Wednesday, August 08, 2007

A very emotive issue - American labour markets and exploitation 

I had the pleasure of working recently with Kim Berry on implementing an XML project for the State of California.

During the course of that I found that the bond was not just around a passion for good software development but also for the industry itself and its health.

Kim leads up the Programmers Guild organization championing rights and conditions in the industry.

His article in BusinessWeek today - sums up the situation facing employees in the industry and being able to maintain a career and job security for their families.

The .COM era following by the bust led to seminal changes in the hiring practices and pay scales. The .COM boom brought with it the advent of offshore development, and temporary on-shoring staff who learned and then took their knowledge back offshore.

The result has been a radical shift in the makeup of software teams across the USA with a preponderance of Indian and now Asian developers. Older American staff have been pushed into niche areas; government where citizenship is a prerequisite and management or specialized support and collaborative or support roles.

And the Indian staff themselves have to contend with sharp practice from employers who can exploit their fragile existence on expiring visas, and lawyers who demand payments for INS filing work.

The upshot has been to create a sea change in the industry and the long term prospects for younger home-grown staff coming up to replace the aging work force look particularly bleak.

The collusion of all decision makers in this has been tacit. Notice that contract awards have been driven by lowest price regardless of solution approach, even in government contracting. Noone stopped to think of the longer term consequences. Congress was led into thinking their measures on visas were abating a shortage of skills, instead of driving down costs and sending jobs overseas. And now Microsoft and IBM are building new universities and research campuses in India and China so they have offshored those resource opportunities away from Americans too.

It is all to clear to see how quickly this unfolded. The Genie is out of the bottle and not going back in. Where it becomes really interesting though is to note this initial round has focused on the software industry where high salaries drove the overseas engines thirst for market penetration. Once the software industry reaches saturation and the salaries bottom out, where to next?

The legal industry is the next on the block, where so many administrative legal actions can be moved via technology. Notice all New York City parking tickets are processed by workers in Sierra Leone keying in the details! The tickets are then sent electronically back to New York for printing and mailing.

It's only a matter of time before whole other areas of legal process are targetted. It's going to be interesting to see how lawyers react when they see plunging rates and demand forcing them to compete against each other for dwindling pool of prestige work. Then we may actually see some different legislation in front of Congress?

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