The kind of free trade you're talking about is better for buyers but as I'm an employee and not an employer, I'm more concerned about the sellers market. Complete, unrestricted labour movement means all wages average out. I'd rather not be getting paid the average between the lowest paying employer out there and the highest, so I'm all for setting up boundaries between them.
You are arguing that distorting the market to increase pay for developers is a good thing for you.
Some work can be easily moved around the world. Some can't. For instance, workers on your local railway can for up wages because the railway can't move, and local people need it. Software can be written anywhere, so if US wages are high, it will be written elsewhere.
And you do see this. US wages, and Japanese wages, are higher than in Europe for developers. Here in the UK, a lot of engineering is essentially R&D outsourced from the US to a place with cheaper STEM workers.
At the same time, I feel wages can be at current levels because developers don't realize how much they are worth. A big part of this is because it's hard to link revenues, even at a software company, to an individual developers achievement. If profit is a pie(chart) carved up between different workers and the share holders, then the worker who has best visibility how the money gets there, and how they contributed, will do best. Hence sales/marketing, management, and finance, all tend to do better, because they get to see the budget.
Dispite what you have heard you can't cheaply outsource most development work, many projects outsourced to India actually end up costing more than they did when they where in the US. Granted the developers cost a lost less, but communication barriers often drive external costs through the roof.
I'd draw a distinction between outsourcing, where you buy programming as a service from a third company, and relocation of a department, which is common in large companies.
So for instance, in Basingstoke, an area where land is cheap just outside London, Sony, Huawei, and ST Ericcson (semiconductor major), all do high grade R&D work. Friends that work for those companies tell me that the work is run from a head office in America, Japan, or China, but done in the UK because of good IP laws, and lower cost workers than in Japan or America.
Similarly, AMD have a huge R&D presence in India, and a lot of foreign talent is willing to relocate there because although wages are lower than in the US, they can enjoy a very high standard of living.
I think the outsourcing you are talking about (small, non IT business buys a custom warehouse management system, programmed as s service), has little resemblance to the actual movement of jobs within large companies that I discuss.
This (movement for whatever reason) has happened to whole industries. The UK used to be a center for semiconductor manufacture, but lost that status for 2 reasons. One was a series of catastrophic strategic decisions at UK semiconductor companies. But the other was that the UK government stopped giving tax breaks to the same extent, and were outbid by Singapore, which was willing to provide tax breaks, infrastructure, and an easy ride through city planning.
The reason semiconductors moved was that the industry involve huge capital investments, and would make them where the deal was best (otherwise they would be outcompeted by a company that got a better deal).
In software, the primary cost is definitely wages, so I'd presume large companies will be very sensitive to wage prices, and go the place the trade off is best.
> Unrestricted labour movement will mean you get paid average if you are average.
There are quite a lot of assumptions in this statement. You assume an efficient market (something that does not and probably cannot exist at scale, if at all). You assume information equality, which is the exact opposite of actual practice, you assume the people who make the hiring decisions have some means of separating the average from the above or below average. In practice development skill is a completely separate and unrelated skill to marketing (of one's self). Ability derives from the former, salary from the latter.
So no, unrestricted labour movement most definitely does not mean you get paid average if you are average (not that I care about this anyway: I think all developer pay should go up across the board). What it will mean is employer perception will be that they should be able to get even better talent at even lower prices. And since employers can wait literally years to fill positions and people can rarely go more than a month without a job, this will certainly drive salaries down even further.
Of course, one could imagine that eventually everything would become more efficient and companies should recognise that better developers cost more. But how many companies actually care about having better developers? For the majority of IT jobs, the hiring company doesn't care about developer quality, they care about costs. If development takes longer, so what. Everyone else in their market will be working under the same constraints so it doesn't matter.
But THERE ARE trade barriers for other professions.
How many H1B CEOs are in the US? How many lawyers or doctors are on H1B visas here (or their work outsourced off-shore?)
Software development appears to be the one the most exposed to cheap competition.
As if their only choices are between working in my country's economy or starving to death.
The issue is, those people "on the other side of the fence" can have dramatically lower costs of living. A completely free labour market for software development would mean that nearly all software developers would have to live in some extreme low cost location just to survive.
And who does this benefit exactly? Not the software developers, the majority of them would take a massive reduction in salary or complete loss of one. Not consumers because that's us. Those who just got a massive pay cut or lost their job. Nope, just executives who are already making far over their share.
In other words, globalisation of the labour force helps those who need the least help.
