The Winter is coming for computer technology labor

Aug 30, 2018 47 Comments

For last 40 years, computer tech enjoyed unprecedented growth, which brought lot of goodness and riches around the world, especially northern america. Due to strong demand for decades, the educational system and funding system has now figured out how to meet current and future need of coding labor at lower spend. It's not current government but more of a general wave to ride globalization to scale. Northern America no longer requires large development hubs, just controlling centers. The side effects are already being seen on temp worker programs. If people think those jobs are going to be taken by resident non-aliens, it's not going to happen. Overall tech blue collar is under attack. Next 10 years, there will be rapid decline in northern American blue collar tech worker TC and worldwide normalization of tech labor wages. It was done on industrial manufacturing few decades ago, and it will be repeated to meet digitization scale world wide. What would you do if scenario I am painting becomes true. I just hired a very sharp programmer at 18$ per hour(includes middle man) in Eastern Europe. He can solve leetcode hard, works 12 hours a day, speaks English and knows all silicon valley software gadgets. Beats the ivy league undergrad Caucasian American, international master's candidate from South East Asia from tier-1 colleges (2) and experienced Chinese valley worker. It's coming....

PS: this is a scenario, happy to be proven wrong but this is how I see it. Healthy debate/scrutiny is welcome.

comments

Want to comment? LOG IN or SIGN UP
TOP 47 Comments
  • Reddit DzrI52
    And people told me I was crazy when I said tc would go down if we keep teaching everyone to code!
    Aug 30, 2018 1
    • Facebook bfcc
      Do those people not understand supply and demand?
      Aug 30, 2018
  • Microsoft gfba68
    Demand is still going up faster than supply. High quality eastern European programmers are not new. It will take 50 years for this to play out, although I do agree it is likely.
    Aug 30, 2018 4
    • New / Eng sc@l@
      The supply of those people is very limited.
      Aug 30, 2018
    • OP
      Can you substaintiate this ? Demand for what ? I am talking blue collar tech jobs, which is coding without any domain requirements.
      Aug 30, 2018
    • New / Eng sc@l@
      I have not seen any place that was able to provide spec for coders. Coders/programmers/whatever you call them are are tasked with gathering requirements, design, implementation and ops. Art major Product Manager will never be able to do full process from inception to tech specs, they can only talk about that loud for extra points at their place of work.
      Aug 30, 2018
    • OP
      Interesting, have you worked at both large and small companies ?
      Aug 30, 2018
  • Salesforce ozEK82
    Fundamentally what you are saying is true. Tech job TCs are deviation from mean and over period of time it has to go back to mean. Only gotcha is I think tech is just getting started and everything we touch need to get digitalized. We are very far from that utopia. So I say we have quite a bit of runway left.
    Aug 30, 2018 2
    • Autodesk / Eng
      Fndnkd

      Autodesk Eng

      PRE
      Autodesk
      Fndnkdmore
      I agree with this
      Aug 30, 2018
    • OP
      Precisely, during 3rd industrial revolution, in order to achieve massive scale the cost of labor had to come down. Scale requires low COGS. Coding is already becoming commodity and wages would decline.
      Aug 30, 2018
  • Lending Club $3.5
    You can still do that in India, same price. Its been happening since last20 years
    Aug 30, 2018 1
    • OP
      Quality of India based Indian programmers is not that high. They are too demanding and their QoS varies a lot. Even NIT/IIT bunch these days too lazy to keep up with demands of the west.
      Aug 30, 2018
  • Intel !GPTW
    Cool story
    Aug 30, 2018 0
  • Infusionsoft / Product dyjY66
    You are correct if you look at basic coding where the programmer is just turning requirements into code. As a product manager I have been making the case for some time that the engineers that want to just be order takers and not contribute to the larger creative process will be commoditized. If I have to go through the trouble of writing requirements for everything I am essential pseudo coding the thing and the programmer is just translating that into code and at that point it doesn’t matter if you are in India or the US and I am going to pick the lowest cost option. However if you look at top performing engineers (notice I didn’t say programmers) they work to understand the business and the problems that the team needs to solve and fully engage in the creative process. This cannot easily be outsource and in my opinion is what is required if you want to continue to demand a premium as an engineer. TLDR if all you do is translate requirements into code prepare to take a pay cut. If you want to avoid that level up and find a job or position that allows you to not just be a programmer but an engineer who understand the business and is expert at solving customer problems.
    Aug 30, 2018 3
    • OP
      I agree. The commanding center is going to remain in America. All other nations would try and build competency centers like that. On a given project one needs very few such engineers though , rest is commodity. Giving manufacturing analogy, for every 50-100 operator you have line supervisor and process eingineer who got bigger picture in that room,rest are aiding cookie cutting.
      Aug 30, 2018
    • New / Eng aYLx06
      Would these be “Solutions Engineer” and “Solution Architect”? The hybrid of tech and business?
      Aug 30, 2018
    • OP
      Those are pre-sales roles and churn is like semi-sales but are better protected from threats like above in my opinion.
      Aug 30, 2018
  • Symantec Burgerr
    Globalization & automation were primary reasons for decline in industrial labor pool. Software industry has seen globalization for the last decade & yet here we are today. The fact that more Eastern Europeans add to this global pool & dilute TC is an overstatement. More demand is created everyday (due to automation) than supply.

    As for your example, its only a matter of time before that 18$ hour engineer realizes they are grossly underpaid
    Aug 30, 2018 3
    • OP
      It's the push and pull model. Traditionally valley had 1:10 ratio of venture fund to established companies investing in R&D which is declining. The stock market boom is hiding that fact in plain sight. VC funds have started diversifying in 10 years and the established firms are doing that more aggressively to keep up with wall street expectations. The shifts are slow but happening. There won't be any venue for the Eastern European candidate to make more and chances are, there will be local competition to drive that number down.
      Aug 30, 2018
    • Symantec Burgerr
      Companies are still investing. Its the VC funding that has bridged the gap. Overall more funding is flowing into tech.
      Aug 30, 2018
    • OP
      The number for VC funding per year is about 50B a year for many years with few exceptions. The 50B pie is slowly going international. The 500B r&d is on decline. People look at ratios and forget that there's massive valuation uptick (meaning deal output and outcome is good). If outcome is good why would input stay flat and move away from US ?
      Aug 30, 2018
  • OpenDoor / Eng MhBB55
    u trippin bruh
    Aug 30, 2018 1
    • OP
      Nope, it's a scenario and likely one from my point of view.
      Aug 30, 2018
  • Oracle / Eng dgbU
    Go do AI dude. Surely only smartest people in US can do
    Aug 30, 2018 0
  • Cisco touché
    Capitalist countries succeed by competition. Competition is required primarily in 3 things:
    1. Capital/Investments
    2. Market size
    3. Educated workforce

    For a long long time, America had 1 and 2 more than other countries. They either imported or outsourced for 3.

    Today, countries like China and India have bigger 2 and 3. China also has 1 but they need to transition to consumerism instead of exporting. India doesn't have 1.

    Eastern Europe has 3 and EU provides with 1 and 2.

    What does America have? Only 1. Historically all these other countries were poor and listened to whatever America told them. That allowed us in the US to live an amazing life for 40 years.

    Today, without 2 and 3, we risk losing 1.

    I really don't think America understands what we just lost by refusing to work with rest of the world.
    Aug 30, 2018 6
    • Cisco touché
      The US is the largest but as a proportion of total world market, they are declining yoy.

      By PPP, China gdp has already beaten the US. That means, local Chinese consumer market is much larger that US already. They don't show up higher than nominal US gdp numbers because of currency exchange rates. If $1 were equal to 1 Yuan, China has already beaten the US.

      Until 2000s, US was the leading consumer of cars, phones, laptops, petroleum products etc.

      Today, China leads in all if them. India leads in phones and is estimated to lead in petroleum products by 2024.

      About educated workforce: Sure the ratio of educated to uneducated is much larger in US. But, the absolute number of educated people in China and India are much larger. This matters. They have a lot of bargainging power and draw in the global market.

      Ask HPE if they want tariffs on HP printers being sold in Asia. Ask Apple why they're unable to compete in India, the fastest growing smartphone market in the world. Why is Harley Davidson moving out of the US? They want access to Europe and Asia more than America. Those countries are competitive and demand is crazy.

      The only American companies doing really really well are tech companies which have historically sucked the best and brightest people from all over the world. That, and recently oil companies because oil is scarce.

      You gotta understand. The consumer is King. In good old days, there was only one consumer. America. Today there are many more.

      If we can't hire the best here and US companies can't sell to other countries, most fortune 500 sales will drop significantly.
      Aug 30, 2018
    • Microsoft gfba68
      PPP doesn't mean $1 = 1 yuan. Yes the proportion of the global market is declining but it's still far larger than the next largest market. You know China isn't even #2, right?
      Aug 30, 2018
    • Cisco touché
      PPP doesn't mean $1 = 1 Yuan. It means that the only reason nominal gdp of China is lower is because they report their gdp in Yuan. We in the west convert it to US dollars and tell everyone that US is numbah 1.

      China is number 2 if you don't count EU as a country. Again, that's nominal.
      Aug 30, 2018
    • OP
      What if 3 is in abundant supply across the board and 2 is entire world, what would people/companies and countries with 1 would do?
      Aug 31, 2018
    • Cisco goto
      ^ they invest in the region where there is 3. Investors are looking for returns. The best chance of returns on capital is someone educated and smart turning it into something that makes money
      Aug 31, 2018
  • Microsoft J.Connor
    I don't want to detract from your main point, but I see similar outcomes in the future (decline of "blue collar" tech work) being hastened as this "cloud-first" mindset continues propagating from cloud service provider marketing teams, right to the boards of major companies. Eventually, it's just going to make sense to outsource your entire datacenter and simply have a footprint of enterprise IoT devices--at least, in the sense that your laptop now becomes part of the "IoT" ecosystem. Opportunities will diminish, and if you can't navigate your career path to working for a cloud service provider, you're screwed. Demand for your skill set will collapse down to a few dozen *aaS companies, and perhaps a few dozen more global corporations who need some IT staff to manage their (much) smaller on-prem footprint.
    Aug 30, 2018 4
    • Microsoft J.Connor
      Eventually, we're all going to look back and wonder at the horrible inefficiencies of all these businesses running their own data centers, Hiring such huge IT staffs, and having that pattern replicated across so many businesses... How the hell did they manage to stay profitable?
      Aug 30, 2018
    • OP
      Not at all detracting. I am looking for answers on what to do. So your suggestion of working for cloud provider is in that direction. Technology/Platform transitions are going to aggravate the situation.
      Aug 30, 2018
    • Microsoft J.Connor
      Consulting firms will take a proportional hit too... less of a demand for bringing technical skill sets into a business, as all the expertise can be outsourced to the same service providers that make the product. Or perhaps they will adapt to selling expertise in how to integrate and configure services..
      Aug 30, 2018
    • Microsoft J.Connor
      Azure, AWS, Google cloud, etc will either acquire or drive out of business the smaller *aaS players.
      Aug 30, 2018
  • Microsoft TrumpWins
    Is this thread a response to the recent H1B changes?
    Aug 30, 2018 1
    • OP
      Bunch of posts and playing victim/assigning blame comments made me post this one.
      Aug 30, 2018
  • Oath / Eng [object
    Not until we have photo realistic VR conferencing and AI technology that can correct accents.
    Aug 30, 2018 1
    • OP
      That made me chuckle!
      Aug 30, 2018
  • Microsoft JesusSatan
    The only reason software hasn't moved away from NA is because of VCs in Silicon Valley.
    Aug 30, 2018 1
    • OP
      VCs now have global presence and 'Crazy Rich Asians and Middle Eastern' folks now going towards local ventures. Look up the source of VC funds, a lot of it comes from long range capital managers which are fronts for wealth funds, dark pool, uni endowments,....
      Aug 30, 2018
  • New / Eng aYLx06
    I think you have a point. Should become a Manager in the future if I want high TC? I would assume those business and leadership skills are harder to outsource.
    Aug 30, 2018 1
    • OP
      Owning deliverables is relatively safer in my opinion. It can be via people,process or product management.
      Aug 30, 2018
  • Facebook public
    Of course but everyone here will be long retired by then.
    Aug 30, 2018 1
    • OP
      Upvote for positive positioning.
      Aug 30, 2018
  • Apple decemberki
    I agree with op here, I recently read that now new hires do not require any degree to get in so, most of the hiring is from coding boot camps and community colleges. It’s a win - win situation for companies either way.
    Aug 30, 2018 0