We were having a debate this evening on the issue of outsourcing to "developing" countries, particularly discussing a case where apparently a business aquaintance has hired a 4-person programming team for $1000/month. The question is, is this going to be a good deal for the money?

My take on it is this; in a global economy, if a set of programmers is cutting down to this kind of level they are fools, not worth the money, or being forcibly held in place by something. Someone with the education and experience required to be a high quality computer programmer should, at some point in their career, have come across the fact that they are considered a valuable and somewhat scarce resource in many parts of the world. They should understand that they can command a reasonable wage and in the global market, should be able to find it.

When the rates get down this low you're probably looking at people who are not the equivalent of your local $80,000/year programmer. Such a person might go for 25% or so of the price (say $2,000/month) due to market differences and a desire to stay home, but when you start talking about 3.7%, it's hard to believe that the top-flight, inventive, effective people aren't going to cross a border somewhere and take the vastly greater wages.

Of course, you don't always need the top-flight programmer, but you need to expect that if you're only offering $250/month then you are not going to be getting the best of the best... they'll go with the guys offering $1500/month for the same job in the same market most of the time. It's not a competition to see who can have the lowest wages; (despite the dreams of systems architects that they can have legions of perfect coding wizards for what is essentially free); it's an attempt to find good people and fairly compensate them for the work they do. If you go into an area with the idea of exploiting the people by offering these kinds of rates you should expect that what you get will not be the happy, perfect coders of your dreams.