A PhD student at Carnegie Mellon costs approximately $80,000 per year. (Research programmers and post-docs cost about the same.) Given that PhD students have to take classes for the first couple of years and are therefore running at 50% capacity, this means that each effective person in my research group costs on average $100,000 per year.
I'm from Guatemala. For $100,000, you can hire 4-5 extremely competent full-time engineers there (even accounting for the 50% overhead rate inside CMU). My question today is: would it make sense to take 5 engineers instead of a PhD student next time I have extra money?
I understand that CMU PhD students have a much higher IQ than the average programmer, and that for certain tasks you can't just rely on programmers, but if the exchange rate is 5 to 1, I think the experiment is worth a try.
And from there, it's a slippery slope: why not just move my whole research group to India or China, since a large fraction of our PhD students come from there anyways?
Part of the goal of being a professor is mentoring, and I love that part: I am not saying we should get rid of PhD students, but that perhaps a mix of some outsourced coding and PhD students would be a better investment for everybody.
Disclaimer: 100% of my PhD students are working on projects of their own choosing, and if anything my biggest flaw as an advisor is not giving them enough direction (instead of micromanaging them).