Embarrassment discount. The theoretical benefits of offshoring are obvious: get the same thing for less. The same goes for juniorization, find a young guy who

Embarrassment discount. The theoretical benefits of offshoring are obvious: get the same thing for less. The same goes for juniorization, find a young guy who can do the same thing for less (this worked out great one time in an HFT I worked for). Your problem is there's a chance -whether you offshored or not- that not only do you not get the same thing, you get a steaming pile that your boss will not appreciate. And it's not like a 80% working software solution is worth 80% of the money, it's worth maybe 20%. So how do we compensate? Fall back on crutches like "we only hire Ivy League or Oxbridge grads". Or make sure whoever it is had a roughly similar culture to yourself (comms style, language), is available in a similar time zone, or has done similar work in the past. It's not that these will ensure you have good programmers, it's more that you can say to your boss, "I acted conservatively but even then sometimes you don't get the right hire". All of which point towards advantaging programmers in the West. Either you have all these qualities (culture, tz, experience), or you have to discount quite a bit. Naturally this isn't universal. You are gonna find people in Asia who somehow make a Western salary, and good on them.