I'm not going to say anything definite about outsourcing good/bad. Sometimes outsourcing reduces the cost but also reduces the quality of the product or service, but sometimes it even increases the quality as well as reducing cost. It depends on the situation.
No, what I think is left unsaid in this discussion is that any trend in who is doing what jobs where is not inherently good or bad but just part of a global economy. "What goes around, comes around" one way to put it. I had employment for several years working on email software, thus my job surely contributed to the loss of mailroom jobs all over the world. Now that some of those potential mailroom employees in India and elsewhere are highly trained programmers instead, there's a theoretical risk that I could lose my job to them in return. I'd have to figure out some new way of providing a service or product that consumers are willing to pay me for.
I know this is highly obvious to some, yet it seems to be morally repugnant to others. I've never understood why. If you argue that my job should be protected from outsourcing, surely that also argues that those mailroom jobs should have been procted from email technology even earlier. Many industries *do* have regulations or other artificial barriers impeding the entry of new technology (the classic example is longshoremens unions opposing the introduction of container shipping). But if that email software had been illegal the world over to protect the jobs of mail room employees, then my job would not have existed, and those offshore programmers would not now have a chance to make a much higher salary programming in outsourced projects.
Now all of this has happened in only seven years (since I personally began working in the communication software field). The pace of change is itself frightening. It would take me several years to completely "retool" myself through obtaining a bachelor's degree in a completely new field or a master's degree in a related field. The disruption is painful. People's salaries have a ratchet effect because we come to rely on a high salary rather than treat it as a bonanza which may end, and we make commitments like large mortgages based on temporarily high salaries. I wonder if we'll ever accustom ourselves en masse to a more dynamic career trajectory where a typical person would go through several fields of employment, self-employment, and an income which could go down as well as up in a given period (obviously some adaptable people are already accustomed to that -- anybody who runs their own business, or sales people whose commissions vary widely by quarter).
Anyway, to try to sum up what strikes me about the outsourcing discussion is how quickly we see a situation as a given. We who joined the Silicon Valley boom accepted salaries which doubled in only a few years and moved to some of the most expensive areas in the world. The Times article that seems to have sparked this blog storm says Since [being laid off], Maglione has been able to find only temporary work in his field, taking a pay cut of nearly 30% from his former salary of $77,000. For a family and mortgage, he says, "that doesn't pay the bills." Obviously this is true given his family, his spending habits, and his mortgage. But taking that $77,000 salary for granted doesn't seem far-sighted, especially given that Maglione himself had his job producing software that automated keeping track of insurance agents -- thus reducing the demand for middle managers to keep track of those same agents.
One thing I am sensitive to is that the pace of change can be harsh. However, given how slow it seems for new technology to actually catch on (I've been watching Instant Messaging deployment for six years now and still hear managers complain about it and misunderstand it), I don't think we need many artificial governers to keep the pace down. Besides, those governing agents tend to turn into brakes very easily and they *still* don't work, they just make the change more abrupt when it finally happens. The pace is what it is, and we have to be adaptable.