IBM Explores Shift Of White-Collar Jobs Overseas

[Natalie Kopple]

http://www.nytimes.com/2003/07/22/technology/22JOBS.html?ex=1060142400&en=29afbe6e5f79e6c4&ei=5004&partner=UNTD
[ July 22, 2003: Message edited by: Natalie Kopple ]

[Billy Tsai]

that is just wrong man
those executives only think about themselves and how to earn more money they have no technology skills all they ever think about is how make themselve more rich.
if they ship the tech jobs overseas the quality of the technology will go down the quality of the softwares etc will all go down with softwares full of bugs.

[Arjun Shastry]

But they are doing it for years now,Microsoft has presence in India since 1987,SUN from 1986,Texas instruments since 1984.IBM was there since late 50s with exception of some years.Cost advantage is the the main thing in addition with global presence.As telecommunication beomes cheaper and effective , this will grow.
{
World has changed in the last 20 years.
}Bill Gates

[Mark Herschberg]

Originally posted by Billy Tsai:
those executives only think about themselves and how to earn more money

I fail to see how you draw that conclusion. I did not see anything in the article about compensation benefits for the executives for ofshoring jobs.
Now it would be fair to recognize basic business rules, which do imply:
- The have an obligation to their shareholders to lower costs and increase profits. As a shareholder, I approve.
- Because their competitors are doing this, they need to do so to stay competitive. Customers will benefit from lower costs of software. As a customer, I approve.
- Employees will also benefit. True some will be fired. But to simply keep every employee and act like nothing has changed is to bury your head in the sand. One day they will wake up and find the other companies have left them behind, and the company with all its employees will be in a much worse position. (If I were an IBM employee, as an employee willing to face competition, I approve.)
- It undoubtedly effects themselves. HR will play a big part in this. If more jobs are sent overseas, IBM will need less HR here in the US. Some of the "executioners" will also be on the chopping block.
- Indians and developers in other third world nations will clearly benefit from more jobs and more opportunities. If done right (which is a big if), it can provide a great boon to a developing nation.
Seems to me when you consider all the benefits to other people, it doesn't look to selfish.
--Mark

[Tim Holloway]

Originally posted by Mark Herschberg:

I fail to see how you draw that conclusion. I did not see anything in the article about compensation benefits for the executives for ofshoring jobs.

I do. In the ideal business enterprise, employees at every level are incentived to boost productivity and cut costs. E.g., given benefits.

Now it would be fair to recognize basic business rules, which do imply:
- The have an obligation to their shareholders to lower costs and increase profits. As a shareholder, I approve.
In theory, ditto for me. Fine print to follow

- Because their competitors are doing this, they need to do so to stay competitive. Customers will benefit from lower costs of software. As a customer, I approve.
I suppose I'd agree, as a customer. Although this leads to "stampede economics". As an investor, I'd rather that my product adds some sort of value so as to keep profit margins up.

- Employees will also benefit. True some will be fired. But to simply keep every employee and act like nothing has changed is to bury your head in the sand. One day they will wake up and find the other companies have left them behind, and the company with all its employees will be in a much worse position. (If I were an IBM employee, as an employee willing to face competition, I approve.)

I'd be hard put to see where "employees benefit". The closest I can come to rationalizing this is that if you're actually featherbedding. In any event, it's been quoted in the IT trade that the hardest job of an IT manager is not motivation - it's avoiding de-motivation. Us geeks tend to drive ourselves pretty hard without being threatened.

- It undoubtedly effects themselves. HR will play a big part in this. If more jobs are sent overseas, IBM will need less HR here in the US. Some of the "executioners" will also be on the chopping block.
I understand the CBS Evening news did a little piece on this bit of irony abut a week back.
- Indians and developers in other third world nations will clearly benefit from more jobs and more opportunities. If done right (which is a big if), it can provide a great boon to a developing nation.
Seems to me when you consider all the benefits to other people, it doesn't look to selfish.
--Mark

Frankly, I don't really care about "selfish". I figure that they'll have to live with the consequences. My major concern is that we're operating with a massive imbalance in the equation. If one offshore employee can work for 1 tenth of what a US worker can, the converse of that is that that offshore worker will have 1 tenth the buying power. In this sense, a company that offshores is like a company that belches out pollution. They're seeing a short-term gain but not acknowledging the long-term consequences.
As a nation, the US was able to unload a significant number of manufacturing jobs and enjoy significant (if short-lived) prosperity throughout much of the '90s. That was in large part because many of those displaced moved into the very fields we're in the process of getting rid of now. Unfortunately, no one's come up with a place for all these newly displaced people to go.
Let me speak from experience. In the 28 months since I lost my (reasonably) high-paying job, I've drastically curtailed my spending. I was set to buy a new car the month I got laid off. That was cancelled. My chimney began to come apart. I've got it cobbled together because I can't afford to pay a contractor to fix it properly. Major projects involving fixing up my patio, replacing worn carpeting, and other home maintenance are all on indefinite hold. My wife wants a formal dining-room table. She can't have it. Probably easily $15K yanked from the local economy right there (excluding the new car).
I don't rent/buy videos. Forget about the $3000 plasma display TV and DVD burner. I've even cut back computer book purchases to carefully-selected essentials.
I spend my unemployed hours weeding the lawn by hand since I can't pay a lawn service. I cancelled my newspaper subscription. Lately the appliances have all been breaking down. Mostly I cobble them back together or do without rather than buying new ones. The dishwasher was more than I could do without. For one thing, it costs more to wash by hand. As is often the case, you often can save more if you can afford to spend more. I didn't consider a GE unit to replace the broken one, though. GE is, after all, one of the biggest software offshorers around and it would have been an insult.
Then there's the lost tax revenue. My federal tax hit each year when fully employed would have covered the gross salary for an orderly in a VA hospital. Or, if you prefer, the salaries of 3 moderately-skilled Indian programmers. Someone else is going to have to cough up that cash unless you can convince Congress not to spend it (good luck!).
Of course, if it was just me, tough. I'm not even sure if the pain of repeating this scenario a million times or more all over the IT industry would be felt that much. But we're not the end of the line here. The true cost of offshoring won't be felt until every job which can be done cheaper overseas is being done overseas.
What happens when you suck all the buying power out of half the US population? What does it matter how much your company saves on costs if your product is still too expensive for the now-deflated incomes of American workers? Do you expect to make it up in purchases from the cheaper India workers? Don't count on it. Just like us, they'll be buying their goods from China, where it's less expensive.
There are some that say no problem - we'll just make the rest of the world our sweatshop (well, they say it more diplomatically) and concentrate on innovation. They seem to think that only Americans can innovate. Which is downright insulting to the rest of the world. What we have is an infrastructure and a capital base, and we're rather busy exporting large chunks of that infrastructure.
I'm not fool enough to think that we can build a wall around the country and pretend that the rest of the world doesn't exist. For one thing, we're already addicted to cheap imports for too many things. However, the reason that we can even have all these cheap imports is that walls that kept large parts of the world in a different price zone have all come down in a very short time. The long-term effect of this is, I think good, but a completely unchecked flood of jobs isn't really good for anyone - if the US economy goes south, then the US demand for offshore labor goes south with it.
We're all in this together, so we all need to find a solution. Whatever it is, it's probably going to hurt, but ignoring the issue will hurt a lot worse.

[shay Aluko]

Sorry Mark, you are VERY wrong and this is why:
you write:

- Because their competitors are doing this, they need to do so to stay competitive. Customers will benefit from lower costs of software. As a customer, I approve.

Why are competitors doing this?, mostly to improve profits and not neccesarily to provide lower cost software, so customers do not neccessarily benefit.Also on a macro level who are the customers you refer to anyway, you? , if your job has been outsourced and you are flipping burgers at $5/hour will you be able to afford this "cheaper software"?, i think not. And don't kid yourself, you are not immune, as long as you are earning a paycheck in the tech field your job can go to a "lower-cost country"
Companies should produce better products and not just arbitrage labor
as a customer i disaprove.
you write:

- Employees will also benefit. True some will be fired. But to simply keep every employee and act like nothing has changed is to bury your head in the sand. One day they will wake up and find the other companies have left them behind, and the company with all its employees will be in a much worse position. (If I were an IBM employee, as an employee willing to face competition, I approve.)

This is only possible if employees are able to compete in terms of quality since they obviously cannot compete on price. Consider this: quality is what it is , a qualitative measure, the only thing that matters to the bean-counters is price.As a matter of fact some companies engaged in offshoring are willing to "satisfice" that is they are willing take inferior quality if only to save a few dollars, since the financial mindset in the U.S does not extend beyond quarterly numbers and wall street stock price.
as an employee i disapprove
you write:

- The have an obligation to their shareholders to lower costs and increase profits. As a shareholder, I approve.

Cost as used above is an all-encompassing term and it should also include the obscene pay given to executives. Are the cost attributable to that being reduced ?, NO. An example is the enormous greed displayed by CEO of GE when he left GE. The obscene amounts he was paid was all over the news and he became a poster child for the reforms we need in America today. This is the same person that ruined thousands of careers with the six-sigma rubbish and forced rankings of employees. The issue is, if employees can be cut then there should be equity in the process and a sharp curtailment of executive pay.

as a shareholder i disaprove
you write:

- It undoubtedly effects themselves. HR will play a big part in this. If more jobs are sent overseas, IBM will need less HR here in the US. Some of the "executioners" will also be on the chopping block.

This sounds good in theory, what you find is that the HR people and executives somehow manage to save themselves and "escape the chopping block"

[Matt Cao]

Originally posted by Tim Holloway:

if the US economy goes south, then the US demand for offshore labor goes south with it.

Hi Tim,
As you forecasted, inbound shipments to the ports of LA and Long Beach fell 4.3% to 505,500 containers from 528,100 a year earlier, when shipments were unusually high. Exports fells 6.2% for the month of June as an excerpt taken from Bloomberg News.
From the logistic POV LA and Long Beach are the nation's largest seaports by cargo volume.
Regards,
MCao

[Matt Cao]

Originally posted by Billy Tsai:
they have no technology skills.

Hi Billy,
Don't be so sure. Some of the executives do have technical background. As I observed, they are whether silverspoon or very clever to navigate their careers into those positions.
Executives do have executive summaries to review whatever the technology seems to interest to them. They have ways to make you eat your words.
Regards,
MCao
[ July 22, 2003: Message edited by: Matt Cao ]

[Mark Herschberg]

Originally posted by Tim Holloway:

In this sense, a company that offshores is like a company that belches out pollution. They're seeing a short-term gain but not acknowledging the long-term consequences.

And much like pollution, it's a prisoner's dilema. Once company A cuts costs by offshoring, then company B has no choice but to do the same.
--Mark

[Svetlana Koshkina]

Hi guys maybe i oversimplifying but i still cannot understand how it works.
Say, i have huge hand in one industry with millions of employees. I see that overseas workers go cheaper, i fire all mine here and hire overthere. Get them to work, collect my product and bring it back to sell here. Unemployed people got impoverished, nobody bying my product, what i i gonna do next? Where is the point?
It would be nice if somebody worked and we were getting richer and lazier(unfair, unfair but still here is a point), but actually we are getting backstabbed: they are getting richer, more skillfull etc, we are getting heart attacks, loosing out skills and running out of money.
Where is it going? We only can become richer by working ourselves, right? If IBM won't use us here we'll never buy their product because we ain't have no money. Is it catch 22? Offshore companies can qualify to be traitors and non-patriotic. They undermine wealth of their own people. Education costs fortunes, many young people cannot pay off their student debts because they cannot find a job. This is extremly unfair.
It is just extortion. New fashion in health care: looking for mental disturbances among population.
They'd better read forums and see where it come from. One solid disturbance. And now lets talk about natural selectivity and the strongest wins rule. It's where it start to suck so much.

[Mark Herschberg]

Originally posted by shay Aluko:

Sorry Mark, you are VERY wrong and this is why:

You are making unrealistic implicit assumptions to support your arguments. They are not correct.

Originally posted by shay Aluko:

Why are competitors doing this?, mostly to improve profits and not neccesarily to provide lower cost software, so customers do not neccessarily benefit.

Learn your economic history. If there is a monopoly or cartel, then yes, they can safely cut costs to increase profits (I would still win if I were a shareholder). Mircosoft, for exmaple, could do this and we'd all still buy their OS (I'm talking about "we" in general, let's not start this religious war :-)
COnsider, say application servers. If IBM can cut the cost of WebSphere 50%, then can still proftiably sell it for 25% less. BEA will feel the price pressure and be forced to cut their prices. This is typical of any industry with highly liquidity among similar products (e.g. cars, computers, bikes, Nintendo/Sega/Sony). It only takes the first company of significant size to cut prices. History suggests that this will happen for J2EE servers, but no for the software Boeing using in its airplanes.

Originally posted by shay Aluko:

If your job has been outsourced and you are flipping burgers at $5/hour will you be able to afford this "cheaper software"? ...And don't kid yourself, you are not immune, as long as you are earning a paycheck in the tech field your job can go to a "lower-cost country

A J2EE server? Probably not, most burger flippers I kno use open source. :-p Seriously, I'm not fan of supply-side economics, but the benefits will trickle down. I am a believer in the free market, and in my own ability to compete. You can go flip burgers, I'm sticking with my white collar jobs and I will benefit.
I'm not kidding myself. I'm smart, I'm an asset and companies want to hire me. If this one outsources my whole division (I alone can't necessarily keep a division profitable), I'll find another company that can use me. Life isn't fair, some people will get the short of the stick. Those are the people who were in the wrong place at the wrong time. I believe change favors the prepared mind, and so, in my book, those folks didn't sufficently prepare.
I've said for years that if all you can do is write code, you're in trouble. I'm adjusting my career and skill set appropriately. if I'm right, then I should be fine and those who didn't see it coming will go the way of the dinasour. If I'm wrong, and I move to a path with no future, then I made a bad choice and will suffer the consequences. Darwinian economics.

Originally posted by shay Aluko:
This is only possible if employees are able to compete in terms of quality since they obviously cannot compete on price. Consider this: quality is what it is , a qualitative measure, the only thing that matters to the bean-counters is price.As a matter of fact some companies engaged in offshoring are willing to "satisfice" that is they are willing take inferior quality if only to save a few dollars, since the financial mindset in the U.S does not extend beyond quarterly numbers and wall street stock price.

So when you buy a Honda instead of a Mecredes are you really sacrificing quality? Of course not, you're buying the right product for your needs. It turns out, you don't need the extra "quality" in the more expensive car. They are not "satisficing" (I'm not quite sure what that means but am inferring it from context), but rather selecting the optimal cost-benefit for their dollar.
Over 20 years ago Philip Crosby wrote "Quality is Free." He showed the true cost of sacrificing quality (again, a Honda vs. a Mercedes is not a sacrifice, not bothering to test code is). If companies are truely that short sighted, they will lose out to the ones who see further ahead. The free market works, don't assume that short-sighted companies (monopolies aside) are magically protected. Sure, they do well in the short term, but utlimately the bubble bursts. Lucent, Enron, <pick a failed startup>.com etc all made short sighted decisions, ran with high stock prices, and then ultimately paid a price.
I will get a job because a smart company will recognize what I bring to the table. You may have read my posting here on wht I consider salary only a small portion of job compensation. A wise company will like-wise reocgnise cost-benefits far beyond the paystub. I am very competitive there. If you're not, you better learn to be,

Originally posted by shay Aluko:
Cost as used above is an all-encompassing term and it should also include the obscene pay given to executives. Are the cost attributable to that being reduced ?, NO. An example is the enormous greed displayed by CEO of GE when he left GE. The obscene amounts he was paid was all over the news and he became a poster child for the reforms we need in America today. This is the same person that ruined thousands of careers with the six-sigma rubbish and forced rankings of employees. The issue is, if employees can be cut then there should be equity in the process and a sharp curtailment of executive pay.

Yes, in principle, there should be. But if it was that important, then the shareholders would elect a board of directors who would cut pay. Shareholders haven't, the board isn't, and so it's not going to happen. We can blame our troubles on others, or we can take responsibility. If you own a company, you have a say (albeit indirectly) in the pay of the executives. if you don't own it, then it's not your business how they choose to spend their money. If you really think a company you own is making a bad decision, you can divest yourself of them and invest in a different company. If they truly are making bad decisions, everyone will abandon them and they will fail.

Originally posted by shay Aluko:
This sounds good in theory, what you find is that the HR people and executives somehow manage to save themselves and "escape the chopping block"

As for HR people, I don't see it. Whenever I see details on cuttings, HR gets the ax; in fact, they usually get it before engineers do. Beofre engineers are cut, they'll stop hiring, reduce benefits, and cut out employee development programs. All that directly reduces the need for HR.
As for executives, it depends on how you define it. Middle managers are often some of the first cut. Of course, those aren't really executives. You're right, the VPs don't get laid off. They claimed the ladder high enough to avoid the flood. Good for them. I hope to be in the position someday myself. I'd rather the company retains based on merrit, and I hope no matter what i will be worth retaining (whether it matters or not, but this is how things are and there's not enough outrage yet to change it. Is it fair? Of course not. If you don't like it, use your voting power to elect a board of directors who won't put up with that.
--Mark

[Mark Herschberg]

Originally posted by Svetlana Koshkina:
Hi guys maybe i oversimplifying but i still cannot understand how it works.
Say, i have huge hand in one industry with millions of employees. I see that overseas workers go cheaper, i fire all mine here and hire overthere. Get them to work, collect my product and bring it back to sell here. Unemployed people got impoverished, nobody bying my product, what i i gonna do next? Where is the point?

Well, if you fire, say 100M US workers, then yes, we'll lose a lot of buying power, and they can't sell back here.
Now imagine if you fire 100 workers, and hire overseas workers. To keep it simple we'll assume the total savings after all costs is 90%. 100 people out of 100-200M workers in the US will have zero impact on the ability to sell your product. Why wouldn't you do it?
Somewhere between 100 and 100M it starts having significant impact on the economy. As I noted above, its prisoners dilema. Its up to the government to throw on the breaks if it looks like we might run off a cliff.
Of course, this argument has assumes that the US is the key market. That is true today, but may not be true tomorrow.
Take Microsoft for example. They have saturated the US market. Most comapnies don't see much additional benefit to upgrading to the next version of MS Office. MS is focusing on developing nations who have growing software markets. Want to look at the sale of databases in South America? I'll bet the trend has been upwards. The rest of the world needs products, too. If the US can no longer efficently provide them, then those customers will turn elsewhere. US comapnies can provide them by turning to cheaper labor overseas. If enough of them buy, it won't matter that the US market does not. We're looking at global economic forces; the US is only one player.
--Mark

[shay Aluko]

Originally posted by Mark Herschberg:

A J2EE server? Probably not, most burger flippers I kno use open source. :-p Seriously, I'm not fan of supply-side economics, but the benefits will trickle down. I am a believer in the free market, and in my own ability to compete. You can go flip burgers, I'm sticking with my white collar jobs and I will benefit.
I'm not kidding myself. I'm smart, I'm an asset and companies want to hire me. If this one outsources my whole division (I alone can't necessarily keep a division profitable), I'll find another company that can use me. Life isn't fair, some people will get the short of the stick. Those are the people who were in the wrong place at the wrong time. I believe change favors the prepared mind, and so, in my book, those folks didn't sufficently prepare.
I've said for years that if all you can do is write code, you're in trouble. I'm adjusting my career and skill set appropriately. if I'm right, then I should be fine and those who didn't see it coming will go the way of the dinasour. If I'm wrong, and I move to a path with no future, then I made a bad choice and will suffer the consequences. Darwinian economics.
--Mark

No offence, but I think you are engaging in what may seem like an orgy self-delusion, "i am smart", what does that mean?
is there any objective measure of your smartness?,
and does your smartness make you a better hire than the thousands of other smart unemployed people?. Be thankful you have a job and you are not flipping burgers, think about it , it could realistically happen, i have seen a lot of people with such high opinions of how they are perceived
lose their jobs. Anyway my question is this, since you are so smart please can you educate us about what criteria you have considered before arriving at the conclusion that you are so smart that companies will be beating a path to your door to hire you?

[Thomas Mcfarrow]

This article references increased competition. This competition is from other U.S. companies. There are no other companies outside of the U.S. could even come close to competing with Microsoft, IBM, HP, Dell, Sun, etc. So what the government needs to do is level the playing field. There needs to be a bill passed so a company could only allow a small percentage of its work force to work outside the U.S (or something similar). Our economy depends on this.
I am not particularly fond of unions but if this trend continues CWA might be the solution.
-- DISGUSTED
[ July 22, 2003: Message edited by: Thomas Mcfarrow ]

[Mark Herschberg]

Originally posted by shay Aluko:

No offence, but I think you are engaging in what may seem like an orgy self-delusion, "i am smart", what does that mean?
is there any objective measure of your smartness?,

Yeah, standarized test scores, my college degress, admission into MENSA, etc. Those are fairly objective.

Originally posted by shay Aluko:

and does your smartness make you a better hire than the thousands of other smart unemployed people?

Does my smartness alone make me a better hire? Maybe, maybe not. But the sum total of my skills (which includes intelligence, personality, intuition, knowledge, etc) does make me a better hire. I know because I get jobs. If the other people were better, they would've gotten the job. Its a very objective, binary function. Occasionally people get lucky. The fact that I've had no trouble finding jobs I want during a down economy over the last few years suggests that its not just luck.
I'm not trying to tute my own ego here. I believe in a free market, let the best person win. If you and I compete for a job and you get it and I don't, good for you! Presumably the better candidate got it, and we're all better off for it. If I lose my job to someone in India, good for them. If a company got rid of my job, put it in India, and then lost money because they didn't see all the implications, too bad. The job market is one big competition, I look forward to competing against you.
While I appreciate your concern, don't worry about me, and my job prospects, I'll be fine.
--Mark

[Frank Silbermann]

Well, the U.N. and its supporters have long been complaining about world economic inequality and call for a new economic order. In other words, that it is unfair for poor Americans to be better off than poor Africans, poor Indians, or poor Chineese.
I'm not looking forward to that, but there it is.

[Billy Tsai]

I had two IBM hard disks died on me b4, each of them were filled with 40gb of files,
And I suffered serious lost
I bought a 40gb IBM Hdd first then after few months it just died for no reason when I turned on my computer but it was about 37gb full so I lost a lot of stuffs including my OS and lots info, but they replace one for me totally for free, and another few months passed one day I just turned on my computer and that hdd just died for no reason whatsoever, once again it was filled full of files about 38~39gb, those two hdds were both made in China.
Then they replaced a brand new one for me for free because the hdd is still under warranty and I just sold it straight away and bought a seagate hdd instead which was made in Singapore and it was even cheaper than the IBM hdd.
I have been using that seagate hdd since then and it still runs okay without any problems ever occurring.
this all happened about 1 and half year ago.
I vow never to use IBM's hdd and anything thats made in China.

[Svetlana Koshkina]

Originally posted by Mark Herschberg:

Now imagine if you fire 100 workers, and hire overseas workers. To keep it simple we'll assume the total savings after all costs is 90%. 100 people out of 100-200M workers in the US will have zero impact on the ability to sell your product. Why wouldn't you do it?
--Mark

Sure. Then take money and run somepalce warm with ocean and palms and a waiter in white pants with martini. Scuba diving's good too.
What there is to do for me in this world with such smarties like yourself on the roll ?

[Matt Cao]

Hi Billy,
What you experience is not a Chinese product are poor quality. I can tell it happens across the world. The problem is in quality control process, one company better than the others. If you purchase a defective IBM HDD, then it make more sense to try other brandname for in your case Gateway HDD made in Singapore.
Regards,
MCao

[Natalie Kopple]

Originally posted by Mark Herschberg
[B]Yeah, standarized test scores, my college degress, admission into MENSA, etc. Those are fairly objective.[/B]

I thought that you did not believe in tests/test scores at all. SCJP, SCWCD, ..., etc. carry no meaning as you have argued all the time.
It is a surprise that all the tests you took objectively measure your intelligence.
I also remember you admitted that it was hard for people to like you. Now, you are saying that you have a likable personality.
[ July 22, 2003: Message edited by: Natalie Kopple ]

[Svetlana Koshkina]

Originally posted by Matt Cao:
Hi Billy,
What you experience is not a Chinese product are poor quality. I can tell it happens across the world. MCao

Best quality of products that one can use all life long is in Japan.
Also quality depends on parts. If parts are bad nobody can assemble them properly.

[Matt Cao]

Hi,
Try to enter the Quality field. You will have your job for a long time. You will be amaze what kind of garbage parts are in your computer. The headache/challenge of engineer is making those garbages worked.
Japanese culture mold the people to produce quality; eventhough, they have their fair share of shoddy product before ISO concept. But if you just rely on the Made in Japan sticker, you will be surprise. Have you open up all the parts right into the IC chip? Most often you will find not all of components are made in Japan. That is where Japanese engineers found their competitive edges. American corporations are forcing their engineers into that path too. Chinese for in the position of American corporations supplier has to follow the same mentality or facing the consequence. Very soon Chinese will do your airplane parts and shuttle too. They have a lot of stake at hand. But I have to admit meeting with them over the quality issues aged me.
Regards,
MCao
[ July 22, 2003: Message edited by: Matt Cao ]

[Mark Herschberg]

Originally posted by Natalie Kopple:
I thought that you did not believe in tests/test scores at all. SCJP, SCWCD, ..., etc. carry no meaning as you have argued all the time.

Java certifications != standardized testing. That's like taking the statement "I don't like GM cars" and assuming "I don't like all automobiles." I do think other standardize tests, and even some certifications do have value, just not Java certs.

Originally posted by Natalie Kopple:

It is a surprise that all the tests you took objectively measure your intelligence.

I don't think they did. Studies abound talking about testing bias. I think they certianly do have rough accuracy. 100 people who score 1400-1600 are in general smarter then 100 people who score 600-800.
In any case, I feel confident in my abilities. I don't place much stock in those tests, but it's about the only widespread objective test I could offer. I didn't know what asked for for proof. Looking back, I should've just ignored the question. It's a moot point; I am what I am irregardless of what any test says.

Originally posted by Natalie Kopple:
[CODE]
I also remember you admitted that it was hard for people to like you. Now, you are saying that you have likable personality.

Um, I don't recall saying that. I think there may be a miscommunication. Can you cite the posting?
--Mark

[Tim Holloway]

I'm smart. I just happened to be supporting a departement where my skills were so critical that they wouldn't let me move anywhere else. Until they dumped the whole department in a recession-induced panic. Then, when I would have in times past gone to work as a consultant, I ran up against international bidders offering to do the same level of advanced J2EE work as myself to $20-25/hour.
Do the math. Rs. 1 lahk per year experience is about the going rate for Java skills in India. For those not conversant, 1 lakh is 100,000 and the exchange rate for Rupees is right around 46 rupees to the dollar. When someone can underbid you to that degree, it's just a matter of time before you find yourself in the unemployment line unless you can do something that can't be offshored or have a might incriminating set of negatives in your posession.
You may be the best TV builder in the US, But you won't find a job building TVs in the US. No matter how cheap you'll work or how skilled you are. That industry left years ago. The very last American TV builder was Zenith.
I destest the term "Darwinian Economics" on the principle that if Darwin had been talking about the same processes that business people think of when they use the term "survival of the fittest", you'b be unable to leave the house for fear of getting your knees ripped out by armor-plated, poison-dripping bunny rabbits with razor claws and 6-inch fangs, but there is a Darwinian term that covers what happens to a population that is stressed until it drops below sustainable levels.
Extinction.

[shay Aluko]

Originally posted by Tim Holloway:
I'm smart. I just happened to be supporting a departement where my skills were so critical that they wouldn't let me move anywhere else. Until they dumped the whole department in a recession-induced panic. Then, when I would have in times past gone to work as a consultant, I ran up against international bidders offering to do the same level of advanced J2EE work as myself to $20-25/hour.
Do the math. Rs. 1 lahk per year experience is about the going rate for Java skills in India. For those not conversant, 1 lakh is 100,000 and the exchange rate for Rupees is right around 46 rupees to the dollar. When someone can underbid you to that degree, it's just a matter of time before you find yourself in the unemployment line unless you can do something that can't be offshored or have a might incriminating set of negatives in your posession.
You may be the best TV builder in the US, But you won't find a job building TVs in the US. No matter how cheap you'll work or how skilled you are. That industry left years ago. The very last American TV builder was Zenith.
I destest the term "Darwinian Economics" on the principle that if Darwin had been talking about the same processes that business people think of when they use the term "survival of the fittest", you'b be unable to leave the house for fear of getting your knees ripped out by armor-plated, poison-dripping bunny rabbits with razor claws and 6-inch fangs, but there is a Darwinian term that covers what happens to a population that is stressed until it drops below sustainable levels.
Extinction.

I couldn't have put it better than you, thanks

[shay Aluko]

here is vision of what the future could look like for an IT worker, i got it from a popular website
"My new job at Taco Bell is very stable what with all the Mexicans coming for lunch every day, and I get all the fries I can eat, for free. Technically, we're only allowed one pop per shift, but my manager, who I believe has already fingered me for a managerial promotion, really looks the other way when I enjoy a second, or even third, refreshing beverage. I have to laugh at all the 9-5 workerbees who have to shlep their own drinks to work. Talent has its privileges! Due to my vast technical knowledge, I am permitted to operate the cash register, which more that one of my less-able co-workers have been told to stay away from. Last week i was issued a FREE work uniform. My manager tells me that, usually, an employee must furnish his own work clothes, but my performance is so exceptional that, rather than make me hand money directly over, I can procure a new uniform now, and have the expense painlessly deducted from my next pay check. I really don't like to gloat about my corporate success, but I just have to share this with somebody. Oh, and last night, as I was walking home, I spotted a five dollar bill lying on the curb. That's like winning free money, and I don't have to pay taxes on it! It's perks like these that make living on Polk Street so enjoyable."

[Mark Herschberg]

Originally posted by Tim Holloway:
I'm smart. I just happened to be supporting a departement where my skills were so critical that they wouldn't let me move anywhere else. Until they dumped the whole department in a recession-induced panic.

With all due respect, you choose poorly. You trusted that if you looked out for them they would look out for you; while admirable, it's not always optimal. When its clear that the company is not going to help my career, I move on. A good company that wants to keep me will create sufficent compensation, meaning, it will help my career.
We can't always predict with perfect accuracy, but we can be cautious and prepared. I always keep a minimum of 6 months live expenses on hand, just in case. I have fewer fun toys then my colleagues, but I also don't have to move back home if I get laid off.

Originally posted by Tim Holloway:
You may be the best TV builder in the US, But you won't find a job building TVs in the US. No matter how cheap you'll work or how skilled you are. That industry left years ago. The very last American TV builder was Zenith.

And those companies which choose to stick with horse drawn carriages also simply lost out. You can either choose to drift with the currents, or be on the lookout for changing weather patterns and sail into safer harbor.

Originally posted by Tim Holloway:
I destest the term "Darwinian Economics" on the principle that if Darwin had been talking about the same processes that business people think of when they use the term "survival of the fittest", you'b be unable to leave the house for fear of getting your knees ripped out by armor-plated, poison-dripping bunny rabbits with razor claws and 6-inch fangs

Maybe its me, but I don't see how you reached that. Business do recognize the value of cooperation, just as society does. But the best part of evolution/economics is, you don't need to believe in it, it'll work just the same either way. :-)
--Mark

[Michael Bronshteyn]

I'm smart. I just happened to be supporting a departement where my skills were so critical that they wouldn't let me move anywhere else. Until they dumped the whole department in a recession-induced panic.

The way it works, unfortunately, they pay you the money until they need you, and the moment they don't need you they throw you out on the street.
In a meantime the company uses psychology tricks like "skills were so critical that they wouldn't let me move" so you live in a fantasy world that you are something special to them.
When you accept your a job offer, you sign a paper saying, that you are "at will and they can terminate your employment at any moment". These are not just empty words.

[Tim Holloway]

I'll admit to a poor choice. I demonstrated that "employee loyalty" that is supposed to be one of the things that American businesses admire about offshore labor <irony/>. I gave them 6 years of faithful service in large part because they were about the last shop in town that didn't rotate employees out every 6-24 months. I really do hate spending half my job looking for the next job.
Well, no longer is this particular employer out of step with the times. For me, a much more sensible thing to do would have been to bail out to a dot-com while the bailing was good. I'd be just as unemployed, but probably a few $100K richer.
Actually, one of my real strengths is the breadth of my background combined with an ability to go in depth. I've worked as a mainframe systems programmer, a Macintosh apps programmer, done Windows device drivers, worked extensively with Linux and J2EE. I'm quite comfortable working down at the hardware level (I've even designed hardware), at stringing disjunct systems together and doing high-level architectural planning.
That won't do me much good should there come a day when offices are replacing their current cranky PCs with Network PCs and the systems are managed from somewhere halfway around the globe, leaving only the junior-electrician task of plugging the cables in as something non-offshorable. There's precious little in IT that's location-dependent. As someone who's been involved many times in just such operations, I can speak with some authority there.
OK, absent anyone coming up with evidence to the contrary, I've relegated IT services (excepting maybe a tiny national-security segment) to flee the continent and take its home alongside manufacturers of electronic equipment and about 2/3 of everything for sale in Wal-Mart these days (Sam Walton's dead and so's his "America First" buying policy).
Quick! You've just discovered that you're not as indispensible as you thought. The entire US Java market is closed to you thanks to that Communist Party meeting you attended in a drunken idle moment of a misspent youth. Invent a job. Now. The mortgage is due. Forget about setting up your own Java business. Remember those $25/hour competitors! I didn't make them up.
This is what we're casually told to do by people who haven't had to put their money where their mouth is. The truth is, you can't "invent" a job. You may be one of those people who can invent a product that people will buy and that will give you a job - and jobs for others as well.
But maybe one in a hundred people have demonstrated that sort of talent. Are you one of them? If so, good for you! Most of my inventions are, unfortunately, in the area of computers, and unless inspiration strikes and I can invent the next SAP, I'm out of luck. Even then, it's no slam-dunk, because a competitor could arise using offshore labor and undercut me. I'd probably do better making horse-drawn buggies for the local tourist trade. Assuming those haven't been replaced by cheap imports as well.
See, the point isn't me whining and crying about my own difficulties. I could take my backyard herb garden and make a commercial venture of it. Or take a low-wage job at Radio Shack attempting (Computer geek != good people skills) to sell imported products at the local Radio Shack. What I worry about is the impact both nationally and globally that an undisciplined offshoring stampede could cause.
Consider: in the 1930s, Germany was in the midst of a serious economic crisis, caused - in part - by the American Depression. Did the German people "invent" new jobs? Or did they simply line up behind some raving idiot who told them that it was Not Their Fault and that the answer was to punish those whose fault it supposedly was?

---

Anent my views on "Darwinian Economics". Popular business clich�s: "It's a Dog-Eat-Dog world", "It's a Jungle Out There", "Only the Strong Survive" (as T-Rex told the shrew). I'll grant you that co-operation exists, too. It's merely a matter that US business culture is inclined to look at partners as people you haven't figured out how to do without yet. <cynicism/> Or do in yet.
Anyone who doesn't believe in economic evolution is likely to become a victim of it. So are those plan their future thinking that Bad Things only happen to Other People. The rain brings life to the drought-stricken village. Or washes it away.

[Al Newman]

Originally posted by Tim Holloway:
I'm smart. I just happened to be supporting a departement where my skills were so critical that they wouldn't let me move anywhere else. Until they dumped the whole department in a recession-induced panic. Then, when I would have in times past gone to work as a consultant, I ran up against international bidders offering to do the same level of advanced J2EE work as myself to $20-25/hour.

Unfortunately there seems to be no way to innoculate yourself from the economic hurricane, Mark. I was smart too, and moved from an oversold telecom equipment supplier to a management consultantcy. In the end it probably earned me a year of work, but I still was made redundant. Nortel probably laid off 60% of it's staff (if not more), and the MC had dumped 50%. Unfortunately I'm a developer, and since the MC couldn't land any development work, most of the developers have been dumped.

Originally posted by Tim Holloway:
I destest the term "Darwinian Economics" on the principle that if Darwin had been talking about the same processes that business people think of when they use the term "survival of the fittest", you'b be unable to leave the house for fear of getting your knees ripped out by armor-plated, poison-dripping bunny rabbits with razor claws and 6-inch fangs, but there is a Darwinian term that covers what happens to a population that is stressed until it drops below sustainable levels.
Extinction.

Hmmmm. I don't like terms like "Social Darwinism" myself, Tim. But one thing which recessions do to me is force me to change or upgrade my skill list to something *more* marketable. Which has been good for longer-term career health in the past. I'm counting on it in the future.
BTW, the good news is that I *may* have a job offer soon. Though they are taking their time about making it I have to say. The bad news is that after tax it's a 25% drop in pay in all likelyhood. Bummer. I'll probably take it even so. I can make it without much surplus. London is an expensive place! But I can't afford to earn this little in the long term.....

[Al Newman]

Originally posted by Tim Holloway:

That won't do me much good should there come a day when offices are replacing their current cranky PCs with Network PCs and the systems are managed from somewhere halfway around the globe, leaving only the junior-electrician task of plugging the cables in as something non-offshorable. There's precious little in IT that's location-dependent. As someone who's been involved many times in just such operations, I can speak with some authority there.
OK, absent anyone coming up with evidence to the contrary, I've relegated IT services (excepting maybe a tiny national-security segment) to flee the continent and take its home alongside manufacturers of electronic equipment and about 2/3 of everything for sale in Wal-Mart these days (Sam Walton's dead and so's his "America First" buying policy).
Quick! You've just discovered that you're not as indispensible as you thought.

Tim, I think you are going a little overboard here. Indian programmers have been capturing market share at the bottom of a long economic slump, but I doubt that they have the ability to produce infinite numbers of trained people. They are going to begin to run out soon, and Indian wage rates will rise, perhaps quickly. Offshoring now accounts for about 3% of Amrican programming jobs. I don't see that rising to 30% anytime soon (or perhaps at all). The trained people simply aren't there!
I doubt that the Network PC will take off, because there are major problems with that model. I am worried about wage levels, as personal experience shows them down about 30% in my area. For now at least.

[JiaPei Jen]

Do consumers really pay less as both manufacturing and office jobs are offshored?

Yes, consumers in the industrialized countries pay less on commodities/services that are manufactured/provided by less paid workers.
On the other hand, what I witness in the industrialized countries (well, at least in the USA) is:
job losses (both blue and white collar jobs) -->
tax base erosion -->
government financial meltdown; just watch what happens to California -->
1. slash of public funding for day care centers, nursing homes, community colleges, universities, etc. --> CONSUMERS MAY HAVE TO RESORT TO SERVICES PROVIDED BY THE PRIVATE SECTOR

2. FEE HIKES; such as TUITION, MOTOR VEHICLE REGISTRATION, ..., etc.
Items 1 & 2 may exceed what consumers have saved on cheaper products/services. Do consumers want to think it all over?
[ July 23, 2003: Message edited by: JiaPei Jen ]
[ July 23, 2003: Message edited by: JiaPei Jen ]
[ July 24, 2003: Message edited by: JiaPei Jen ]
[ July 24, 2003: Message edited by: JiaPei Jen ]

[Jon McDonald]

Hey All,
Great topic and debate! I just thought I might throw in my two cents.
Just wanted to make a few points concerning being smart and free markets:
I'm a pretty smart guy myself . But I think what is more telling than saying you're smart is elaborating on how you came to believe this. If you understand this, it will probably make sense why some people are not very worried about there prospects for the future. For those of you who fit this mentality tell me how accurate I am in describing your past.
Personally,I grew up directly and indirectly competing with, and being compared to, my peers from a very early age (I took my first standardized test for addmission to pre-school). Be it grades and/or standardized tests, there was almost always a means of telling who was the most intellectually dominant person.
The funny thing is, once you dominate among one group of peers, if you are lucky, you are moved to a more competitive enviornment with peers of a higher caliber than you had before. Preschool to kindergarten, to elementary school, to high-school, to college, etc. At each level it (should) get more competitive and more challenging.
Now if throughout that time you were always able to dominate, then of course in this economy, you are probably not going to be to worried. This is all just another competition, just like all of the others you have dominated before. So what if only the top 30% of all software developers in the U.S. will have jobs (I'm exagerating the numbers here), if you are in the top 1% of all developers what do you have to worry about?
I have to admit that I am a big fan of the free market system. While I could give a lot of reasons why, in the agragate, a free market raises the quality of life, blah, blah, blah, the real reason for me is much more simple. I like the free market system because I do well in a free market system. It is pretty much the same game with the same rules that I have been playing, and winning at, since pre-school, so why should I think that the results this time will be any different?
I know the next argument to come up is that since "we"(American Developers) are now competing with "them" (Indian, Chinese, Russian, African Developers) the question isn't about who is smarter, it is now about "them" being cheaper.
I disagree for one simple reason, while American Programmers as a whole may be competing with Indian Programmers as a whole, at the level of individual jobs (as long as there are a few software development jobs left in the U.S.) I am competing with other Americans (and a few H1-B's ).
You see, the decision on whether or not a company outsources an entire project to India is made way before I enter the picture. The only effect that decision has is it makes the entire market more or less competitive by adding or subtracting availible jobs for American Developers.
Once that decision is made, I am no longer competing with programmers in India, I am competing with programmers in Chicago, Boston, Washington D.C. or wherever I live and wish to work. The competition my be more intense because of fewer jobs, but so what? If I don't think that I can be competitive I will re-train and move to a field or location where I can be competitive.
It's like the old joke:
Two guys are walking in the jungle, all of the sudden they see a tiger in the distance coming after them. The first guy starts to put on his running shoes. The second guy looks at the first and says, "whats the point of doing that? You won't be able to outrun that tiger." The first guy looks at him and says "I don't have to outrun the tiger, I just have to outrun YOU!!"
Just Some Thoughts,
Jon
[ July 23, 2003: Message edited by: Jon McDonald ]
[ July 23, 2003: Message edited by: Jon McDonald ]

[Mark Herschberg]

Originally posted by JiaPei Jen:
[QB]Do consumers really pay less as both manufacturing and office jobs are offshored?

Yes, consumers in the industrialized countries pay less on commodities/services that are manufactured/provided by less paid workers.
...economy goes to hell

Yep, that's why America's economy tanked when cheap Japanese electronics hit the market in the early 60s.
Er, I mean when light manufacturing left in the 70s.
No wait, that's not right. The US economy tanked when the textile, auto and other heavy manufacturing industries faced competition in the 80s from Asia.
Oh I remember now, it was when the high end electronic competition came from south east asia in the early 90s, right?

Um, remind me when the US economy irrevocably tanked due to foreign comeptiton?

--Mark
[ July 23, 2003: Message edited by: Mark Herschberg ]

[HS Thomas]

Yep, that's why America's economy tanked when cheap Japanese electronics hit the market in the early 60s.

Didn't the Americans take that technology to the Japanese ?
Or rather, after WWII, the Japanese asked a few American consultants to help re-build their economy.
And out of that was born a Quality Control never seen before and emulated much since.
In the 90s the Japanese economy took a dive followed by a lot of falling on swords(harikiri ?) by the top men. (At least their top men know how to take the blame.)
But since, some of the most successful Auto manufacturing plants in the UK in the current recession are Japanese plants - Honda , Nissan.
Ford, seems to be sufferring the recession.Ford incorporated a lot of the Japanese QA controls in it's hey days 80s and 90s.
Interesting , how what goes around, comes around.
But the Japanese had a peculiar culture, one of a kind.
In fact, they are now working with a new generation of mish-mashed Japanese-American culture which means they have to do things slightly differently.
Drawing parallels with IT, it will be a long long time before anything similar can be seen to come out of India or China. Most are hedging bets on China,(again ,the culture and political situation plays a part, as they have just come out from an oppressive Communist regime ).
As Billy laughs at Chinese products, so did the West laugh at Japanese early offerings. And then they stopped laughing.
You are still more likely to choose a Sony or Sanyo over Philips ( sorry can't remember any other brands).
The West( the big companies) wants to be a player so have set bases since the eighties in both China and India.
Alfred is right in that he doesn't think much quality would come out of the east in the short term; But are we in the West going to twiddle our thumbs in the meantime.
Get competitive ! I think things like Extreme Programming is going to shift the balance. You can't let all that creativity go one way.
regards
[ July 24, 2003: Message edited by: HS Thomas ]

[shay Aluko]

Originally posted by Jon McDonald:
Hey All,
You see, the decision on whether or not a company outsources an entire project to India is made way before I enter the picture. The only effect that decision has is it makes the entire market more or less competitive by adding or subtracting availible jobs for American Developers.
Once that decision is made, I am no longer competing with programmers in India, I am competing with programmers in Chicago, Boston, Washington D.C. or wherever I live and wish to work. The competition my be more intense because of fewer jobs, but so what? If I don't think that I can be competitive I will re-train and move to a field or location where I can be competitive.
It's like the old joke:
Two guys are walking in the jungle, all of the sudden they see a tiger in the distance coming after them. The first guy starts to put on his running shoes. The second guy looks at the first and says, "whats the point of doing that? You won't be able to outrun that tiger." The first guy looks at him and says "I don't have to outrun the tiger, I just have to outrun YOU!!"

Sorry Jon, i think you got it wrong, the situation is this, you will NOT be competing against your peers in the United States for the simple reason that there ARE NO JOBS TO COMPETE for. This is not a situation where a project leaves the country, this a situation where an entire INDUSTRY leaves the country. Its simple-minded to say that you simply train in a new field, i believe to get yourself to any level of competence in this IT field regardless of how intelligent you are, you need to invest a few years.Do you feel like throwing that away and starting in a new field like say, Nursing?, you don't like that do you? thought so.
I can only feel sorry for people who overrate themselves (a la Mr Herschberg), like many people, i believe myself to be very smart, scored in the top 5% in standardised tests like GRE , i have degrees etc.. etc, but all that is of no use if there is no "game" to compete in; unless i want to work in another country like say, India.I wonder if India will willingly open its doors to American programmers?.
Anyway, your joke is only true if the Tiger only has an apetite for one person, if it likes two people for lunch all he has to do is kill the first one , and quickly kill the second one, you see, the second runner has only bought himself a few extra minutes of life, how about that?

[JiaPei Jen]

Mark Herschberg twisted around what I said and made a fuzz on it.
I said that
1. slash of public funding on day care centers, nursing homes, community colleges, universities, ..., etc. turns many consumers to resort to those services provided by the private sector. In addition, jails are releasing prisoners.
2. consumers are paying higher tuition, motor vehicle registration fee, ...., etc.
Consumers are paying more on the one hand in exchange for cheaper products/services that are manufacture/provided by offshore less paid workers.
Net everything out, I am trying to figure out consumers are paying less or more.

[JiaPei Jen]

Shay, it is very true:
-----------------------------------------------
your joke is only true if the Tiger only has an apetite for one person, if it likes two people for lunch all he has to do is kill the first one , and quickly kill the second one, you see, the second runner has only bought himself a few extra minutes of life.
-----------------------------------------------
The tiger will never be satisfied with devouring only one person unless the tiger truely wants to enter God's kingdom after its death.

[Tim Holloway]

An observation I made to myself a while back. Banks have been buying other banks to create ever-bigger systems. They brag about hour it adds value because of economies of scale.
Howver every time this happens, bank fees go UP. Whatever economy they're seeing isn't passed along. I finally gave up and joined a local credit union, which provides substantially the same services and charges a heck of a lot less.

---

I'll go a long with the tiger analogy. With one condition. Make the number of tigers proportional the the population ratio. I.e. THREE tigers.

---

Network computing. Remember, it took Microsoft 3 tries to get "Pocket PCs" right. But they kept trying. A new network computer is coming out for $165/unit. It's based on the idea that web services are the way to work (Don't laugh - hosted versions of MS-Word have been rumored for years). We'd probably be further along if PCs hadn't dropped in price so much, but at some point the support costs for smart PCs outweigh their benefits for most office uses.

---

I'm positing a dire scenario for the simple reason that if you expect the worst, you'll have some idea of how to handle the bad. India alone has 3 times the U.S. population and thus could handle their own (sofar limited) IT needs and STILL spare people to take over US jobs, but that's not the whole story, since a lot of India is undereducated. It remains, however, that in the current tight labor market there are those of us who are bidding for work and getting slapped down because companies are focussing on quantity and lot quality. The REAL proof (or disproof) will be when the economy takes off again and either the jobs will open up or they won't. Myself, I don't believe that all things work for the best in this Best of All Possible Worlds or that God will exempt me from the age-old drive that employers have to try and commoditize IT despite frequent lessons to the contrary, or my oft-proven genius.
Indian IT salaries have seen some upward movement lately because of the old supply-and-demand. However when they're getting paid 1/10th an American salary that doesn't change much (well for them it does ). To get that other 9/10ths either Indian programmers are going to end up being paid like Indian doctors or the entire Indian economy is going to see horrific inflation. Although even if they got paid even HALF as much as we do, they'd be less a "no-brainer" choice for labor.
I'm not picking on India specifically, as I've mentioned before. They're simply the most visible example. Next week Uganda could be the low bidder and the only thing that would keep the Indians out of the same boat is that Uganda doesn't have as large a labor pool.
Anyway, I'm off to my first job interview since last October. Wish me luck!

[Mark Herschberg]

Originally posted by JiaPei Jen:

I said that
1. slash of public funding on day care centers, nursing homes, community colleges, universities, ..., etc. turns many consumers to resort to those services provided by the private sector.

The is no evidence of this. In fact, depite recent increases in tuition at many state universities there has been no flight to private schools, which still remain more expensive. There is some early indication of students simply stopping enrollment in public schools.
I am not aware publicly funded day care centers or nursing homes, except some of the former exist as part of other social welfare, e.g. day care while single moms receive training for new jobs. In the majority, if not all of those programs, the parents have no means to afford private care.
In general, in the US, public social services are far cheaper then private services. Those who can afford it use private services. Those who can't, use public. Public services will almost never overprice private services, because that defaults the purpose of social subsidy.
Perhaps you can provide some numerical evidence for your claims?

Originally posted by JiaPei Jen:

Net everything out, I am trying to figure out consumers are paying less or more.

Well you can look at the CPI. http://www.bls.gov/cpi/home.htm has information on it. The CPI has been steadily climbing roughly linearly since about 1971, going from about 121 to 538 in 2002. This trend has been fairly constant despite the extensive economic swings during the 30 year period.
That's roughly a 5 fold inscrease over 30 years. Roughly speaking thats about what, a 5-6% increase in price per year? But we must als keep in mind that you can't compare apples to apples, because a 1995 car offers much more then a 1965 car. Given that the national GDP has increased about 4% per year annually it seems the CPI is mostly keeping pace.
Speaking of apples, looking at the data for prices of eggs, bread, beef, OJ, and coffee, since 1980, and electricity since 1984, these items have only marginally increased during the 20 years period, or even ended where they began.
Despite the increased foreign competition from Asia and Europe in the last few decades, it seems that the US is roughly holding steady.
Of course, in deference to Mark Twain, I recognize that anyone, including myself, can make the numbers dance to almost any tune.
--Mark