Letter from California

An archive of the weekly "Letter from Calfornia", written by Jim McCarthy.

Wednesday, March 31, 2004

A couple weeks ago, I had lunch at a cool Hollywood hangout with a friend of mine that I’ll call Paul. Like me, he’s been in the Internet business for about as long as it’s been around, and he’s done very well. Today, though, instead of sounding like a high-tech hipster, he sounded like a dinosaur on his way out.
“There aren’t going to be any of these jobs left in this country, Jim,” he said. He’s worried about the fact that American companies have been hiring thousands of Indian software engineers. “How are we going to compete?” Paul said, looking at me through $100 sunglasses.
I’ve noticed that people have a much easier time accepting change when they don’t have any personal involvement. For example, when my five-year-old son has to stop playing and leave for school at 7:30 in the morning, his three-year old sister has no trouble seeing him march down the steps with backpack and lunchbox in hand. 30 minutes later, when it’s her turn, it’s a whole different issue. Suddenly the go-to-school question hits home, and she’s either too tired to go to school, has decided there’s no need for her to go to school or she just grabs the leg of the coffee table and dares us to take her.
I mentioned to Paul that the steelworkers, autoworkers, and textile workers of previous generations felt just like he did at one time. “Yeah, but that was different,” Paul said. “Yeah, this time, you’re actually affected by it,” I replied. Over the years, plenty of American companies have taken relatively low-skilled jobs paying relatively low wages to other countries because the workers there can do similar work for a lot less money. $10 or $12 a day might not sound like much to Paul, but it keeps a person in pizza and Pepsi pretty well in places like Indonesia or Mexico. American workers for a long time have had to face the fact that if you’re doing a job that you learned by reading a manual for an hour in the storage room on your first day, there’s a good chance that someone somewhere could do it about as well for quite a bit less money.
On the other hand, Paul is right. Exporting a job canning tomatoes and exporting a job writing computer programs don’t feel quite the same. The friends he worries about don’t have low-skilled jobs. They didn’t join the union the day they graduated from high school. Instead, they went to fancy colleges, got highly skilled, highly paid jobs in an exploding new industry. As software engineers, they did everything right.
When I was a kid in the 1980s, I used to dream of being a software engineer, but after a while, it became clear that my brain wasn’t wired right if I planned to make a career of sitting for hours on end staring at a screen, becoming one with the mind of the machine. Still, for me, the guys who could do that were like magicians, and they still are. Typing letters and numbers into a computer and producing “Doom” is like taking sand and making diamonds. Personally, I’ve always been impressed.
“Hey, “ I said, “Americans have always found ways to compete in these situations.” It’s true. Anybody who ever owned an American car made in the 70s remembers rattles, leaks, parts falling off or other tales of woe. I owned a car whose hood would occasionally fly open while driving. After the Japanese challenge, American cars, and American autoworkers, got better, and today, we have better cars and better car companies.
He took off his glasses and looked at me across his barbecue chicken and goat cheese pizza. “A software engineer starts out making $60,000 a year and after a few years, you can be 26 or 28 years old and make $100K if you’re good,” Paul said. In India, engineer salaries are so cheap that they run them in 3 shifts, sharing one computer among the three engineers that take turns working. For the Indians doing the work, the salary they get is a giant step up from the other work that’s available to them.
“Listen, Paul,” I said, “the industry is going to have to adjust. You know how it is. One superstar engineer is worth 10 or 15 average engineers. We’re going to have to figure out ways of doing more of that.”
“You’re right, Jim,” Paul said, as we walked to the parking lot. “It’s just scary, that’s all,” he said as he stepped into his leather-appointed Audi A6 and headed back to his challenging, high-profile, high-paying, highly-skilled, but now endangered, job.


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