I think living in the West where dev salaries are best a lot of the readers of this blog article would be concerned about a big change to the status quo. But article is pretty speculative
You’re conflating ‘the West’ with the Bay Area. Most people in European countries, or even smaller American cities, are pretty relaxed about the idea of California job opportunities becoming more widely distributed.
Yea I guess that is true. But that may or may not be mistaken, I mean, depending on the skill of even lower paid devs in other parts of the world. Its hard to say how things will shake out but I would say the better you have it now the more you don't want things to change, even if there are some scenarios where you gain.
Yes? For a tech company outsourcing software creation is like outsourcing upper management, sure you can do it but then you basically move the whole business. If you want to create an American tech company then the tech needs to be built in America. Indian tech companies are not nearly as successful as American ones, so you probably want to stay an American tech company today. Once India starts cranking out companies that beats out American ones you will probably see more tech companies move their entire HQ there, but until then they will mostly stay in USA.
Except for the owners of the company, they get to pocket the difference...
But of course this is less about tech workers that are already getting outsourced because the, well, workers are more technically savvy anyway so of course it happened sooner.
It is possibly more relevant to people in management, or people like professors and many other random jobs who are discovering that working from home works fine for them. Though sometimes it's questionable whether this is because their work is largely on a computer or just because they didn't do much anyway...
If we don't have permanent UBI in place soon it will continue to be an emergency response to job losses like now. The economy is shifting as surely as the sun sets to one where if you don't own or play a major leadership role you either aren't necessary or can be outsourced.
Floor workers are getting replaced with robots and touchscreens; managers are realizing they too can be outsourced; lawyers are finding that no, the work they do isn't that hard to automate; doctors are finding that machine learning can analyze images better than they can; it's not going to stop... why would it? Why would a business owner want to keep a human with a continually increasing salary around if they can possibly replace you with technology that costs your annual salary once and after that just requires maintenance?
There are cases where that's just not possible, but my imagination for what is possible to swap has definitely gotten bigger. Even if a job isn't entirely replaceable, productivity tools are making the same amount of work take a quarter of the staff.
The more highly qualified you are the more at risk to offshoring your job is. A long time ago, Albany Molecular, a contract research organization, highlighted they were based in Albany, NY. A shithole, yes, but a shithole with cheap cost of living.
Nowadays, the PhD jobs are based in Shanghai, Szeged and Hyderabad. The only thing that's left stateside is regulatory functions and support. You don't need a PhD for that. Political leadership should be concerned about the loss of institutional knowledge and knowledge networks.
Do you have any proof for that? Everything I know says that more qualified people congregate, in general in the places with the highest cost of living...
more qualified people congregate, in general in the places with the highest cost of living
That has to do with short job tenures (in the US) and industry consolidation. In the past, someone might have joined Upjohn in Kalamazoo, Eli Lilly in Indianapolis or Dow in Midland and stayed there their whole careers. Nowadays everyone changes jobs every 5 years and employment is in San Francisco, Boston and San Diego. It's problematic.
Mass wealth accumulation and wealth inequality has shifted power so far towards businesses that the general populous requires solving a massive orchestration problem (together) in order to change that imbalance which I'm beginning to believe may not be something that can reach critical mass and a stable state in larger populations as historically peaceful revolutions were capable of.
As such, businesses are calling the shots economically, legislatively/governmentally, culturally, ... and their interests are falling further out of alignment with most peoples' well being.
We're becoming less innovative and working more to chase short-term profit margins for employers that keep us fed and sheltered instead of pursuing societal interests.
From your DOW example and the chemical industry, DOW and those they've acquired used to innovate. In their later years they've turned in an IP portfolio management business, focusing on strategic patent purchases to stiffle competitors and eek our royalties for certain processes.
This isnt unique to the chemical industry, it's happening across the board. In the neverending quarterly optimization search space, we're making tradeoffs that are hurting us more and more leading to instability in society all to inflate a few peoples' pockets and grips on control.
The labor market has always been a target but due to social ramifications, has been largely avoided. We're now seeing more aggressive attacks on optimizing costs in the labor market in order to meet growth expectations and it's really starting to press on people. I'm just wondering at which point enough people will crack or give up instead of continuing to support the madness.
Speaking to web technologies specifically I have found this to be opposite at my prior employers. There is a lot of incompetence in web related technical jobs which makes it hard to trust new candidates/employees and offshore employees tended to be less trust worthy in regards to competency.
At my current employer, though, the offshore developers in India have really found the secret sauce and are really nailing productivity and code quality to the danger of US employees.
Sometimes that secret sauce is simply good local management: they shield their DEVS from noise (not only physical) and are more focused and also more specialized. A small team of focused DEVS is all it takes to maintain a codebase.
All these rustbelt towns are suffering from 30 years of tax base erosion and high unemployment, with nothing to replace it. It's somehow reminiscent of post-fall Trantor. Further up the I-91 corridor is nicer!
I am from Syracuse, NY and currently live and work in Rochester, NY - Albany is a straight shot drive along I-90 and has similar socioeconomic conditions.
Upstate suffers from high taxes and regulations introduced by the Governor with NYC in mind. Combine that with long winters and urban decay and we see that many bright young professionals born here end up fleeing once their parents retire.
I personally am planning on moving to Raleigh, NC in a few years. I only rent an apartment now so I'm mostly insulated from the astronomical property and school taxes, but I feel the state as a whole does not have my best interests in mind.
You should try no education and public services at all. Here in the rural South, 70 % of my students are incapable of doing 8th-grade math. These are the nursing school aspirants, and you genuinely fear for your life when you must go to hospital. Same with property taxes. You need functioning city services. Our county roads here are on a 70-year repaving schedule, and it shows. There was a storm a couple of weeks ago, and the town can't afford to haul away the debris. Inequality has a way of affecting even the wealthy. Hope you enjoy the Southernness of Raleigh.
It's not. It's a pretty typical smaller ("tier 2"?) city in the northeastern US, with several colleges and plenty of trees, parks, and museums. It's the seat of state government, and has quite a few really nice neighborhoods of old houses, as well as some classic brownstones, if you prefer that sort of thing. It's fairly diverse, and has good nightlife due to the large college-aged population (at least, it used to).
Unfortunately it is fashionable (among people who choose not to live in them) to talk about non "tier-1" cities as if they are "shitholes", but IMO the quality of life people experience is probably higher on average: less crowding, more open space, more housing, cleaner, less expensive.
You fly to Disneyworld, I take the train to the seaside.
You live in a big house, I live in a small apartment.
You pay American income taxes, I don't.
You demand clean air and water, I tolerate pollution.
There are some fundamental factors which make labour in other parts of the world much cheaper, and people willing to accept a much lower quality of life and associated lower incomes.
Its no wonder that big tech is so in favour of remote working - its going to allow the outsourcing of a huge amount of work (white collar) previously considered untouchable.
Funnily, except for the pollution part, most of your items on the right seem more attractive from a quality-of-life point of view than those on the left. Flying to Disneyworld sounds like a nightmare I would never (willingly) do, but a trainride to the seaside is always nice.
Haha I have to admit I wasn't sure of his point at that stage. Taking a train to the seaside sounds sort of romantic. Flying to Disneyland sounds sort of rote. I still get the point but it is amusing.
That strong social safety net does not fall from the sky. People in those countries just pay higher taxes instead, so if you want your employee to have the same net income, you need to increase the salary.
My American friends always rant about the high income taxes in Sweden. But my taxes include health insurance and I pay essentially nothing for kids' daycare, school and university. For people without perfect health and with kids, the total pay is worse in the U.S.
Those properties lead to inefficiencies for the workforce. Pollution negatively impacts the health of a population, including mental health. Lower taxes lead to less reliable infrastructure. And there are probably other non-obvious benefits to having a workforce living in a developed country.
Western Europe and the USA have maintained a huge advantage over the world. I wouldn't be so confident about that advantage disappearing. Much like wealthy people today are much more likely to have ancestors who were wealthy, I think people born in developed western nations are going to continue to enjoy competitive advantages over others for many more generations.
Agreed. Just keep investing in yourself, your network, and growing and you'll be fine. That's my hypothesis anyway. I am not the best at what I do but I am getting better everyday and I keep in touch with people doing really cool things at the biggest places in case I want to join them in doing something neat. My network came through for me when I was suddenly let go due to this pandemic and so I am giving back by helping out those coming up behind me as best I can but also investing in myself by upskilling.
What's going to drive that scrutiny? Shareholders won't demand it, they'll be happy to keep the additional margin. Employees may demand more, but that will only accelerate hiring from lower wage regions.
But when you start opening up jobs to people from all over the world, those in countries with lower living costs can undercut those in higher-income countries.
Globalism has already decimated the working class in developed countries, it's only going to accelerate and get worse.
Salaries are set by supply and demand. Looming economic collapse aside, we can assume a move to remote work doesn't necessarily mean an increase in global supply or demand.
Salaries will even out but workers will have the ability to change jobs more easily. Companies will want to keep talent. Top tier salaries might go up as companies are now competing for talent globally.
I wonder if we'll see brain drains (without emigration) as a country's talent is bought out by a wealthier country. Would you want your country to have the salaried workers or the executives and corporate revenues(or maybe that goes into the modern incarnation of double dutch)?
Seems like this article ignores the gigantic wave of out-sourcing throughout IT that already happened in previous decades and in many cases returned to near-shore / onsite work.
What you actually see if you look at remote work job boards is many (if not most) companies in say, the USA, want remote people from the USA (or at least the same timezone as the USA). I think this is what will happen in other countries too.
In my totally unscientific assessment of remote job boards, US companies seem to be the only ones requesting US-only applicants, and I have no insight as to why this happens.
In my -South American- country the trend is to look outwards if you're hiring remotely; European countries seem to fit this description too.
Yes, recent changes in the tax code made it less enticing for US companies to offshore US jobs. The company can potentially end up losing a lot of (otherwise legitimately acquired) tax benefits.
With respect to R&D, for example, the US no longer allows foreign R&D activities to qualify for the R&D tax credit.
>> With respect to R&D, for example, the US no longer allows foreign R&D activities to qualify for the R&D tax credit.
From what I've seen, many companies will shoehorn regular product development into the R&D category. I'm not sure if it's supposed to cover next iteration of existing products that most company should be doing anyway.
That's fine, as long as the R&D work is done in the US.
R&D doesn't require something to be socially innovative; it's evaluated at a per-company level. It's intended to incentivize companies to recreate wheels in-house (if it is otherwise financially reasonable to do so).
Companies should not need a financial incentive to develop new products. They already have an existential incentive to do so. This also creates a barrier to entry for small companies that don't have the resources to ensure compliance and claim the benefit. It also subsidises product development engineers - a profession that is doing well already. I'm an engineer so I appreciate the artificial wage inflation, but if I take that hat off I don't think it's appropriate for the government to subsidize us.
You're missing the context. The point of the R&D credit is for companies to engage in R&D activities in the US as opposed to other countries. Additionally, it was introduced in reaction to other countries introducing R&D credits to steal R&D work from the US.
It does not create a barrier to small companies. If you're not big enough to handle the paperwork for the R&D credit, you're not spending enough to derive meaningful benefit from the credit anyways. And generally, there exist plenty of accounting firms that will prepare the R&D documentation on a % basis (of the allowable R&D credit identified).
It also subsidises product development engineers - a profession that is doing well already
In the software world, sure. There are plenty of industries where product development staff (many of whom aren't engineers) don't make anywhere close to 6 figures.
I did the R&D tax credit this last year and it seems to me the savings for offshoring would drastically make up for the loss in R&D tax credits in most cases.
Also, some states, like CA, are very unfriendly which regard to the extra costs required for employees in terms of benefits, wages (salary exempt) and classification of employees with the ABC test [1], so the wins that states make for employees incentivizes many employers to look elsewhere instead.
In a more remote work culture, even ignoring offshoring/nearshoring, this is going to be really bad for people in certain states. And it will be bad for those states themselves.
The increased competition among states to attract higher income workers will be interesting. States like Tennessee, North Carolina, etc have a massive opportunity in front of them as they were already pretty well poised to attract younger professionals.
> Also, some states, like CA, are very unfriendly which regard to the extra costs required for employees in terms of benefits, wages (salary exempt) and classification of employees with the ABC test [1], so the wins that states make for employees incentivizes many employers to look elsewhere instead.
This is exactly right.
People seem to think all these regulations are doing them a favor and increasing their freedom but what's actually happening in reality is pretty much the opposite.
It's now literally cheaper even after accounting for delivery risks to hire people from Tennessee, North Carolina, etc.
Also, some states, like CA, are very unfriendly which regard to the extra costs required for employees in terms of benefits, wages (salary exempt) and classification of employees with the ABC test [1], so the wins that states make for employees incentivizes many employers to look elsewhere instead.
This explains why so much R&D happens in CA. Because it's too expensive to do it in this state...
The reason R&D happens in CA is because any company that wants to sell to CA is already going to be subject to CA taxation anyway, however they try to apportion their state income. If you develop R&D in another state and use that to sell to CA, you've just added an additional state to your tax compliance burden. Moreover, if you generate the R&D in say, Nevada, but the overwhelming majority of your income is CA sales, CA can (edit: changed from will) simply disregard your chosen allocation as fraudulent.
I did the R&D tax credit this last year and it seems to me the savings for offshoring would drastically make up for the loss in R&D tax credits in most cases.
This was true...before GILTI and BEAT were passed in the TCJA in 2017. It's no longer true. And as a downside, you must also contend with transfer pricing requiring your offshored entity to show a profit, and thus pay foreign taxes which likely would not be recoverable in the US under the GILTI regime.
We're starting to get into the sort of advice I charge $$$ for...
You don't need an entity to contract offshore, but if you're doing foreign R&D you're savings generally would be less than you would get back with the R&D credit. If for some reason your savings are greater with fully-offshored R&D, you need to ask yourself serious questions about why it's so much cheaper--including the likelihood that your R&D is being shared with the contractors' other clients if you're using an Indian or Chinese contractor.
You're also going to have IP valuation issues due to those risks, meaning that the IP simply won't be worth much, if anything, to a US or EU buyer, compared to the same IP generated anywhere by a subsidiary.
From a GILTI perspective, your IP is now foreign-generated IP, so you're looking at potentially paying the GILTI tax if you sell resulting products outside of the US.
There are additional legal considerations that apply to outsourced R&D development as well.
It's my understanding that if a US company wants to hire someone outside of the US to work remotely from outside of the US; they must treat the employee as an independent contractor.
Additionally, the US company would have to abide by any local labor laws / tax laws in the country they are hiring in.
>It's my understanding that if a US company wants to hire someone outside of the US to work remotely from outside of the US; they must treat the employee as an independent contractor.
Depends on what legal structure they've established within the country where the employee resides (and the laws regarding such things).
European countries are outliers due to EU regulations. Any EU "citizen" can work anywhere in the EU, so pragmatically speaking, why would you only want to hire Spanish people instead of opening the door to French, Italian or German candidates? It comes at literally zero cost to the company.
Some industries are heavily regulated in the US and having non-US based employees can become a real headache for US companies. A lot of US companies have background check as part of their hiring process, pretty hard to do for someone not US-based.
Also, if you target only the continental US you're already talking about companies that may be spread across 4 major timezones. If you start including Europe you're now dealing with people that are gonna be more than 6 hours removed from your HQ's timezone.
> European countries are outliers due to EU regulations. Any EU "citizen" can work anywhere in the EU, so pragmatically speaking, why would you only want to hire Spanish people instead of opening the door to French, Italian or German candidates? It comes at literally zero cost to the company.
The employer needs to pay social contributions in the employee's residence country. And more often than not, the employee cannot just become a freelancer or incorporate a single-person company and bill only one customer, as this is considered disguised employment. So no, it's not necessarily trivial for an EU company to hire a remote worker somewhere else in the EU, unless they have a local presence already.
The payroll taxes can likely be taken care of easily by your payroll provider/accountancy firm, but there's potentially local business licensing requirements[1] you become subject to as well. If you have an office, you generally do all of that based on the location of the office, and the employee's home address doesn't come into play. But if the employee is officially a work from home employee, some states/municipalities treat that as a presence subject to business licensing or permitting requirements with the local authorities, as well as potentially triggering sales tax collection requirements that have to be accounted for within your sales/invoicing processes.
My understanding from people who have done it is that:
-- Yes, you can outsource most of the payroll-related headaches to someone like ADP but
-- There are still a lot of other state by state details that can't just be handed off to a third party and told "Make it so." It's not a particularly big deal for a larger company, but it can be a fair bit of overhead for a small employer adding a new remote employee in a state with lots of paperwork.
To add to this, in over 17 states there are also city or county level income taxes[1] that you have to be set up to handle.
Then there's the potential for each employee's address to be considered a nexus, since each of their homes becomes a de-facto company presence. Potentially subject to local registration, licensing and taxation by local municipal authorities, in addition to just the state level requirements. If you have a presence in the state, and your employee's official work location is that location, then you only have to deal with that local registration once wherever the presence is located. But if you don't have a location the state, or you have employees who are officially designated as work from home (rather than unofficially working from home while being designated as assigned to an office), then this quickly scale into a giant mess of regulation to navigate[2].
If you disregard international companies with English as the company language, most of the companies usually have a local language requirement. So still, you want to hire Spanish/French/German/Italian speakers in the EU market.
The US has 330m people, you generally (emphasis, as there are certainly exceptions) don't need to look beyond its labor base to find what you're looking for.
If you're in Estonia and looking to hire a software engineer for remote work, maybe you end up hiring someone from Poland or Spain. That's still EU hiring in the EU, more akin to what you're referring to with the US. On average the smaller the country, it probably increases the odds that more of the labor you're looking for is going to be outside of your own borders.
A lot of software companies’ customer contracts specify that only U.S. employees can access customer data, also. Ops, customer support engineering, and many kinds of bug fixes all require that access.
Agreed. Sometimes, when reading articles/comments about out-sourcing, I question my own sanity. We've done it before, am I the only one remembering it? It failed miserably.
If companies want to relocate work to India, or China, or Eastern Europe, they can already do it.
It actually worked in manufacturing but it had some negative externalized long term negatives for the US. The long term negative is that the country lost innovation ability in those areas. The countries that manufacturing was outsourced to are gradually or have become the innovators in those areas.
For higher end companies, it wasn’t outsourcing. It was remote offices. The expertise still does move to those countries.
In the first wave of outsourcing, companies saw that the contract organization provided more or less equivalent results at substantially reduced cost.
What they failed to realize is what they outsourced were their bottom tier workers, the unproductive people. They got excited by the reduced cost with minimal reduction in effectiveness.
When they try to outsource their better talent that’s where they failed to recognize good talent is costly everywhere. You might save some salary but it’s offset by lots of other things from time shift to organizational culture.
> [...] what they outsourced were their bottom tier workers, the unproductive people.
That might be true to some extent, but I think there's a problem with that line of thought.
People are a "moving target". What may be a bottom-tier worker now, could very well be a valuable employee in 5-10 years. Many folks have built their career by starting at a low level and then getting promoted and upskilled over time through hard work and commitment. Starting at a low position and advancing is becoming, sadly, a rare thing.
The "first wave" and subsequent waves of outsourcing have to a large extent eliminated paths of career advancement for many workers. At first it was unskilled laborers and now it has been creeping up to virtually all technical job descriptions. The wet-dream of MBA's who promote this stuff is corporations consisting of a few C-level people and their board, and then a layer of fab-less product and operations people who just manage supply-chain and services stuff with external vendors. It's an ugly picture but that's what the global supply chain people want.
I think this just means employers will still have incentive to hire people to be employees (as then they benefit from the employee's growth), rather than contract out work to firms which may reassign or replace the (now valued, experienced) employee. When you contract out instead of hire, you're giving an incentive to a firm to get the work done as cheaply as possible, and that's not always the right trade-off.
The earlier waves of outsourcing were about shifting things like management responsibility out of the company, and I think that was shown to have unintended negative consequences for a lot of firms. I don't think there's much reason why an employer wouldn't be excited about hiring good, talented people from cheaper labor markets now.
This. Not to mention it has become much easier for anyone motivated to learn valuable skills online-- now there will be more opportunities to apply them.
Someone in the Philippines learning Python on Khan Academy today could very well be competitive for a senior engineering job in 10 years if the career path were possible.
I've met countless skilled technical people who could not a get job at XYZ company simply due to visas, not qualifications. Now working for these companies can be a real possibility.
You forgot to account for domain knowledge. You can be better than me at python, but I know my area and customers. When I'm given a half complete spec I can make good choices for the most part and get done without getting clarification. I can guess what version 2.0 will need well enough that most of the time those features will drop in quickly while major refactoring is required to get them into the better programmers 2.0.
Of course there are tradeoffs. A programmer who is much better than me has advantages in quality (assuming you are much better, in my biased opinion I'm great)
You're probably right about this, but I'm betting we'll see political parties in countries all over the world start putting up roadblocks to this sort of thing.
It's already happening to a degree. There a number of what you might call "reluctant Trump voters" where I work. The most frequent (and often only) argument you'll hear from them in favor Trump is around immigration and H1-B visas. You'll also notice that the Democrats in the U.S. who are surprisingly quit around Trumps efforts to reduce H1-B issuance.
I'd be willing to bet that unrestricted competition for a limited number of high-paying jobs in the developed world would fuel the Nationalist parties and movements that we've been seeing more of in the U.S. and Europe.
My opinion has been that it's good for US workers if foreigners immigrate and become citizens, because even if they make less than most Americans, they make more than they did in their prior country, which means they are improving the global market for labor, from the point of view of workers.
But having classes of people who live in the country but have special restricted rights and never become full citizens worries me.
I wish we could move away from the idea that citizenship is a reward for following the rules and instead consider that making people citizens is a benefit for (maybe even vital to preserving) society.
Yeah, and the posters thinking that this will help wealth inequality (either among the general population or just among tech workers collectively as a whole) are hopelessly naive. It is practically guaranteed to make wealth inequality worse, and now tech workers will start to feel a lot of pain, more like the general US population has.
This is going to happen faster than other times when offshoring has occurred in various industries historically too. Just think about it. You can bet contract work is going to be commonplace, and you can kiss your benefits goodbye. If you do not think this will happen to you, well, you’re next on the chopping block.
Work will become hyper competitive for benefits and for full time status. A good employee will be someone who answers emails 24/7 and within minutes of it being sent, night or day. The work will never end. Surveillance technologies for remote work will remove any semblance of freedom when you work from home. This is all very unlikely to be made illegal in the US in the foreseeable future. Also. populism uprisings that occur in a respective country last on average for 30 years, so you better be thinking in the very long-term for how bad this could actually be.
I'm confused. Perhaps you could clarify how honing your skills to be valuable as a remote worker is somehow the gateway to the rich eating all of us.
My personal experience with remote work is that it allows me to be present as a father in my children's lives and also to be more productive. I'm not saying everyone will have that experience, but for me it's an excellent fit.
As far as productivity, if we look at productivity increases since 1950, we should be working half as much for the same productivity/pay (https://news.ycombinator.com/item?id=20766443). With voices like Andrew Yang trying to shift social values to valuing the underappreciated like stay-at-home mothers through a UBI, this seems like a positive path forward.
I know things seem dark right now, but in my powerless position, I choose to believe there is a better, more positive path forward, and I put my energy into pursuing it.
Frankly, I've never met a rich guy whose nose I couldn't bloody. I've rarely met one whose spirit I couldn't cut deeply in less than 15 minutes of conversation.
The entrenched economic powers will (as they always do in these economic transitions) capture a disproportionate share of any productivity gains resulting from a mass change to remote work. And their spirits don't care if you win a low stakes battle. They are winning the war. (Just a metaphor, folks!)
They have their hands on the levers. The have the resources to arbitrage or withhold or defect or take hostages (economic!) until they get what they think they can get.
Same thing will happen with self-driving cars.
The peons will capture just enough value so the new life seems a bit better than the old life.
(Long long time remote worker, since before my 17 year-old was born. Love being at home with my kids, love the efficiency and flexibility.
I hear you. The good will and love of your children is something even death can't take, though. Money can't be banked beyond the grave. No religion. Just Pascal's wager in effect.
I'm hardly an abused slave ready for violent revolution. My life is pretty good if it's just meaningless. Naval gazing at some rich person doesn't help me at all. However, I do believe that guns in the hands of America's peaceful fathers are the best deterrent to the tyranny that everyone here just seems to accept as unavoidable.
An additional problem MBAs sometimes miss is that when you export jobs to contract orgs is that this accumulated institutional knowledge is lost—it’s no longer held in-house. Conversely it contributes to the expertise of the contract org. But not all orgs think long term. Or they get enthralled by “core competency”.
I don't think this is really missed by the MBAs, HN's favorite punching bag. These types of opportunity costs are absolutely a part of the make/buy decision process (but maybe undervalued?). I think it has much more to to with the "enthralled by core competency" aspect.
I'm confused by your use of "enthralled by core competency". I think if an MBA is actively dissembling the structures that brought a successful product together and exerting destructive control over any further research they absolutely deserve some criticism.
Some executives stay long term, some build portfolios, guide companies through a given stage and jump to the next. They can then say they “saved” this and that by offshoring. What happens 5 years after they leave is of little consequence.
Institutional knowledge informs why a solution works better than a shiny. The contract org will push through what works best for them, more than what’s best for your org long term. Contract orgs like checking off Hundreds of NIST or CIS controls as if that in and of itself means anything substantive.
And how many companies today are managing costly, legacy software solutions that they built in-house years (decades) ago? Every one I have ever seen.
The same logic could be used to justify duct tape software across the enterprise. There is some point where the cost-benefit leans in favor of outsourcing. Institutional knowledge may be under-priced by today's business execs, that is certainly possible. But we also shouldn't build a homegrown solution for every problem.
> An additional problem MBAs sometimes miss is that when you export jobs to contract orgs is that this accumulated institutional knowledge is lost—it’s no longer held in-house.
This. I have seen consulting companies keeping consulting contract only because the only guy that knew their system inside out was this single consultan that had been there so long that he became the effective sysadmin with the last word on everything related on the subsystem that he had been managing for years.
This is 100% spot on. Organizations build up value over the long-haul by learning things and then building on top of those things, learning some more, building on that, and so on.
Look what happened to G.E. They outsourced everything they possibly could and had a decade or two of unparalleled profitability. But, over time the well of ideas and competencies for products and services dried up and they went from being a powerhouse to a cautionary tale.
Don't export knowledge or know-how to save a few bucks. It always comes back to bite you.
This may well apply to countries as well. Due to the scales involved, it takes longer to notice the deleterious effects, and is much harder to reverse course.
I'd say it's already happened in the U.S. We're just starting to realize that you can't fully divorce the development and design process from the actual manufacturing process and expect to stay competitive for that long.
accumulated knowledge, isn't just applicable to orgs. but to the individual workers too. old school org's such as HP n IBM recognized this early. & had policies in place that they would never lay off anyone ever. some countries from what I heard in Japan that policy is still going on. i.e company man
> People are a "moving target". What may be a bottom-tier worker now, could very well be a valuable employee in 5-10 years. Many folks have built their career by starting at a low level and then getting promoted and upskilled over time through hard work and commitment. Starting at a low position and advancing is becoming, sadly, a rare thing.
I think the validity of this point depends on how you understand "bottom tier". When I read "bottom tier"[1] I tend to read that as a combination of "people who suck at their jobs" and "people who are doing things that are highly commoditized or commoditizable". The former interpretation in particular has nothing to do with seniority.
[1] And I'm reading it this way probably because I'm back-projecting based on experience of working with some outsourced/offshored workers who sucked at their jobs.
People who suck at their job can learn, and become better. Not all, but everyone was bad at something before they leveled up.
Highly commoditized positions are also a great way to learn about less commoditized work. How many old rich people used to say they started in the mailroom.
How does one deal with a culture of decreasing vertical mobility within a particular organization. They may suck at their job and be shuffled between the bottom tiers of increasingly flat management structures. If there is no room for growth this model fails, many older people did move vertically but this practice has been almost deliberately been removed from corporate life.
Junior employees must have deliberate exposure to responsibility and challenge in a structured environment that supports them if the are to grow. This is the job of middle management, who are the first target of every MBA driven reorg. Hence the end of development.
My dept is a bunch of Linux Admins, of varying skill level; but all at least mid-grade or higher. There are no junior admins. They are paying top wages so we can do paperwork, create accounts, and manage file permissions.
Then they can't understand why projects fall behind.
I was out of work a couple years ago and I applied to work in a mailroom. It turned out that the company whose mailroom it was, was not the hiring entity - it was outsourced. So, no working your way up anywhere.
Furthermore, the interviewer spent the entire interview complaining about how she mostly couldn't even get people who would show up, let alone act maturely. We discussed the starting date, but within a day or two she reneged, presumably because I had dressed formally for a minimum wage job and was overqualified.
Another thing that comes to mind is the janitorial duties were outsourced in the building I used to work in.
This sort of thing is why I think it's dumb whenever I read something about a progressive company having a minimum wage of whatever for their employees - it's purely a statement about who they keep on their books and who they use indirectly.
The "moving target" problem is significant for countries (or geographic regions in the case of large countries or open borders). However, for an individual company, it is a tragedy of the commons situation.
Why should a company A pay more to train a bottom tier worker into a high tier worker, when said worker will then be able to move to company B who offshore's its low tier workers. In effect, company A is subsidizing company B's training program.
> The "first wave" and subsequent waves of outsourcing have to a large extent eliminated paths of career advancement for many workers. At first it was unskilled laborers and now it has been creeping up to virtually all technical job descriptions. The wet-dream of MBA's who promote this stuff is corporations consisting of a few C-level people and their board, and then a layer of fab-less product and operations people who just manage supply-chain and services stuff with external vendors. It's an ugly picture but that's what the global supply chain people want.
This is how Microsoft operated for a while. Entire support ecosystems were built around Redmond, from non-core competency support (design, boutique marketing, food services, maintenance) to core competency augmentation (vendor, off shore, near shore, local). They still employ that model but to a lesser extent. They've moved away from it based on labor market trends and local competition (more companies have moved to the greater Seattle competing for resources). So I don't know if its a universal doctrine or model that will be employed, but it does seem to have a time and a place.
Yea, it's already happened to some extent in the life science industry. It's part of the reason our biotech industry is in shambles. Many of the companies I work with dream of "going virtual", doing research at an unaffiliated lab, taking credit, moving that research to a massive CMO, then dissolving any physical assets, layoffs, and then there is a just a board, execs and profit. It's totally destructive to actual human progress.
I don't think outsourcing manufacturing is destructive of human progress. You got huge companies like AMD and NVIDIA , who certainly contribute to human progress, who outsource all their manufacturing to TSMC because only a few companies worldwide can make those kinds of semiconductors.
Back then, Commodore had an advantage over the competition because they had MOS Technologies as a subsidiary and could rapidly iterate on hardware design. Same in the life sciences business. Nothing is easier than dreaming up a compound, but then you encounter reality, some compounds may be difficult to access synthetically, there are unexpected interactions, and these issues are best sorted out when synthetic chemistry, crystallographic support and the life sciences people are all in the same building. Fabless just doesn't work well outside semiconductors.
Which is why the trend with Apple is to do everything in-house (SoC, etc). Tight vertical integration facilitates difficult software-hardware technologies.
This reminds me of Standard Oil back in the 19th century. They had so much cash floating around that they could build big integrated refineries, railroad and pipeline infrastructure which contributed heavily to efficiency. The price of Kerosene dropped 80% during the history of the company.
Admittedly there's something to be said for outsourcing MFG to someplace like TSMC. But they still employ engineers to design the chips and maintain deep technical talent.
I was thinking more along the lines of companies that are little more than a layer of product managers and operations folks just managing vendors and service providers that do ALL the work.
Biotech startups are usually formed around a drug or biological to hedge the risk of preclinical and early trial work. These are usually developed with some kind of novel process. Usually you get a small early IPO if things work out at that stage to raise working capital. This happens because most traditional VCs won’t fund this type of biotech. That’s changing somewhat. Then the company sells to a major pharma or biotech if the product works out.
Also sometimes these biotechs, if they have novel approaches, are sought by big pharma because they’re more agile. So they buy them out as their R&D labs or invest in them for their IP.
The day before they graduate, a Harvard college student will work on your research project or startup for $0/mo, if it’s interesting enough. The day after, Facebook is ready to pay them $10,000/mo+.
They’re the same human being before and after graduation day. Just as talented the day before as the day after. It’s the pedigree variable that explains the vast majority of the salary.
You’re saying something similar, it’s just that you’re getting distracted by the red herring of the out sourced worker. You should be analyzing the difference between a Harvard and a UC Irvine student, whose average salary difference is as large as the difference between an average US programmer and Accenture contract off shore programmer. It’s got nothing to do with time shifts and organizational culture. You’re looking at this way too logically, along with many other commenters. Indeed I think hardly anyone, including the people who actually say work for Facebook, understand really why one person is paid more or less than another, at their own companies or elsewhere.
That aside you’re onto something with low skilled workers being replaced. The net result of hoovering up low paying programming jobs and sending them to another statistical group (not in this country) is that programming salaries appear to rise. Which is exactly what happened. So if you are of the opinion that programming salaries rising reflects increase in demand, so you should get into programming boot camp, you’d be like 200% wrong. You’re chasing a low salary programming job that doesn’t exist. Which again, is sort of exactly what happened.
I've had a similar experience at my job and I think it's actually both things.
On one side you have people that managed to claw their way through the boot camp but didn't actually pick up any of the skills; they memorized enough to get through instead of actually learning stuff. On the other side, you have people that did learn but aren't confident in their skills and so flub the interview when their confidence gives out.
I've watched the latter happen on more than one occasion and I really wish I knew how to handle it as an interviewer.
I am in LA and a friend tells me he can't hire good in house engineers locally. When I suggest Vietnam/etc he indeed mentioned tradeoffs regarding timeshift/culture. I guess you can't have it both ways.
What happened is that most IT never returned but the work that IT was doing is now done by cloud service providers. Because of immense software scaling, it made sense to pay for quality workers.
You can sell each additional software product at very high margins so it makes sense to spend a bit more on the worker for a slightly better product that will result in many more high margin sales.
Sometimes they found that it was more effective to do low cost work in cheaper US locations (American South, etc...) than India.
A large telco I worked for (owns a significant % of global cable TV assets and programming) used to outsource all hardware and software development. While I worked there as a contractor from 2013-2018 I saw them replace this with large onsite teams in their HQ in the EU and nearshore teams in Belarus and Ukraine.
I've encountered some of these nearshore companies in E. Europe multiple times over the last decade, business is booming for them.
Remote work is not the same as out-sourcing. Out-sourcing was a necessary evil and only worked for large/mature companies with carved out business processes that could be offloaded. These companies were never remote-first.
With companies being forced to modify their internal processes to be remote-first, what they will realize is that remote does work once they align to it. And once they realize that, there is no stopping them. Since the benefits of having a remote first company well aligned to working efficiently far out-weigh the benefits of a co-located team.
One business process that is generally carved out well is customer support. Many large corps have offshore support centers. A sector that comes to mind is mobile-comm companies (e.g. T-Mobile).
And it's not really the same as a globally distributed company either. Plenty of companies have large software development offices in places like Eastern Europe which is a very different situation from outsourced call centers (cost is still one of the drivers, though not the only one).
For example a few years ago I worked with a programmer from India who was part of a "remote consulting company" based in the Netherlands. The experience of working with her was identical to working with the larger offshore companies based in India. As in, time zone, cultural and communication barriers were substantial and disruptive to our productivity.
Communication and cultural differences become significant drags on velocity. Time zone differences exacerbate resolving issues. More importantly, it’s tough communicating technical issues in your non-native language.
It’s also hard to build an engineering culture when you don’t engage with your coworkers often. You have to build credibility so you can work through difficult issues - that’s hard to do when your primary medium of communication is Slack.
We're in what I'll call the third wave of offshoring now. There are pockets of offshore developers who are actually interchangeable with US-based teams; but the cost difference is more like 25-50% less than the previous waves that were promising 90% cost savings.
My last company ended up outsourcing from Mexico, Colombia, Uruguay and Argentina with good results. We often didn't tell clients they were offshore and billed US rates for them and pocketed the difference. Over the course of about 5 years we had let go our US-based teams because they were just too difficult to hire and retain for the marginal increase in quality.
How did you decide which clients could use offshore labor? If you did that in financial or defense industries you could be opening yourself up to significant legal liability
It's usually spelled out in the terms of an MSA. You're right, there are plenty of companies you can't offshore work for, and they'll make sure that language is in your MSA. Bill rates adjust accordingly.
> Seems like this article ignores the gigantic wave of out-sourcing throughout IT that already happened in previous decades and in many cases returned to near-shore / onsite work.
Agreed.
> What you actually see if you look at remote work job boards is many (if not most) companies in say, the USA, want remote people from the USA (or at least the same timezone as the USA). I think this is what will happen in other countries too.
Which realistically they cannot enforce, merely incentivize; I'm pro-remote work, mainly because it can free up roads and reduce emissions for more critical infrastructure and needs in the Market, all while offering people the ability to re-locate to less populated areas and ideally help under development, and boost there local economies there. That includes International/Non-US based countries.
There's some serious irony that traditionally globalist brogrammer types are now whining about outsourcing (to "poorer" areas, or other countries). You guys didn't care when it was happened to blue collar workers, and then go and rag on Trump voters who didn't see any other way out.
Then there's the other faction that doesn't understand basic economics and expects Bay Area pay from Bangladesh so they can live like a king. Your employer will pay the minimum they can. Salaries are only high right now because of the concentration of talent and cost of living.
To those people, please, get over yourselves and stop thinking you're somehow better because you went to college or don't do manual labour.
Edit: Wow. Downvote in five seconds. Really makes you think how much effort people are putting into processing the words I wrote.
But many programmers (from Silicon Valley in particular) or other middle class workers like finance, law, etc.. are in this weird bubble totally isolated from reality. The working class has been complaining about outsourcing for decades and I just find it hypocritical that this bubble is only just starting to complain because now it affects them with remote work.
It's elitist attitude and my number one complaint about our industry.
On the contrary - from my own anecdotal experience - programmers have been complaining about outsourcing forever. There was an especially strong distaste for it at Intel where outsourcing was more common. I've seen countless articles and opinions here on HackerNews outlining the tremendous loss of quality and productivity by outsourcing work over the years. Have you considered if you're the one living in the bubble?
> Edit: Wow. Downvote in five seconds. Really makes you think how much effort people are putting into processing the words I wrote.
What is there to process besides you making a strawman and injecting flat politically polarized tropes and adding nothing but pollution to a discussion? You are arguing in bad faith with shoddy arguments and should be downvoted:
- False equivalence between blue collar and white collar outsourcing -- what makes you think knowledge work isn't substantially different from blue collar work for them to be apples and oranges?
- Putting words in someone else's mouth -- no one here ragged on Trump voters who "didn't see any other way out" -- you perceived that and projected it into a space inappropriately. This is a giant forum with a variety of people and political opinions. Don't flatten that into a single viewpoint and expect to not get heat for it.
- Misunderstanding of labor pricing. Employers pay the minimum they can, but saying "salaries are high right now because of concentration of talent" misses the network effect of concentration of talent. If you don't understand the nonlinear effect of that, I think it is a little bit misguided to suggest that others do not understand "basic economics"
Please, rethink how you worded your post and how you can say what you were trying to say in a more factually grounded and less inflammatory way. I promise you will get better responses with this approach.
You're right. I wrote this post in anger and frustration because I don't like how things are heading. Let me try and clear things up.
> - False equivalence between blue collar and white collar outsourcing -- what makes you think knowledge work isn't substantially different from blue collar work for them to be apples and oranges?
I'm not suggesting that blue collar and white collar work is similar, but that, at the end of the day, these are livelihoods we're talking about. Remote work will eventually lead to outsourcing (if it is possible).
Plenty of workers are saying, "give us WFH - it works" and if this is true, I can't see why those jobs wouldn't get shipped off ASAP. Every job outsourced is a damn shame, but as far as the media is telling me, I'm now supposed to start feeling sorry for white collar but not blue collar outsourcing? This is blatant bias.
> Putting words in someone else's mouth -- no one here ragged on Trump voters who "didn't see any other way out" -- you perceived that and projected it into a space inappropriately. This is a giant forum with a variety of people and political opinions. Don't flatten that into a single viewpoint and expect to not get heat for it.
Not on this forum, no, but go pick up any newspaper and you'll see plenty of evidence of this. I would go as far as to say, the primary reason Trump was elected was due to his strong anti-China/anti-outsourcing stance. That makes this whole situation political.
> - Misunderstanding of labor pricing. Employers pay the minimum they can, but saying "salaries are high right now because of concentration of talent" misses the network effect of concentration of talent. If you don't understand the nonlinear effect of that, I think it is a little bit misguided to suggest that others do not understand "basic economics".
I do understand this, but remote working to begin with, is predicated on the axiom that being in the same, shared physical space, isn't essential. If that's true, why would companies continue to overpay (from their PoV) workers in these tech hubs (at least long term)
In 2002, when I was looking at colleges and deciding what to do with my life, I received advice that I shouldn't go into programming, because outsourcing was going to make all the programming jobs go away. Fortunately for me, I ignored this advice.
As others have noted, this all is not new (even if it might be different level).
> You guys didn't care when it was happened to blue collar workers
It's a strawman argument to conclude that because someone thinks that a thing is good on the whole (outsourcing), that there can't be bad consequences to it (people losing their jobs). For whatever it's worth, there seems to be a pretty strong pro-tech-union group on HN (which, I happen to disagree with, but that's a whole different story).
Hopefully that's enough evidence that someone took the time to process what you wrote, and you use the feedback to write better.
I wouldn't conflate SV elitists with "brogrammers". It wouldn't be too far to say a programmer is today's blue collar worker. So, you're fighting your own "bros".
This article seems to ignore the fact that working with people in vastly differing timezones can be a real nuisance. Yes, it can also be a boon for some positions, like follow-the-sun type SRE or customer support, but for a lot of positions, having people working massively different schedules is a real challenge.
It can absolutely work, given the right async workflows, but it can also absolutely fail. I'm inclined to believe failure is the default mode of operation.
Almost my entire (small) company is based in NYC, but we have one programmer in Europe. He just adjusts his schedule to US Eastern Time hours. Might be harder if he was in Australia, but that still leaves a lot of flexibility.
Heck, as I'm writing this, it's 11:20 am where I live, and I just overheard my sister get out of bed in the next room. Last night, she was taking an online MCAT prep course until after I went to bed around midnight. She could easily work in a different timezone.
In my experience, Eastern Time to Central European Time synchronous communications works pretty well without anyone having to deviate too much from normal working hours. Add Pacific Time to the mix and you're starting to need people willing to take calls at 6am and/or in the evening.
But, yes, some people are willing to adjust their personal time zones. I know someone who lives in Hawaii and runs a PR agency with mainland US clients. She just normally gets up very early.
The implication from this litter of thinkpieces on HN is that proximity to a tech hub (SV/NY) is your only competitive advantage as a knowledge worker—your butt is close to their chair. This runs counter to the other prevailing wisdom about SV/NY, which is that those areas are hubs—and essential to the tech industry—because the world's top talent is drawn to it.
The same set of people aren't saying both things. The people who believe SV and NY have top talent are exactly the ones who think remote work is great. I'm excited about the trend; a bigger pool of talented engineers for me to work with means I'll be able to accomplish more and have to compromise less on my career goals.
The people who worry that remote work will be a disaster are the ones who never believed SV engineers were more talented in the first place.
If someone says SV engineers are talented, but only in some technical way that doesn't really matter, I'd classify that as a claim that they're not really talented.
There are multiple layers. I think SV will remain a hub from a commercial standpoint, so if you're fishing for VC money that's still where you want to be.
From a purely technical standpoint, we'll see, but tbh, as others have said, outsourcing has been happening for decades now and if anything the wave is currently retreating.
I can count three VCs in my immediate circle of contacts that are expanding up and down the West Coast at least.
The NIMBYs in SF are going to get their wish: shrinking the city and collapsing its major industry. As another poster stated: things that don't make sense get adjusted in bad economic times. Things like paying 7-10X for real estate when you're in a digital industry...
I was just reading another piece that suggested the current crisis is likely to accelerate a number of trends that were already happening to some degree. I certainly don't expect the Bay Area to empty out or for Google to move their HQ to Omaha. But a lot of big tech companies were already shifting more of their hiring to new offices in areas removed from their HQ even if they don't make a big deal of it like Amazon did. And, anecdotally, I hear of a lot more people in my circles leaving the Bay Area than moving to it.
VC money being geographically concentrated in SV seems like the kind of ingrained inefficiency that VCs themselves clamor on about disrupting excessively. Dealflow is a solvable problem for distributed futures.
As someone who is unable to move to California due to family, I've always seen the biggest benefit I am missing to be not applying to jobs close by, but being the proximity to people I can connect with who can help me (and my ideas) grow.
It's an old cliche, but true, that if you surround yourself with people smarter/better than yourself then you will likely get better yourself; conversely, if you are the smartest person in the room on X (no one is the smartest in the room on everything), then there is no forcing function driving you to get better other than one you artificially create for yourself.
"The room" has lost most of its meaning, hasn't it? You're no longer limited to working with people who live within driving distance of yourself, you can now meet super smart people from all over the world on lots of websites, talk to them, work with them, learn from them, get inspired by them.
> "The room" has lost most of its meaning, hasn't it?
I don't think so. Trust and sense of shared purpose and ability are still largely built in person. The continued productivity people claim during the pandemic lockdown is mostly coasting off what was largely established in person before.
Websites, chat-rooms, and video calls are no substitute for the environment created by the physical agglomerations of people found in industry hubs.
That's not specific to the tech industry, either. It's true for any industry whose progress is dictated by hubs of creativity, including health, energy, entertainment, and transportation.
Oh sure, for networking and contacts etc, in person is still the thing. I meant for the "being the smartest person in the room" thing.
Before the internet, you had to go live in a metropolis to even know of these other people that were also interested in what you like, much less talk to or work with them. That has changed dramatically, and you absolutely can work with very bright people on very advanced things while you live somewhere in the middle of nowhere.
Don't get me wrong, it's still nice to meet people in person, but if you can't find a community online where people are smarter than you and/or better than you in whatever you do, you're either a super genius or you're not looking.
> I meant for the "being the smartest person in the room" thing.
I find the preoccupation over chasing the vaguely defined, but often bandied definition of "smart" a bit dull.
What matters more in my opinion is being in an intellectually stimulating and also psychologically safe environment. Other "smarter" people than me have made this observation too.
I'm not saying it has to be SF, NYC, or London, but the environment matters immensely, and it can turn a motivated person who might not appear "smart" in another context into a
much more creative person.
> Oh sure, for networking and contacts etc, in person is still the thing.
It's for far more important things than just yukking it up with people and trading business cards.
> if you can't find a community online where people are smarter than you and/or better than you in whatever you do, you're either a super genius or you're not looking.
I personally have yet to see an purely online community that fosters creativity without some fundamental anchoring in creative communities in the real world. The only exception I can think of are online game-building communities and competitions (i.e. Ludum Dare), but that's an unusual case. Is it impossible to find more example that? No. But I'd argue that strictly or even primarily online creative communities are unusual, and the online part is more about networking and cross-pollinating between in-person creative communities.
It can be both. Prior to the current situation, many/most companies preferred people who could/would commute to a company office. Which gives more options to people willing to work near one of those hubs and mostly work in an office.
At the same time, many people prefer to live near one of those hubs whether because they just like NYC, Boston, Austin, Bay Area, Seattle, etc. or because they believe it gives them more flexibility in changing employers. (And/or being in proximity to many like-minded individuals.)
Things that don't make sense tend to get adjusted during bad economic times. I've worked with alot of companies as a customer, and at end of the day, none of the stakeholders are getting bang for the buck. Companies set money on fire, employees are mostly living a middle class lifestyle at an insane level of compensation.
I live out in the provinces, and we pay 20-30% of the rate for SV talent. My lifestyle in SV would require 7x the compensation without me being any smarter or skilled than I am. NYC is more of a real place and is probably less inflated, alot of the premium there is really about domain expertise.
> NYC is more of a real place and is probably less inflated, alot of the premium there is really about domain expertise.
We'll see. I'm betting you're wrong - NYC has nothing on SF in tech expertise and the rest of the country (especially outside of the West coast) doesn't have much on it either.
If by tech expertise you mean knowledge of cloud and large scale web applications, then yes. For security though, and I'm sure this is true for other industries, the Bay Area has very little on the defense industry in Maryland.
Security is a small part of the overall tech industry. I live near Bethesda and I would hardly call the region a tech hub on par with any of the ones in the West coast.
While I agree that DC is not on the standard with SF or Seattle (what are the other West Coast tech hubs), DC is definitely a tech hub in it's own right.
The problem with DC is that the talent pool is extremely diluted by disillusioned, rent-seeking government contractors who get a certification, claim a bunch of stuff on their resume, and get bid as part of a 20-person team on a contract that really only requires 5-6 committed (for the sake of argument, "SV caliber") people.
The problem is, hardly anyone that is "SV caliber" wants to work on pokey gov't contracts, but enough people on that team care enough about the mission, the project, or their company to allow the freeloaders to get away with it.
There's no incentive to firing them because a) the client understands that govt work is extremely inefficient so they tolerate it b) the freeloaders are very good at not pissing anyone off (they are very friendly and dress well, etc) and c) their employer literally loses money if they are removed.
So the cycle continues.
Having said all that, in amongst the chaff there is a significant kernel of wheat in the DC area, both in the contracting as well as private sector space.
Capital One has a really good engineering culture and hires a lot of very smart kids straight out of school and trains them very well. Many of them don't stay in DC, however, and go on to work at GOOG, MSFT, AMZN, etc for big salaries after their 2-year stint at COF is over.
NoVa definitely has some strong talent and you're correct in highlighting Capital One specifically (they recruit heavily at my alma mater and I know a number of talented people who work there). You're also correct about talent dilution - I worked for a brief stint at a government agency doing tech work and I would say the majority of contractors are unfortunately, quite untalented and love to hide behind buzzwords.
> what are the other West Coast tech hubs
I would say the Bay is several different tech hubs rolled into one, Portland has a fair bit of tech work, and LA is overlooked but increasingly becoming a big one.
In terms of getting work, I would say there are fewer security research jobs available in the Bay Area than scattered around the beltway. My last search, there were a ton of jobs asking how to authenticate servers to each other when what I want to talk about is how to fuzz or instrument code.
So you think every node.js / rails developer that happens to live in SV and work in a startup is the next Linus? Of course they're lots of ordinary developers working and living there.
And yes, being born American / European is a huge advantage over 80% of the rest of humanity.
Seriously. There are a ton of wannabes up there (entrepreneurial and technical) just like there are wannabe actors in LA. A lot of incredible talent missing at those companies because people simply have zero desire to live there. I can appreciate the Bay Area but it's just not my style (weather, culture, lack of diversity in industry, etc). I'd bounce to wine country or the forests up north if I lived up there now.
immigration doesn't select for the most talented, it selects for the younger, the male, the willing, the otherwise unburdened etc. The intellectual bar to enter SV is not that high. The willingness to relocate, assimilate to the culture etc, is.
The article makes broad, sweeping generalizations, but it was enjoyable and engaging to read, so cheers to the author for that. He's right, too, generally speaking: lots of work can and will be done remotely from various locations across the globe. Of course, there will always be natural divides (that's what makes us human). Someone who can't speak the same language as the rest of the team just isn't going to get hired, no matter how well they can code.
Government regulations also play a huge role in how "globalized" a job can be. If you're working at a defense contractor, for example, you sure as heck aren't going to be replaced by a foreign national. In many cases, the office culture at those companies won't change hardly at all, due to data governance restrictions.
Very true for parasite employees. But to employees who actually work and have a basic understanding of self fulfillment, it means nothing more than environment change.
I think the biggest population at risk if useless office jobs that have just had staying power for legacy reasons. Once those go remote and off shore they're never coming back to high cost of living areas.
The economic incentives to out-source development to India have been there for decades. In the 2000s, "everyone" (i.e., the media) was sure that soon there would be no high-paying programming jobs left in the Western world. Well, how did that pan out?
First, start by making a giant empty class heirarchy in java. Once you have created a dozen classes that inherit from each other, but not yet made any variables or functions, send it right over, your work is done my man.
> What globalization did to manufacturing jobs, remote work will do to many service jobs.
This is bait. It's taken as a given rather than a hypothesis to be proven, which invalidates most of this post for me.
Issues with the analogy:
- Offshoring existed before remote work was popularized. For the many of "your jobs" up to be "taken" that shift has already occurred.
- Outsourcing is not a magic bullet. Timezone gaps, communication style, expert knowledge, and legal compliance are all issues that previous outsourcers to call centers have already discovered.
- Significant gaps remain between "tier-1" and "tier-2" support. Effective deployment of offshoring requires using the two to complement one another, not trying to use the latter to replace the former.
No matter what it is that your company is selling, tricky situations will come up that needed to be escalated to an experienced customer success team, whether that's the founder or a dedicated team. Being able to recruit globally doesn't magically make building that team any easier.
> But if company goes 'remote' much more work becomes outsourcing worthy.
Again, there's a difference between "outsourcing worthy" and "can reliably outsourced for enough cost savings for the whole thing to not be ROI negative". And, that's my point. Companies going remote doesn't magically jump start geographic labor arbitrage from zero. That geographic labor arbitrage has been ongoing for a long time.
The horse is out of the barn there. I remember working with HP, Microsoft and IBM people in 1999 whose management chains were in South Dakota, Phoenix, etc.
Anyone can already take your job, as long as they are willing to relocate, or your company opens a new office near them.
It is more important than ever to differentiate yourself. To do that you need to find something to do that you love, and then find (or more often make) a niche in that that that you become one of the top ten people in within your context.
By context I mean you don't need to be the best in the world, you can be the best at X within the Y industry, or within defense consulting, or in the U.S. And you don't need to be the best (though see the quote about being the only), but at least in the top 10.
There are two quotes I am fond of that say similar things much better than I can:
"Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it." - Steve Jobs
"You do not merely want to be considered just the best of the best. You want to be considered the only one who does what you do." - Jerry Garcia
That really seems like something that can be figured out, especially if the result is 3x less in wages.
Unlike immigrating to the US, which is sometimes plain impossible.
They don’t hire that Brasilian to be their employee. The Brasilian is a one-man company. They contract the company to render whatever service. The Brasilian company does whatever Brasiliantaxes and procedures are necessary.
I know a first-world company hiring third-world people. All the taxes are handled by the contractor himself. There are no legal issues to speak of, you only need an invoice from the contractor, or from an intermediator company, such as fiverr.
...and then find (or more often make) a niche in that that that (sic) you become one of the top ten people in within your context
Whatever happened to just getting a normal job and putting in an honest day’s labor?
Now we’re expected to become “one of the top ten”... what exactly? How is that supposed to work? What about those of us with families for goodness sake. We can’t all be super Linus Torvalds ninja hackers putting out code 12 hours a day.
But shouldn't we account for that and adjust accordingly so we aren't ruining society in a race to the bottom? It's all choices, we don't HAVE to allow it to happen.
This is getting into a discussion of Universal Basic Income, which I am a big fan of.
But I'd posit that salaries are not a zero-sum game, in the microcosm or the macrocosm.
Within a company each department head likely gets a certain amount of raises to distribute within their department, maybe enough to give most people X%, but also enough to give 2 or three 1.5X%. The company itself has a limited amount it can spend on labor costs.
Within a country there is the monetary supply. There is approximately $1.5 trillion physical currency in circulation. That equates to about $5k per person. Yes there is money that is not backed by physical currency, but the more of that you create (or the more physical currency you create) the higher inflation goes. If we want UBI then we need to back it with something. The Saudis backed it with their annual oil profits, Alaskans the same, and the Norwegians straight out created an investment fund from oil surplus profits. Getting to a workable UBI is not going to be a stopgap fix, and will likely take around 50 years to implement correctly.
It's doable from a technical perspective, in a number of ways. I worry about the political perspective. Our parties are divisive and one party can tear down any of the works of a past administration. So what is to prevent the UBI investment fund being repurposed, similar to Social Security's outcome.
But if the model is built to support this then it isn't an issue. If you see my earlier post about hypothetical improvements we can make to our global economy. If everyone is making more and industry is growing within the country then more classical economics applies (e.g. the pie is growing). In this scenario it's not an issue. It's only when there isn't positive growth that inflation is a huge issue.
> so we aren't ruining society in a race to the bottom
Nope.
What is going on here is the person from India gets to now enjoy a much higher quality of life (because 50% of a U.S. salary gets you a lot in India) while the person from California sees their effective take home pay decrease (because their costs continue to grow but not their salary)
Definitely not a race to the bottom but it sucks to be the person from California.
On the other hand, the person in India will relocate thousands of miles for practically any job, while the person in California will pretend that life is hard because of someone else's doing instead of moving to a place they can afford better.
Well I won't claim to be the thought leader on this, however I'm happy to look at some hypothetical ideas. To be clear I'm not looking to reverse globalization completely or stop it.
Rule 1: International trade deals forbid offshoring of manufacturing. Example, cars from Ford can't be made in Mexico for 1/10th the price. This is universal and enforceable by dissolution of companies that don't comply.
Rule 2: Stringent regulations to prevent Tax and location based gaming of Rule 1. Ford doesn't get to pay taxes in Tahiti, incorporate a mailbox in Mexico so they can make their cars there, but take advantage of US infrastructure for the rest of their business.
Rule 3: Companies reaching a monopoly size will be broken up into relatively equal sized companies, importantly those companies will be competing in similar regions. It's not like AWS and Amazon. It's like two Amazons. I'm sure figuring out the codebase and IP will make many jobs for lawyers and engineers. Maybe less for the MBA's.
EDIT: For rule 3 I forgot to add that the break up forces innovation as similar companies are competing now in the same market. It's an engine of growth built into the system.
> cars from Ford can't be made in Mexico for 1/10th the price
Sure, but then the buyers of said cars from Ford has to pay the premium.
The heavy growth of Amazon, Walmart has proven that the U.S. customer does not care about well paid workers, their benefits or their health - why would they agree to pay more for cars?
> but take advantage of US infrastructure for the rest of their business.
Fair enough. This point is basically Ford gaming the system by taking more out (take advantage of US infrastructure) than what they put in (taxes, local worker compensation)
> Companies reaching a monopoly size will be broken up into relatively equal sized companies
You and I can do this already.
You and I can get together today and force Google or Amazon to be broken up.
However, a broken up Google or Amazon is more powerful than Google or Amazon itself.
There's a practical limit to how expensive a share can get before majority can't afford it anymore. "NYSE: BRK.A" is not the norm, it's an exception. If BRK split itself up, they would, overnight, become way more valuable.
Google has already broken itself up because of this.
The only reason Bezos has not broken Amazon up is because its tremendously profitable AWS and Amazon's North American retail operations allows it to fund and offset the not so profitable (yet) international retail businesses.
Once those are profitable, Bezos will happily break them up before you or I get to it.
Regulations never help.
It cannot. It can, at best, move issues around.
The day we regulated minimum wage, we removed the only tool an unemployed, untrained but happy-to-be-employed-if-possible person had to entice an employer.
When given a choice between an unemployed, but trained person vs. an unemployed, untrained person both at minimum wage, I know who to choose every time. The unemployed, untrained person cannot even get on unemployment!
When people say they want to break up the big tech companies they are not talking about making them do a stock split. They are talking about dividing them into separate entities. This comment seems to conflate these two actions. Amazon or BRK could do a stock split if they thought it would raise their market cap, and it wouldn’t be a big political controversy. It would increase the number of shares but not change the corporate structure or affect any monopoly concerns.
Who is the "our" here? My identified in-group is rootless cosmopolitans, so I am happy to see globalists of any nationality take jobs away from protectionist xenophobes.
Do you recognize that your in-group is not widely represented? It's not xenophobia, you're trying to dog whistle something about my character that is untrue. Can you acknowledge that you're being protectionist of your privileged class?
You're suggesting that we should erect artificial barriers to prevent certain groups from accessing lucrative jobs to protect certain privileged classes from competition. It's morally equivalent to (although more socially acceptable than), e.g., banning the hiring of non-white people or women so that white males can make more money. If you can discriminate on the basis of nationality then why not race and gender and religion also?
`an honest day’s labor` never really existed, you were never going to get paid the amount of profit a practically unskilled repetitive job delivers to the person of company you work for.
At the same time, there are plenty of jobs (in the USA) you could do 16 hrs a day and still not make enough money to provide for your basic needs.
I don't think people have to be top ten or something like that to be useful, but being a meat-based robot is hardly compelling for either side anymore. You need to have at least some skill and you need to make sure you keep developing as the world around you also develops. With human expansion the rate of change itself has changed, and not even a luddite would be unaffected by that.
You can put in a normal amount of effort if you want, but then you don't have the right to demand a more than a normal amount of compensation (~$50k/household in the US). I don't think it's unreasonable to demand extra effort for a FAANG salary.
An honest day's labor only existed in the middle of the 20th century. Before the New Deal you had to work hard on a farm or a factory to make ends meet. After the Great Stagnation in the 1970s, the economy cannot sustain widespread growth in prosperity for all classes of American society. The Post-World War II economic expansion was a 1 time miracle enabled by the picking of several low hanging fruits.
"These figurative "low-hanging fruit" from the title include the cultivation of much free, previously unused land; the application and spread of technological breakthroughs, particularly during the period 1880–1940, including transport, refrigeration, electricity, mass communications, and sanitation; and the education of large numbers of smart people who previously received none."[0]
The party is over. Americans are at the top but they aren't getting any higher, and everyone else in the world is catching up. That means Americans have to compete with the rest of global middle class.
I'd argue you don't need to truly be top ten, you need to be sufficiently good that finding someone better isn't worth the marginal cost (hiring is really expensive!)
Another way of thinking of this: can you be considered top 10 within a pool of 100 applicants?
Also, who is "top ten" is extremely subjective, based on the company, who is evaluating, and niche. I would guess that within a 100 developer cohort there's not a lot of overlap between the top ten embedded c++ developers and the top ten react developers, and even the top ten that can do both c++ AND react.
You don't, it's the same psycho advice US tech people have been giving each other nervous breakdowns about for two decades now. Thousands of people have solid jobs that pay well where they can learn at a normal pace, do interesting work and put it down at 5/6pm.
If it's true that America really is that way, my advice is look abroad because life is not about your job.
Your recommendation to become the top 10 in something is either impossible, or only achievable by narrowing definitions down to inanity. I can easily be the top 10 in <industry> <feature> written in <specific language version> <specific framework version> run on <specific infrastructure>, but who cares? Recommending that people become the top 10 in their industry is an impossible recommendation; as there might be hundreds of people in my company who perform a similar role, let alone within my industry.
It’s a bit like recommending someone become one of the top 10 basketball players to make money; someone will do it, but the chances are so slim that it’s a bad recommendation.
'Top 10' is a convenient label. It's more about the answer to the question 'who are the most respected experts in X within the Y', and maybe even make X be instead 'X using Z'. Several careers having been made by being known as a leader using a particular technology, or a co-creator of the technology from the beginning, though it always comes with other things to back it up as well:
* Tim Berners-Lee - the web, W3C
* Peter Saint-Andre - XMPP, messaging RFCs
* DHH - Ruby on Rails
* Martin Fowler - Design Patterns
..and many more.
Yes, getting to the Tim Berners-Lee level of industry recognition is unreasonable to expect for most. But I think it is reasonable to think that this is doable, with the depth of the expertise niche needed to be outstanding being inversely proportional to the talent of the expert. One person might have an expertise niche of messaging, while another has RabbitMQ as their main niche. Both are viable to base a living off of.
At a certain point you’re talking about programmer celebrities and trying to draw general career advice from them, which is silly. We can’t all be celebrities, and any career advice based on that is kind of pointless.
Now talking about having a niche is a fair argument, but that’s literally a completely new argument. “Be in the top 10” and “specialize” are not the same pieces of advice, at all.
>>> And you don't need to be the best (though see the quote about being the only), but at least in the top 10.
Basically, you're saying only the top 1% will be employable.
This is going to be a new experience for a lot of devs in the bay area that have been spoiled with job offers. Those days are over. I'd say it's time to hunker down, save as much as possible because future employment will be scare. And, there's already a vast oversupply of talent. I'd hate to think what it would look like in 5 years time.
Side question. I have noticed for a few weeks now that since I don't have a Medium account I'm prevented from reading certain articles (like this one), but I still have access to some other articles on the platform. Does it mean that some authors require that the readership be part of the network too? What are the rules?
As someone who has worked remotely and worked for remote teams for some time now, I can say that you need hire a higher caliber people with excellent communication skills who you can really trust to deliver.
I think remote work will just make sure good people are in higher demand, which means that the market may even get hotter for better people.
Companies who just complete on price will fail spectacularly.
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[ 2.5 ms ] story [ 305 ms ] threadThe average developer wage for SV is $100,000 higher than the average where I live.
But of course this is less about tech workers that are already getting outsourced because the, well, workers are more technically savvy anyway so of course it happened sooner.
It is possibly more relevant to people in management, or people like professors and many other random jobs who are discovering that working from home works fine for them. Though sometimes it's questionable whether this is because their work is largely on a computer or just because they didn't do much anyway...
If we don't have permanent UBI in place soon it will continue to be an emergency response to job losses like now. The economy is shifting as surely as the sun sets to one where if you don't own or play a major leadership role you either aren't necessary or can be outsourced.
Floor workers are getting replaced with robots and touchscreens; managers are realizing they too can be outsourced; lawyers are finding that no, the work they do isn't that hard to automate; doctors are finding that machine learning can analyze images better than they can; it's not going to stop... why would it? Why would a business owner want to keep a human with a continually increasing salary around if they can possibly replace you with technology that costs your annual salary once and after that just requires maintenance?
There are cases where that's just not possible, but my imagination for what is possible to swap has definitely gotten bigger. Even if a job isn't entirely replaceable, productivity tools are making the same amount of work take a quarter of the staff.
Nowadays, the PhD jobs are based in Shanghai, Szeged and Hyderabad. The only thing that's left stateside is regulatory functions and support. You don't need a PhD for that. Political leadership should be concerned about the loss of institutional knowledge and knowledge networks.
That has to do with short job tenures (in the US) and industry consolidation. In the past, someone might have joined Upjohn in Kalamazoo, Eli Lilly in Indianapolis or Dow in Midland and stayed there their whole careers. Nowadays everyone changes jobs every 5 years and employment is in San Francisco, Boston and San Diego. It's problematic.
I'd say that's the understatement of the century.
Mass wealth accumulation and wealth inequality has shifted power so far towards businesses that the general populous requires solving a massive orchestration problem (together) in order to change that imbalance which I'm beginning to believe may not be something that can reach critical mass and a stable state in larger populations as historically peaceful revolutions were capable of.
As such, businesses are calling the shots economically, legislatively/governmentally, culturally, ... and their interests are falling further out of alignment with most peoples' well being.
We're becoming less innovative and working more to chase short-term profit margins for employers that keep us fed and sheltered instead of pursuing societal interests.
From your DOW example and the chemical industry, DOW and those they've acquired used to innovate. In their later years they've turned in an IP portfolio management business, focusing on strategic patent purchases to stiffle competitors and eek our royalties for certain processes.
This isnt unique to the chemical industry, it's happening across the board. In the neverending quarterly optimization search space, we're making tradeoffs that are hurting us more and more leading to instability in society all to inflate a few peoples' pockets and grips on control.
The labor market has always been a target but due to social ramifications, has been largely avoided. We're now seeing more aggressive attacks on optimizing costs in the labor market in order to meet growth expectations and it's really starting to press on people. I'm just wondering at which point enough people will crack or give up instead of continuing to support the madness.
At my current employer, though, the offshore developers in India have really found the secret sauce and are really nailing productivity and code quality to the danger of US employees.
Upstate suffers from high taxes and regulations introduced by the Governor with NYC in mind. Combine that with long winters and urban decay and we see that many bright young professionals born here end up fleeing once their parents retire.
I personally am planning on moving to Raleigh, NC in a few years. I only rent an apartment now so I'm mostly insulated from the astronomical property and school taxes, but I feel the state as a whole does not have my best interests in mind.
You should try no education and public services at all. Here in the rural South, 70 % of my students are incapable of doing 8th-grade math. These are the nursing school aspirants, and you genuinely fear for your life when you must go to hospital. Same with property taxes. You need functioning city services. Our county roads here are on a 70-year repaving schedule, and it shows. There was a storm a couple of weeks ago, and the town can't afford to haul away the debris. Inequality has a way of affecting even the wealthy. Hope you enjoy the Southernness of Raleigh.
Unfortunately it is fashionable (among people who choose not to live in them) to talk about non "tier-1" cities as if they are "shitholes", but IMO the quality of life people experience is probably higher on average: less crowding, more open space, more housing, cleaner, less expensive.
https://www.nytimes.com/2019/08/16/technology/ai-humans.html
You eat meat, I eat potatoes.
You fly to Disneyworld, I take the train to the seaside.
You live in a big house, I live in a small apartment.
You pay American income taxes, I don't.
You demand clean air and water, I tolerate pollution.
There are some fundamental factors which make labour in other parts of the world much cheaper, and people willing to accept a much lower quality of life and associated lower incomes.
Its no wonder that big tech is so in favour of remote working - its going to allow the outsourcing of a huge amount of work (white collar) previously considered untouchable.
Currency exchange means some can work at a discount compared to USD
Government subsidies hoping to diversify their economy may even pay partial salaries
Strong social safety net in other countries means companies may not need to pay for health benefits for remote workers
My American friends always rant about the high income taxes in Sweden. But my taxes include health insurance and I pay essentially nothing for kids' daycare, school and university. For people without perfect health and with kids, the total pay is worse in the U.S.
Western Europe and the USA have maintained a huge advantage over the world. I wouldn't be so confident about that advantage disappearing. Much like wealthy people today are much more likely to have ancestors who were wealthy, I think people born in developed western nations are going to continue to enjoy competitive advantages over others for many more generations.
* I'm online at the same time as my coworkers, you don't respond until the next business day.
* I can travel to any business location next day, you need a visa application.
* Your continued employability is subject to geopolitical risk, but California isn't sanctioning Ohio any time soon.
* I can handle sensitive data and technology, your country is subject to export controls.
* I develop rapport with customers, you don't understand the slang used in support tickets.
Your saving on travel, they save on building, building services and location adjusted wages.
With huge savings being made by all businesses and less costs on the balance sheet.
Wages will come under intense scrutiny.
What's going to drive that scrutiny? Shareholders won't demand it, they'll be happy to keep the additional margin. Employees may demand more, but that will only accelerate hiring from lower wage regions.
Globalism has already decimated the working class in developed countries, it's only going to accelerate and get worse.
Salaries will even out but workers will have the ability to change jobs more easily. Companies will want to keep talent. Top tier salaries might go up as companies are now competing for talent globally.
I wonder if we'll see brain drains (without emigration) as a country's talent is bought out by a wealthier country. Would you want your country to have the salaried workers or the executives and corporate revenues(or maybe that goes into the modern incarnation of double dutch)?
Should be interesting.
What you actually see if you look at remote work job boards is many (if not most) companies in say, the USA, want remote people from the USA (or at least the same timezone as the USA). I think this is what will happen in other countries too.
In my -South American- country the trend is to look outwards if you're hiring remotely; European countries seem to fit this description too.
With respect to R&D, for example, the US no longer allows foreign R&D activities to qualify for the R&D tax credit.
From what I've seen, many companies will shoehorn regular product development into the R&D category. I'm not sure if it's supposed to cover next iteration of existing products that most company should be doing anyway.
R&D doesn't require something to be socially innovative; it's evaluated at a per-company level. It's intended to incentivize companies to recreate wheels in-house (if it is otherwise financially reasonable to do so).
It does not create a barrier to small companies. If you're not big enough to handle the paperwork for the R&D credit, you're not spending enough to derive meaningful benefit from the credit anyways. And generally, there exist plenty of accounting firms that will prepare the R&D documentation on a % basis (of the allowable R&D credit identified).
It also subsidises product development engineers - a profession that is doing well already
In the software world, sure. There are plenty of industries where product development staff (many of whom aren't engineers) don't make anywhere close to 6 figures.
Also, some states, like CA, are very unfriendly which regard to the extra costs required for employees in terms of benefits, wages (salary exempt) and classification of employees with the ABC test [1], so the wins that states make for employees incentivizes many employers to look elsewhere instead.
In a more remote work culture, even ignoring offshoring/nearshoring, this is going to be really bad for people in certain states. And it will be bad for those states themselves.
The increased competition among states to attract higher income workers will be interesting. States like Tennessee, North Carolina, etc have a massive opportunity in front of them as they were already pretty well poised to attract younger professionals.
[1] https://www.labor.ca.gov/employmentstatus/abctest/
This is exactly right.
People seem to think all these regulations are doing them a favor and increasing their freedom but what's actually happening in reality is pretty much the opposite.
It's now literally cheaper even after accounting for delivery risks to hire people from Tennessee, North Carolina, etc.
This explains why so much R&D happens in CA. Because it's too expensive to do it in this state...
The reason R&D happens in CA is because any company that wants to sell to CA is already going to be subject to CA taxation anyway, however they try to apportion their state income. If you develop R&D in another state and use that to sell to CA, you've just added an additional state to your tax compliance burden. Moreover, if you generate the R&D in say, Nevada, but the overwhelming majority of your income is CA sales, CA can (edit: changed from will) simply disregard your chosen allocation as fraudulent.
I did the R&D tax credit this last year and it seems to me the savings for offshoring would drastically make up for the loss in R&D tax credits in most cases.
This was true...before GILTI and BEAT were passed in the TCJA in 2017. It's no longer true. And as a downside, you must also contend with transfer pricing requiring your offshored entity to show a profit, and thus pay foreign taxes which likely would not be recoverable in the US under the GILTI regime.
I do know that certain countries limit what you can send them as far as $ each month as part of anti-money laundering regulations. And it's a pain.
What other implications are there? Is it because some of the offshoring countries force you to register there to conduct business?
Or is it because they want to create a separate P&L for tax and/or liability purposes? Or to park IP?
You don't need an entity to contract offshore, but if you're doing foreign R&D you're savings generally would be less than you would get back with the R&D credit. If for some reason your savings are greater with fully-offshored R&D, you need to ask yourself serious questions about why it's so much cheaper--including the likelihood that your R&D is being shared with the contractors' other clients if you're using an Indian or Chinese contractor.
You're also going to have IP valuation issues due to those risks, meaning that the IP simply won't be worth much, if anything, to a US or EU buyer, compared to the same IP generated anywhere by a subsidiary.
From a GILTI perspective, your IP is now foreign-generated IP, so you're looking at potentially paying the GILTI tax if you sell resulting products outside of the US.
There are additional legal considerations that apply to outsourced R&D development as well.
Additionally, the US company would have to abide by any local labor laws / tax laws in the country they are hiring in.
Depends on what legal structure they've established within the country where the employee resides (and the laws regarding such things).
Some industries are heavily regulated in the US and having non-US based employees can become a real headache for US companies. A lot of US companies have background check as part of their hiring process, pretty hard to do for someone not US-based.
Also, if you target only the continental US you're already talking about companies that may be spread across 4 major timezones. If you start including Europe you're now dealing with people that are gonna be more than 6 hours removed from your HQ's timezone.
The employer needs to pay social contributions in the employee's residence country. And more often than not, the employee cannot just become a freelancer or incorporate a single-person company and bill only one customer, as this is considered disguised employment. So no, it's not necessarily trivial for an EU company to hire a remote worker somewhere else in the EU, unless they have a local presence already.
Every state has their own tax scheme. Every new employee in a new state is a big set up cost and ongoing maintenance.
[1] https://smallbiztrends.com/2018/04/remote-employee-complianc...
-- Yes, you can outsource most of the payroll-related headaches to someone like ADP but
-- There are still a lot of other state by state details that can't just be handed off to a third party and told "Make it so." It's not a particularly big deal for a larger company, but it can be a fair bit of overhead for a small employer adding a new remote employee in a state with lots of paperwork.
Then there's the potential for each employee's address to be considered a nexus, since each of their homes becomes a de-facto company presence. Potentially subject to local registration, licensing and taxation by local municipal authorities, in addition to just the state level requirements. If you have a presence in the state, and your employee's official work location is that location, then you only have to deal with that local registration once wherever the presence is located. But if you don't have a location the state, or you have employees who are officially designated as work from home (rather than unofficially working from home while being designated as assigned to an office), then this quickly scale into a giant mess of regulation to navigate[2].
[1] https://taxfoundation.org/local-income-taxes-city-and-county...
[2] https://smallbiztrends.com/2018/04/remote-employee-complianc...
If you're in Estonia and looking to hire a software engineer for remote work, maybe you end up hiring someone from Poland or Spain. That's still EU hiring in the EU, more akin to what you're referring to with the US. On average the smaller the country, it probably increases the odds that more of the labor you're looking for is going to be outside of your own borders.
No I don't think so. They look with within EU.
If companies want to relocate work to India, or China, or Eastern Europe, they can already do it.
For higher end companies, it wasn’t outsourcing. It was remote offices. The expertise still does move to those countries.
What they failed to realize is what they outsourced were their bottom tier workers, the unproductive people. They got excited by the reduced cost with minimal reduction in effectiveness.
When they try to outsource their better talent that’s where they failed to recognize good talent is costly everywhere. You might save some salary but it’s offset by lots of other things from time shift to organizational culture.
That might be true to some extent, but I think there's a problem with that line of thought.
People are a "moving target". What may be a bottom-tier worker now, could very well be a valuable employee in 5-10 years. Many folks have built their career by starting at a low level and then getting promoted and upskilled over time through hard work and commitment. Starting at a low position and advancing is becoming, sadly, a rare thing.
The "first wave" and subsequent waves of outsourcing have to a large extent eliminated paths of career advancement for many workers. At first it was unskilled laborers and now it has been creeping up to virtually all technical job descriptions. The wet-dream of MBA's who promote this stuff is corporations consisting of a few C-level people and their board, and then a layer of fab-less product and operations people who just manage supply-chain and services stuff with external vendors. It's an ugly picture but that's what the global supply chain people want.
The earlier waves of outsourcing were about shifting things like management responsibility out of the company, and I think that was shown to have unintended negative consequences for a lot of firms. I don't think there's much reason why an employer wouldn't be excited about hiring good, talented people from cheaper labor markets now.
Someone in the Philippines learning Python on Khan Academy today could very well be competitive for a senior engineering job in 10 years if the career path were possible.
I've met countless skilled technical people who could not a get job at XYZ company simply due to visas, not qualifications. Now working for these companies can be a real possibility.
Of course there are tradeoffs. A programmer who is much better than me has advantages in quality (assuming you are much better, in my biased opinion I'm great)
It's already happening to a degree. There a number of what you might call "reluctant Trump voters" where I work. The most frequent (and often only) argument you'll hear from them in favor Trump is around immigration and H1-B visas. You'll also notice that the Democrats in the U.S. who are surprisingly quit around Trumps efforts to reduce H1-B issuance.
I'd be willing to bet that unrestricted competition for a limited number of high-paying jobs in the developed world would fuel the Nationalist parties and movements that we've been seeing more of in the U.S. and Europe.
But having classes of people who live in the country but have special restricted rights and never become full citizens worries me.
I wish we could move away from the idea that citizenship is a reward for following the rules and instead consider that making people citizens is a benefit for (maybe even vital to preserving) society.
This is going to happen faster than other times when offshoring has occurred in various industries historically too. Just think about it. You can bet contract work is going to be commonplace, and you can kiss your benefits goodbye. If you do not think this will happen to you, well, you’re next on the chopping block.
Work will become hyper competitive for benefits and for full time status. A good employee will be someone who answers emails 24/7 and within minutes of it being sent, night or day. The work will never end. Surveillance technologies for remote work will remove any semblance of freedom when you work from home. This is all very unlikely to be made illegal in the US in the foreseeable future. Also. populism uprisings that occur in a respective country last on average for 30 years, so you better be thinking in the very long-term for how bad this could actually be.
My personal experience with remote work is that it allows me to be present as a father in my children's lives and also to be more productive. I'm not saying everyone will have that experience, but for me it's an excellent fit.
As far as productivity, if we look at productivity increases since 1950, we should be working half as much for the same productivity/pay (https://news.ycombinator.com/item?id=20766443). With voices like Andrew Yang trying to shift social values to valuing the underappreciated like stay-at-home mothers through a UBI, this seems like a positive path forward.
I know things seem dark right now, but in my powerless position, I choose to believe there is a better, more positive path forward, and I put my energy into pursuing it.
Frankly, I've never met a rich guy whose nose I couldn't bloody. I've rarely met one whose spirit I couldn't cut deeply in less than 15 minutes of conversation.
They have their hands on the levers. The have the resources to arbitrage or withhold or defect or take hostages (economic!) until they get what they think they can get.
Same thing will happen with self-driving cars.
The peons will capture just enough value so the new life seems a bit better than the old life.
(Long long time remote worker, since before my 17 year-old was born. Love being at home with my kids, love the efficiency and flexibility.
Doesn't change the ultimate macro outcome.)
I'm hardly an abused slave ready for violent revolution. My life is pretty good if it's just meaningless. Naval gazing at some rich person doesn't help me at all. However, I do believe that guns in the hands of America's peaceful fathers are the best deterrent to the tyranny that everyone here just seems to accept as unavoidable.
Institutional knowledge informs why a solution works better than a shiny. The contract org will push through what works best for them, more than what’s best for your org long term. Contract orgs like checking off Hundreds of NIST or CIS controls as if that in and of itself means anything substantive.
The same logic could be used to justify duct tape software across the enterprise. There is some point where the cost-benefit leans in favor of outsourcing. Institutional knowledge may be under-priced by today's business execs, that is certainly possible. But we also shouldn't build a homegrown solution for every problem.
This. I have seen consulting companies keeping consulting contract only because the only guy that knew their system inside out was this single consultan that had been there so long that he became the effective sysadmin with the last word on everything related on the subsystem that he had been managing for years.
Look what happened to G.E. They outsourced everything they possibly could and had a decade or two of unparalleled profitability. But, over time the well of ideas and competencies for products and services dried up and they went from being a powerhouse to a cautionary tale.
Don't export knowledge or know-how to save a few bucks. It always comes back to bite you.
I think the validity of this point depends on how you understand "bottom tier". When I read "bottom tier"[1] I tend to read that as a combination of "people who suck at their jobs" and "people who are doing things that are highly commoditized or commoditizable". The former interpretation in particular has nothing to do with seniority.
[1] And I'm reading it this way probably because I'm back-projecting based on experience of working with some outsourced/offshored workers who sucked at their jobs.
Then they can't understand why projects fall behind.
Furthermore, the interviewer spent the entire interview complaining about how she mostly couldn't even get people who would show up, let alone act maturely. We discussed the starting date, but within a day or two she reneged, presumably because I had dressed formally for a minimum wage job and was overqualified.
Another thing that comes to mind is the janitorial duties were outsourced in the building I used to work in.
This sort of thing is why I think it's dumb whenever I read something about a progressive company having a minimum wage of whatever for their employees - it's purely a statement about who they keep on their books and who they use indirectly.
Why should a company A pay more to train a bottom tier worker into a high tier worker, when said worker will then be able to move to company B who offshore's its low tier workers. In effect, company A is subsidizing company B's training program.
This is how Microsoft operated for a while. Entire support ecosystems were built around Redmond, from non-core competency support (design, boutique marketing, food services, maintenance) to core competency augmentation (vendor, off shore, near shore, local). They still employ that model but to a lesser extent. They've moved away from it based on labor market trends and local competition (more companies have moved to the greater Seattle competing for resources). So I don't know if its a universal doctrine or model that will be employed, but it does seem to have a time and a place.
I was thinking more along the lines of companies that are little more than a layer of product managers and operations folks just managing vendors and service providers that do ALL the work.
They’re the same human being before and after graduation day. Just as talented the day before as the day after. It’s the pedigree variable that explains the vast majority of the salary.
You’re saying something similar, it’s just that you’re getting distracted by the red herring of the out sourced worker. You should be analyzing the difference between a Harvard and a UC Irvine student, whose average salary difference is as large as the difference between an average US programmer and Accenture contract off shore programmer. It’s got nothing to do with time shifts and organizational culture. You’re looking at this way too logically, along with many other commenters. Indeed I think hardly anyone, including the people who actually say work for Facebook, understand really why one person is paid more or less than another, at their own companies or elsewhere.
That aside you’re onto something with low skilled workers being replaced. The net result of hoovering up low paying programming jobs and sending them to another statistical group (not in this country) is that programming salaries appear to rise. Which is exactly what happened. So if you are of the opinion that programming salaries rising reflects increase in demand, so you should get into programming boot camp, you’d be like 200% wrong. You’re chasing a low salary programming job that doesn’t exist. Which again, is sort of exactly what happened.
Like you are implying: status signaling from degree mills is pretty useless compared to actual competency.
Whether or not that’s due to differences in education or purely signaling behavior is something I have yet to fully make up my mind about.
On one side you have people that managed to claw their way through the boot camp but didn't actually pick up any of the skills; they memorized enough to get through instead of actually learning stuff. On the other side, you have people that did learn but aren't confident in their skills and so flub the interview when their confidence gives out.
I've watched the latter happen on more than one occasion and I really wish I knew how to handle it as an interviewer.
...but it's really just a comfortable lie we tell ourselves.
Presumably he means that he can't hire them for the amount he's willing to pay.
I don't think that's correct. They outsourced lower-skill jobs that could be done remotely to regions with lower labor costs.
Do you have any examples? I dont see this at all.
You can sell each additional software product at very high margins so it makes sense to spend a bit more on the worker for a slightly better product that will result in many more high margin sales.
Sometimes they found that it was more effective to do low cost work in cheaper US locations (American South, etc...) than India.
I've encountered some of these nearshore companies in E. Europe multiple times over the last decade, business is booming for them.
With companies being forced to modify their internal processes to be remote-first, what they will realize is that remote does work once they align to it. And once they realize that, there is no stopping them. Since the benefits of having a remote first company well aligned to working efficiently far out-weigh the benefits of a co-located team.
For example a few years ago I worked with a programmer from India who was part of a "remote consulting company" based in the Netherlands. The experience of working with her was identical to working with the larger offshore companies based in India. As in, time zone, cultural and communication barriers were substantial and disruptive to our productivity.
It’s also hard to build an engineering culture when you don’t engage with your coworkers often. You have to build credibility so you can work through difficult issues - that’s hard to do when your primary medium of communication is Slack.
My last company ended up outsourcing from Mexico, Colombia, Uruguay and Argentina with good results. We often didn't tell clients they were offshore and billed US rates for them and pocketed the difference. Over the course of about 5 years we had let go our US-based teams because they were just too difficult to hire and retain for the marginal increase in quality.
Useful for CERTAIN types of jobs, especially recurring ones
Agreed.
> What you actually see if you look at remote work job boards is many (if not most) companies in say, the USA, want remote people from the USA (or at least the same timezone as the USA). I think this is what will happen in other countries too.
Which realistically they cannot enforce, merely incentivize; I'm pro-remote work, mainly because it can free up roads and reduce emissions for more critical infrastructure and needs in the Market, all while offering people the ability to re-locate to less populated areas and ideally help under development, and boost there local economies there. That includes International/Non-US based countries.
Seems like a win-win to me.
Then there's the other faction that doesn't understand basic economics and expects Bay Area pay from Bangladesh so they can live like a king. Your employer will pay the minimum they can. Salaries are only high right now because of the concentration of talent and cost of living.
To those people, please, get over yourselves and stop thinking you're somehow better because you went to college or don't do manual labour.
Edit: Wow. Downvote in five seconds. Really makes you think how much effort people are putting into processing the words I wrote.
But many programmers (from Silicon Valley in particular) or other middle class workers like finance, law, etc.. are in this weird bubble totally isolated from reality. The working class has been complaining about outsourcing for decades and I just find it hypocritical that this bubble is only just starting to complain because now it affects them with remote work.
It's elitist attitude and my number one complaint about our industry.
I coincidentally found this yesterday, and while it is on the topic of racism, you can just as much transpose races for classes, and still be on point: https://everydayfeminism.com/2015/02/colorblindness-adds-to-...
What is there to process besides you making a strawman and injecting flat politically polarized tropes and adding nothing but pollution to a discussion? You are arguing in bad faith with shoddy arguments and should be downvoted:
- False equivalence between blue collar and white collar outsourcing -- what makes you think knowledge work isn't substantially different from blue collar work for them to be apples and oranges?
- Putting words in someone else's mouth -- no one here ragged on Trump voters who "didn't see any other way out" -- you perceived that and projected it into a space inappropriately. This is a giant forum with a variety of people and political opinions. Don't flatten that into a single viewpoint and expect to not get heat for it.
- Misunderstanding of labor pricing. Employers pay the minimum they can, but saying "salaries are high right now because of concentration of talent" misses the network effect of concentration of talent. If you don't understand the nonlinear effect of that, I think it is a little bit misguided to suggest that others do not understand "basic economics"
Please, rethink how you worded your post and how you can say what you were trying to say in a more factually grounded and less inflammatory way. I promise you will get better responses with this approach.
> - False equivalence between blue collar and white collar outsourcing -- what makes you think knowledge work isn't substantially different from blue collar work for them to be apples and oranges?
I'm not suggesting that blue collar and white collar work is similar, but that, at the end of the day, these are livelihoods we're talking about. Remote work will eventually lead to outsourcing (if it is possible).
Plenty of workers are saying, "give us WFH - it works" and if this is true, I can't see why those jobs wouldn't get shipped off ASAP. Every job outsourced is a damn shame, but as far as the media is telling me, I'm now supposed to start feeling sorry for white collar but not blue collar outsourcing? This is blatant bias.
> Putting words in someone else's mouth -- no one here ragged on Trump voters who "didn't see any other way out" -- you perceived that and projected it into a space inappropriately. This is a giant forum with a variety of people and political opinions. Don't flatten that into a single viewpoint and expect to not get heat for it.
Not on this forum, no, but go pick up any newspaper and you'll see plenty of evidence of this. I would go as far as to say, the primary reason Trump was elected was due to his strong anti-China/anti-outsourcing stance. That makes this whole situation political.
> - Misunderstanding of labor pricing. Employers pay the minimum they can, but saying "salaries are high right now because of concentration of talent" misses the network effect of concentration of talent. If you don't understand the nonlinear effect of that, I think it is a little bit misguided to suggest that others do not understand "basic economics".
I do understand this, but remote working to begin with, is predicated on the axiom that being in the same, shared physical space, isn't essential. If that's true, why would companies continue to overpay (from their PoV) workers in these tech hubs (at least long term)
As others have noted, this all is not new (even if it might be different level).
> You guys didn't care when it was happened to blue collar workers
It's a strawman argument to conclude that because someone thinks that a thing is good on the whole (outsourcing), that there can't be bad consequences to it (people losing their jobs). For whatever it's worth, there seems to be a pretty strong pro-tech-union group on HN (which, I happen to disagree with, but that's a whole different story).
Hopefully that's enough evidence that someone took the time to process what you wrote, and you use the feedback to write better.
This article implies the cog theory of developers, and I rarely see that supported on this site:
>You can get the same work done, but cheaper. What would you choose?
It probably won't be the same work. Other variables, such as throughput, also factor in.
I hate medium too, anyway for my the paywall is like a nice feature, if it's behind it I'm probably better off not reading that shit anyways
It can absolutely work, given the right async workflows, but it can also absolutely fail. I'm inclined to believe failure is the default mode of operation.
Heck, as I'm writing this, it's 11:20 am where I live, and I just overheard my sister get out of bed in the next room. Last night, she was taking an online MCAT prep course until after I went to bed around midnight. She could easily work in a different timezone.
But, yes, some people are willing to adjust their personal time zones. I know someone who lives in Hawaii and runs a PR agency with mainland US clients. She just normally gets up very early.
So which is it?
The people who worry that remote work will be a disaster are the ones who never believed SV engineers were more talented in the first place.
Or that technical talent does not really contribute to success as much as the prevailing theories believe?
From a purely technical standpoint, we'll see, but tbh, as others have said, outsourcing has been happening for decades now and if anything the wave is currently retreating.
The NIMBYs in SF are going to get their wish: shrinking the city and collapsing its major industry. As another poster stated: things that don't make sense get adjusted in bad economic times. Things like paying 7-10X for real estate when you're in a digital industry...
As someone who is unable to move to California due to family, I've always seen the biggest benefit I am missing to be not applying to jobs close by, but being the proximity to people I can connect with who can help me (and my ideas) grow.
It's an old cliche, but true, that if you surround yourself with people smarter/better than yourself then you will likely get better yourself; conversely, if you are the smartest person in the room on X (no one is the smartest in the room on everything), then there is no forcing function driving you to get better other than one you artificially create for yourself.
I don't think so. Trust and sense of shared purpose and ability are still largely built in person. The continued productivity people claim during the pandemic lockdown is mostly coasting off what was largely established in person before.
Websites, chat-rooms, and video calls are no substitute for the environment created by the physical agglomerations of people found in industry hubs.
That's not specific to the tech industry, either. It's true for any industry whose progress is dictated by hubs of creativity, including health, energy, entertainment, and transportation.
Before the internet, you had to go live in a metropolis to even know of these other people that were also interested in what you like, much less talk to or work with them. That has changed dramatically, and you absolutely can work with very bright people on very advanced things while you live somewhere in the middle of nowhere.
Don't get me wrong, it's still nice to meet people in person, but if you can't find a community online where people are smarter than you and/or better than you in whatever you do, you're either a super genius or you're not looking.
I find the preoccupation over chasing the vaguely defined, but often bandied definition of "smart" a bit dull.
What matters more in my opinion is being in an intellectually stimulating and also psychologically safe environment. Other "smarter" people than me have made this observation too.
I'm not saying it has to be SF, NYC, or London, but the environment matters immensely, and it can turn a motivated person who might not appear "smart" in another context into a much more creative person.
> Oh sure, for networking and contacts etc, in person is still the thing.
It's for far more important things than just yukking it up with people and trading business cards.
> if you can't find a community online where people are smarter than you and/or better than you in whatever you do, you're either a super genius or you're not looking.
I personally have yet to see an purely online community that fosters creativity without some fundamental anchoring in creative communities in the real world. The only exception I can think of are online game-building communities and competitions (i.e. Ludum Dare), but that's an unusual case. Is it impossible to find more example that? No. But I'd argue that strictly or even primarily online creative communities are unusual, and the online part is more about networking and cross-pollinating between in-person creative communities.
At the same time, many people prefer to live near one of those hubs whether because they just like NYC, Boston, Austin, Bay Area, Seattle, etc. or because they believe it gives them more flexibility in changing employers. (And/or being in proximity to many like-minded individuals.)
I live out in the provinces, and we pay 20-30% of the rate for SV talent. My lifestyle in SV would require 7x the compensation without me being any smarter or skilled than I am. NYC is more of a real place and is probably less inflated, alot of the premium there is really about domain expertise.
We'll see. I'm betting you're wrong - NYC has nothing on SF in tech expertise and the rest of the country (especially outside of the West coast) doesn't have much on it either.
The problem with DC is that the talent pool is extremely diluted by disillusioned, rent-seeking government contractors who get a certification, claim a bunch of stuff on their resume, and get bid as part of a 20-person team on a contract that really only requires 5-6 committed (for the sake of argument, "SV caliber") people.
The problem is, hardly anyone that is "SV caliber" wants to work on pokey gov't contracts, but enough people on that team care enough about the mission, the project, or their company to allow the freeloaders to get away with it.
There's no incentive to firing them because a) the client understands that govt work is extremely inefficient so they tolerate it b) the freeloaders are very good at not pissing anyone off (they are very friendly and dress well, etc) and c) their employer literally loses money if they are removed.
So the cycle continues.
Having said all that, in amongst the chaff there is a significant kernel of wheat in the DC area, both in the contracting as well as private sector space.
Capital One has a really good engineering culture and hires a lot of very smart kids straight out of school and trains them very well. Many of them don't stay in DC, however, and go on to work at GOOG, MSFT, AMZN, etc for big salaries after their 2-year stint at COF is over.
NoVa definitely has some strong talent and you're correct in highlighting Capital One specifically (they recruit heavily at my alma mater and I know a number of talented people who work there). You're also correct about talent dilution - I worked for a brief stint at a government agency doing tech work and I would say the majority of contractors are unfortunately, quite untalented and love to hide behind buzzwords.
> what are the other West Coast tech hubs
I would say the Bay is several different tech hubs rolled into one, Portland has a fair bit of tech work, and LA is overlooked but increasingly becoming a big one.
Government regulations also play a huge role in how "globalized" a job can be. If you're working at a defense contractor, for example, you sure as heck aren't going to be replaced by a foreign national. In many cases, the office culture at those companies won't change hardly at all, due to data governance restrictions.
I would imagine that any employer who thinks of their staff like that is already outsourcing or planning to outsource anyway.
This is bait. It's taken as a given rather than a hypothesis to be proven, which invalidates most of this post for me.
Issues with the analogy:
- Offshoring existed before remote work was popularized. For the many of "your jobs" up to be "taken" that shift has already occurred.
- Outsourcing is not a magic bullet. Timezone gaps, communication style, expert knowledge, and legal compliance are all issues that previous outsourcers to call centers have already discovered.
- Significant gaps remain between "tier-1" and "tier-2" support. Effective deployment of offshoring requires using the two to complement one another, not trying to use the latter to replace the former.
No matter what it is that your company is selling, tricky situations will come up that needed to be escalated to an experienced customer success team, whether that's the founder or a dedicated team. Being able to recruit globally doesn't magically make building that team any easier.
This is different though, because those companies weren't 'remote' so offshoring is not viable without that prerequiste.
But if company goes 'remote' much more work becomes outsourcing worthy.
Again, there's a difference between "outsourcing worthy" and "can reliably outsourced for enough cost savings for the whole thing to not be ROI negative". And, that's my point. Companies going remote doesn't magically jump start geographic labor arbitrage from zero. That geographic labor arbitrage has been ongoing for a long time.
The horse is out of the barn there. I remember working with HP, Microsoft and IBM people in 1999 whose management chains were in South Dakota, Phoenix, etc.
Anyone can already take your job, as long as they are willing to relocate, or your company opens a new office near them.
It is more important than ever to differentiate yourself. To do that you need to find something to do that you love, and then find (or more often make) a niche in that that that you become one of the top ten people in within your context.
By context I mean you don't need to be the best in the world, you can be the best at X within the Y industry, or within defense consulting, or in the U.S. And you don't need to be the best (though see the quote about being the only), but at least in the top 10.
There are two quotes I am fond of that say similar things much better than I can:
"Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it." - Steve Jobs
"You do not merely want to be considered just the best of the best. You want to be considered the only one who does what you do." - Jerry Garcia
This where immigration restrictions make a difference. A Brazilian developer has trouble working in SV, but no trouble working remote.
Outsourced people can take your job, for much less money.
Whatever happened to just getting a normal job and putting in an honest day’s labor?
Now we’re expected to become “one of the top ten”... what exactly? How is that supposed to work? What about those of us with families for goodness sake. We can’t all be super Linus Torvalds ninja hackers putting out code 12 hours a day.
But I'd posit that salaries are not a zero-sum game, in the microcosm or the macrocosm.
Within a company each department head likely gets a certain amount of raises to distribute within their department, maybe enough to give most people X%, but also enough to give 2 or three 1.5X%. The company itself has a limited amount it can spend on labor costs.
Within a country there is the monetary supply. There is approximately $1.5 trillion physical currency in circulation. That equates to about $5k per person. Yes there is money that is not backed by physical currency, but the more of that you create (or the more physical currency you create) the higher inflation goes. If we want UBI then we need to back it with something. The Saudis backed it with their annual oil profits, Alaskans the same, and the Norwegians straight out created an investment fund from oil surplus profits. Getting to a workable UBI is not going to be a stopgap fix, and will likely take around 50 years to implement correctly.
It's doable from a technical perspective, in a number of ways. I worry about the political perspective. Our parties are divisive and one party can tear down any of the works of a past administration. So what is to prevent the UBI investment fund being repurposed, similar to Social Security's outcome.
Nope.
What is going on here is the person from India gets to now enjoy a much higher quality of life (because 50% of a U.S. salary gets you a lot in India) while the person from California sees their effective take home pay decrease (because their costs continue to grow but not their salary)
Definitely not a race to the bottom but it sucks to be the person from California.
globalization is happening whether we want it to or not.
> we shouldn't protect our interests
I made no comments either way.
... but, sure, let's think about this.
If you were to pass rules and regulations to stop globalization from happening, what would the top 3 be?
Rule 1: International trade deals forbid offshoring of manufacturing. Example, cars from Ford can't be made in Mexico for 1/10th the price. This is universal and enforceable by dissolution of companies that don't comply.
Rule 2: Stringent regulations to prevent Tax and location based gaming of Rule 1. Ford doesn't get to pay taxes in Tahiti, incorporate a mailbox in Mexico so they can make their cars there, but take advantage of US infrastructure for the rest of their business.
Rule 3: Companies reaching a monopoly size will be broken up into relatively equal sized companies, importantly those companies will be competing in similar regions. It's not like AWS and Amazon. It's like two Amazons. I'm sure figuring out the codebase and IP will make many jobs for lawyers and engineers. Maybe less for the MBA's.
EDIT: For rule 3 I forgot to add that the break up forces innovation as similar companies are competing now in the same market. It's an engine of growth built into the system.
This is the broken window fallacy.
Sure, but then the buyers of said cars from Ford has to pay the premium.
The heavy growth of Amazon, Walmart has proven that the U.S. customer does not care about well paid workers, their benefits or their health - why would they agree to pay more for cars?
> but take advantage of US infrastructure for the rest of their business.
Fair enough. This point is basically Ford gaming the system by taking more out (take advantage of US infrastructure) than what they put in (taxes, local worker compensation)
> Companies reaching a monopoly size will be broken up into relatively equal sized companies
You and I can do this already.
You and I can get together today and force Google or Amazon to be broken up.
However, a broken up Google or Amazon is more powerful than Google or Amazon itself.
There's a practical limit to how expensive a share can get before majority can't afford it anymore. "NYSE: BRK.A" is not the norm, it's an exception. If BRK split itself up, they would, overnight, become way more valuable.
Google has already broken itself up because of this.
The only reason Bezos has not broken Amazon up is because its tremendously profitable AWS and Amazon's North American retail operations allows it to fund and offset the not so profitable (yet) international retail businesses.
Once those are profitable, Bezos will happily break them up before you or I get to it.
Regulations never help.
It cannot. It can, at best, move issues around.
The day we regulated minimum wage, we removed the only tool an unemployed, untrained but happy-to-be-employed-if-possible person had to entice an employer.
When given a choice between an unemployed, but trained person vs. an unemployed, untrained person both at minimum wage, I know who to choose every time. The unemployed, untrained person cannot even get on unemployment!
BIG RED FLASHING CITATIONS NEEDED SIGN HERE
> Whatever happened to just getting a normal job and putting in an honest day’s labor?
That doesn't sound very interesting.
At the same time, there are plenty of jobs (in the USA) you could do 16 hrs a day and still not make enough money to provide for your basic needs.
I don't think people have to be top ten or something like that to be useful, but being a meat-based robot is hardly compelling for either side anymore. You need to have at least some skill and you need to make sure you keep developing as the world around you also develops. With human expansion the rate of change itself has changed, and not even a luddite would be unaffected by that.
"These figurative "low-hanging fruit" from the title include the cultivation of much free, previously unused land; the application and spread of technological breakthroughs, particularly during the period 1880–1940, including transport, refrigeration, electricity, mass communications, and sanitation; and the education of large numbers of smart people who previously received none."[0]
The party is over. Americans are at the top but they aren't getting any higher, and everyone else in the world is catching up. That means Americans have to compete with the rest of global middle class.
[0] https://en.wikipedia.org/wiki/The_Great_Stagnation
> We can’t all be super Linus Torvalds ninja hackers putting out code 12 hours a day.
Another way of thinking of this: can you be considered top 10 within a pool of 100 applicants?
Also, who is "top ten" is extremely subjective, based on the company, who is evaluating, and niche. I would guess that within a 100 developer cohort there's not a lot of overlap between the top ten embedded c++ developers and the top ten react developers, and even the top ten that can do both c++ AND react.
If it's true that America really is that way, my advice is look abroad because life is not about your job.
It’s a bit like recommending someone become one of the top 10 basketball players to make money; someone will do it, but the chances are so slim that it’s a bad recommendation.
Also, how do you define “top 10”?
* Tim Berners-Lee - the web, W3C
* Peter Saint-Andre - XMPP, messaging RFCs
* DHH - Ruby on Rails
* Martin Fowler - Design Patterns
..and many more.
Yes, getting to the Tim Berners-Lee level of industry recognition is unreasonable to expect for most. But I think it is reasonable to think that this is doable, with the depth of the expertise niche needed to be outstanding being inversely proportional to the talent of the expert. One person might have an expertise niche of messaging, while another has RabbitMQ as their main niche. Both are viable to base a living off of.
Now talking about having a niche is a fair argument, but that’s literally a completely new argument. “Be in the top 10” and “specialize” are not the same pieces of advice, at all.
Basically, you're saying only the top 1% will be employable.
This is going to be a new experience for a lot of devs in the bay area that have been spoiled with job offers. Those days are over. I'd say it's time to hunker down, save as much as possible because future employment will be scare. And, there's already a vast oversupply of talent. I'd hate to think what it would look like in 5 years time.
Yeah, there's no way the governments of nations will let their companies outsource their IT more and more that easily.
I think remote work will just make sure good people are in higher demand, which means that the market may even get hotter for better people.
Companies who just complete on price will fail spectacularly.
Bring it on.