[jsfg_cinti] U.S. Programmers at Overseas Salaries (Indian-style wages to American workers)

What do you think of the ideas discussed in this article?  
Could this be the future for all U.S. jobs (i.e., competition from overseas 
will drive down the wages paid to the level of third world countries)?  

Notice the final sentence where the article's author comments that if this 
trend continues "the results could be quite interesting".  If this trend 
continues, what would be the results?  In what way would the results be 
interesting?  

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http://techupdate.zdnet.com/techupdate/stories/main/US_Programmers_at_Overseas_Salaries.html?tag=zdafavorites

U.S. Programmers at Overseas Salaries
By David E. Gumpert
December 4, 2003

It's the great unanswered business-economic question of our day: How do we 
replace the hundreds of thousands of information-technology, call-center, 
paralegal, and other jobs rapidly exiting the U.S. for India, Russia, and other 
low-wage countries? The main answer that the so-called experts put forth, 
without a lot of conviction, is that we'll create new "high-value" jobs to 
replace those leaving the U.S. What are those jobs? No one seems to know. 

In the meantime, the matter of overseas subcontracting appears to have become 
open-and-shut. If you're an executive with half a brain, you can come to only 
one conclusion when tallying the differences in costs between hiring computer 
programmers in the U.S., vs. India or Russia. These days, the jobs are going to 
Indians and Russians. 

...

Jon knew the numbers for experienced American programmers doing the specialty 
work he required: $80,000 a year, with benefits adding an additional $5,000 to 
$10,000 per programmer. The intermediary came back with the number for the 
services from India: $40,000 per programmer. 

...

And then Jon had a brainstorm. What if he offered Americans the jobs at the 
same rate he would be paying for Indian programmers? It seemed like a long 
shot. But it also seemed worth the gamble. So Jon placed some ads in The Boston 
Globe, offering full-time contract programming work for $45,000 annually. (He 
had decided that it was worth adding a $5,000 premium to what he'd pay the 
Indian workers in exchange for having the programmers on site.) 

The result? "We got flooded" with resumes, about 90 in total, many from highly 
qualified programmers having trouble finding work in the down economy, Jon 
says. His decision: "For $5,000 it was no contest." Jon went American. And the 
outcome? "I think I got the best of both worlds. I got local people who came in 
for 10% more (than Indians). And I found really good ones." 

...

What if other companies begin taking the same approach -- offering Indian-style 
wages to American workers? On the positive site, we could begin to solve our 
job-creation problems. But on the negative side, America's standard of living 
would inevitably decline. There's only one way to find out for sure how it all 
might shake out, and that is for other executives to replicate Jon's 
experiment. The results could be quite interesting. 

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