4 ms·

Why did "outsourced workers get (relatively) much more expensive after"?

mjr00 9mo ago
Great question. I'm not an economist so I have no idea why. The outsourcing rates I've all seen have gotten way higher in the past ~10 years though.
- Insanity 9mo ago
  Beyond just the usual inflation? I'm not an economist either, but I also assume that as the country attracts more local talent for local companies, the competition for outsourcing becomes harder. (i.e, you now have to pay more than the local companies). All just speculation on my part though, I really have no clue either.
  - PaulHoule 9mo ago
    People from Bangalore were telling me it was getting crazy expensive to live there (by Indian standards) circa 2013.
foxyv 9mo ago
Essentially the thinking went. If everyone is remote, why not hire remote workers from countries that are a lot cheaper. Suddenly you had a hard time finding contractors and FTEs from those countries because everyone was hiring them. At the same time it got really hard for entry level developers in the USA to find work. The supply/demand curve shifted and now those workers are becoming more expensive while domestic workers are becoming cheaper.
giraffe_lady 9mo ago
India specifically is in the middle of a massive years-long labor movement that is changing the terms of work there and I believe shifting the degree of alignment with western corporate outsourcing though I'm not very informed about the details. Scale is beyond comprehension though, there were 250 million people on strike one day last summer. This is not ever really covered in western media or mentioned on HN for reasons that are surely not interesting or worth pondering at all.
- givemeethekeys 9mo ago
  Americans can’t afford to strike like that.
  - esseph 9mo ago
    Can't afford not to.
  - linkregister 9mo ago
    You're most likely correct; I originally started writing this comment to refute your statement, but found that my assumptions appear to be wrong. Americans have the nearly the highest nominal and PPP income of OECD countries as of 2024, only behind Luxembourg, Iceland, and Switzerland [1]. India experiences substantially higher shelter and food insecurity and poverty rates than the United States. However, tech workers in Bangalore are paid an order of magnitude higher than prevailing local wages in other sectors, at around ₹2M (₹20 lakh) [2]. Median annual rents for 2BHK (2 bedroom) apartments appear to be around 1/10th of that figure at ₹3 lahk in desirable neighborhoods [3]. It appears to be reasonable for a technology worker to be able to perform a sustained strike. I have never personally traveled to Bangalore, though I have lived in places where cost of living is under a tenth of median American income. I invite correction by people with first hand knowledge about cost of living in Bangalore. 1. https://www.oecd.org/en/data/indicators/average-annual-wages.html https://www.oecd.org/en/data/indicators/average-annual-wages... 2. https://timesofindia.indiatimes.com/city/bengaluru/median-tech-pay-in-india-declines-sharply-us-hits-new-highs-report/articleshow/124856820.cms https://timesofindia.indiatimes.com/city/bengaluru/median-te... 3. https://www.birlaevara.org.in/best-areas-in-bangalore-for-rental-returns-and-passive-income.html https://www.birlaevara.org.in/best-areas-in-bangalore-for-re...
    - leosanchez 9mo ago
      > It appears to be reasonable for a technology worker to be able to perform a sustained strike. I don't think the strikes are done by tech people at all. Just normal workers.

mjr00 9mo ago

Great question. I'm not an economist so I have no idea why. The outsourcing rates I've all seen have gotten way higher in the past ~10 years though.

Insanity 9mo ago
Beyond just the usual inflation? I'm not an economist either, but I also assume that as the country attracts more local talent for local companies, the competition for outsourcing becomes harder. (i.e, you now have to pay more than the local companies). All just speculation on my part though, I really have no clue either.
- PaulHoule 9mo ago
  People from Bangalore were telling me it was getting crazy expensive to live there (by Indian standards) circa 2013.

foxyv 9mo ago

Essentially the thinking went. If everyone is remote, why not hire remote workers from countries that are a lot cheaper. Suddenly you had a hard time finding contractors and FTEs from those countries because everyone was hiring them. At the same time it got really hard for entry level developers in the USA to find work. The supply/demand curve shifted and now those workers are becoming more expensive while domestic workers are becoming cheaper.

giraffe_lady 9mo ago

India specifically is in the middle of a massive years-long labor movement that is changing the terms of work there and I believe shifting the degree of alignment with western corporate outsourcing though I'm not very informed about the details. Scale is beyond comprehension though, there were 250 million people on strike one day last summer. This is not ever really covered in western media or mentioned on HN for reasons that are surely not interesting or worth pondering at all.

givemeethekeys 9mo ago
Americans can’t afford to strike like that.
- esseph 9mo ago
  Can't afford not to.
- linkregister 9mo ago
  You're most likely correct; I originally started writing this comment to refute your statement, but found that my assumptions appear to be wrong. Americans have the nearly the highest nominal and PPP income of OECD countries as of 2024, only behind Luxembourg, Iceland, and Switzerland [1]. India experiences substantially higher shelter and food insecurity and poverty rates than the United States. However, tech workers in Bangalore are paid an order of magnitude higher than prevailing local wages in other sectors, at around ₹2M (₹20 lakh) [2]. Median annual rents for 2BHK (2 bedroom) apartments appear to be around 1/10th of that figure at ₹3 lahk in desirable neighborhoods [3]. It appears to be reasonable for a technology worker to be able to perform a sustained strike. I have never personally traveled to Bangalore, though I have lived in places where cost of living is under a tenth of median American income. I invite correction by people with first hand knowledge about cost of living in Bangalore. 1. https://www.oecd.org/en/data/indicators/average-annual-wages.html https://www.oecd.org/en/data/indicators/average-annual-wages... 2. https://timesofindia.indiatimes.com/city/bengaluru/median-tech-pay-in-india-declines-sharply-us-hits-new-highs-report/articleshow/124856820.cms https://timesofindia.indiatimes.com/city/bengaluru/median-te... 3. https://www.birlaevara.org.in/best-areas-in-bangalore-for-rental-returns-and-passive-income.html https://www.birlaevara.org.in/best-areas-in-bangalore-for-re...
  - leosanchez 9mo ago
    > It appears to be reasonable for a technology worker to be able to perform a sustained strike. I don't think the strikes are done by tech people at all. Just normal workers.