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By Jack Ganssle
Years ago I heard a rumor - and have no idea if it's true - that conservative pundit William F. Buckley sailed his yacht 3 miles offshore, into international waters, to try Marihuana. Presumably he inhaled. Being outside of US jurisdiction he was no longer bound by the laws of the nation, so did nothing illegal.
International Sports Link runs an offshore betting service from Port Canaveral, Florida. Gamblers spend the day aboard ship hovering just outside the 3 mile limit where they quite legally engage in behaviors that are quite illegal on the smudge of land that's not even over the horizon.
Now SeaCode (http://www.sea-code.com) has taken this idea to a new extreme. To skirt America's annoying worker-protection and tax laws, SeaCode plans to buy a cruise ship they'll outfit with 600 Indian and Russian programmers. It'll lie at anchor 3.1 miles off Los Angeles. This inexpensive labor will be just a half hour boat ride from shore, sparing their American customers the 14 hour flights to India.
According to Forbes (http://www.forbes.com/business/forbes/2005/0509/048.html), workers will earn $1800 per month, quite a hefty hike over the $500 they'd get in their own countries. but far less than their colleagues ashore.
SeaCode's web site claims "Another SeaCode benefit is that 90% of revenue comes back to the U.S. instead of flowing out of the U.S. to distant-shore outsourcing locations." Huh? These people aren't paid enough to live in the USA; their salaries will go back home. It's more likely that 90% of the revenue will head overseas.
The company plans to cleverly disguise the programmers as "seamen" registered in the Bahamas so SeaCode can avoid those pesky payroll taxes.
The offshoring tempest has left me somewhat ambivalent. It's heart-wrenching to see the work flee the country, and I can't see how the trend will benefit us in the long or short term. I fear the burdening trade deficit, accelerated as these offshoring dollars find haven overseas, will make US bonds less attractive to foreign investors who finance a big part of our suicidal deficit.
But this is a trend that cannot be stopped. It's the result of the perfection of capitalism. CEOs have a fiduciary responsibility to reduce costs wherever they can. If they don't we, their stockholders, boot `em out. Engineers often write that some action should be taken but I've yet to see a viable plan.
At the last two San Francisco ESCs I've moderated a Shop Talk discussion group about offshoring. A year ago people were angry and loud. Last month they were much more subdued and resigned. We're wearily accepting this new business model.
Now SeaCode is bringing offshoring to our own shores.
SeaCode's approach sounds like a great idea to me. Surround the USA with shiploads of migrant workers. Suck away the jobs, don't pay taxes, and funnel money overseas as fast as possible. Come into port once a month to dump sewage. When our economy is finally drained they can steam to another coastal nation that still has a few bucks in the treasury.
There might not be much we can do about offshoring. But I've long wondered what our nuke subs do now that the Cold War has ended. Perhaps a new role for their torpedoes is lurking. just about 3.1 miles offshore.
(Before you hit the "flame" button, that last is a bitter joke.)