Many people have argued strongly that offshore outsourcing is bad for U.S. workers in the IT industry becuase it causes a massive loss of jobs. Many go on to conclude that it is "un-American" to outsource.
These same people may have been surprised on April 24th, 2006. On that date, Information Week (which normally commiserates with anti-outsourcing sentiment) hit the stands with it's latest and startling figures on the outsourcing debate. Contrary to the massive job losses predicted by outsourcing critics (including many Information Week reporters and those who constantly write letters to the IW editors), the cover reported that IT employment had hit an all time HIGH record. It also stated that job satisifaction and security are up and that the average manager's median income has climbed as high as to be on the cusp of six figures!
The cover:
The cover states "Our research reveals a surprisingly robust job market, even as the threat of offshoring looms large".
The results may have been suprising to Information Week. But they were no surprise at all to anyone familiar with the basic of free trade theory. In fact they were completely expected.
Where is the growth coming from? Free trade theory predicts that the rise of outsourcing would cause a loss of lower paying jobs (as they go overseas). But it also predicts an increase in U.S. higher paying jobs. And as the article shows, this is EXACTLY what is happening. Programmers decreased 20% since 2001. But higher paying manager jobs more than made up for this (increasing by 91,000 jobs). And of course, demand for such manager jobs is increasing, which means that salaries are going up too (close to the six figure range)!
Why is this happening? I call it the "affordability magnification effect". You can read more about it in my other blog entry on the topic.
"That's great for the economy and the IT industry as a whole", some would say. "But what bout those heads-down coders? What do they do?" If that describes you, you need to get out of your cubicule and turn off your PC and learn more advanced management skills. Yes, that includes project management skills and it also means learning people management skills. To some coders that might be worse than having no job at all. If so, that is a choice they can make. But it is not accurate to prented that there is no choice. On the other hand, those that do choose to adapt, are guaranteed to do better off finanically than they did before outsourcing came along. 91,000 new managers will attest to it.