Chapter 4: A Futile Chore
Footnote: Barriers: Off-Shore Skills
Modern communications enable foreign operatives to provide domestic customers with high technology skills at a price with which local providers, trapped in a high-cost economy, cannot compete.
I recently (circa 1992) received a mailshot offering programmers from the Soviet Union at £50 per day working remotely. These programmers who would be managed from the U.K. and connected by high speed data communications lines from their locations within the Soviet Union are skilled in mainstream programming languages like 'C', COBOL, BASIC, Pascal and some popular '4GLs'. Because of their cheaper economy, I have no possibility of competing with the Russians on price-performance. Level playing field?
Typically (at 1992 prices) this works out at a door-to-door rate of £50 a day. It includes equipment, accommodation and administrative overheads, plus the collection of requirement specifications and the delivery of finished working and tested software via high-speed international data links.
Currency exchange rates allow them to provide it much cheaper. The unfairness is that within the Soviet, Pacific Rim and Indian economies, a programmer or software engineer may well enjoy a good living based on a loaded labour rate of £50 a day. Within the UK economy, one certainly cannot - especially bearing in mind the cost of the tools of his trade. The result will probably be the complete demise of fundamental software skills within the UK. Thus I am now locked out of my own home market by operatives overseas whose economies can sustain them far more cheaply than the UK economy can sustain me.
The Facts and Figures
I have done a costing on how I would have to operate if I were to provide the services I used to provide at a rate which would be competitive with what the former-Soviets and the Third World now provide them for. An all-inclusive daily rate of £50 would provide me with a maximum gross income of about £100 per week provided I were kept busy all the time. In reality, only about half of my time is chargeable. My actual gross income would therefore be about £50 a week. This is roughly 40% less than U.K. State welfare provides for my family of four excluding mortgage interest.
Therefore, to compete with my former-Soviet and Third-World counterparts, I would need my income supplemented by £46 a week plus mortgage interest. After fixed outgoings on my home, this allows me and my family about £1.50 per person per day for food, clothing, washing, entertainment and all other requirements. And this would achieve for my family the same standard of living we currently endure on U.K. State welfare, though far less reliably.
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©May 1998 Robert John Morton