“The Best and Brightest”

Quote without comment (none needed):

The best and the brightest in the eyes of business and government seem to be the cheapest and most pliable.

Wages and cheap labor

A few years ago I had a long running contract as a programmer at a large company. If you are a contractor two rates are important, the “bill rate” that the corporation pays your contract agency and the “contract rate” that the agency pays you. Contract agencies hate to tell you the “bill rate” because then you know how big a cut they are taking and how little you are getting.

But sometimes you can find out. And I found out that the corporation had a standard bill rate of $68 an hour that they paid to the contract agencies for most of the programmers they got.

Until they started hiring guestworkers in a big way. Most large companies and contract agencies know how to game the system so they can pay guestworkers much less (about 30% less) than they would pay an American. So they get as many as they can. But once they do, then all contractor rates go down. And sure enough, when the company started hiring guestworkers, it lowered if bill rate for all contractors from $68 an hour to $65 and hour, and then lowered it to $50 an hour.

Well, some of us got a wage cut of 100% when they replaced just about all American contractors with guestworkers. And when we tried to get another contract, all the agencies started offering us 50% less than we hade been working for (because they found that they could send the work offshore where the workers were paid only one tenth as much as here).

Cheap labor doesn’t just hit the individual who loses their own job. It hits everyone from that moment onward as the wages for all jobs go down to match what the companies can get away with paying anywhere in the world.

Your job’s next.

Gut Feelings

Chertoff, our Homeland Security czar, has a “gut feeling” that we will have a terrorist attack:

Chertoff indicated to the Tribune that the assessment is “not of a specific threat, but of increased vulnerability”

And sure enough, here come the terrorists with a virtual free pass across our southern border:

The FBI is investigating an alleged human smuggling operation based in Chaparral, N.M., that agents say is bringing “Iraqis and other Middle Eastern” individuals across the Rio Grande from Mexico. … A spokesman in Albuquerque said the FBI had “no viable information” that could lead to a case.

What was that we heard about fighting them over there so we wouldn’t have to fight them here? I’d have a gut feeling too if my incompetence at doing my job let all the terrorists come here just so we can keep on getting that supply of illegal cheap labor.

Liberals vs Neo-Liberals

It’s the economy, stupid!

Some folks who used to be Liberals want us to believe they still are. Well, sorry, Bub. It’s not enough to say that gay black guys should be able to get abortions. If you want to be a Liberal then you have to support their having jobs, and those jobs paying a living wage with decent safety standards…and with affordable medical care and a safe and secure retirement.

If you support gay guys having abortions but then support giving away our jobs, forcing us to take our kids out of college because we can no longer afford their tuition, even making some of us die early because corporate execs want to replace us with those who will not ask for healthcare, then you are not a Liberal–you are a corporate whore, no matter who you may have been thirty years ago.

You can support the people or the cheap labor plutocrats, but not both.

Immigration by the numbers

Roy Beck‘s video should be seen by anyone wanting to understand the consequences of the recent bills recently pushed in Congress, supposedly to “fix the immigration problem”, but really to fatten the wallets of the “cheap labor” upper caste. It’s worth your 13 minutes:
http://video.google.com/videoplay?docid=4094926727128068265

Amnesty? Or Open Season on Blacks?

The big push is on. In both the House and Senate the Cheap Labor Lobby is pushing to open the floodgates on bringing in folks to take jobs from American workers. The SKIL Bill (the SHILL Bill) in the Senate and the Strive Act Ithe Starve Act) in the house will allow huge numbers of guestworkers in to take any job that requires a college degree, and allow amnesty (without ever using the name) for unlimited numbers of illegals to take any job that does not.

If people want to give up their own middle class jobs (or the future jobs of their children or grandchildren) to guestworkers, that is their choice.

But right now I’d like to know where are the jobs coming from that are taken by the one to three million illegal immigrants coming in every year, many of them without technical job skills or good communications skills. Are there that many new jobs being created in this country for them?

Well, no. They are most certainly NOT taking jobs that Americans won’t do. They are taking jobs that Americans were doing, Americans who were already poor or barely making it, until they got replaced.

And it turns out that many of them were Black.

Finally, studies are starting to appear to show the effects of government policies to stop enforcing laws against illegal immigration:

The employment rate of black men, and particularly of low-skill black men, fell precipitously from 1960 to 2000. At the same time, the incarceration rate of black men rose markedly. This paper examines the relation between immigration and these trends in black employment and incarceration. Using data drawn from the 1960-2000 U.S. Censuses, we find a strong correlation between immigration, black wages, black employment rates, and black incarceration rates. As immigrants disproportionately increased the supply of workers in a particular skill group, the wage of black workers in that group fell, the employment rate declined, and the incarceration rate rose. Our analysis suggests that a 10-percent immigrant-induced increase in the supply of a particular skill group reduced the black wage by 3.6 percent, lowered the employment rate of black men by 2.4 percentage points, and increased the incarceration rate of blacks by almost a full percentage point.

Unfortunately, the study is behind a for pay firewall, and only excerpts can be found. More data from it:

Between 1960 and 2000, the employment rate for black men plunged from 90 percent to 76 percent; for “low-skilled” black men (defined as high-school dropouts), in particular, it fell from 89 percent to just 56 percent. Between 1980 and 2000, meanwhile, the incarceration rate for black men rose from just 1 percent to nearly 10 percent. A new study considers this shift in light of large-scale immigration, which may have crowded black men out of the labor market and made a shift to crime more appealing. The researchers found that as immigration increased the supply of workers at a particular education level, the employment rate for black men in that category declined, and the incarceration rate rose. From 1980 to 2000, the authors conclude, immigration accounted for roughly a third of the decline in the black employment rate, and about 10 percent of the increase in the incarceration rate for low-skilled African Americans.

George J. Borjas, one of the authors of the above study, also authored the book Heaven’s Door: Immigration Policy and the American Economy, with similar findings:

…the benefits of immigration have been greatly exaggerated and that if the American people allow immigration to continue unabated and unmodified, they are supporting an astonishing transfer of wealth from the poorest people in the country, who are disproportionately minorities, to the richest.
…
Despite estimates that range into hundreds of billions of dollars, net annual gains from immigration are only about $8 billion.

In dragging down wages, immigration currently shifts tens of billions of dollars per year from workers to employers and users of immigrants’ services.

And:

The new immigrants, Borjas finds, have also increased inequality in this country by depressing the economic opportunities of native-born unskilled workers. They have placed substantial fiscal burdens on the welfare systems of the states in which they congregate, and they have benefited employers of unskilled workers. In sum, today’s immigration “can be viewed as an income-redistribution program, a large wealth transfer” favoring high- over low-income Americans.

Many of these findings are now uncontested. The National Academy of Sciences Research Council (NRC) estimates that immigration was responsible for 44 percent of the decline in real wages experienced by high-school dropouts between 1980 and 1994. Writing in the Public Interest (Fall 1998), Steven Camarota, a scholar at the Center for Immigration Studies, maintained that the wage effects are even “larger than those reported in the NRC study.”

…multiculturalist banalities, it should be noted, happen to coincide neatly with the interests of the principal beneficiaries of today’s immigration–the people who hire the pool cleaners and gardeners in Beverly Hills and East Hampton and who insist on having freshly hand-picked vegetables and salads on their dinner table.

Illegal immigration has been used as a policy by cheap labor advocates to transfer hard-gotten gains over many decades from the poor, many of them Black, to the richest. And the gullible among us have gone along with it, with former Liberal (now Neo-Liberal corporatist) Senator Kennedy leading the charge to help George Bush and the wealthy racists take money from Blacks and give it to themselves (with tiny tidbits to the illegals themselves) by trying (successfully or not) to force Blacks and Hispanics to compete against each other for the limited pool of jobs. And there will be gullible Liberals and Progressives there to help. And perhaps save a few bucks by exchanging their own Black nanny or gardener for a Brown one.

Guestworker Economics

Being a guestworker here, whether on an H1B or an L1 visa (or even as an illegal alien) can be a great financial deal for the guestworker, even if they are paid a great deal less than an American citizen would be paid.

The guestworker gets to arbitrage the difference between the cost of living between the US and the country they came from (and where their family and relatives still live). In countries such as India and Mexico both normal wages and the cost of living is one tenth what it is here. So if the guestworker can endure harsh living conditions here (living many to a room, for instance), every dollar they can send back is worth ten times as much. Some H1Bs have told me that they can retire with a wealthy lifestyle back in India with what they can save from working here for the six years the H1B visa lasts, even if our Department of Labor allows them to be paid at only the 17th percentile of normal wages here for the job. And I’ve been told by guestworkers from other countries that the cost of living differential in their countries is 50 to 1 instead of merely 10 to 1, making it even more desirable to work here, legally or illegally. They are not merely surviving, they can become the financial elite of their country. At the expense of American workers, and to the enrichment of American corporate executives.

Even if the job is offshored, the worker in the foreign country is getting a good deal. I’ve been told that the prevailing wage for high tech workers in India is between 4 and 7 dollars an hour. But with the cost of living differential, the worker can afford a mansion and two maidservants with that salary. Still a good deal for them, if not for us. (But I hear that the employers in India are being told by American companies that they are paying their workers there far too generously, and the job can be done for far less in China and Vietnam and some of the Eastern European countries.)

But the economics are bleak for the American workers being dumped. When an employer can get any workers at the 17th percentile of current wages, then not only is an American worker laid off, but ALL Americans working at that job will get wages lowered to that level. At one location I worked at for years, as soon as H1B contractors came in working for 30-40% lower wages, the rates offered to all American contractors were lowered by the same amount. And on the illegal side, as soon as illegal immigrants could be encouraged to come here as meatcutters, the wages for all those meatcutters fell from $20 an hour to $9 an hour.

And the harm to American workers cascades. When an American computer programmer is replaced by a guestworker, that guestworker is used as a liason to enable the offshoring of two more jobs, so now three Americans are out of a middle class job. They are forced to work at jobs making only a fourth or a fifth as much as they used to make. Not only do their entire families suffer, losing homes, kids having to leave college, but they displace the workers at the lower paying jobs, all the way down to the bottom of the wage scale.

And it will get worse, pushed by our many corporatist legislators who, under the guise of “immigration reform”, want to destroy many more of our families by increasing the number of guestworkers to virtually unlimited levels.

Computers and engineering are virtually dead as careers for American workers, with college enrollments continually declining. Students are not stupid. They know there will be no jobs for them. What they do not know is that ALL middle class jobs are going to be outsourced to guestworkers or offshore.

I suspect some folks reading this think that surely their job will be immune. Good luck.

Stealth Immigration

The Senate passed the immigration bill and it’s off to the House. Bet you think it’s actually about illegal immigration and amnesty and walls. Sorry, but that’s just the cover story, allowing Congress to throw a little meat to those voters who have to work for a living and are afraid they won’t be able to.

The real voters–those who don’t have to put their votes in the ballot box because they put their votes into congressional campaign funds–they don’t care one way or the other about giving illegal aliens amnesty to do low paying jobs, they care about getting rid of highly paid white collar workers and replacing them with low paid workers from other countries. And they will get what they want no matter what the House does to the Immigration bill. And you will never hear on the news what is really going on.

If you have a white collar job, or if your spouse or parent or child has one, expect for them to have to give it up or have to take a fifty or seventy percent pay cut to keep it over the next decade. If you read the blogosphere, you may have a chance to find out what is happening…

From OpEdNews:

H1-B Visa Foreign IT Workers and the Immigration Bill
IT Unemployment Is About To Take A BIG Jump UP!
….
From the very beginning of the Bush Administration U.S. companies have lobbied Congress and President Bush extensively to obtain greater freedom in hiring cheaper foreign technology workers via H-1B and L1 visa programs. Concurrently, U.S. companies have also been busy relocating many technology jobs offshore to India and China where salaries are a fraction of U.S.-base technology salaries and where there is no health insurance cost – because the governments of those countries provide social health care for their citizens.
….
President Bush and Congress are about to greatly expand the H1B and L1 “guest worker” visa programs via the giant Immigration Bill, now pending before US Congress.

There are proposals that would expand the annual H1B limit from 65,000 to 115,000 by excluding dependents which are now are counted against the cap from the total, it could mean the entry of as many as 300,000 people a year, with an option of raising the cap 20 per cent more each year.

If you don’t know what that means, try calculating 20% compound interest on 115,000 for ten years, for 20 years… A clue: by year 25 it comes to 11 million a year…and we only have three and a half million IT workers total and that has been declining due to the current influx of guestworkers. By then they will have been able to replace any white collar job currently being done by an American citizen. That means you and anybody you love. And all the money they save on your salaries goes into their bonuses.

So what is going to happen? They will work it out in committee. They will give the House some meat so the voters will think they are getting “tough on immigration” and the House and Senate will quietly allow all the guestworker provisions to sail on through. And you will never know what happened until you get laid off. And your kids come back to live in your basement.