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The reason people are comparing US and Indian employees is because the doubling of IBM's India workforce since 2007 seems to be, in many ways, a result of labor
by davesque 9y ago
The reason people are comparing US and Indian employees is because the doubling of IBM's India workforce since 2007 seems to be, in many ways, a result of labor arbitrage, as the linked article is arguing. You can slice things any way you want, but the fact is that this is a problem for the average American worker. In other words, it's something that readers of the NYT would care about.
- samstave 9y agoI am beginning to think that out-sourcing ones-self is a better and better idea...
- saimiam 9y agoMeaning?
- majewsky 9y agoMoving to a poorer country on reduced pay that still outperforms that of locals in the same job, maybe?
- mikestew 9y agoCollect a U. S. salary while shipping the actual work to a less expensive worker elsewhere. Just like companies do, only on an individual basis. I believe it has actually been done (then the person got caught and fired, IIRC).
- alxmdev 9y agoIt's been done alright! > "As it turns out, Bob had simply outsourced his own job to a Chinese consulting firm. Bob spent less than one-fifth of his six-figure salary for a Chinese firm to do his job for him." https://www.theguardian.com/world/2013/jan/16/software-developer-outsources-own-job https://www.theguardian.com/world/2013/jan/16/software-devel...
- hardlianotion 9y agoI remember that. The only bit I have no sympathy with was that he chose to send his whole day quietly browsing the web.
- pm90 9y agoI've heard a lot of my foreign born collegues do that. After they've reached a certain seniority, they decide to go back to their country of birth while keeping similar compensation, essentially making them very rich in their home country. I've only seen this work for Indian and Chinese born nationals though, where the home country has good relations with the US (as opposed to, say Iraninans, who don't have the option of going back).
- samfisher83 9y agoEven the arbitrage is going to start failing. The housing is insanely expensive in India especially relative to the salaries. At some point most of the people who can leave will leave, because its hard to live there with the salaries they are are getting. You can make more in other countries and the housing difference would not even be that much different.
- jgalt212 9y ago> its hard to live there with the salaries they are are getting hmm, sounds just like SF or NYC.
- screye 9y agoI'd say worse. IBM employees in India get paid around 500,000 rupees in India. A non-cramped 2 bedroom apartment in a decent area in the big cities (Mumbai, Bangalore, Delhi ) will set you back 10,000,000 rupees easily. That is 20 times their salary. I'd say that's a higher multiplier per unit salary, than for the US. Also note that living just outside the city (as people in the US do) isn't always an option, unless you are up for a 2+2 hour commute daily.
- hkmurakami 9y agoAnecdata is a ~10x multiplier in SV for the kind of housing you describe.
- nikanj 9y agoThe numbers look similar in Vancouver and Toronto. It seems to be an emergent trend in the global housing markets.
- wbl 9y agoExcept Tokyo, Vienna, Montreal, Germany. Almost like we could apply their policies in SV.
- snambi 9y agoAmericans are not aware of cost of living in places like Bangalore. The India real estate is expensive for the folks living in Silicon Valley. It is cheaper to buy real estate in USA compared to India.
- seanmcdirmid 9y agoThe same is true in china, but that has more to do with real estate bubbles than fundamentals. Rents are still very cheap. Is the same true in Indian cities?
- gourabmi 9y agoThe real estate pockets in industrial hubs like Bangalore, Mumbai is expensive. Tier 2 cities are cheaper.
- seanmcdirmid 9y agoHow do sale prices correlate to rents?
- geodel 9y agoYearly rents are about ~2% of the price of property, In US it is about ~7%. So yes rents are cheaper in India because that's what market can afford.
- taurussai 9y agoIn Bangalore, sale price/monthly rent ratio in an ok neighborhood would be around 200. In a pretty good neighborhood this go up to to 300-400. Mumbai is more expensive than this. Nobody buys property in India and makes a killing off the rents -- its mainly the price appreciation (inflation is around 6-7%).
- gozur88 9y agoThat's the classic real estate bubble.
- nopin 9y agoDo you know that Indian GDP has grown significantly from 2007? Could it be that the market in Asia has grown and hence IBM wants a larger presense in India. And that since the labor is relatively cheaper they can afford more people over there than in USA? Why do you think that by staying in US IBM could have competed with other companies in India fighting for the Indian/Asian market?