Mike Ault's thoughts on various topics, Oracle related and not. Note: I reserve the right to delete comments that are not contributing to the overall theme of the BLOG or are insulting or demeaning to anyone. The posts on this blog are provided “as is” with no warranties and confer no rights. The opinions expressed on this site are mine and mine alone, and do not necessarily represent those of my employer.

Tuesday, March 10, 2009

Outsource This!

I just watched President Obama’s speech on the educational reforms that he proposes. As laudable as his proposed fixes are, I mean after all, who isn’t for tougher standards for graduates, more pay for good teachers and accountability at all levels, I feel perhaps he has missed the boat in a key area.

The New York Times recently published an article stating that the college graduate has seen a bigger decline in employment than just about any other sector. Don’t get me wrong, a college graduate still gets better pay and benefits than a non-college graduate, but just getting a degree will not guarantee you the American dream any longer.

The key area that President Obama has neglected is that American college graduates expect to receive wages in excess of $60K per year. Unfortunately foreign graduates who still reside overseas are usually pleased to receive the equivalent of a third of this amount or less, especially in the Asian countries and in Latin America. This means that by outsourcing a company can get 3 times the number of employees and hopefully three times the productivity. This isn’t always the case but that is the logic used to justify sending jobs overseas.

What many companies are finding however is that those budget employees come with their own issues. For example, a programmer who has never experienced a free market economy may not understand all the intricacies of accounting in such a system. Of course I probably needn’t mention the various cultural and language difficulties that are also experienced with outsourcing.

I am afraid that many of the stimulus jobs that seem to be offered from the President’s plans seem to be short term blue collar type jobs that won’t do much to help the college graduate with advanced degrees. If you work outside of the computer industry, for example, for two years as a heavy machinery operator on a construction job, you will find your computer science degree probably isn’t worth much anymore.

Soon the only way to get a job will be to move out of the USA and go to a country where the cost of living is in line with what the companies who outsource are willing to pay employees, but don’t look for benefits!


Ben Prusinski said...


I lost my job recently and see the off shore work going to these places in Asia, Latin America (Brazil) and India at millions of jobs per year, never to return. Sun and IBM are sending millions to these countries and our wonderful corrupt politicians are selling Americans out to greed.

Zaffer Khan said...

Just a thought!!

I think America should do what India has been doing lately... "Quality Education costs are pretty much affordable".

Majority of the Families of the cities take the responsibility and make it a must to educate their children to survive in the competitive market.
Also, the Indian Govt. has been working aggressively in providing quality education to children from rural areas, all free of cost.

And, so a company has lots of resources to choose from in the market (varying from a Top Class Post-Graduate to an Average Class Graduate)

I think this should work for Americans too, so as to retain the jobs in America.