We’re Losing More Tech Jobs Than Socks Jobs to China

Some of the more amazing stories about China’s domination of manufacturing these days pertain to the cities in China that make most of just one of the world’s consumer goods, like socks.

But a new study from the Economic Policy Institute makes it clear we haven’t just lost textile jobs to China, we’ve lost high tech manufacturing jobs too. The study finds, for example, that since China joined the WTO, the outsourcing of tech manufacturing to China has been the biggest driver of our trade deficit with China.

Within manufacturing, rapidly growing imports of computer and electronic parts (including computers, parts, semiconductors, and audio-video equipment) accounted for more than 44% of the $194 billion increase in the U.S. trade deficit with China between 2001 and 2010. The growth of this deficit contributed to the elimination of 909,400 U.S. jobs in computer and electronic products in this period. Indeed, in 2010, the total U.S. trade deficit with China was $278.3 billion—$124.3 billion of which was in computer and electronic parts.

Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China. This broad category of high-end technology products includes the more advanced elements of the computer and electronic parts industry as well as other sectors such as biotechnology, life sciences, aerospace, and nuclear technology. In 2010, the United States had a $94.2 billion deficit in advanced technology products with China, which was responsible for 34% of the total U.S.-China trade deficit. In contrast, the United States had a $13.3 billion surplus in ATP with the
rest of the world in 2010.

As a result, those parts of the country where such tech jobs had been concentrated have been inordinately affected.

The trade deficit in the computer and electronic parts industry grew the most, displacing 909,400 jobs—32.6% of all jobs displaced between 2001 and 2010. As a result, the hardest-hit congressional districts were in California, Texas, Oregon, and Massachusetts, where remaining jobs in those industries are concentrated.

[snip]

The three hardest-hit Congressional districts were all located in Silicon Valley in California, including the 15th (Santa Clara County, 39,669 jobs, 12.23% of all jobs in the district), the 14th (Palo Alto and nearby cities, 28,866 jobs, 9.0%), and the 16th (San Jose and other parts of Santa Clara County, 26,478 jobs, 8.72%).

Now, to a great degree, we already knew this. IBM sold its PC division to China in 2004. And whereas stories of abusive conditions for those who make branded goods used to focus on sneakers, they now focus on Apple’s products.

But it also ought to be a wake-up call. It took some time for the upheaval caused by NAFTA to thoroughly devastate the Rust Belt and parts of the south. And while CA may be large and diverse enough to recover from the loss of these jobs, in other places (surprisingly, perhaps, NH, which lost the highest percentage of its jobs to China), they’re not.

Plus, there’s the whole problem of lost capabilities. As this manufacturing goes to China, we lose the symbiotic effect of having people manufacture–say–iPhones down the road from the folks losing designing the new ones. Thus, while in the short term it may be easy for Steve Jobs to churn out new products sending this stuff to China, in the post-Steve Jobs era, particularly with this lost symbiosis, it may be harder to continue to innovate.

But don’t worry. I’m sure working class Californians will be just as happy in their service jobs as Michiganders are. Which is to say, not that much.

Marcy has been blogging full time since 2007. She’s known for her live-blogging of the Scooter Libby trial, her discovery of the number of times Khalid Sheikh Mohammed was waterboarded, and generally for her weedy analysis of document dumps.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including the Guardian, Salon, and the Progressive, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse and dog in Grand Rapids, MI.

65 replies
  1. Desider says:

    What’s not there is an analysis of what jobs were created.

    Computer parts are very commodity, low margin. e.g. Steve Jobs is noted for getting very aggressive prices for Apple components.

    HP’s PC sales are the world’s highest. They have rather tiny margins, but how much less would that have been without Chinese production?

    Also, what has that meant for Americans stocking up on computers? Typically a lower spend at the store, making computers more affordable for all. (A $1 less at the store means $1.10 less including sales tax, and often $1.30 less if you include income tax on money to buy those devices)

    While it may be nice to have iPods made down the road, it’s a pretty messy polluting business, and the US has not had the manpower or masochistic tendency to maintain a lot of this cut-throat business down the road. Intel, NVidia, Qualcomm & Broadcom still do quite well top despite doing all their chip fab in China, competing against Taiwan’s AMD, and the very strong UK ARM (for smartphones).

  2. emptywheel says:

    @Desider: See where it says “US domestic export jobs supported” in Table 1, right there on this page?

    They do analyze those jobs. Not in as much depth, granted, but then there are a fraction of them.

    And the argument that we need to make iPods in China because the production process is poisonous? That’s another way of making a lousy economic argument known as “externalities are free!”

  3. emptywheel says:

    @Desider: Also, you ignored the point about losing capabilities when you move manufacturing offshore. We in fact are losing some of our chip edge for just this reason. And we’ve lost a great deal of our high tech edge already.

    The reason we have to borrow Korean technology for car batteries? Because we lost our advantage in battery technology because we shipped these jobs to Korea and CHina.

  4. allan says:

    I was struck by the absolutely blase’ attitude towards offshoring in this recent NPR story on a tech start-up in Seattle.
    The coding is being done in India and, you will be shocked to learn, problems with that have slowed down the project.
    Maybe these would-be Mark Zuckerbergs should have gone down the road to Boeing to get some advice about the dangers of offshoring.

  5. joberly says:

    Interesting study, EW, thanks for the link. This is a bit off-topic, but I’ve recently encountered the way modern medicine outsources high-tech jobs from the US.I had a biopsy on Sept. 2nd and my physician received the lab results on the 8th. I learned that the tissue was made into a paraffin block in the US, but air-freighted to Bangalore for micro-sectioning, staining, slide preparation, and pathology analysis. On the 8th, my doctor gave me the (not-so-good) news and encouraged me to get a second opinion. The second clinic insists on receiving not only the pathology report from Bangalore but also the physical slides made in India. Furthermore, they ask for a certain lead time on analyzing the pathology and slides. I wonder if the slides will go back to India for a second trip to a second lab for a second reading? Can it be so much cheaper to send tissue samples to India once, maybe twice, rather than pay lab techs and a pathologist M.D. to do the work Stateside?

  6. MadDog says:

    At some point in time, and perhaps sooner that our own MOTU ruling mandarins realize, there won’t be sufficient work here in the US for any of us to afford to buy the stuff we shipped overseas to be made.

    Deadbeat nation here we come.

  7. emptywheel says:

    @joberly: Yikes. I hope it’s not too not-so-good.

    My dad, who was a high level computer exec, died of brain cancer in the early 1990s. He was then involved in developing AmEx’s smart cards, and he was determined, having had to lug his brain scans around to get second opinions, to push smart cards for medical records.

    But that only works when it all stays in the US.

    Meanwhile, I’m a bit squeamish bc I’m going to have to get my own checkup with a new radiologist next year, whereas my other one knew me by sight (both my films and my person).

  8. Desider says:

    @emptywheel: Was trying to say it’s a more complicated situation.

    I took a look at BLS predictions of 10-year job growth one time, and computer programming was hit hard. Until I realized that the same number of jobs were added as “computer analyst”, which I took to mean “programmer with field specific knowledge”.

    My guess is that many people would use “programmers lost” as the end story.

    If HP downsizes its design department, but upscales marketing, will the added jobs appear in the “displaced jobs” list?

    If GM spends $100 less on each of 10,000 computers, will any of that saved million dollars appear as a job added from outsourcing?

    I do agree that outsourcing a technology can be a great loss to domestic clustering of similar technology. In principle. It’s a trade-off, and sometimes it will or won’t matter. We’ve played this game forever with the Japanese – losing our edge in TVs, etc. While Japan grows its own rice to feel good. Does it matter that China bought IBM’s PC division? Well, HP seems ready to dump its own as well. Free market types will say better to buy cheaper, protectionist types will say we’re losing something valuable. Both have a point.

    Re: externalities, I remember awful electronics sweatshops in LA, and huge yellow billowing clouds of smog back in the early 80’s. I’m kinda glad we outsourced that problem to China’s cities, to be frank.

    Overall, I think the biggest problem is the theft of trillions by Wall Street, the sheltering of tax due overseas, the endless war and the mortgage scam. All of this sapped money that could have been invested in new talent and re-tooling and growing new industries. China didn’t cost us near as many jobs as trillions stolen in a few weeks between W & Obama.

    And then there’s the issue that if we weren’t buying stuff from China, we’d be sending them poverty aid. Hard to have it both ways.

  9. MadDog says:

    @emptywheel: I’m awaiting the time when the Chinese (and perhaps the Indians) start on a buying binge of US assets like the Japanese did in the late 80s-early 90s.

    I wouldn’t bet against the Chinese being better at choosing the assets to buy. None of the idiocy of buying US movie studios or suchlike.

    And given the people to liveable land ratio in China, real estate will be high on their list. And none of that crap like buying oceanfront condos in Hawaii as the Japanese did. Perhaps we can sell them Texas (with apologies in advance to the many good folks like WO who live there).

  10. emptywheel says:

    @Desider: Actually, you’re the one simplifying things.

    1) programmers aren’t analysts, and guessing doesn’t make it so

    2) If HP downsizes design and creates a few more marketing jobs, it’s still a net loss of jobs (but we’re talking mfg jobs, which are more likely to be replaced w/service jobs or unemployment, not another white collar job)

    3) If GM spends $100 less on outsourcing, it will and has gone to exec compensation

    4) If you have no problem making Chinese people sick for your consumer waste–particularly when mitigating the waste is an option, too–then I find you an immoral person

    We need to move toward a sustainability issue. Having mo mfg here is not sustainable–in fact, it’s one of the big reasons why our company has become focused on FIRE. Having none in China is a problem, too. But we’ve got no balance, and it’s killing the US (while, bc of attitudes about poisons like yours, literally killing people in China).

  11. joberly says:

    @emptywheel: # 7. Good luck to you this year. As for me, I’m thinking about asking for frequent flyer miles–after all, it’s my tissue back and forth on those flights from MSP to Bangalore !

  12. JohnLopresti says:

    Maybe muddying the waters some: an article about perennial gray market dynamics, mostly about IT components, but also discusses automotive, and value added resellers of various stripe. Filesize 10 kb, document length 2 pages. Undated. circa y2k. Even mentions ibm and the 8080, but treats macro factors rather than the minutiae.

  13. jo6pac says:

    @Desider:
    Re: externalities, I remember awful electronics sweatshops in LA, and huge yellow billowing clouds of smog back in the early 80′s. I’m kinda glad we outsourced that problem to China’s cities, to be frank.

    You should have check out wind patterns on Earth before you made this statement.

  14. Desider says:

    @emptywheel: 1) look at the BLS definition for analysts and tell me I’m way off: http://www.bls.gov/oco/ocos287.htm

    2) If HP adds marketing jobs and they don’t show up in net jobs lost to offshoring, then the figures are incomplete.

    3) Whether $1 million goes into jobs or exec compensation, it’s not China’s fault or an inherent fault of offshoring. It’s that we let businesses write our laws, don’t tax properly, don’t have training & mobility programs.

    4) If I live in Vegas, I’m not going to smell Irvine’s fumes either. I don’t have to deal with Detroit rust belt issues either. Mitigating LA’s waste was only one issue – LA couldn’t scale production like that – it consolidated in China. Which is where the next mitigation is taking place, and the Chinese seem to be taking it more seriously than Republican-plagued U.S.of A. thanks, but I’ll take your branding of “immoral” under consideration. Meh. Note when I started looking into all this, China had a huge Pearl Delta pollution cleanup program. When was the last time something serious got started in the US?

    Buckminster Fuller dealt with all this years ago – poisons and such move around the world, get dealt with in different ways, technology evolves frequently to deal with it. Fortunately China has a chance to develop technology to deal with its pollution, though the timescales are an issue. Stuff that gets dumped on Africa is just toxic stew.

    Regarding “wind patters on Earth”, whatever the wind in China, it’s not gonna make my eyes water 20 miles north in San Fernando pass.

  15. orionATL says:

    these are some really eye-opening numbers.

    thanks for digging into this, ew.

    from a “national accounts” perspective, a large predominance of imports over exports can affect our gnp. an imports imbalance must be made up domestically by the consumer, business, or govt sectors of the economy.

    if consumer and business spending can’t contribute to rectifying the imbalance, then govt spending must, else gnp falls.

    see this dean baker essay at fdl:

    http://my.firedoglake.com/deanbaker/2011/09/12/another-lesson-on-national-income-accounting-for-robert-samuelson/

  16. Desider says:

    @MadDog: The Chinese already have their housing bubbles. Their banks are a mess. Their investment in infrastructure is often political and not economically viable. That’s not completely doom-and-gloom, but the Wise Chinese is probably not a stereotype to bank on.

  17. emptywheel says:

    @Desider: Um. My mom was a computer systems analyst. I’m familiar with the type.

    They’re different jobs. One is about setting up stuff–hardware and software to accomplish a goal–and another is about writing code. And while you used to be able to move from one to another, specialization is going to make that a lot more difficult.

    And actually, yes, the $100 to salary is about outsourcing. OUtsourcing is about competing on cost but not long term viability. It is akin to the culture that says you reward CEOs on quarterly performance but not on decade long performance and not on building a company rather than buyers.

  18. Desider says:

    @emptywheel: Uh, Apple gets its $100 parts discount but competes on quality and innovation. Savings likely go to investors rather than consumer or executives.

    There are more ways to skin a cat. Cost savings can be just one part of an overall strategy. Outsourcing unessential tasks to people who can perform them cheaper can be quite viable. That’s part of HP’s business model, and many people seem quite happy with it.

    Re: programmer vs. analyst, there is also hybrid programming analyst activity in the market and other variations, and in general the analyst job pays better. So good to trade programmer jobs for analyst jobs long-run, no?

  19. chetnolian says:

    This whole thread sounds like Britain 20 years ago. Then we were concerned about exporting high tech jobs to the US, and I do mean in semiconductors. While we are in a market driven society, and as the whole world is now I don’t expect to see the end of it, work will follow cost and cost will be lower where folks earn less. In due course it’ll move to Africa, probably quite soon.

  20. Sojourner says:

    @joberly: Wish you the best in all of what you have to face!

    Just to add to your experience, I was astounded a few years back to have some x-rays sent to India for review! Another form of outsourcing! I would have felt a bit better knowing a qualified radiologist was looking at them.

  21. Sojourner says:

    @Desider: Some of your premise in all this is that there are cost savings in outsourcing to foreign lands. In terms of wages per hour, maybe. When you add in the increased difficulties in communications, the projects that get delayed or slowed down, and the numbers of re-do’s that are requried, no… But, I have to ask how you define an “unessential” task. In the IT world, every task is essential — and so is communication. As an IT project manager, I have seen the issues.

    Trading programmer jobs for analyst jobs? Personally, I do not believe that there should be any trading at all…

  22. Desider says:

    @Sojourner: There’s no free lunch with offshoring. If you can’t control the remote communication, you lose. There are companies that certainly manage their offshored crews well.

    One guy told me that cost wasn’t the issue – he needed to know he could get many more people quickly so he could bid on new projects.

    “Unessential IT” – how about all the backoffice stuff that’s already been offshored to Ireland and elsewhere?

    If you’re in the flower business, is IT “essential”? It could be, but for many companies, outsourced can be a better solution. Offshored is not the only version of that. Will we be angry at low tax, non-union states take outsourced programming work from others?

  23. Desider says:

    @Desider: Also, prices of offshored work is going up. Many companies have on-shored previous work. However, that doesn’t mean it doesn’t work. Just that the dynamics and economics change, YMMV.

  24. Don Bacon says:

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  25. MadDog says:

    @Desider:

    “…Outsourcing unessential tasks to people who can perform them cheaper can be quite viable. That’s part of HP’s business model, and many people seem quite happy with it…”

    Thus speaks a Mammon First worshipper. I’m sure the thousands of US employees who are going to be layed off by HP will be “quite happy with it”…or not.

    But hell, they’re “unessential”.

  26. MadDog says:

    Totally OT, but Attorney General Holder made a speech in Brussels today that makes any US civil libertarian want to puke. A sample:

    Attorney General Eric Holder Delivers Remarks to the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs

    …And in discussing this topic, I feel it’s important to note that – in a number of significant contexts, and contrary to the popular perception of many within the EU – privacy rules in the United States are stricter than those within the EU. For instance, in the critical context of securing the interception of a telephone or email account during a criminal investigation, the U.S. has among the most – if not the most – stringent requirements in the world. Similar levels of scrutiny – accompanied by equally robust protections – are applied in the United States to other forms of personal information, including the results of DNA testing, health records, financial records, and tax information. Moreover, as implemented, our privacy laws provide comparable protection to all people…”

  27. emptywheel says:

    @mzchief: I think it’s an attempt to split the baby. They can’t afford to miss the Chinese market. The US won’t make a trade complaint on this (and in this particular case it’d be problematic in any case since USG is still an owner of GM), but they also won’t turn over the Volt to China.

    So SAIC and they will develop one. Expect to see some really hot Buick-branded elective vehicles in about 3 years, possibly built in China.

  28. MadDog says:

    And speaking of losing technology things to China, consider today’s unveiling of an opinion from the DOJ’s Office of Legal Counsel:

    Unconstitutional Restrictions on Activities of the Office of Science and Technology Policy in Section 1340(a) of the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (13 page PDF)

    …Section 1340(a) purports to prevent OSTP from using appropriated funds “to develop, design, plan, promulgate, implement, or execute a bilateral policy, program, order, or contract of any kind to participate, collaborate, or coordinate bilaterally in any way with China or any Chinese-owned company.” In our view, section 1340(a) is unconstitutional as applied to certain activities undertaken pursuant to the President’s constitutional authority to conduct the foreign relations of the United States…”

  29. jerryy says:

    That technical expertise leaving is not limited to ‘silicon’ tech, but tech in general. GM (whom is returning to profitability after being bailed out) just opened a state of the art factory in Thailand:

    http://powertrain.automotive-business-review.com/news/gm-opens-new-diesel-engine-plant-in-rayong-thailand-120911

    If you look closely into the recent reports about the US being a net exporter of solar tech products to China, you will find that we are shipping solar panel factories over there and buying back completed solar cell assemblies — factories cost more, but in a few years they will have all they need.

    Perhaps Apple’s efforts at pulling back from China and Korea to Japan and Brazil will lead them to looking at the US. Certainly there is a lot of tech skilled labor building up here ( the folks Bill Gates ignores so that he can go before Congress and plead for more H1B visa permits to then import more low wage workers to depress tech wage demands ).

  30. MadDog says:

    And more OT – Via the DOJ’s Inspector General:

    Audit of Department of Justice Conference Planning and Food and Beverage Costs, Audit Report 11-43, September 2011 (148 page PDF)

    …The audit found that DOJ had few internal controls to limit the expense of conference planning and food and beverage costs at DOJ conferences. We identified several conference expenditures that were allowable but appeared to be extravagant. For example, one conference had a luncheon for 120 attendees that cost $53 per person, and another conference had a $60,000 reception that included platters of Swedish meatballs at a cost of nearly $5 per meatball…”

    $5 per meatball. I can only imagine how scrumptious they must have been.

  31. MadDog says:

    @MadDog: Another few tidbits from that DOJ IG report:

    “Drug Enforcement Administration International Drug Enforcement Conference
    Istanbul, Turkey
    July 8 – 10, 2008
    Total Cost: $1,181,902

    Executive Office for Immigration Review
    Legal and Interpreters Training Conference
    Washington, D.C.
    Aug. 3 – 7, 2009
    Total Cost: $688,904

    OJP, Office for Victims of Crime
    11th National Indian Nations Conference
    Palm Springs, CA
    Dec. 11 – 13, 2008
    Total Cost: $583,392…”

  32. sojourner says:

    @Desider: I would just like to understand how “offshoring” benefits the United States. Personally, in terms of the “bottom line,” many companies are fooled into believing (such as with #28 above) that there is some great financial benefit. I just got off a project where the client undertook to “offshore” certain things in the hope of saving money. They got billed at US rates, and still had to do the work over again.

    I ask again — what is wrong with keeping the work, and the jobs, in the US?

  33. MadDog says:

    Back on topic.

    Back in the day when I was making formal product line presentations as a Product Manager to the Chairman and the board of a international computer company, I frequently encountered and worked with many folks who scored high on IQ tests.

    These were often the most brightest of folks in their areas of expertise, but just as often, their brilliance was of a narrow nature.

    Whether it was the high finance interpretation of the future value of the dollar versus the yen, or high technology interpretation of the automation possibilities and reduced labor costs in surface mount technology, many of these “brilliant” acknowledged experts were only “brilliant” in the most narrow sense.

    And that brings to fore the moral of both my story and the lessons I learned.

    “Penny wise and pound foolish” is only a cliché because it is so commonplace. The general US business support for “outsourcing” has not been a decision made with the broad understanding of its consequences, but instead, when its “brilliant” experts have chimed in, it has been made with the “brilliant” narrowness of “Penny wise and pound foolish” expertise.

    More often, outsourcing decisions have been made by even lesser individuals who can claim no particular expertise, but are rather merely following the herd.

  34. P J Evans says:

    @jo6pac:
    The smog got fixed (mostly) by better air quality rules, not by sending the jobs away. And even in 1980 the air was a lot better than it was in the mid-60s.

    The problem is that the high-tech jobs like programming moved to India in the 90s, and they aren’t coming back soon. Neither are a lot of other jobs. Unless you can convince Congress that it’s a matter of national security, they don’t care.

  35. orionATL says:

    OT

    digby has this post on the ron suskind book – the part where suskin says the whitehouse workplace was hostile to women.

    digby begins by giving jonathen alter his time at the mic to counter suskind’s reporting.

    the meat of the post, however, is in comments by usc berkeley economist brad delong, a colleague of christine romer, and one of the most engaging writers in the weblog world.

    take a look here:

    http://digbysblog.blogspot.com/2011/09/he-sure-was-lot-more-generous-with-me.html

  36. Desider says:

    @MadDog: I think you miss the point. People outsource their data centers to HP, in-country. (Outsource not same as offshore).

    But yes, companies lay off more people than HP adds to do the same job. That’s part of efficiency. Only way out is to grow other business.

  37. Desider says:

    @sojourner: There’s nothing wrong with keeping work in the US.

    People have to understand the real costs and risks of offshoring. There are some advantages and some real disasters.

    It was hyped after the dotcom bust, but finding a company that will deliver is non-trivial. My impression is that people are happier with Chinese manufacturing than they are with offshoring programming to India, but only a gut feel. (likely easier to control manufacturing output than programming, as one big issue)

  38. MadDog says:

    @Desider:

    “I think you miss the point. People outsource their data centers to HP, in-country. (Outsource not same as offshore)…”

    Nonsense! Don’t attribute your failure to communicate your point to anyone but yourself.

    Nowhere in your original comment can anyone find any indication that you were writing only about domestic outsourcing to HP.

    Just because you had the thought in your head doesn’t give you a pass if you don’t actually write it.

    There are smart people here, but no one I know claims to read minds.

  39. MadDog says:

    @Desider: Ooohhh…guess that hit its mark. Right back at you!

    “…HP is in the outsourcing business, not offshoring. Look it up…”

    Advice it seems you’ve never taken:

    Intel, HP chiefs praise offshore outsourcing

    The CEOs of two technology giants on Tuesday issued an unapologetic defense of offshore outsourcing, saying that their firms need the talent that lies outside the U.S. and calling for increased investment in areas that will keep American workers competitive…”

    And I won’t call you a dick. I generally don’t state the obvious.

  40. Desider says:

    @MadDog: Gee, you know nothing and are proud of it. Of course HP uses offshoring. But their prime business is providing localized outsourced data services for companies that need data center support. Again, look it up. Don’t be lazy – first Google hit might be a porker.

  41. Desider says:

    @MadDog: What facts? That one of the world’s largest companies has outsourcing as a component of its business? Gee, whodathunkit?

    All your diatribe started with that I didn’t predict you’d confuse offshoring with outsourcing. Oh gee, sorry I didn’t hold your hand through the maze.

  42. MadDog says:

    @Desider:

    “What facts? That one of the world’s largest companies has outsourcing as a component of its business? Gee, whodathunkit?”

    We all appreciate commenters who get it wrong and refuse to admit it. Even when the former head of HP admitted to offshoring, you just can’t admit that fact.

    Have you ever tried calling HP/Compaq Customer Support? Guess what? It ain’t based in the US, and hasn’t been for years.

    Instead, you blithely try to change the topic back to outsourcing.

    As for being a “know nothing and are proud of it”, I’ll let the other commenters here speak to that.

    Just FYI, I’ve been commenting on EW’s blogs for years (here, at FDL, at TNH), and you, you’ve just recently showed up. I’m not at all impressed.

  43. Desider says:

    @MadDog: Duh, Customer Support is a call center, not a programming hub. It likely doesn’t even count as a tech job – it’s 1st tier support – “have you pressed the Any Key?”

    HP is also a global company. When they walk into ING bank in Amsterdam and say, “we want to handle all your data services”, they’re not going to get agreement to ship it all to India – they better have some local data centers near Amsterdam to keep the client reassured. (plus network performance)

    But like all sensible companies, they will see what they can offshore to India at reasonable rates with guaranteed performance – including some software development but not all. The big companies have the resources to put management on the ground in India to make sure they get delivery. Small SME’s don’t, so doing anything with India is much more risky.

    The article you quote is from 2003, at the height of the “offshoring” frenzied debate. Many companies tried at that time, and quite a few pulled back their effort later.

    As far as programming to China, no one trusts the Chinese not to steal any ideas, so I don’t think that business will take off. Even manufacturing from diapers to phones is risky – no brand Nokia phones that fall off the truck.

    So yes, a quote from HP HR saying offshoring exists is pretty worthless as a response.

  44. Desider says:

    @John Casper: Please put scandals in relationship with other issues.

    During the Great Leap Forward millions of Chinese died from starvation. Poor infrastructure and natural calamities have wiped out millions more. Extreme poverty, children working the field all day, etc. are part of China’s history that has improved greatly (despite Mao’s mad push for overpopulation). The slavery scandal mentioned certainly existed more in 1910 as much as 2010.

    91 cases of child labor found in 120 factories is an increase, but not a calamity like millions of dead. In desperate countries, 12-14 year olds working is not a horrible thing. However China is past desperate now, so child labor laws can apply.

    Couldn’t read the other article on safety, but obviously we can help China by requiring minimum safety and other worker protections.

    Still, this discussion started on the worry that these other countries are taking our jobs, and part of it turns to poor worker conditions. Well the 2nd part is worse if we shut down offshoring – there will be many fewer jobs and no western influence with somewhat better standards.

    Offshoring brings value to both sides, but it’s not a free lunch, and its cost & human effectiveness is inconsistent.

    And I still think the loss of US jobs is more attributed to the way the US taxes companies and hands out money to banks & Wall Street, not to offshoring per se.

    Otherwise, our government would have enough to guarantee government jobs, a safety net for the unemployed, and pointed assistance & stimulus to help new business create jobs (rather than wishful tax cuts)

  45. MadDog says:

    @Desider:

    “…HP is also a global company. When they walk into ING bank in Amsterdam and say, “we want to handle all your data services”, they’re not going to get agreement to ship it all to India – they better have some local data centers near Amsterdam to keep the client reassured…

    [snip]

    …So yes, a quote from HP HR saying offshoring exists is pretty worthless as a response.”

    BS! I can assure you from my own personal experience with a Forture 50 company that HP/Compaq does indeed sell offshoring of IT services (including Customer Service call centers). I’ve personally been present when they’ve explicitly made this very pitch.

    Note: I’ve been doing IT work for over 30 years. I’ve worked in IT at and with the biggest global companies in the world. Citibank, AT&T, Boeing, Lockheed, 3M, and many more.

    I’ve been a Systems Analyst, a Supervisor, a Manager, a Product Manager, a Director, and even yes, a Vice President of IT stuff.

    So again, you simply cannot admit the fact (and even try to denigrate it) that HP does sell offshoring services, even when HP itself admits it publicly.

    It seems in your world, facts are a tiresome thing.

    Don’t bother to respond any more since you’ve entirely used up any credibility I’d give to even a total stranger.

  46. Desider says:

    @MadDog: Blah blah blah.

    I said “they’re not going to get agreement to ship it *ALL* to India”

    I explained that a Call Centre isn’t at heart about tech jobs, which was the point of this thread – call centers are phone banks with people reading scripts.

    I said HP sells offshore services as *PART* of what it offers, but that companies often want to see outsource data centers *NEARBY*.

    I’m happy you’ve had a great IT career, and that proof-reading isn’t part of your duties.

    I’m sure you’ll manage to read something else irrelevant, misleading or erroneous in what I’ve written.

  47. Desider says:

    @MadDog: To quote myself again: “But like all sensible companies, they [HP] will see what they can offshore to India at reasonable rates with guaranteed performance – including some software development but not all. ”

    Now get busy – I’m sure there’s something more for you to mis-parse.

  48. MadDog says:

    @Desider: You’ve taken reading (and writing) comprehension to a new low.

    Your own statement:

    “Fuck off. HP is in the outsourcing business, not offshoring. Look it up. Don’t be a dick.”

    (My Bold)

    And now another of your very own statements with this:

    “I said HP sells offshore services as *PART* of what it offers…”

    (My Bold Again>

    Your very own first statement contradicts your very own second statement, and all of this in a single blog thread.

    Every single time I catch you in a falsity or a misrepresentation of fact, you try to weasel out but it never works because it’s all here for everyone to see.

    And as always, you try to pass on your own failings as someone else’s.

    You get hoisted with your own pétard every single time.

  49. Desider says:

    @MadDog: You’re anal about little stuff and miss the actual picture.

    HP’s big play is not “send all your work to India/China for cheap”. It’s about “we can handle all your data, save you money, with better guarantees”. That is an outsourcing play.

    While they use offshoring facilities, that is not the dream they’re selling. Since they’re worldwide, of course they’ll provide Thai facilities in Thailand and China facilities in China. But they have a large European presence, for example, that’s not going away.

    But anyway, go praise your past IT life some more and I’ll get back to work.

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