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[P]
Use cheap labor to fund your Open Source idea

By slimy in Technology
Tue May 01, 2001 at 09:43:55 PM EST
Tags: Software (all tags)
Software

Companies like M$ open offices in India to save on software development costs. There are reasonable argument which argue this as an immoral undertaking, but if the development isn't for a commercial development but an open source one then a lot of those arguments go out the window... it's just a donation to society and if someone in England getting 60 pounds an hour wants to pay me better than market rates in Australia to program their latest idea, I'd be thrilled!

I work in Australia and for one hours worth of my income I can afford to pay an Indian programmer a very healthy days wage. I have this idea I would like to see tried out and I'm always short of productive hours to get it done, this seems like a great way to get my project implemented.

The questions are, is it moral? and, how can I make it happen?


The specific example I have to offer is my previous employer. They had an office in India, I was getting paid $40,000 AU and an equivalent Indian employee would cost them $6,000 AU. There were major problems with hiring and working with staff in India, not necessarily in quality of work but definitely in communication and project management.

I'm an Australian and working as a programmer myself. If I could get a days work on my open source project idea for one hour of my pay I'd do it in an instant, if this idea is not flamed I will undertake it in a small Linux/XML/JSP idea I've got in mind. I'd be pleased to produce a journal/article reporting on my experience.

I have already received some comments on this idea, the most interesting ones indicated this attitude:

  • If this were done by a for-profit corporation, then the situation would be very different.
  • It involves exploiting the cheaper cost of living in India, not necessarily the Indian him/herself. An Indian programmer works for less for four reasons: 1) no labor laws, 2) lower standard of living, 3) greater supply of labor, and 4) tremendously lower cost of living. In unskilled labor, 1 & 3 are the primary reasons wages are at starvation levels. Among skilled workers, 4 is the main reason wages are lower. Assuming $1 US = $1 AU, if you paid me that much money, I would have to work for two weeks to pay my Janurary heating bill. On the other hand, my Indian counterpart probably pays nothing for heat, and essentially nothing for housing (by comparison). The problem with corporations exporting production is that this means that I now have to compete against someone with living expenses that are less than 20% of mine.
  • Pay your third-world employees substantially above the market wage. It's only fair, you've got the money, and you shouldn't exploit their lack of labor protections. You get what you pay for too.
  • Don't throw more work at them than is fair.

On to specifics and practicalities...

Finding staff is a problem which can be easily solved. Host a free site where one can register work that needs staffing. It would be great if a registered programmer could wake up, log on, choose the project they will work on for the day, do the work, and be reimbursed on delivery as per specification.

Market rates need to be advertised and agreed to, it would be terrible if this idea was turned into slave labor. I propose that any work be remunerated with at least 1.5 times the local contract rates.

I've no idea yet how I would go about paying someone in India.

Project management suffers risk, make tasks small and well defined. It could be pointed out that many open source projects work without deadlines, really it's ready whenever it gets done.

Communication; this could be the killer. I can't find proof, but I expect that a good percentage of Indian IT graduates have reasonable English skills.

If anyone can offer any advice on the practicalities I'd be really pleased to read your comments.

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Use cheap labor to fund your Open Source idea | 28 comments (26 topical, 2 editorial, 0 hidden)
Immoral? (4.66 / 9) (#1)
by Tezcatlipoca on Fri Apr 27, 2001 at 05:25:23 AM EST

Since when it is immoral to pay for receiving a service?

I think you are confussing terms a project that is GPL does not have to be made by hobbyists. GPL refers only to licensing issues not to how you implement the product

Now you have to make some decisions here, you must have a budget for your project, and estimate of how long would it take, etc. Then you should be able to come with a realistic price you could pay to a consultant in India. Don't forget overheads (to transfer money costs you).

Free markets regulate themselves very well: if you pay too much in a market with low wages you are guaranteed to get to choose amongst the best available over there, the supply is vast, demand is low, so it works great both ways: your project gets brilliant people, motivated because they get more than average. It is like an after Xmas sale: you would not miss a Xmas bargain, will you?

WIll this last? Not in an ideal market, ideally all IT companies should be flooding to India to make their development there, but if that happens the supply eventualy dries out and, guess what, Indian Engineers begin to become more expensive until eventualy is not economic anymore and you move to the next emerging nation.

Os I would say, go for it, and let the markets regulate themselves, you can't do nothing about it any way, whatever you decide influences the market for Indian engineers but you have no control over all of it, so don't get too worked abou it.

Regardin English, that is not a problem, most educated people speak proficient English, the accent is very different, but so is the Australian accent as well, so you'll have a lot of fun ;-)

Might is right
Freedom? Which freedom?

Immoral? (4.50 / 8) (#2)
by duxup on Fri Apr 27, 2001 at 06:06:44 AM EST

What makes you think this might be immoral?

As long as you pay them a decent wage that they can feed their family with, house themselves, save some $ for the future, and provide reasonable working conditions, I can't see how morality might factor into this.

Re: Immoral (none / 0) (#25)
by Eccles on Wed May 02, 2001 at 11:22:39 AM EST

The only time I could see it be immoral is if you have some sort of slave labor situation (sweatshops, Chinese kids making fireworks, that sort of thing.)

[ Parent ]
Communication not a problem (4.00 / 4) (#3)
by imperium on Fri Apr 27, 2001 at 06:16:55 AM EST

India was under the British colonial heel for so long that English is standard. In fact, many Indians speak better English than the average Brit or American.

I think your idea would be extremely popular in India, too. Everyone loves well-paid self-employment...

x.
imperium

Do you actually work with Indians? (4.75 / 4) (#6)
by Karmakaze on Fri Apr 27, 2001 at 09:01:00 AM EST

I ask this, because I do. The company I am about to leave makes most of its money importing H1B workers from India (they're trying to be a progamming company - but it takes time to build that).

Yes, almost all Indians speak English passably. Very few of them (unless they have spent time in the UK, US, or Canada) speak as well as a native English speaker. There are communications issues, even with the ones who are fluent enough they feel comfortable coming to the US to work. The ones that stay in India (they have an office there) generally are less fluent.

Look at any job posting that accepts foreign workers - they almost always specify "good communication" - that's code for "no heavy accents". They specify it, becuse it's an issue.

One of my informal jobs here was to coach our consultants in English for their interviews. You have the same grenre of communications problems as you will working, say, in Japan. Many Japanese speak English, too, but think of all of the "let's mock the Japanese use of English" sites that are up.

There are also, even though it's not PC to admit it, cultural issues. I never bounced off so many walls of sexism as when I started to work with this company. The shorter the time spent in the US, the more attitude I had to overcome. I shudder for any female manager sent to an overseas site.


--
Karmakaze
[ Parent ]

No, I don't (3.50 / 2) (#7)
by imperium on Fri Apr 27, 2001 at 09:17:07 AM EST

This is largely based on my father's experiences in India, visiting the public transport authorities there: you have more direct experience, for sure.

However, I would still be surprised to hear that the educated programming classes in India aren't fluent in English, and I'm not yet convinced that fluency is the dominant filter for those leaving to work in America.

As for cultural issues (I prefer the word "problem" to "issue", but no matter), that doesn't surprise me a bit. I do wonder whether Indians in America experience more or less of these than Americans in India. Any thoughts?

x.
imperium
[ Parent ]

im an indian (none / 0) (#21)
by univgeek on Sun Apr 29, 2001 at 06:03:55 AM EST

I guess the cultural issues will take some time to resolve... But as far as language is concerned I dont think many Indians have a problem. I do know that we are seen as having a substantial accent.. but hey so do Australians... With 1/6th of the worlds population with us I guess people should get used to our 'accent' soon :-)
Arguing with an Electrical Engineer is liking wrestling with a pig in mud, after a while you realise the pig is enjoying it!
[ Parent ]
accents (none / 0) (#24)
by drhyde on Wed May 02, 2001 at 08:07:40 AM EST

fwiw, I find the majority of indians (and pakistanis, and bangladeshis too) more comprehensible than fellow anglo-saxons from some parts of the same city as myself.

[ Parent ]
India has lots of labour laws (4.28 / 7) (#4)
by Paul Johnson on Fri Apr 27, 2001 at 08:27:24 AM EST

What makes you think India has no labour laws? India has tons of labour laws, which is one of the main reasons why its still so poor. If you run a bicycle factory in India you have to get a government permit to increase your production, on the grounds that if you increase your production then some other bicycle factory is going to have to reduce its production and therefore lay of workers. If you employ people in India then either laying them off or firing them is incrediably difficult.

Paul.
You are lost in a twisty maze of little standards, all different.

not really (4.00 / 1) (#20)
by univgeek on Sun Apr 29, 2001 at 05:58:13 AM EST

Im from india myself.. There used to be pretty restrictive labour laws. but those have disappeared and its mostly free-for all now ie you can do what you want. Imports too are going to be 'open' in a couple of years. And anyone can start a company without too much of a hassle.
Arguing with an Electrical Engineer is liking wrestling with a pig in mud, after a while you realise the pig is enjoying it!
[ Parent ]
I fail to understand... (3.66 / 12) (#5)
by Giant Space Hamster on Fri Apr 27, 2001 at 08:54:29 AM EST

If a large corporation pays an Indian programmer $6000, it's immoral. But if you pay an Indian programmer $6000, it's perfectly fine.

What kind of demented logic did you use to reach this conclusion?

-------------------------------------------
The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.
-- Bertrand Russell

If you really want to do something like that... (4.00 / 3) (#8)
by agillesp on Fri Apr 27, 2001 at 10:42:18 AM EST

I believe eLance will put your project in front of many offshore development firms. They also handle the currency exchange, etc. (for a healthy commission on the sell-side)

From experience, I can tell you that this sort of thing sounds much better 'on paper' than in practice. Language barriers, cultural differences, and even time zones conspire to make offshore development difficult at best. Look at it this way; software development is hard when you've got everyone in the same cube farm; it's harder still when you outsource development talent; adding more logistical hurdles makes it commensurately harder.

Of course, as you point out, it's done all the time, and the folks who do it would have you believe that it's working out swimmingly. For firms like Microsoft that make a serious commitment to setting up a development (sweat) shop with on-site project managers (slave-drivers), it most likely results in cost savings and perhaps reduced time-to-market. In a more 'virtual' setting, e.g. Indian development shop, Australian project manager, things tend to get dicey.

The more pressing question is "is it moral?" (What you really mean is "is it ethical?" but that's a semantic issue.) The very fact that the question occurred to you indicates that you think there are ethical issues at play. Perhaps you already know the answer to your own question and are looking to salve your conscience.


-- Life is finite, time is infinite. Therefore, the probability that I exist is zero. AE
Look before you leap (4.00 / 2) (#9)
by Nezumi on Fri Apr 27, 2001 at 12:40:49 PM EST

Before you pin too much of your hopes on the labour market in India, it may be wise to check out the current situation over there. Things are a teensy bit on the tense side where labour law is concerned.



Not immoral (4.33 / 3) (#10)
by dze27 on Fri Apr 27, 2001 at 03:39:49 PM EST

This isn't exactly 8 year olds stitching soccer balls for 50 cents a day. I don't see a problem with it at all. No one's under any duress to do the work and it seems like it's a reasonable wage for the time and place.

The very act of contracting work out overseas is work in and of itself.

Standard contracting rates vary wildly depending on cost of living etc. I understand the daily rates for Ottawa, Canada (where I live) and London, England (for example) are very similar dollar-for-pound (i.e. 500 $/day here, 500 pounds/day there). But the exchange rate is like 2.20 C$ per pound... it's the fact that rent in London is insanely expensive and so on. So you can't just look at the apparent price of the work in your own monetary terms.

"Luck is the residue of design" -- Branch Rickey


Shh.... listen to an Indian! (4.91 / 12) (#13)
by mystic on Fri Apr 27, 2001 at 09:28:24 PM EST

I am an Indian, though not living in India at present. This is an interesting topic. My take on it:
  • Lesser wages is not the only reason why MNCs hire Indian programmers working in India. It is also because of the time difference. Exactly 12 hours. This means that guy X in US can work from say 9 a.m to say 9 p.m in US and then send the code over to India and the guy Y in India will start working on the code from his 9 a.m (US's 9 p.m)to 9 p.m IST (Indian Standard Time). Thus work gets done 24 hours a day.
  • Indian programmers are good. I cannot say they are the best, but most of the programmers in India are good, or atleast they were. If you are planning to hire Indian coders, doing it over Internet is not a very nice idea. This is because of the recent explosion in the number of name sake "programmers". India has seen a boom in IT coaching centres, and they churn out an lot of not_too_superior coders. So choose carefully.
  • I really don't think it will be immoral at all. You are not under paying them. You are not forcing them. You are just giving them a great offer.
  • It is important where your coder is stationed. This is important if you are setting up a branch in India. It is not relevant if you are hiring the guys as a freelance guy. In places like Bombay, political unrest is common and you will see a lot of Union strikes etc. But there are places like Banglore, Hyderabad where politician are more IT minded (if I may use that word) and promote IT investment.
  • Language - I really don't think that language will be a problem. Yup, some Indians do have a very strong accent, but don't worry this will change soon thanks to to Star TV, CNN, BBC etc. :)


comments to date (3.00 / 1) (#14)
by slimy on Sat Apr 28, 2001 at 01:53:35 AM EST

Comments thus far have been great. The idea appears to have merit and I will definately attempt to make it work. I'll maintain a forum for discussion on the topic and report on progress as things unfold.

I thought I'd post some more focused requests...

  • does anyone have links to or examples of accurate contracting rates in india?
  • does anyone have suggestions regarding the best way to transfer funds?


prog pay. (none / 0) (#22)
by univgeek on Sun Apr 29, 2001 at 06:08:22 AM EST

an entry-level programmer with zero experience normally gets around Rs10K pm. IF he is from a good institution. That works out to approx 200-250$US pm. Programmers with 2-3 years exp get 3 or four times that I think. If you want really good people I think you should be willing to pay > 50Kpm ie 1000$US. Of course this is a single persons salary. Not taking into accnt any other costs. hope that helps.
Arguing with an Electrical Engineer is liking wrestling with a pig in mud, after a while you realise the pig is enjoying it!
[ Parent ]
How to do development with Indian companies? (none / 0) (#27)
by shridhar on Wed May 02, 2001 at 02:17:44 PM EST

Would you be interested in doing a full-fledged development with an Indian company? By doing this you would not have to bother about hiring good programmers. I work for one such company and the project which I worked on recently had only one person at the other end (In the US) driving the development He used to give us requirements and we used to do the design (get his go ahead on that) and the coding. He could choose how many programmers he wants on the team. He had to spend not more than 8-10 hours a week on the project. If you are interesed in such a development, I can put you in touch with my manager. The billing rates are (approx. $4000 per month per developer).

[ Parent ]
I'm sorry... (2.09 / 11) (#15)
by DeadBaby on Sat Apr 28, 2001 at 09:43:10 AM EST

The second I saw "M$" I stopped reading and voted -1.
"Our planet is a lonely speck in the great enveloping cosmic dark. In our obscurity -- in all this vastness -- there is no hint that help will come from elsewhere to save us from ourselves. It is up to us." - Carl Sagan
anyway to change the article (4.00 / 3) (#16)
by slimy on Sat Apr 28, 2001 at 09:57:32 AM EST

It seems a shame people are voting against it for the M$ reference. If I realised it would be such a bone if contention i'd would have replaced it with 'MNC' or just 'large software companies'. It is irrelivant to the topic.

Is there a way to make DeadBaby happy without resubmitting?

[ Parent ]

You could stick pacifier in his mouth. (4.80 / 5) (#17)
by elenchos on Sat Apr 28, 2001 at 05:25:37 PM EST

Or increase his dosage of Ritalin.

My advice is to not bend over backwards to satisfy the trivial nitpicks of people who will vote down a story for reasons like that. The more authors conform to such prissy notions of decorum and tortured diplomatic language, the more bland and uexpressive we become. The term "M$" speaks about you and your attitudes; it has personality, even if it is a little abrasive and slightly less than original. "MNC" or "large software companies" is boring and overly harmless.

Gonzo all the way. If I want boring and harmless I'll read the New York Times.

Say to yourself in the early morning: I shall meet today inquisitive, ungrateful, violent, treacherous, envious, uncharitable men. All these things have
[ Parent ]

your morality (3.25 / 8) (#18)
by klamath on Sat Apr 28, 2001 at 08:49:00 PM EST

I've said it before but the same comments apply here; your article is pretty limited when you assume one universal system of ethics or morality. While I don't expect a full proof of whatever system of ethics you advocate, at least elaborating on some of your one-line assertions would be helpful.
Companies like M$ open offices in India to save on software development costs. There are reasonable argument which argue this as an immoral undertaking, but if the development isn't for a commercial development but an open source one then a lot of those arguments go out the window...
Oh really? Why is it immoral? And why do these unspecified argument disappear when dealing with a not-for-profit organization? If you seem to make some fundamental assumptions like the above that are very dubious, and then proceed to make sloppily apply these assumptions to reality (*yawn*). When you already assume that globalization is immoral, there really isn't a lot to talk about. Also, "open source development" is not incompatible with "commercial development" or private companies.

Oh, and the dollar sign makes you seem really l33t, if that's what you were going for...

* Pay your third-world employees substantially above the market wage. It's only fair
LOL! Oh, it's only fair, is it? Again, it would be nice if you'd cut down on the arbitrary assertments.
Don't throw more work at them than is fair.
Here's that magic word again. I'd be interested to see how you define "fair".

regarding MNC's (none / 0) (#19)
by slimy on Sat Apr 28, 2001 at 11:14:06 PM EST

I certianly don't claim to be an expert on the pros and cons of globalisation. From my first hack at getting this article up I got a eloquent response which i summarised and included. I'll attach that post below.

This was contributed by RandomPeon, I can't make contact so I hope he doesn't mind. I don't claim this to be correct just because it was written down but perhaps you'd care to comment...

"This made me think.

If this were done by a for-profit corporation, I'd be righteously pissed off. Why? That corporation, in return for receiving a charter and services from its government, has an obligation to be socially useful to the citizens of the chartering government. Under US law, corporations that have a net detrimental effect on society can be disbanded, although this power is never used anymore. (Things might be different legally down under, but the moral reason to create corporations - they benefit society - is still the same.)

Second, a public for-profit corporation is essentially required to mistreat these workers. If they can get away with paying starvation wages or firing someone who is sick, they have an obligation to do so in order to maximize their profits. Corporations must maximize shareholder value, even if it involves mistreating people.

Third, it involves exploiting the cheaper cost of living in India. An Indian programmer works for less for four reasons: 1) no labor laws, 2) lower standard of living, 3) greater supply of labor, and 4) tremendously lower cost of living. In unskilled labor, 1 & 3 are the primary reasons wages are at starvation levels. Among skilled workers, 4 is the main reason wages are lower. Assuming $1 US = $1 AU, if you paid me that much money, I would have to work for two weeks to pay my Janurary heating bill (this must seem very strange to an Aussie - Jan heating bill :-). On the other hand, my Indian counterpart probably pays nothing for heat, and essentially nothing for housing(by comparison). The problem with corporations exporting production is that this means that I now have to compete against someone with living expenses that are less than 20% of mine.

Hell, in the US, we use our H1-B visa program to mistreat Indians who work in IT here. One of my foreign colleague's wife lost her job here and was unable to find another job within 10 (?) days. Bye, Raja. (This is before the INS (Immigration and Naturlization Service) changed the rules).

But, your idea is different. You're not trying to make a buck, so you can pay a decent wage without worrying about your profits. You're not trying to globalize IT labor market and screw Western workers in exportable fields into the ground. But I don't know if it's that different....

That said, couple suggestions:
1) Pay your third-world employees substantially above the market wage. It's only fair, you've got the money, and you shouldn't exploit their lack of labor protections. You get what you pay for too.
2) Don't throw more work at them than is fair.
3) The Golden Rule.

There are one or two things which have already been indicated to be incorrect in that. From other posts it seems that there are quite stringent labor laws.

My opinion on fair... If the situation were reversed (which it could quite easliy be, any london/american coders interested? :) would I consider it a good deal in terms of renumeration and risk, would i take up the offer .

Klamath, how about yourself, given the oppertunity what would your reaction be? and, why?

[ Parent ]

Open source (2.00 / 1) (#23)
by prostoalex on Wed May 02, 2001 at 03:11:11 AM EST

Perhaps you were confusing a little bit open-source with the offshore development, as I don't see clearly why two would mean the same, although coincidence might bring those two together. The question of morality is sort of useless, as long as you have a wilful worker willing to do the job and money to pay him, that's a business relationship. I know a lot of offshore developers in Ukraine, where I am actually from, and they don't seem to be enslaved and poverty-striken, even with the lower than average wages, as judged by American standards. You pay them less, but at the same time you pay higher taxes, pay higher utility bills and pay about $70 for a dinner for two at an average restaurant. If you cannot find any reason, why you shouldn't do offshore (and there might be some cases when that's not recommended), then go ahead.

Supporting Open Source (none / 0) (#26)
by starman42 on Wed May 02, 2001 at 01:50:48 PM EST

I work for a software company in Germany and this company has offices in India. There are 27 programmers working there and they are all very pleasant and good programmers. Their english is good, though understanding them when they speak is a different subject entirely :) I am a project manager and must coordinate the work done in India with the work being done in Germany. It is not an easy task, at all. Of course, for an open source project that I assume would be GPL'd, it is not as critical as when one has investors to satisfy :) I think that the idea is really great. To give everyone an idea of how much an Indian programmer makes per month, the Indians that work for our company average 550DM per month (about $200US). Before anyone starts to feel sorry for them, it is good money, by their standards. As an example, if you have $50,000US at your disposal, you could live in India for twenty years without having to work. I have been seriously contemplating this option :) David

Of course it is ethical !!!!!!!!!!!!! (none / 0) (#28)
by newellm on Thu May 03, 2001 at 02:01:21 AM EST

A person will take the best job they can get based on $, the work, the environment, and other factors. If they decide to work for you for any amount of money, this must be the best work that they can find. You have just made life better for them. Even if you aren't paying them enough to buy all the food their family needs, they are still getting more food than they would have been able to get if you hadn't offered them the job.

I don't see the problem with some large corp. paying 12 year old kids 50 cents a day to make shoes. What else would they do? They obviously don't have any better alternatives or they wouldn't have chosen that job. They are making 50 cents a day which is going back into their economy and helping them now and in the future.

The only reason that it would not be ethical, is if you were forcing them to work no matter what the pay. I don't think that there are very many places that this is occuring today.

Matt Newell

Use cheap labor to fund your Open Source idea | 28 comments (26 topical, 2 editorial, 0 hidden)
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