In the IT offshoring arena, India looms large. But it’s not the only foreign country eager to take American IT jobs. There’s also China.
We’ve all heard news stories about manufacturing moving over to China. With good reason…millions of manufacturing jobs have moved to Chinese factories since 2001.
But how much of a threat is China to the American IT job market? Let’s find out.
The Statistics of Chinese IT Outsourcing
According to StatisticsBrain, American companies outsourced at least 3.2 million jobs to China since 2001. Most are in manufacturing, of course. But a large portion were in IT.
For example, in 2015, the U.S. lost 211,700 programming/software engineering jobs to Chinese outsourcing. That’s a total of $14.4 billion dollars in lost wages. 200,000 IT jobs lost per year. . .every year.
Another report from the Economic Policy Institute (EPI) identifies several other IT job types frequently outsourced:
- IT Support
- Mobile App Development
- Disaster Recovery
- Database Administration
(This report examined Chinese outsourcing from 2001-2013. In the 4 years since, outsourcing has increased even more, according to Computer Economics’ August 2017 research.)
The EPI report found that outsourcing to China caused job losses in every state, including D.C. But California was the hardest hit, losing more than 560,000 total jobs.
These are scary numbers. China could easily gobble up enough American IT jobs to gut our IT industry. Judging by some of the Reshoring Bumper Sticker requests we’ve received, many feel it’s already gutted!
China Lures IT Jobs on Price
Why would any business want to send IT work over to China? Easy. Price. According to TheBalance.com, an entry-level IT worker earns $7,000 USD a year in China. A Chinese IT manager only makes $22,600/year USD. No American company can pay their workers that little for IT work. (At least not quality IT work…the old truism, “You get what you pay for” still holds!)
China is the 3rd highest-rated country for outsourcing (after India and Indonesia). They’re eager to take on more foreign IT work. It gives them buying power, access to intellectual property, and most importantly, leverage in the global economy.
Next issue we’ll tackle the other side of the China coin: Intellectual Property Theft. While losing IT jobs to China hurts our IT industry and workforce, IP theft damages the entire U.S. economy.
What are your thoughts on outsourcing IT work to China? Send them to woof@planetmagpie.com.
