ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Thursday, April 21, 2005

"Slave" Ship...

This has got to be a joke. No way that this would get very far. At 3 miles, its visible from shore, and every news outlet will be doing a story complete with helicopter shots of the ship and interviews with the AFL-CIO and the International Telecommunication's Union.

And the headline won't take long to write (see title above).

Followed by pickets around the businesses that actually used the SeaCode's services. And whats the benefit over traditional outsourcing to low-cost countries? None that I can see.

This is real... at least according to this Forbes magazine article. Interesting thing is that they'll be paying more than Indian programmers would earn in Bangalore, so I'm not sure what the benefit is. If you're a customer of these guys, you could get the same mid-quality code out of India for 1/3 of the cost and not have the "slave ship" tag associated with it.

Two San Diego entrepreneurs have come up with a very literal twist on offshoring software development jobs. This pair wants to get their hands on a 600-cabin cruise ship and park it off the coast of El Segundo, Calif., just over the 3-mile border that marks international waters. They'll pack the boat with engineers who will write code day and night.

The two founders of SeaCode, David Cook and Roger Green, are confident their plan will float. All they need to do is classify their workers as "seamen," so that they're protected by international maritime laws that skirt the need for those pesky immigration visas. The workers will fly in and out of Los Angeles International and board the ship with a sailor's card from the Bahamas, where the ship likely will be registered. This lets the company avoid U.S. payroll taxes on the foreign coders. Cook, a former supertanker skipper, plans to dock in Long Beach once a month to resupply and dispose of waste.

Programmers--sorry, seamen--hired from places like India and Russia would have their own cabins, work eight- or ten-hour stretches on either a day or night shift and have the rest of the time to sleep, play shuffleboard or take a water taxi to shore. Cook imagines a four-months-on, two-months-off work cycle. Take-home pay will be about $1,800 a month, compared with $500 per month for an experienced engineer in India. "We're not a slave ship," says Cook. Adds Green, "It's like the International Space Station."

SeaCode's pitch is that it will still charge the same rates as developing-world firms (Green says Indian firms hide behind amazing markups) while offering clients freedom from killer flights to India, Israel and other faraway destinations to check in on projects. Work will also get done faster with two shifts. "Try to get American software engineers to work at night," says Cook.

Cook and Green, who used to be chief information officer at chip-equipment manufacturer Cymer, have already raised an undisclosed amount toward a $10 million ship. Their backer is Barry Shillito, a San Diego angel investor and former assistant secretary of defense. Right now the two are close to making an offer on a 34-year-old boat called the Carousel, currently steaming around the Canary Islands. Says Green: "We're looking for a couple of anchor clients."

As much as it sounds like a joke, the plan could work. "Nothing tells me that it's flatly prohibited," says San Francisco maritime lawyer James Walsh. That's because a "seaman" can be defined broadly as anyone who works on a vessel. But don't count on locals to be happy about a colony of programmers floating just over the horizon. "It's not my prerogative to tell them to take a hike. I'll leave that to the Coast Guard," says Kelly McDowell, mayor of El Segundo.
One thing to take from this is the lengths to which entreprenuers will go to avoid paying payroll taxes. Hmmm, seem to recall Dems talking about increasing those last time I checked...

By the way, give me 5 years and offshoring to India won't even be on the radar screen - given our demographic trends.

I also happen to go against my party on Bush's guest worker program. The way I see it, if you make legal immigration within the NAFTA countries easier, it accomplishes two goals:
  1. It reduces illegal immigration as most would rather wait a week or two to be an official guest worker - and this allows the Border Patrol to actually focus on the illegals that we should be concerned about (criminals/terrorists, etc).
  2. If they're here legally through a guest worker program, you won't have business paying them less than minimum wage (which they're able to do if they're able to threaten deportation). This puts the guest worker on a level playing field (from a skills standpoint) as low-skilled US workers.
I'm probably out of step with the majority of gopers... but I see that there's a reason for the guest worker program.

My one concern is the balkanization of America which would occur if English isn't the lingua franca... Right now, there's an incentive for Hispanics to learn English (as they'll earn more if they do), but as their percentage of the population increases, there'lll be less of a need to learn English - and the split will turn into something similar to what we see in Canada, with a large section of the country threatening secession.

Your Co-Conspirator,
ARC: Brian