Cafe Hayek: Remember when they were going to take all our jobs?
jn
· 2 years ago
Behold, the sky has not fallen, and the rest of the world does not defy the fundamental laws of economics.
ben
· 2 years ago
I read this post and felt inspired by it, which I suspect is the opposite of what the quoted author intended. The impression I get is that India is rapidly on its way to the wealth of western economies, with the quoted article pointing out some growing pains along the way.
If employers value interpersonal skills and hire according to ability in that area among others, then there is every reason to expect students to shift demand to schools that offer training in interpersonal skills, and schools to respond by increasing the supply of that training. It might take a bit of time if governments are running these schools.
Xmas
· 2 years ago
As an IT worker who loves off-shoring this is great. It means that the Indian marketplace is about ready to be self sustaining.
The big problem with Indian workers though is cultural. They will do exactly what you ask them to do. Even if what you ask them is wrong. After a few years working in the US, they get over this though.
Tim
· 2 years ago
Well besides rising wages and trade training bottlenecks there are other infrastructure bottlenecks limiting India's performance here.
My company explored the outsource trail in India and found it unexpectedly narrow. In particular general services like electric power reliability and the poor quality of India's airport / aviation infrastructure were a problem.
We needed to be able to move personnel in and out of India by air back to the west safely, reliably and comfortably, and this was a problem. There are inter-cultural (see here) and legal risk issues (see here )as well.
There is an article here discussing the "myth" that Indian call centers are more productive. My guess is it's a "half truth" rather than an outright "myth".
Martin
· 2 years ago
Interesting post.
1. Presumably Bill Gates will have to look elsewhere to get all those software engineers he wants to import in order to artificially depress his paybill (if you want to feed the world, Bill, hire an American - and pass on the good news to Bono), because it looks like Indians are less skilled than Americans. No more Indian immigration; that's that one solved:
2. Hmmm...can't someone be, like, you know...sued for sending confidential data to a nation whose people don't all have flushing toilets? I mean, it's all well and good that India is on 'the path to riches' (it never ceases to amaze me just how the prospect of Indians getting richer animates economists far more than the concept of Americans becoming poorer: I don't get it), but not long ago my church was visited by a lady who worked for a leprosy charity, and who gave a talk on how leprosy is still prevalent there. This is a country that still has leper colonies, for goodness' sake! While I have no problem putting my hand in my pocket to help buy a $21 vaccine, it galls me that the UK's richest resident, Lakshmi Mittal, is sitting on riches beyond the dreams of avarice while his countrymen are still contracting leprosy. Why is it my duty to relieve their suffering - but not his?
ben
· 2 years ago
An exceedingly snobbish post, Martin. I can't work out whether its the poor you don't like, or Indians, or just all non-Americans in general.
mobile
· 2 years ago
It's like Yogi Berra used to say: "Nobody uses them anymore because their services are too highly valued."
Dennis Mangan
· 2 years ago
"An exceedingly snobbish post, Martin."
Why? For pointing out the obvious? We've been told for years now just how badly we need all those Indian H-1B visa workers, and how the American economy wouldn't be the same without them. Yet plenty of software engineers can't get work.
Isaac Crawford
· 2 years ago
Martin Wrote:
:(it never ceases to amaze me just how the prospect of Indians getting richer animates economists far more than the concept of Americans becoming poorer: I don't get it),"
Well, if the US were to start getting poorer (which we're not at all) at the same rate the Indians are getting richer, you'd see a lot of economists jumping up and down... India is making great strides, your complaints about their level of poverty should encourage more Indian hiring, not less.
Isaac
ADR
· 2 years ago
Ben,
You're clearly missing the point. The author DOES want you to be inspired, at least in the sense that all of out anti-outsourcing paranoia is proving to be unjustified. The author clearly is not anti-Indian in any way.
Martin,
No one's asking for a handout when it comes to the sourcing issue - simply a chance to do a job. The anti-outsourcing crowd wants us to not give them jobs even if they can do it better for less $$$.
Dennis,
Your point that somehow there's all these competent American software programmers running around unemployed while we bring Indians in is, of course, nonsense. Why would any company hire an attorey and go through the awful H1B visa process? If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer.
Bottom line - today I can get competent computer help at 9:30 pm after the kids are in bed. Yes, the world's a better place.
Martin
· 2 years ago
Ben,
Snobbery, like love - is not a crime!
Although I can't work out why you're projecting this concept on to me.
Isaac,
I don't agree with you. The abolition of the caste system and the eradication of sex-selective abortion might do more to help India grow than just exporting Indians.
Unless you're a remittance monger, in which case exporting Indians is a good idea - although it removes any incentive the Indian government might have to get its house in order.
Dennis Mangan
· 2 years ago
"If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer." Sorry, but that's incredibly naive. Your average Indian programmer who's tied to a specific employer via H-1b visa will gladly take 25 grand a year over deportation.
ben
· 2 years ago
Martin, perhaps I'm missing an attempt at humour, but objecting to hiring workers in a country where not everyone has flushing toilets and "still has leper colonies, for goodness' sake" sounds like snobbery. It certainly seems off-point.
Sanjiv
· 2 years ago
"Your average Indian programmer who's tied to a specific employer via H-1b visa will gladly take 25 grand a year over deportation"
Now, who is being naive?
http://www.dol.gov/esa/regs/
statutes/whd/0003.iana.htm
What you have suggested above is illegal if that 25 grand a year (in your hypothetical example)is lesser than "actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question" OR "the prevailing wage level for the occupational classification in the area of employment"
If the employer violates this clause -paragraph (1)A in that link- his pending appications to hire aliens will be frozen for the next three years. There are also monetary penalties. I am no expert, am just pulling out these facts from that link. If I have misinterpreted them, feel free to correct me. Does anyone know of studies/research that uncovered employers breaking these laws (am talking about H1-B in particular) in order to hire aliens for lesser salaries?
Dennis, can you give me a citation for your claim about that 25 grand? Do you know of a study/survey that concluded the average Indian programmer will settle for 25 grand
instead of being deported?
another bob
· 2 years ago
Three reasons it's difficult to find qualified techies in India (I know I worked on this for two years):
1. Transportation infrastructure is non-existent at best and dangerous most of the time. So, where in the US you might be able to recruit from a 20 to 40 mile radius of the job location, India is more like 5 to 10 miles.
2. Various human resources studies show that software engineering requires a level of abstract reasoning associated with an IQ of 115 minimum; approximately 1 standard deviation above average, 100. Check out avg IQ by country here http://en.wikipedia.org/wiki/List_of_countries_... For India, 115 is more than 2 SD above average.
3. A huge percentage of the 1.1B souls in India are under 15. My experience is that 22 is a bare minimum age for good engineers.
Compare this with Lynn and Venha
happyjuggler0
· 2 years ago
mobile,
That reminds me of the line that "nobody goes there anymore because it is so crowded". Or perhaps you were paraphrasing Yogi.
It all adds up to the same thing, there may be a ceiling on wages whereby it doesn't make sense to hire any more, but that doesn't mean that anyone who is qualified but unemployed or underemployed will be unable to get a good job. The very fact that the ceiling has been reached means by definition that there is high demand for such workers.
The ceiling can be raised by more training, or by relevant education if you will. Therefore the wage ceiling isn't permanent. As others have noted, India's real problem is crappy roads, crappy electricity (i.e. not nearly enough, nor enough in the pipeline being built), insufficient seaport and airport space. To which of course is the inadequate education system that is mentioned all over this thread, and one finally comes to the root of all the problems, namely that India has yet to shed its dysfuncional state antipathy to free markets and profits, especially if foreigners make some of those "unseen" prfoits that are unseen because they exist in an alternate future that isn't going to happen any time soon.
Dennis Mangan
· 2 years ago
Sanjiv: The United States allegedly has a border too. Doesn't mean it's enforced.
Sanjiv
· 2 years ago
Dennis: Your analogy isn't good enough. Just because a particular law can be broken is not evidence that it is being done so routinely.
When ADR said,
"If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer",
he knew what he was talking about. Your response was to call him naive which to me indicated that you have probably read of instances where employers were willfully flouting the laws. So, I repeat: If you have read (or personally know of) any such instance, please feel free to share it with us. Else, I must conclude that you don't know what you are talking about.
I am from India and feel absolutely no obligation to defend illegal practices irrespective of who is benefitting from them. All the same, I would like to know if the hiring of aliens (on H1B, that is) for lesser pay is just rhetoric or has been substantiated.
Sanjiv
· 2 years ago
Oops. Please replace "he knew what he was talking about" with "he/she knew what he/she was talking about." My apologies.
Dennis Mangan
· 2 years ago
Sanjiv: That "he/she" thing was hilarious. As for H-1B visas, here's what no less than Alan Greenspan recently said: "Allowing more skilled workers into the country would bring down the salaries of top earners in the United States, easing tensions over the mounting wage gap, Greenspan said.
“Our skilled wages are higher than anywhere in the world,” he said. “If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income.”
Income inequality has risen in the past three decades."
http://blog.vdare.com/archives/
2007/03/26/matloff-on-greenspan-on-
deliberately-lowering-american-tech-
workers-earnings/
Sanjiv
· 2 years ago
"That "he/she" thing was hilarious."
Oh that...
I have my undergrad sociology lecturer to thank for that one. In an answer to a question, I had used "he" throughout and when I got back my graded answers, every single occurence of "he" had been modified to "he/she". Have been traumatized since then.
Will check out that link.
Sanjiv
· 2 years ago
"If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income.”
According to Wiki, H-1B caps started to be reached around mid 1990s. So, it has been quite some time since a "significant window" for skilled workers has been opened. How has the skilled-wage level moved over the past 10-12 years? Does somebody know of reliable links/stats? If the skilled-wage level over the past 10-12 years hasn't decreased noticeably, then Greenspan's statement is suspect. Agree?
Sanjiv
· 2 years ago
http://www.myvisajobs.com/
reports/
Occupation/2005_h1b_visa_occupation.pdf
Has a staggering break up of average salaries for different fields coming under H-1B.
Nigel
· 2 years ago
Martin:
The lady who visited your church is very likely exaggerating things to boost collection. I am Indian, and have never heard of a leper colony in India.
Also, for the record, both caste-based discrimination and sex-based abortion have long been illegal in India. In both cases, it is difficult to enforce this 100% since people's behavior will change only slowly. Are race-based and sex-based discrimination completely non-existent in the US?
All Comments
Behold, the sky has not fallen, and the rest of the world does not defy the fundamental laws of economics.
I read this post and felt inspired by it, which I suspect is the opposite of what the quoted author intended. The impression I get is that India is rapidly on its way to the wealth of western economies, with the quoted article pointing out some growing pains along the way.
If employers value interpersonal skills and hire according to ability in that area among others, then there is every reason to expect students to shift demand to schools that offer training in interpersonal skills, and schools to respond by increasing the supply of that training. It might take a bit of time if governments are running these schools.
As an IT worker who loves off-shoring this is great. It means that the Indian marketplace is about ready to be self sustaining.
The big problem with Indian workers though is cultural. They will do exactly what you ask them to do. Even if what you ask them is wrong. After a few years working in the US, they get over this though.
Well besides rising wages and trade training bottlenecks there are other infrastructure bottlenecks limiting India's performance here.
My company explored the outsource trail in India and found it unexpectedly narrow. In particular general services like electric power reliability and the poor quality of India's airport / aviation infrastructure were a problem.
We needed to be able to move personnel in and out of India by air back to the west safely, reliably and comfortably, and this was a problem. There are inter-cultural (see here) and legal risk issues (see here )as well.
There is an article here discussing the "myth" that Indian call centers are more productive. My guess is it's a "half truth" rather than an outright "myth".
Interesting post.
1. Presumably Bill Gates will have to look elsewhere to get all those software engineers he wants to import in order to artificially depress his paybill (if you want to feed the world, Bill, hire an American - and pass on the good news to Bono), because it looks like Indians are less skilled than Americans. No more Indian immigration; that's that one solved:
2. Hmmm...can't someone be, like, you know...sued for sending confidential data to a nation whose people don't all have flushing toilets? I mean, it's all well and good that India is on 'the path to riches' (it never ceases to amaze me just how the prospect of Indians getting richer animates economists far more than the concept of Americans becoming poorer: I don't get it), but not long ago my church was visited by a lady who worked for a leprosy charity, and who gave a talk on how leprosy is still prevalent there. This is a country that still has leper colonies, for goodness' sake! While I have no problem putting my hand in my pocket to help buy a $21 vaccine, it galls me that the UK's richest resident, Lakshmi Mittal, is sitting on riches beyond the dreams of avarice while his countrymen are still contracting leprosy. Why is it my duty to relieve their suffering - but not his?
An exceedingly snobbish post, Martin. I can't work out whether its the poor you don't like, or Indians, or just all non-Americans in general.
It's like Yogi Berra used to say: "Nobody uses them anymore because their services are too highly valued."
"An exceedingly snobbish post, Martin."
Why? For pointing out the obvious? We've been told for years now just how badly we need all those Indian H-1B visa workers, and how the American economy wouldn't be the same without them. Yet plenty of software engineers can't get work.
Martin Wrote:
:(it never ceases to amaze me just how the prospect of Indians getting richer animates economists far more than the concept of Americans becoming poorer: I don't get it),"
Well, if the US were to start getting poorer (which we're not at all) at the same rate the Indians are getting richer, you'd see a lot of economists jumping up and down... India is making great strides, your complaints about their level of poverty should encourage more Indian hiring, not less.
Isaac
Ben,
You're clearly missing the point. The author DOES want you to be inspired, at least in the sense that all of out anti-outsourcing paranoia is proving to be unjustified. The author clearly is not anti-Indian in any way.
Martin,
No one's asking for a handout when it comes to the sourcing issue - simply a chance to do a job. The anti-outsourcing crowd wants us to not give them jobs even if they can do it better for less $$$.
Dennis,
Your point that somehow there's all these competent American software programmers running around unemployed while we bring Indians in is, of course, nonsense. Why would any company hire an attorey and go through the awful H1B visa process? If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer.
Bottom line - today I can get competent computer help at 9:30 pm after the kids are in bed. Yes, the world's a better place.
Ben,
Snobbery, like love - is not a crime!
Although I can't work out why you're projecting this concept on to me.
Isaac,
I don't agree with you. The abolition of the caste system and the eradication of sex-selective abortion might do more to help India grow than just exporting Indians.
Unless you're a remittance monger, in which case exporting Indians is a good idea - although it removes any incentive the Indian government might have to get its house in order.
"If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer." Sorry, but that's incredibly naive. Your average Indian programmer who's tied to a specific employer via H-1b visa will gladly take 25 grand a year over deportation.
Martin, perhaps I'm missing an attempt at humour, but objecting to hiring workers in a country where not everyone has flushing toilets and "still has leper colonies, for goodness' sake" sounds like snobbery. It certainly seems off-point.
"Your average Indian programmer who's tied to a specific employer via H-1b visa will gladly take 25 grand a year over deportation"
Now, who is being naive?
http://www.dol.gov/esa/regs/
statutes/whd/0003.iana.htm
What you have suggested above is illegal if that 25 grand a year (in your hypothetical example)is lesser than "actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question" OR "the prevailing wage level for the occupational classification in the area of employment"
If the employer violates this clause -paragraph (1)A in that link- his pending appications to hire aliens will be frozen for the next three years. There are also monetary penalties. I am no expert, am just pulling out these facts from that link. If I have misinterpreted them, feel free to correct me. Does anyone know of studies/research that uncovered employers breaking these laws (am talking about H1-B in particular) in order to hire aliens for lesser salaries?
Dennis, can you give me a citation for your claim about that 25 grand? Do you know of a study/survey that concluded the average Indian programmer will settle for 25 grand
instead of being deported?
Three reasons it's difficult to find qualified techies in India (I know I worked on this for two years):
1. Transportation infrastructure is non-existent at best and dangerous most of the time. So, where in the US you might be able to recruit from a 20 to 40 mile radius of the job location, India is more like 5 to 10 miles.
2. Various human resources studies show that software engineering requires a level of abstract reasoning associated with an IQ of 115 minimum; approximately 1 standard deviation above average, 100. Check out avg IQ by country here http://en.wikipedia.org/wiki/List_of_countries_... For India, 115 is more than 2 SD above average.
3. A huge percentage of the 1.1B souls in India are under 15. My experience is that 22 is a bare minimum age for good engineers.
Compare this with Lynn and Venha
mobile,
That reminds me of the line that "nobody goes there anymore because it is so crowded". Or perhaps you were paraphrasing Yogi.
It all adds up to the same thing, there may be a ceiling on wages whereby it doesn't make sense to hire any more, but that doesn't mean that anyone who is qualified but unemployed or underemployed will be unable to get a good job. The very fact that the ceiling has been reached means by definition that there is high demand for such workers.
The ceiling can be raised by more training, or by relevant education if you will. Therefore the wage ceiling isn't permanent. As others have noted, India's real problem is crappy roads, crappy electricity (i.e. not nearly enough, nor enough in the pipeline being built), insufficient seaport and airport space. To which of course is the inadequate education system that is mentioned all over this thread, and one finally comes to the root of all the problems, namely that India has yet to shed its dysfuncional state antipathy to free markets and profits, especially if foreigners make some of those "unseen" prfoits that are unseen because they exist in an alternate future that isn't going to happen any time soon.
Sanjiv: The United States allegedly has a border too. Doesn't mean it's enforced.
Dennis: Your analogy isn't good enough. Just because a particular law can be broken is not evidence that it is being done so routinely.
When ADR said,
"If the work's done over here we need to pay prevailing wages, so simply paying less isn't the answer",
he knew what he was talking about. Your response was to call him naive which to me indicated that you have probably read of instances where employers were willfully flouting the laws. So, I repeat: If you have read (or personally know of) any such instance, please feel free to share it with us. Else, I must conclude that you don't know what you are talking about.
I am from India and feel absolutely no obligation to defend illegal practices irrespective of who is benefitting from them. All the same, I would like to know if the hiring of aliens (on H1B, that is) for lesser pay is just rhetoric or has been substantiated.
Oops. Please replace "he knew what he was talking about" with "he/she knew what he/she was talking about." My apologies.
Sanjiv: That "he/she" thing was hilarious. As for H-1B visas, here's what no less than Alan Greenspan recently said: "Allowing more skilled workers into the country would bring down the salaries of top earners in the United States, easing tensions over the mounting wage gap, Greenspan said.
“Our skilled wages are higher than anywhere in the world,” he said. “If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income.”
Income inequality has risen in the past three decades."
http://blog.vdare.com/archives/
2007/03/26/matloff-on-greenspan-on-
deliberately-lowering-american-tech-
workers-earnings/
"That "he/she" thing was hilarious."
Oh that...
I have my undergrad sociology lecturer to thank for that one. In an answer to a question, I had used "he" throughout and when I got back my graded answers, every single occurence of "he" had been modified to "he/she". Have been traumatized since then.
Will check out that link.
"If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income.”
According to Wiki, H-1B caps started to be reached around mid 1990s. So, it has been quite some time since a "significant window" for skilled workers has been opened. How has the skilled-wage level moved over the past 10-12 years? Does somebody know of reliable links/stats? If the skilled-wage level over the past 10-12 years hasn't decreased noticeably, then Greenspan's statement is suspect. Agree?
http://www.myvisajobs.com/
reports/
Occupation/2005_h1b_visa_occupation.pdf
Has a staggering break up of average salaries for different fields coming under H-1B.
Martin:
The lady who visited your church is very likely exaggerating things to boost collection. I am Indian, and have never heard of a leper colony in India.
Interestingly, Wikipedia (http://en.wikipedia.org/wiki/Leper_colony) says that there are leper colonies in the US. I cannot vouch for its accuracy, though.
Also, for the record, both caste-based discrimination and sex-based abortion have long been illegal in India. In both cases, it is difficult to enforce this 100% since people's behavior will change only slowly. Are race-based and sex-based discrimination completely non-existent in the US?