I don’t see any reason to believe this. If all jobs could be done remotely wages would go down in some areas and up in others. Not sure why you would think wages would go down simply because they could be done remotely.
Because remote work generally increases supply of labor. In the short term the bottleneck is managerial resistance to building a culture of remote work. In the medium term when companies see that groups are successful they will search for talent at the lowest cost, duh! There is no magic that says rich western countries will win that competition. Increased global supply of software engineers and other knowledge workers will generally lower salaries unless there is enough demand to hoover all of them up.
Now the counter is that as far as innovation is concerned competition for the best will go up as companies do rely on less, but higher quality employees to get shit done. Those employees do generally (at least for now) come from rich countries, but that too will change. It will change because high quality people will realize they no longer have to emigrate for opportunity.
Josh[/quote]
That’s not true. That’s the standard MBA answer that might look good as a theoretical research paper, but is not reflection the practical realities of the software industry…
There are plenty of outsource mobile engineering teams offshore right now that are offering services for 1/2 the cost…But yet many companies (us included) are still hiring domestic talent and paying significant higher wages than foreign software engineers.
Why is that?
Well, because if you ever built a product from ground up, the practical experience is that, yes you can do a complete offshore development project with cheap labor from a remote country IF all your product specification/requirements are fully documented with all your I’s and T’s crossed and all they need to do is implement exactly how the spec is written..In other words, if software ends up being more like factory assembly.
This might work in highly strict industries like defense, and medical devices..
But for the rest of the real world, software doesn’t work that way. Most of these cutting edge companies never have a fully speced/requirements gathered product feature of what they want to build. There is a lot of ambiguity from a product perspective of what needs to get built and a certain level of flexiblity, creativity, and tolerance for shitty product requirements….
The shitty product requirements that happens a lot can be managed by a inshore/inhouse team that is paid more to tolerate that shitty requirements, and just-in-time requirements development needed to make a product release. Bluntly put, your inhouse team is an exempt employee and you can make them work to get shit done even if the spec isn’t perfect.
If you try that with an outsourced third party software shop that is cheap overseas, what you will end up is a shitty end product because it only does exactly what the shitty product requirements specified, leaving out the rest of the missing requirements….And in the end, you’ll end up spending even more money design/implementation/qa to address all those missing things after the fact, because like any software…It’s much more expensive to make fixes/changes after things have been released. They are paid by the hour, and couldn’t give a shit their product requirements suck…Because they get paid by what you tell them to do, regardless of how the end product turns out.
That leaves the last option which is hiring directly someone overseas and pay them 1/2 the cost. Again, you can do this too, but there’s a bunch of legal/coordination tasks for this to happen. And there are language and cultural barriers that again makes it challenging for those teams to deal with a half baked product requirement spec.
That’s why you CAN farm out boring, fully speced out shit…But it’s really difficult to farm out work/design that won’t ever have a full product spec on what needs to be built, which ends up tending to be the cutting edge things…
Yes, many companies like mine have also gone through this exercise and learned the hard way too and burned dollars with cheaper “labor”. That’s why we we are now going the opposite direction, since the previous direction didn’t work and turned into a dumpster fire.
You won’t understand this if you work in one those strict, to the T industries that have thick process, that use heavyweight things like TSP/PSP software process or anything heinous like that. Because in those industries (like defense and medical), you do need a heavyweight process and move much slower, because if you fuck up, people will die.
But for the rest of the world, the rest of the world doesn’t use this painfully strict software process because if it did, nothing would get done…I would shoot myself if I had to work that way…
