-
April 30, 2007 3:01 PM
Questioning the Planet's Richest Man To His Face
The first in a series of live blogs from the international economic summit in Butte, Montana
It's not everyday you get to stand up in front of 2,000 people and challenge the statements of the richest man on the planet right to his face. But that's what I did today in the main auditorium at Montana Tech here in Butte, Montana (otherwise known as Butte America). That's right, Microsoft founder Bill Gates beamed into the big economic development conference going on here via teleconference to quote Tom Friedman, praise the new economy and get our sparse state excited about our prospects for the future. And when it was time for questions, I got up and asked a simple one: Why does he think Montanans - or any Americans, really - should be optimistic about the economy he describes and the "good-paying" jobs he says he offers when we know that companies like Microsoft are aggressively trying to outsource more and more jobs to cheap overseas labor markets?
My question followed Gates' regurgitation of the Great Education Myth (aka. the myth that all a state like Montana needs to do is better educate its workforce in order to compete). Using what I learned when researching my recent San Francisco Chronicle column (which is a prelude to a section of my new book out in 2008), I specifically cited a series of articles (here and here, for example) in which the group WashTech uncovered official Microsoft documents proving that the company is telling middle management to look to outsource as much high-tech work as possible. Even if Montana had the best education system on the planet, how can Montana workers compete with workers in developing countries making the equivalent of slave wages especially when Microsoft is already showing that it has every intention to outsource at all costs?
Gates responded by repeatedly citing the Great Labor Shortage Lie - the one that claims that America is suffering from a massive "shortage" of software engineers. This lie, of course, ignores the academic and government data that shows there is no real shortage of engineers. He also claimed with a straight face that "you can't find brilliant engineers somewhere else where they are much cheaper" than here in America. And he bragged about Microsoft being a net exporter of products from the United States.
On this last point, he may be accurate at this moment in time. But the whole point of my question - and of this conference in general - is what our economy will look like in the future. Companies like Microsoft may have export surpluses right now, but because we have international economic policies in place that encourage companies to cut costs by moving production to countries with low-wage labor, it sure looks like we're not going to have such a surplus in the future. And Gates seemed to suggest he understood this. After getting the audience excited about the virtues of the high-tech economy, he admitted, "Montana is not necessarily going to be a hub of the IT industry." Thanks to a business-created tax code that rewards outsourcing and a lobbyist-written trade policy that includes no basic wage/labor standards, Gates' admission is a rosy understatement.
-
TAKE ACTION
-
Recent CREDO Blog entries
-
This Modern World
-
November 6, 2008 -
October 27, 2008 -
October 20, 2008 -
October 15, 2008 -
October 13, 2008
-
-
Donations Recipients
-
RSS feeds
Discussion
FWIW, I don't know that the Duke study really says anything conclusively about the shortage (or lack thereof) of engineering talent.
I can anecdotally relate that in the web/internet world, there's a huge shortage of quality talent, and even though this is the most easily exported labor of all, outsourcing in the corporate model has not been working out.
Most real knowledge-work -- that is, anything more complex than reading a customer-service script -- requires close working relationships between parties. It's not like cranking out a cheap-ass TV. The cycles are much shorter, and cultural differences are a real barrier to fruitful collaboration.
Even in absence of any labor standards (which would be a good thing, IMHO), the trend I see is away from the servitude models of 20th Century Globalized manufacturing and towards more equitable international partnerships between smaller firms and entities. These relationships are more beneficial in part because the collaborative/creative aspect sets a high standard, and also because they're not mitigated through a depersonalizing institutional structure. Which makes it harder to be, you know, cruel and inhumane.
Paradoxically, it is engineering around old-line business like manufacturing (including chemical manufacturing) which is easiest to move offshore. The nature and pace of the work cycle allows for the kind of huge bureaucracy you need in order to run a good slave empire.
Well, certainly Gates isn't giving anyone much reason to go into the computer field if they were born in America now, is he? Since most of us have to get loans to attend college and have to pay those loans back, it would be bad business to use loan money to pursue a career in a field where the major employer tells you without talking to or meeting you that
a. Everyone else is smarter than you.
b. Everyone else is better educated than you.
I think he's just trying to squeeze the last drop out of the American consumer before he bails out of the country physically.
p.s. His products are lousy. The only reason Microsoft exists is because either he figured out how to market his product or he found someone who knew how to market it. Never mind the fact that people are requesting Windows XP instead of his new product. He's going to stop making Windows XP which is what the customer wants and force them to buy the new thing. My take on it all is that he thinks we should just all shut up, buy it, and be grateful. Yep... Good ol' Bill Gates. What-a-guy...
Josh,
I am a software engineer. I recently participated in several interviews my company conducted for senior-level software engineering positions. There was absolutely no shortage of qualified candidates. I actually wish we had more jobs available because we turned so many good people away.
Further, I happen to live in the Seattle area, the same area that Bill Gates says he can't find qualified people.
So, please excuse me when I say your anecdotal evidence is lacking, just as much as Bill Gates'. The Duke study was far more comprehensive and credible.
What a sick and greedy fuck Gates is. The SOB still doesn't have enough cash and is pushing both insourcing and outsourcing to fatten his megafortune even more.
I wish this beastial side of Gates was more visible to the public - he's no philantrophist or humanitarian but a modern day robber baron.
I hope he goes the way of Hughes.
And yeah his products generally suck, the only reason his company grew because he practiced intellectual piracy from the beginning - remember "embrace and extend" or more commonly known as "embrace and strangle" not to mention a host of monopolistic pratices that destroyed better software houses.
Not to mention his bribing both parties to keep out of his business affairs.
And Vista? Well crappy things do come in big over priced packages. 7 years ago I used to joke that at the rate M$ was going you'd need a gigahertz process and a gig of memory to run M$ bloatware and guess what I was right.
What's really sickening about this conference as is that fact that they are highlighting Bob Rubin. Rubin was co-head of Goldman Sachs. The same company that later advised Montana Power on its ill-fated quest to transform into a telecom company. Years later we Montanans are still getting screwed by huge power bills while we continue to send OUR power out of state - disgusting.
David, as a matter of disclosure I think you need to tell people that Gov. Schweitzer has also endorsed this conference and is planning on being a speaker. And since the governor's office is involved in the event, I take it your wife. a politcal appointee, who is an economic development specialist in the gov's office is participating somehow since this is an economic development summit. While I applaud your effort to go after these corporate crooks I also think that people who live in glass houses (or are married to people who live in glass houses) should not throw stones.
If I'm wrong on this one, by all means set the record straight.
Bill Gates isn't forcing me to buy Vista. He's forcing me to look at the different flavors of Linux out there and changing operating systems altogether. So far Ubuntu is looking like where I'm going. I am going to miss all the cool games though.
Of course they're highlighting Rubin. Maxie is a Republi-lite and Rubin is their guru. As far as Maxie's concerned, it's a feather in his cap.
Another reason to support real Democrats and fire the Republi-lites.
Speaking of outsourcing jobs, there was an interesting NPR item yesterday.
They were talking about the fact that while the Indian and Chinese engineers from their premier universities are being snapped up, the engineers from their second-string schools are not even employable because of major deficiencies in their education.
Appearantly they don't have quality smaller engineering schools like Montana Tech. They put all their eggs in one basket, and aren't turning out the quantity of good engineers that we are.
Right now, Tech has practically a 100% placement rate for their engineering grads.
Chris,
Wow. Perhaps it's locational (Bay Area vs Seattle) or that I'm too deep in a niche. Everyone I know wishes they could hire someone. How wide a net are you casting and what constitutes a qualified candidate for a Sr. Engineering position? I'm honestly curious because my experience is so much the opposite.
I'm a fan of David's work, and I'm not a fan of Bill Gates or trying to say his motives or outlook are correct. I just don't think the future of internationally-distributed information labor is going to unfold at all like international manufacturing and resource extraction, and I think the narrative David is developing would be more powerful -- and suggestive of more direct action -- if it took that into account.
Bill Gates is just another corporate blowhard. He never gave away a nickel until Melinda came along. The "Gates Foundation" is still getting off on the cheap considering the size of his fortune. Phoney!
Of course there is a shortage of good software engineers. The current "shortage" keeps wages too high for Gates.
Josh,
I've worked on projects with some of effort outsourced, and the results were horrible - but management just increased the percentage of offshore resources again and again. I have to believe their devotion to short-term gain is overwhelming their sense of long-term preservation.
Cosmic: What does management care about long-term goals? The have their golden parachutes, so they can run the company into bankruptcy and still make out like the bandits they are.
As a software professional, I get really disturbed when I see posts that talk about the poor quality of outsourced work.
When I was a kid, "Made in Japan" meant poorly-constructed, shoddy goods. It took several decades, but by the 70's the Japanese took over the consumer electronics industry, and severely threatened the U. S. auto industry.
In the late 80's, China started producing toys and cheap tools. They were cheap, but people took a false sense of security in noting that it was just toys, and did not understand the threat to American manufacturers and workers.
When an industry moves to a new location, it takes decades to build up the infrastructure to suuport it - roads, power supply, financial instruments, legal frameworks, as well as a large pool of sophisticated workers and managers. These take decades to develop.
India is at the beginning of that curve. India is where Japan was in the 60s or China in the 80's - just beginning.
Microsoft announced an investment of $2 billion in setting up R & D and training centers in India. This follows hundreds of millions, if not a billion dollars, in the 90s, setting up professorships and training programs for the Indian Institute of Technology.
It's not just Microsoft. It's Sun Microsystem, Hewlett-Packard, Texas Instruments, Cisco, Dell,etc. American businesses have already invested billions of dollars in setting up training centers in India, to train hundreds of thousands of workers. IBM is investing billions in setting up R & D and training centers in China.
American taxpayers and investors have spent billions of dollars paying for the high-speed internet infrastructure that allowed the outsourcing to take place.
Meanwhile, in the US, if we want to learn this technology, we have to pay $500 a day to attend "Developer conferences". The same conference in Singapore is $25 a day. The U.S. educational system is gearing up for "no child left behind", which is code-speak for training the millions of illegal immigrants coming to this country who illiterate in their own language, much less in English, and who will require an extraordinary level of support just to be able to hit the right pictures on the cash register at McDonalds.
Businesses want to hire people who have spent years, and tens of thousands of dollars of their own time and money to learn the latest technology, and require candidates have two years' experience on technology that's been on the market for six months, and then complain because they can't find someone to come in and hit the ground running.
Meanwhile, kids graduating from school can't get entry-level jobs, because they are being taken by H1-b workers, who come in on a contract with InfoSys.
The whole thing is rigged, and it's been going on for almost two decades.
The same week that Carly Fiorini, then-President of Hewlett-Packard went to D.C. to lobby for millions of US tax dollars to go to the tech sector (like it didn't have enough money already), when criticized for laying off tens of thousands of American workers, and replacing them with cheaper Third world workers, said, "There's no such thing as an American job".
These CEOs HATE the idea that average, working-class people can afford to drive cars, and take vacations, and live in nice houses. They want us to live like the peasants they consider us to be.
We need to know a lot more about the investments and the decisions that are being made today that mean the loss of jobs in ten or fifteen years.
Jobs follow investments, and if we wait until we begin to notice the job loss, it's too late.
Join the Discussion