It's very simple, follow the money (and the politics). These corporations have (collectively) somewhere north of 1.6 trillion in capital offshore that the Dems will eagerly tax to fund their social programs (they'll spend MORE than that of course if they get a chance, but at least that much) if any attempt is made to repatriate it. American engineers are always regarded as inefficient (unfairly in my opinion - just notice how many Asian engineers it takes to "replace a light bulb" or perform some common task, compared to getting it done here), but right now it's like comparing apples and kumquats. If there were to be a law passed allowing that money to come back tax-free (or nearly so) for the purpose of hiring US employees, there would be a tsunami of tech hiring like we haven't seen since the boom of the dot-com days. The likelihood of such a law getting passed is fundamentally a question of how many Democrats get "thrown under the bus" in the upcoming midterm elections, at least IMHO.
China and India may be producing more "engineers" but their educational systems are not in the same class as American ones. These "engineers" are inferior to US educated engineers and you have to have 3-4 workers to replace 1 good US worker. Factor that into your costs. Add to that the poor work ethics, disloyalty, and poor communications skills. I'm Asian and speak from experience, so save it.
Does anyone want to explain the almost total lack of innovation this past decade? IMO, it's mainly due to outsourcing and the effect on job security in the US. We used to rule the world in innovation -- now we import most of it.
Here is a challenge to the programmers that are concerned about outsourcing overseas. Start a programming company here in the states. If you are the boss then you make the decision to outsource or not.
Shazam! I wonder why. Could it be that the recession really hasn't ended? Or. perhaps (tax) uncertainty of what this (tax) administration is about to (tax) do? Or, perhaps the health care costs are projected to skyrocket that adding employees without having the opportunity to "read the bill before it was passed" means that the impact of this horrible bill is about to hit coporations and they know it. It was patently obvious to many 2 years ago what was going to happen should this administration gain power, and the tech companies are right on schedule to slow growth as projected. Oh, you know the saying "put your money where your mouth is"? Well, I did before the election (converted all my 401k to cash) and haven't lost a cent. Could it be that tech companies are taking a wait and see approach too?
I believe they are hiring in their foreign factories they built. Officially, U.S. companies are not required to report such statistics. And, in light of the current political firestorm surrounding offshoring, it is doubtful that many will volunteer the information truefully.
If U.S. companies have and do have a choice, they will build tax free factories in foreign friendly countries, and hire low wage income tax free foreigers to work those jobs. CEO decision: why hire in America when you dont have to pay taxes and higher wages.
-Time zone differences-when North America sleeps, Asia is on the job so, in effect, U.S. companies can get work done 24 hours a day.
-Educated labor pool-some popular offshoring locations are in countries that grant more undergraduate engineering degrees annually than the U.S. For example, China awarded more than three times the number of degrees as the U.S. and India more than double. Japan and Russia have granted more engineering degrees than the U.S. as well.14
-Avoidance of organized labor-many developing countries do not have unions or other employee advocacy groups to fight for fair wages and reasonable working conditions and schedules.
-No federal or state unemployment taxes
-No child labor laws
-No environmental or workplace safety laws
-No worker retirement or pension costs
There is so much treasonous propangda by U.S. corporate funded "think tanks" that say offshoring is a small percentage of U.S. job loss. You cant believe any numbers or statitics fraudently reported.
The U.S. is hiring overseas, but just not hiring U.S. workers and they dont have to tell us.
There needs to be economic reasons to hire Americans. With the current tax code, there isn't much reason to do so.
I suggest our government TAX all companies at double the rate it does now. Change the TAX code to prevent companies from setting up headquarters overseas and paying less tax. And provide a tax credit for hiring American workers.
For a non-governmental solution, Boycott products from companies who lay-off American workers and move jobs overseas. Maybe their new employees can afford their products/services -- I think not. Why should we suppport these traitors ?
Surely this could not have anything to do with the ever increasing pace of offshoring? Most of the people I work with are either offshore or on visas. Meanwhile engineers like myself discourage our children from engineering careers because of this reality. Pick a large company and look at the jobs it has available in the US, then look at the positions it has open in, say, India. Who are we kidding? It's a sad age we are entering for American engineering in my opinion.
Dylan is right. The author asks why "most technology companies are not contributing to an economic recovery".
The reason is just that there isn't much sign of a "recovery" at present, and if things get worse, those cash-rich companies are going to have to spend their cash to compensate for low cash flow (income) from operations.
The Fed has spent immense amounts of ITS cash on giant banks and insurance companies, which employ a relatively small number of giantly-paid employees. No contribution to recovery there, either. Nothing has come of it, except to keep those businesses in business in spite of low cash flow from "operations".
Tech companies seem to be just following the Federal lead.
This is a strange recession. Companies are sitting on loads of money. There are lots of skilled unemployed, many of whom will never work in the same job again. Yet, it still seems to be difficult to hire qualified people for many positions. More and more kids can't afford a college education, yet so many that get one can't find a job now.
These same companies that have stockpiles of money are howling about unfair practices by our government and by other governments. Rather than solution finding, blaming seems to be the popular theme of the day. They claim that the government has made it too expensive or that anti-competitive practices have made them non-competitive.
I don't know that we can blame anyone but ourselves (the business community). We're the ones not investing in the future. We're the ones looking for a quick-buck rather than pursuing long-term technology advancements. And we're the ones not insisting on adequate funding for education.
I know there are points of hope. Out in Hillsoboro, Oregon, in the areas surrounding Intel, the schools have great programs in robotics, electronics and software. Yet, just twenty miles away, the high school laid off its single electronics teacher.
I've read that despite our sliding position in the hierarchy of education around the world, that the US spends more than any other nation on education, even the ones that exceed our results. I say quit complaining about that too. A lot of things cost more here. We make more and spend more. Yes, we need to keep an eye on efficient spending, but putting 35 students in primary and secondary school classrooms and pricing public universities beyond the financial means of most people is not going to help.
If we really want to get out of this financial crisis and regain out technological leadership, we need to stop waiting for the government to bail us out and invest in education and innovation instead of letting those piles cash sit and slowly diminish in value.