STEVE BALLMER: China and India. And if you look at it, a higher percentage of the best and brightest, more kids in absolute graduate in computer science in those two countries, their growth rates in graduates are going up. In the United States actually we have fewer computer science graduates today than we did five years ago. [Ed. As the technology and telecommunication sectors collapsed, enrollment in U.S. computer science programs has fallen by 60% to 80% in the past two years. For some reason, this is a mystery to CEO's like Steve. We must also note that India has about five times more people aged 20 to 29 than does the U.S. They will always win any battle based on numbers of people. China has about ten times more people aged 20 to 29 than does the U.S. So of course, "more kids in absolute graduate in computer science in those two countries". This is a surprise? No, this is failure to look at the whole picture by those who want to spin the story.]
So in a sense part of it's just about the hubbub of labor rates and blah, blah, blah. The bigger issue is what kinds of things do we need to do to encourage more American kids --
STEVE SHEPARD: Yeah, but how does that solve the problem? I mean, if we had more software engineers graduating from American universities and those jobs are going to India anyway, we just have more unemployment among software engineers.
STEVE BALLMER: Well, no, you might look, if you told me you can hire somebody in India for $20,000 a year, which would be a great, high paying job, and the --
STEVE SHEPARD: Equivalent job.
STEVE BALLMER: -- sort of equivalent is $120,000 job in the U.S., that's a very tough tradeoff, and not for me because we like to do all our R&D in Seattle, but there are some jobs for which that would be a tough tradeoff for some people. We have a small facility in India. It will grow, but we don't anticipate it being very large so far from an R&D perspective at Microsoft.
But if you say to somebody, look, the Indian engineer is $20,000 and the engineer in the United States is $50,000 a year, which is still a very respectable job in the United States, it's not a $120,000 job, the whole economics of that proposition start to look quite a bit different.. [Ed. Note: The average computer engineers salary in the U.S. is $47,580 per year at the 104th highest pay grade in the U.S., not $120,000 per year, in the year 2000. Salaries have gone down since then. So why is Steve Ballmer hiring in India when his own argument says he can hire U.S. workers today?] The communication hassle, the time zone hassle, there are many things that you say the hassle of those things, are they worth the cost savings and at some big delta some people are going to say they are and a much smaller delta people are going to say they're less valuable and that's partly the function of how many folks are graduating with technical degrees here in the United States.