Outsourced Jobs Are No Longer Cheap, So They're Being Automated • Hacker News Board

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#11

Post by tluyben2 » Thu, Oct 09, 2014, 4:35 AM UTC

bruceb wrote: post #9

Cites recent layoffs but has no real stats on the decline of outsourcing, near shoring, etc. Weak. Part of the problem with India is lack of standards. There are people who are good at programming in both the US and India and people who are bad at it. The problem is in the US most of the bad ones don't end up getting a CS degree where in India they do. This means there are a lot of people in India who have a little b…

To add to this; a lot of companies in India just gather as many people as they can with a CS degree in a building (often 1000s) and hire them out in 'teams' to western companies. This is a valid (currently) business plan which makes them a lot of money. It also gives outsourcing a really bad name, but that does not seem to deter companies from hiring these kind of, let's call them what they are, sweatshops. The idea is definitely appealing; you hire educated women and men, usually they are monitored (often by camera's!) to make sure they site and work 8 hours / day, 5-6 days / week and they have the skills you need. Not happy? You get another person right away! You can expand or shrink your team(s) at any time.

That they are treated like robots sitting in long rows of far too little space and that they are not allowed to get up besides for lunch and tea at set times is not interesting to most; that this kind of environment (not even looking at if they are good at their jobs or not; some are, some are not like you say) is destroying any chance of getting quality anyway is lost on most people who hire. This market is growing as it does sound incredibly attractive on paper. The prices are also still a lot (for programmers you pay around 20-40% of what you would pay in the west, it used to be 5-10%) lower than the same role (on paper) in 'the west'.

I hear some companies actually get work done this way and are very happy with it, growing continuously without worrying about who does the tech; they have 100s of companies to pick from and 100-1000s of employees in these companies. How they manage that, I have no clue, but I do hear a lot of my Indian friends who try to make something 'west' quality in India complain about these popping up a lot and a lot young guys dream of making these, in essence no-risk at the moment, 'brain work' farms.

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#12

Post by beedogs » Thu, Oct 09, 2014, 4:45 AM UTC

"What does it mean for the economies of these up-and-coming world powers? Well, probably the same thing that it means for everyone else: The automators will continue to get very, very rich, while the automated will have to find something else to do."

Or, you know, basic income. Why is the answer to "there are no jobs anymore" always "well, I guess you can starve, then"?

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#13

Post by tluyben2 » Thu, Oct 09, 2014, 4:48 AM UTC

ilaksh wrote: post #3

I know this is a tough sell but I am going to say it anyway. Automation effects every single person and every single job. For example, if your job is writing custom software, it becomes progressively harder to find problems that don't already have open source solutions. Or look at how component marketplaces and open source components or modules increases software reuse. There is not an infinite capacity for software…

Currently this is only working to some extent; there is no sign of software development demand going down because of open source or saturation. It's going up, and fast. I would guess the reason for that is that we don't have any way of truly composing those open (or closed; it doesn't matter for your example; closed source works in the same way; if you could buy it you would) source solutions to do something a company needs. You have to find them, test them, hook them together, test them a lot more, deploy them, test them a lot more and then change them over time. Most companies fail at finding them (and write them themselves); if they do, the first testing is done badly, so after hooking them up the solution won't work as expected etc etc. There simply is no robust way of composing 'software' easily without actually blowing your budget (a few times over) to see if the solution(s) fits.

Intuitively I can see that, feature wise, SugarCRM, Solr, Hadoop, HBase, Postres and OpenERP would be a fit for your company if I could integrate them in a certain way; Google gives you enough clues for people who did this (years ago), so how hard can it be? Hard enough to spend massive amounts of money and then still not even be slightly happy about it. Happy meaning that your 1000s of employees can use it and your company runs on it as you, as CEO, envisioned. Is it more or less costly than writing only what you actually need from scratch? No idea, no-one is going to try that; you try SAP/Oracle/MS or this kind of thing and that's it.

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#14

Post by yummyfajitas » Thu, Oct 09, 2014, 4:52 AM UTC

gboudrias wrote: post #4

> The automators will continue to get very, very rich, while the automated will have to find something else to do. Part of me thinks this will lead to make much more apparent the paradox of capitalism: Those with the most money can... make the most money. Over time this means it all gets funneled into just a few families' pockets, until they own everything (which is silly and most likely would not be put up with afte…

Over time this means it all gets funneled into just a few families' pockets, until they own everything...

Yes, this is a popular theory, but it doesn't appear to be happening. To quote Larry Summers:

> the Forbes 400 list also provides only limited support for Piketty’s ideas that fortunes are patiently accumulated through reinvestment. When Forbes compared its list of the wealthiest Americans in 1982 and 2012, it found that less than one tenth of the 1982 list was still on the list in 2012, despite the fact that a significant majority of members of the 1982 list would have qualified for the 2012 list if they had accumulated wealth at a real rate of even 4 percent a year.

http://www.democracyjournal.org/33/the-inequality-puzzle.php...

For comparison, I'm personally achieving well over 4% returns by trading my own account. Those with the most money can't possibly do the same thing (my strategies won't scale).

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#15

Post by QuantumChaos » Thu, Oct 09, 2014, 4:56 AM UTC

msandford wrote: post #6

gboudrias wrote: post #4

> The automators will continue to get very, very rich, while the automated will have to find something else to do. Part of me thinks this will lead to make much more apparent the paradox of capitalism: Those with the most money can... make the most money. Over time this means it all gets funneled into just a few families' pockets, until they own everything (which is silly and most likely would not be put up with afte…

A huge part of the problem here is the low, low interest rate environment we're in. Low interest rates make expensive machines cheaper than humans. High interest rates make humans cheaper than machines. (For a range of values of cheaper) Being able to afford a $300k house on $50k/year is great until you don't make the $50k/year anymore because you've been automated out of a job. In the past people with a lot of money…

This is nonsense. Various funds available to ordinary people, including pension funds, do invest in the hedge funds and private equity funds. If anyone were actively buying businesses and replacing people with capital equipment, it would be these groups.

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#16

Post by QuantumChaos » Thu, Oct 09, 2014, 5:00 AM UTC

tluyben2 wrote: post #11

bruceb wrote: post #9

Cites recent layoffs but has no real stats on the decline of outsourcing, near shoring, etc. Weak. Part of the problem with India is lack of standards. There are people who are good at programming in both the US and India and people who are bad at it. The problem is in the US most of the bad ones don't end up getting a CS degree where in India they do. This means there are a lot of people in India who have a little b…

To add to this; a lot of companies in India just gather as many people as they can with a CS degree in a building (often 1000s) and hire them out in 'teams' to western companies. This is a valid (currently) business plan which makes them a lot of money. It also gives outsourcing a really bad name, but that does not seem to deter companies from hiring these kind of, let's call them what they are, sweatshops. The idea…

I don't really see the problem here. Indians are willing to work under these conditions, which honestly don't sound worse than the US. It sounds like even though they might shrink/grow teams at will, because the building has many teams, the risk for the individual is low. And you said that companies are happy with the work these teams do. So what is the problem?

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#17

Post by brandonmenc » Thu, Oct 09, 2014, 5:03 AM UTC

ilaksh wrote: post #3

I know this is a tough sell but I am going to say it anyway. Automation effects every single person and every single job. For example, if your job is writing custom software, it becomes progressively harder to find problems that don't already have open source solutions. Or look at how component marketplaces and open source components or modules increases software reuse. There is not an infinite capacity for software…

> For example, if your job is writing custom software, it becomes progressively harder to find problems that don't already have open source solutions.

There's a lot of work to be done writing glue code.

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#18

Post by noonespecial » Thu, Oct 09, 2014, 5:08 AM UTC

beedogs wrote: post #12

"What does it mean for the economies of these up-and-coming world powers? Well, probably the same thing that it means for everyone else: The automators will continue to get very, very rich, while the automated will have to find something else to do." Or, you know, basic income. Why is the answer to "there are no jobs anymore" always "well, I guess you can starve, then"?

Its almost like a signaling error. A farmer would gladly grow corn in exchange for a tractor and a mechanic would gladly supply that tractor in exchange for corn, but the corn that theoretically could be factory farmed by automation would be cheaper than the farmer can grown and the robot built tractor would theoretically be cheaper than the mechanic can build so neither do anything. Both farmer and mechanic starve and then the automated systems make neither corn nor tractor while the capital owner wonders why no one is buying.

The whole system would be made richer by injecting the small signal a basic income would provide into the negative feedback loop thats keeping it damped.

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#19

Post by yummyfajitas » Thu, Oct 09, 2014, 5:08 AM UTC

tluyben2 wrote: post #11

bruceb wrote: post #9

Cites recent layoffs but has no real stats on the decline of outsourcing, near shoring, etc. Weak. Part of the problem with India is lack of standards. There are people who are good at programming in both the US and India and people who are bad at it. The problem is in the US most of the bad ones don't end up getting a CS degree where in India they do. This means there are a lot of people in India who have a little b…

To add to this; a lot of companies in India just gather as many people as they can with a CS degree in a building (often 1000s) and hire them out in 'teams' to western companies. This is a valid (currently) business plan which makes them a lot of money. It also gives outsourcing a really bad name, but that does not seem to deter companies from hiring these kind of, let's call them what they are, sweatshops. The idea…

Yes - this is a common model. But those in the west should also recognize another opportunity: given a couple of months, you can also recruit a great team rather than simply a large one. You just need to do it a little differently than the bodyshops.

There are a lot of good workers stuck in the desk farms described above and they'd love to work for you. The recipe for hiring them:

1. Don't be a dick, your outsourced team here is just as good and deserves the same respect as a US based tech team. 2. Really, see (1). Treat your outsourced team with the same respect you'd give a US based team. Don't be a PHB or a know it all American. 3. Pay above market. Instead of paying $chipotle_wages, pay 2x$chipotle_wages.

I recently helped a startup recruit over here. It was a great team - I'd be very happy to work with such a team in NY or anywhere else. It took about 1 month to recruit them (good luck trying that in the west). Unfortunately they all quit 2 weeks after I stopped being involved - apparently there were failures with steps (1) and (2).

Re: Outsourced Jobs Are No Longer Cheap, So They're Being Automated

#20

Post by zenogais » Thu, Oct 09, 2014, 5:09 AM UTC

gboudrias wrote: post #4

> The automators will continue to get very, very rich, while the automated will have to find something else to do. Part of me thinks this will lead to make much more apparent the paradox of capitalism: Those with the most money can... make the most money. Over time this means it all gets funneled into just a few families' pockets, until they own everything (which is silly and most likely would not be put up with afte…

> Another part of me thinks that automation has been part of our society for a long time, and that taking it further only changes the kind of jobs everyone has, maybe even promoting equality by eliminating the more menial tasks (and therefore making every worker's skill and experience important, instead of them being just a replaceable cog).

This is the theory, but the realities of this promoting equality are really to be doubted. An increase in the supply of labour has two fairly predictable effects - it both lowers wages overall (more supply, less demand) and provides a pool of cheap workers should things pick up. When there are more unemployed there is also typically an increase in the intensity of work in the jobs that remain - people tend to work much harder for the same or less pay under the looming threat of unemployment. One prevailing myth is that the unemployed workers are simply retrained for new jobs created by automation, however even with government subsidized retraining this doesn't seem to work [1]. In reality automation seems to be a source of widespread immiseration beneficial to only a few.

[1]: http://www.manhattan-institute.org/html/ir_21.htm