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Local Outsourcing

Mar
10
2004

San Francisco Supervisor Jake McGoldrick’s chief aide, Jerry Threet writes in with some outsourcing comments and he makes a smart observation to counter what appeared here yesterday.
I think you may be missing part of the outsourcing story, though. Many of those who have suffered the worst fall-out from outsourcing phenomena are those same Progressive Libertarians who benefited from the dot.com craze.


Perhaps thousands of folks found new jobs in fields associated with the dot-com boom, from programmers to technical writers to designers. Since then, the pickin’s have been slim and now they are slim to none. One big reason is the outsourcing craze.
My friends who had jobs in these fields have experienced a progression (or regression). First, they lost a dot.com job with a firm that should never have received funding if not for the bubble. Then they were relegated to a series of contract jobs or temp jobs to make ends meet. Over time, as outsourcing increased, these jobs began to dry up and the rates they commanded began to fall. Now its hard to find anything.
These were all folks who were sold on the “free market” while it was working for them. Now that its not, they are seeing a different side of things and they don’t like what they see.
A bit different perspective from the VC funders, but I suspect there are more workers than capitalists, even in the Bay Area white collar sectors.
Threet’s working an angle here: His boss has introduced legislation at City Hall to restrict San Francisco from giving contracts to companies that use overseas labor. He’s following a trend; and in union-friendly Northern California it’s not going against the tide by any means. Obviously, it will be easier to get support for this sort of legislation if down-and-out dot.comers hook up with the brethren in the unions. I’m not convinced, but anything’s possible. This is, after all, San Francisco politics. And the disappointment that many people legitimately feel about how they’ve been treated through boom and bust is the stuff that makes for political give and take.
There’s something else going on, however, when computer jobs get sent overseas. The New York Times got at this in its outsourcing story yesterday. The market for computer programmers and software engineers has changed. Computer coding has gotten easier and more routine. That means that jobs that used to be complicated, requiring certain kinds of skill, aren’t in as much demand.
This web log and the millions like it is a good example. Four years ago to run and regularly update this site, I would need help with HTML and other kinds of coding. But now, I can just pour my words into a template; what used to take at least one other person is now me and some software.
This whole thing provides a look at the international aspects of the labor market. First of all, a U.S.-based coder is out of work. I hired a designer to make this ‘blog look different from others and I have a part-time freelancer helping me with odds and ends as they come up but there’s no need for a $45,000 engineer. Instead, that person and their skills have been replaced by modules and templates that I pretty much handle – for better or worse – on my own. Oh, and I can do this from anywhere in the world because everything I need is hosted at this web site.
That doesn’t mean the software business is dead. Not by any means. But the labor market has changed. So, by the way, is the capital – money – market. This site uses Moveable Type created and licensed by Six Apart, a company now based in San Mateo but started by two San Francisco’s Sunset District residents. Where does Six Apart get its funding? Glad you asked. It’s big backer is the Japanese venture capitalist, and famous ‘blogger, Joi Ito.

Share  Posted by Chris Nolan at 10:32 AM | Permalink

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