“Catherine Mann of the Institute for International Economics makes the case in favor of offshoring: High-tech hardware would have been 20% more expensive in the 1990s if not for offshoring. This spurred investment in more high-tech gear, boosting productivity and freeing up cash to plow into still more innovation. Plus, for every dollar spent on offshoring, the U.S. gets back $1.12 (and the global economy reaps another 33 cents), says a report from McKinsey consultants. Think about it: As more workers in India land higher-paying jobs, they can afford to buy more U.S. products, from processor chips to Hollywood films. By spreading the wealth, offshoring makes life a little better in some of the poorest regions of the world. “ [1]
I think all this anti-IT offshoring talk is rediculous. A lot of IT workers are not much more skilled (if at all) than the average assembly line worker. Why should they be paid so much more? If their jobs can be done by IT sneaker factories in Mexico, so be it. You don't see people like Don Box or Bill G getting laid off. They are much to important to their companies. If IT guys would rather sit around and complain all day instead of working on making themselves more competitive in the land of opportunity, maybe they don't deserve their jobs in the first place. Magazines always interview these guys who have been out of a job for like 2 years and finally end up working at McDonalds or something because they just can't find anyone willing to hire them. Wake up and smell the coffee. If no one else wants you either, is it any wonder that you were expendable?
I agree with Greenspan on this one:
"In response to these strains and the dislocations (outsourcing could) cause, a new round of protectionist steps is being proposed," Greenspan said. "These alleged cures would make matters worse rather than better. They would do little to create jobs; and if foreigners were to retaliate, we would surely lose jobs..."
"...We can erect walls to foreign trade and even discourage job-displacing innovation," Greenspan said. "The pace of competition would surely slow, and tensions might appear to ease--but only for a short while. Our standard of living would soon begin to stagnate and perhaps even decline as a consequence.
"Time and again through our history, we have discovered that attempting merely to preserve the comfortable features of the present--rather than reaching for new levels of prosperity--is a sure path to stagnation," he said. [2]
Although laws making IT offshoring less attractive might have the short term benefit of slowing the IT job loss rate, it's long term effect will be to damage American companies in the global marketplace. The immediate effect will be that everyone else will be able to bring their solutions to market at 1/3 the cost, in many situations, or at a much faster pace, in situations where resources have been a limiting factor (sound like any projects you've worked on?). Longer term, it will lead to American consumers looking more and more to non-American software vendors for their software acquisitions (Toyota anyone...?), which definately will not be good for the American software industry either.
[1] http://www.forbes.com/home/free_forbes/2004/0412/094.html
[2] http://news.com.com/2100-1022_3-5172975.html