a very different problem. Undocumented workers do hold jobs that US workers typically aspire to have. But, what happens to the US technological lead when Americans say themselves "why study for a STEM career, just to get replaced by an H1B worker?
Therefore, my point is that while the H-1B program is not perfect and is certainly abused, I am dubious of kneejerk claims that it is this fraud that in any way hurts "most Americans". With millions of jobs being lost every year due to the economy, there simply aren't enough H-1B workers to account for very much of it.
You are dead wrong. The number of H1Bs is extremely significant. In many IT departments, the H1Bs have completely taken over.
Re:Obama is not the Great Leader that many wish hi (Score:1, Informative)
For the past 30 years every Republican president has increased the debt while every Democrat has decreased it.
Sure, if you're lucky enough to avoid being in office when Kuwait gets invaded, ride the dot-com bubble, then miss 9/11 and the resulting housing crisis.
But don't let those little coincidences get in the way of your pretty chart.
I'm getting tired of the whole "my party is better than your party" crap.
Neither of them have had the American public's best interest at heart in some time.
Re:Apparently Obama knows not Grigsby & Cohen (Score:5, Informative)
Because H1Bs can not easily quit. A US worker can go to his/her boss and say "I'm way over due for a raise, either increase my salary, or I will be forced to look for work elsewhere." If an H1B does that, he/she is on the next airplane back to India.
No. That's no longer true. In fact, it hasn't been that way for a while. The H1B program was amended around 2000 to enable people on an H1B visa to move from job to job without being forced out of the country.
What has not been changed is the green card process. If you want a green card, it can easily take 4+ years and the system requires you to stick with one employer during the application process. If you change employers, you have to start the entire process all over again. The thing is that the H1B visa is only good for 6 years - after which you gotta leave the country for an entire year and then start the green card process all over again.
So, if the H1B holder wants to become a permanent citizen, he generally can't go job shopping after the first year or so of employment. Which is really quite perverse since, presumably, these guys are highly skilled and there is a dearth of people like them in the US labor market. So we ought to be doing everything we can to make it easier for them to become citizens, not harder.
Re:Apparently Obama knows not Grigsby & Cohen (Score:4, Informative)
And then there is this video, documenting how a law firm _advised_ their clients on how to avoid the H1-B requirements to avoid finding a qualified US worker.
You can make money providing Americans as consultants, but because our expenses are so much higher, we do tend to cost more. So a consulting agency can make a much higher margin of profit, and face far less stringent work safety or harassment policies.
Re:Here's todays reality: (Score:3, Informative)
And Toyota and Honda assemble cars in the U.S
That happens because there are tariffs on assembled cars that are avoided by assembling cars in the US. One of the few places that the US has chosen to protect its labor force is auto manufacturing. Without those tariffs the foreign auto manufacturers would fill cargo ships with completed cars and pay no one in the US for labor.
The result is a large number of foreign assembly plants here in the US. Those workers have health plans, they have not collected 99 weeks of unemployment, had their houses foreclosed, or joined the ranks of 40 million American citizens collecting food stamps. Most of them did not incur 10+ years of education debt to achieve all of the above.
It is possible to protect your labor force. You may not wish to because it means industry messing up the 'environment' (in the US instead of Asia) or more expensive stuff (hindering the rapid growth of income disparity) but you can not claim it doesn't work.
Re:I think he is mostly right (Score:3, Informative)
That makes no sense. The Tea Party supports free trade. If you're for free trade, why are you worried about them?
The tea party is populist and protectionism is almost always the populist agenda.
I looked around in google for a bit and I didn't find all that much about free trade from tea party associated politicians.
But I did find a number of articles along these lines:
http://money.cnn.com/2010/11/01/news/trade_tea_party.fortune/index.htm [cnn.com]
Re:Apparently Obama knows not Grigsby & Cohen (Score:1, Informative)
I'm also a Canadian in the US on an H-1B. The number one problem with TN status is that you can't apply for permanent residency while on that status. No green cards. Effectively, you get to stay until you meet a grumpy border guard.
Aside from that, TN status has a lot of problems, not the least of which is that every time you leave the country (to go home for xmas, for example) the border guard gets to deny your visa for no reason at all. With an H-1B, they at least need a reason. Tax implications are worse as well. You have to keep crossing the border at prescribed times to reactivate your status.
Re:outsource college (Score:3, Informative)
Simple.
That silly piece of paper is proof that you've paid your dues and gone through the discipline of going to college.
It doesn't matter if the degree is any good or not, if your prospective boss uses it to thin the herd of candidates, then it matters.
Colleges probably know that too, hence them charging an arm and a leg for it.
Degrees have little to do with book smarts, and a lot to do with employer perception.
Have a job to fill in Milwaukee..is it location? (Score:3, Informative)
interviews where there are 400+ guys applying for a single job
I'm trying to hire a system designer and project leader in a medical device business. This requires technical experience, ability to do requirements/traceability and risk management in a heavily regulated industry. It is a very challenging role and a great leadership role in a very reputable company. Not exactly an IT or programming job but is definitely a senior technical role.
I have NO candidates in the funnel. The requirements for the job are the minimum and not anything crazy. However, I'm in Milwaukee Wisconsin...so is it a location thing? Where are my 100's of qualified candidates? Right now, H1 or not..I need candidates.
I would normally not mention something like this in an open forum but seemed appropriate. I'm not posting the exact job since I know that's a bit of an abuse. Wish I could though...seems like many good people on /.
Re:Apparently Obama knows not Grigsby & Cohen (Score:4, Informative)
The H1-B issue is somewhat moot because that visa transitions into a permanent residence and citizenship over the years. I've been reading Slashdot since 1998 and reading about those "evil H1-B workers" since the beginning -- guess what? Those very same H1-B workers from 1998 are now all citizens. So, at some point, the argument devolves into, "yeah those brown citizens are stealing our jobs!" Which, honestly, is a horrible racist argument.
Criticism over L-1 visas (does not lead to citizenship) or outsourcing is more valid, because that is money exiting the country. However, we, the U.S., have balanced trade with India (equal money flows out to India as money flows in from India). The largest trade imbalance is what we have with China (for a variety of reasons, mostly due to the China suppressing the value of the Yuan/Renminbi). For that reason, our economists and think tanks prefer industry and trade to move to India from China, because it will greatly reduce the American trade deficit.
Re:Apparently Obama knows not Grigsby & Cohen (Score:2, Informative)
Sorry, but I am an H1B currently applying for a greencard and the information in this post is mostly incorrect. For starters, it is a *lot* longer than 4 years now (I'm looking at 9+ and one of my colleagues is now on year 13), and once you have your Labour Certification, you can extend your H1B indefinitely in 1 or 3 year chunks. You are correct in that I can't go job shopping.
And for the record, I'm from the UK and paid a *lot* more than the average H1B. I'm also getting screwed as my UK qualifications should put me on the 'highly skilled' fast track, but some DB in the INS doesn't have the correct row in it... so I'm regarded as equivalent to a USA bachelors degree despite having higher than a doctorate.
Since I've been here, I've put over $90K into the local economy on buying house improvements and other local services.
Re:But try adjusting for REAL inflation (Score:3, Informative)
At the last auction, the Federal treasury bonds ended up with negative interest. This is only going to pay off if there is significant inflation. (I don't understand this, but I'm assured that's what it means.)
To me this means that you should purchase real property on a fixed interest loan. If you can. Or get something fairly cheap for cash, if you can. And hope a facilities management company can keep it rented in in decent condition. Others say this means you should buy precious metals. The key is, you don't want to end up holding fiat currency. I'd suggest in investing in foreign currencies, but it looks like the kind of thing that's going to hit all countries at about the same time.
OTOH, I'm not an economist. I'm not practicing what I preach. I'm trusting my investments to a stock management company. Is this a good choice? Don't know. I'm already retired, and that makes a difference. And I suspect that within 20 years money as we know it will be obsolete. So will jobs, as we know them. Doesn't mean that there won't be things that serve the same functions, but the functions may well divide differently. E.g., what does a job mean when 80% of the people don't have one? Currently it's well over 10%...we don't know how much higher, because the government lies about the unemployment figures, and has been doing so for at least the last 50 years. They also lie about the inflation rate. I wouldn't be surprised to find that the unemployment rate was currently 20%, or even higher. And when the economy recovers, what jobs do you thing will be created for the people that recently lost their jobs to fill? Any? Companies would prefer to invest in hardware than in personnel, so if it can be automated in anything approaching the same cost as hiring people to do it, it will be automated, or redesigned away. (Consider the recent evolution of "self-checkout" counters at supermarkets.)
Re:Obama is not the Great Leader that many wish hi (Score:3, Informative)
My point is that it is way too simplistic (and technically wrong) to assign credit or blame to Presidents for debt levels. I know Presidents usually propose the budgets but Congress has complete control over them. The President is the easy target because he is only one person but we should really blame Congress, if for nothing more than not standing up to the President when they really should.
Re:Obama is not the Great Leader that many wish hi (Score:1, Informative)
The US national public debt has not gone down since Harry Truman managed to do it in 1950-1951. I'd love to know what you're smoking.
And in case you're wondering, since then it has gone as follows:
Dwight Eisenhower (R) - From 266 billion to 288 billion. 8.2% increase over 8 years or a little over 1% per year
John F. Kennedy (D) - From 288 billion to 305 billion. 5.9% increase over 2 years or a little under 3% per year
Lyndon Johnson (D) - From 305 billion to 353 billion. 15.7% increase over 6 years or about 2.5% per year
Richard Nixon (R) - From 353 billion to 475 billion. 34.5% increase over 5 years or about 6.9% per year
Gerald Ford (R) - From 475 billion to 698 billion. 46.9% increase over 3 years or about 15.6% per year
Jimmy Carter (D) - From 698 billion to 997 billion. 42.8% increase over 4 years or about 10.7% per year
Ronald Reagan (R) - From 997 billion to 2.857 trillion. 186.5% increase over 8 years or about 23.3% per year
Daddy Bush (R) - From 2.857 trillion to 4.411 trillion. 54.3% increase over 4 years or about 13.6% per year
Bill Clinton (D) - From 4.411 trillion to 5.807 trillion. 31.6% increase over 8 years or about 3.9% per year
Baby Bush (R) - From 5.807 trillion to 11.909 trillion. 105.1% increase over 8 years or about 13.1% per year
Barack Obama (D) - In his first year he's managed to increase the public debt by 13.8%
Republicans tend to be terrible at controlling spending, I will grant you that. The two worst performers on the list are Ronald Reagan and Gerald Ford. But Obama comes in at 3rd (so far) with Papa and Baby Bush at 4 and 5.
Out of all of our presidents, the only ones who did any real good were Andrew Jackson and Calvin Coolidge (Jackson reduced our public debt to less than $35,000!). The worst of them all was FDR, managing to increase the public debt by a STAGGERING 1044% in 12 years or 87.3% per year. One could argue he had some extenuating circumstances, however.
Re:Obama is not the Great Leader that many wish hi (Score:2, Informative)
The power of the purse is the domain of Congress and more specifically the House of Representatives. This turns your Democratic spend thrift thesis on it's head (excluding G.W. Bush).
Finally, the last Congress (or president if you insist) to lower the national debt was Truman coming out of WWII. Your post is provably false on all levels.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm [treasurydirect.gov]
Re:Apparently Obama knows not Grigsby & Cohen (Score:3, Informative)
This does not mean college graduates are getting careers, it just means they're graduating and finding a job: 43% of recent college grads are underemployed [bankrate.com], meaning they accepted a job that do not utilize their degree, and 67% of grads with degrees in arts and sciences (that means you computer science grads) are underemployed.
So just because the unemployment rate for college grads is 4.7% does not mean they're getting jobs, even back in 2004 18% of recent college grads were underemployed. [collegegrad.com]
Even now, 317,000 US waiters and waitresses have at least a bachelor's degree. [thecynicaleconomist.com] Clearly we have enough highly educated college grads in this country but even they can not find careers that match their degrees.
Re:IBM & company (Score:4, Informative)
Inflation is low?
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here are some REAL numbers, as opposed to the ones you eat up from the gov't:
October 1 2010
Gold: new high
Silver: new 30 year high
Gold stocks hit 52 week high
Oil: strong day and strong week
Dollar: dropped 13 percent from peak 3 months ago
September is done, media says: this is best September in 71 years. Dow gained 7.7%, S&P gained 8.8%.
However this month of September.
CRB Index (commodities): gained 8.7% - beat DOW and just under S&P
Soy beans: up 9.5% - beat S&P
Copper: up 10% - beat S&P
Rice: up 10% - beat S&P
Oil: up 11% - beat S&P
Corn: up 12% - beat S&P
Silver: up 13% - beat S&P
Frozen concentrated orange juice: up 13% - beat S&P
Cotton: up 17.5% - beat S&P
Sugar: up 19.3% - beat S&P
Currencies:
Swiss Frank: up 4.6%
Euro: up 7%
Australian Dollar: up 9% - beat S&P
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this is all inflation and the prices hikes will hit your local shelves too in not too distant future, your gov't is working on it.
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Houses are overpriced, their prices should all drop by a large factor.
The gov't doesn't want to see the banks fail, banks who are now all insolvent, since they are still holding toxic mortgages and the rest of their 'money' is used to buy gov't bonds, all of which have low interest on them. So if the house prices actually fall where they belong (and where it would be excellent for the economy) the banks would fail first on mortgages, and then on the interest going up, because the money they have in bonds would yield much lower interest than what the banks would have to return this money at.
Your favorite Fed helicopter prints money now to lend it to the US gov't, the so called QE2 is not even about economy, it's about the US gov't borrowing exactly the same amount as the Fed will be printing all by June.
The Fed has become the lender of last resort to US gov't. It's broke, it's actually bankrupt now.
The US gov't and the US media are even saying that if the debt ceiling is not raised, the global economy will be destroyed, which is:
1. Nonsense. The global economy is producing, it's the US who'll suffer because all it produces is inflated currency.
2. Shows the world that US is never going to pay its debts out, it's never intending to.
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Intellectual property shouldn't even exist.
Gov't protection of "intellectual property" is part of the problem, not part of any solution. It should not happen, it's bad for economy, not good.
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In the early nineties even almost out of college students could start hedge funds in US, it is now absolutely impossible without huge money to cover all compliance and regulations costs.
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So, are you starting a business in USA?
Re:Apparently Obama knows not Grigsby & Cohen (Score:4, Informative)
"Can't get qualified Americans to do the job" is business speak for "Can't get qualified Americans to do the job for minimum wage or some other joke salary." Imported labor artificially drives down wages, then hides behind the excuse that no American wants to do it. When I was in college, you could get $7 an hour cutting tobacco on local farms, and a lot of us did it during the summer. A few years later, the farmers started to bring in illegals and H1-B's from Mexico, and the pay suddenly dropped from $7/hour to $4-$5/hr., with the farmers complaining they just couldn't get us lazy Americans to do it.