Ask Dr. Gigabyte

Ask Dr. G.

Troubled? Confused? Puzzled? Out of sorts? Lost in a sea of madness? Dr. Gigabyte is here to save your butt. Bring him those tough questions you just dont have answers tothose questions upon which your very career may hinge. Dr. G. returns this month from a cathartic experience in a Wal-Mart in Paris, Ky., refreshed, renewed, and ready to serve you.

Dear Dr. G.: I am caught on the horns of a dilemma. My director of software development tells me he needs about 5,000 hours of programmer time to complete our CRM conversion. My CFO tells me I have the budget for a fourth of that. My CEO tells me offshoring is not an option. What about nearshoring? Isnt there a cruise ship somewhere loaded with cheap programming talent?
CIO Caught in Columbus

Dear CIOCIC: You are not caught on the horns of a dilemmayou are caught in an untenable situation. It sounds to me like senior management has mandated a project and not provided adequate resources for its completion. Who messed that up? Did you maybe lose control of your responsibilities? Did you not demand enough funding to complete the project? Shame on you, or shame on thembut shame on somebody.

But I digress. Your question is about nearshoring. Yes, there is a start-up venture in San Diego that proposes to anchor a cruise ship three miles offshore. It is called SeaCode (www.sea-code.com). The plan is to fill this ship with 600 or so programmers. This will create U.S. engineering jobs and ensure that 90 cents of every dollar from our clients stays in the U.S. instead of flowing to foreign locations. Ouch. So, the plan is to hire cheap foreign labor, house employees on a ship in international waters to avoid silly visa, tax, and work rules, and then make certain almost none of the wages paid these coders will be returned to their own homeland. Does this sound a little like indentured servitude?

My grandfather was a coal miner in western Pennsylvania. He got there by being hired in Eastern Europe, from where he was transported over to this country by ship (and it wasnt a cruise ship). He worked 12 hours a day in the mines and then was expected to buy everything at the company store. That made it a little hard to get ahead. This scheme doesnt sound all that different to me.

Maybe I am being a little harsh. After all, these guys get to live on a cruise ship, and they each get their own stateroom. Think of all the amenities! The fun! Swimming pools, ballroom dancing, three-minute aerobic classes on the mezzanine deck, Friday nights mystery dinner, and Saturdays formal reception. Fanny packs are optional. This is just the sort of thing that would appeal to struggling Third World workers trying desperately to get ahead in this life. Makes you wonder just how many beers these guys had consumed when they dreamed this thing up.

These programmers reportedly are going to be paid about $1,800 a month, a little more than $10 an hour. Now, I have heard more than half of the applicants for these jobs are U.S. citizens. Wow. There are qualified coders out there willing to work for $10 an hour? Which brings me to another, much bigger issue. The U.S. economy has become a service economy. For all practical purposes, we do not create or manufacture things in this country anymore. And now we collectively are deciding we cannot afford our own skilled services. We live in a land where we are willing to pay $4 for a cup of coffee (just how much money does a barista make anyway?) but are not willing to pay a decent wage for skilled software developers. What was it Karl Marx said about workers controlling the means of production? Where are we going to be when the only skills the U.S. has to sell to the rest of the world are decaf double latte assembly and futures trading?

Offshoring, nearshoring, or whatever you want to call it, the act of finding cheap ways to get things done today may help your quarterly reports but is shortsighted. The world economy is a zero-sum operation. There are only so many dollars or yen or euros to go around. If we cant build anything and we dont have any natural resources, we better learn to live by our wits, and offshoring is going to make that all the more difficult to accomplish.

Need help? If you have a question for Dr. G., please send via e-mail to gigabyte@tdmag.com. And quit making your questions so controversial!

Readers are invited to send their questions to for response in this column. Letters are for purposes of exploring insurance IT issues only and may or may not be contributed by any particular individual.