Layoffs up – for you and me

2009-Feb-17

A year ago I said that American workers would suffer huge layoffs…but that the guestworkers replacing us would not be laid off. We, I was right.

And once again, American workers are being laid off by the millions. But not the guestworkers being brought in to replace us.

Infosys has no lay off plans

CHENNAI: IT major Infosys has no plans to lay off its employees and is going ahead with placement of all the 18,000 candidates who were extended offer letters.
….
Asked about the US Government’s decision on restriction of H1B visas and the stimulus packages, he said, “Right now, I see there is no impact…” he said.

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Looting the corpse of capitalism

2009-Feb-09

Yeah, I remember capitalism. I remember the fables that company officers have a fiduciary responsibility to manage the company for the benefit of the shareholders. Yeah, right. From the Economist, The bonus racket:

In its last three years, Bear Stearns paid $11.3 billion in employee compensation and benefits. According to its 2007 annual report, Lehman Brothers shelled out $21.6 billion in the three years before, while Merrill Lynch paid staff over $45 billion during the three years to 2007.

And what have shareholders got from all this? Lehman’s got nothing (the company went bust). Investors in Bear Stearns received around $1.4 billion of JPMorgan Chase stock, now worth just half that after the fall in the acquirer’s share price. Merrill Lynch’s shareholders got shares in Bank of America (BofA) which are now worth just $9.6 billion, less than a fifth of the original offer value. Meanwhile, Citigroup paid $34.4 billion to its employees in 2007 and is now valued by the stockmarket at just $18.1 billion.

So the “employees” got five or ten times as much as the shareholders. But, you say, doesn’t that mean that we got that money because we are employees? Nope.

For the last decade these companies and most others have been getting rid of all the “rank and file” employees they can, and replacing them with cheap foreign labor. Fifteen years ago most workers were Americans. Now the executives and middle management are American, but a huge percentage of the rest are guestworkers, except where whole operations have been offshored. (The janitors and such are often illegal workers now.) Most of the “employees” who are getting so much more than the shareholders are the CEO and top executives.

At a typical Fortune 500 corporation such as those listed above the project manager and a lead tech may still be American workers, but most the the rest of the staff, the analysts, the programmers, the systems administrators, the database administrators are now mostly contract workers rather than permanent staff. And the contract workers are mostly guestworkers. At my last gig, I was brought in on contract to a major financial services firm (not one of the above) to work on a major project. I found myself in a room of 90 people. Two of us were Americans, me and a secretary to handle the paperwork. All the rest were guestworkers, mostly from India, but the rest from a wide variety of countries. And that is the “new normal”. Not one was brought in because they had unique skills, and nearly all of them ended up getting canned after a few weeks because they couldn’t do the job they claimed. But they were brought in because they were being paid half as much as the standard wage for American workers. And all the money that was saved on employee expenses became bonuses for the upper management. Just look again at the Economist article. Who got the money and who got the shaft?

They don’t care about the shareholders, they don’t care about the quality of the products they create, they don’t care that when they lay off their workers that those workers they lay off can no longer buy their products. They care only about getting as much as they can get before it all comes crashing down.

And the time for it to all come crashing down is just about now…


Baby Boomer Retirement? We Wish!

2008-Jun-30

I’m a baby boomer. After 18 years with one company I was forced into “early retirement” when I was still in my 40s. Obviously I couldn’t actually retire since I’d have gotten a pension of about ten dollars a month. So I became a contract programmer, no job security, no benefits, just money. Which was OK until the Fortune 500 began replacing all of us with guestworkers and then offshoring. So for the last eight years I’ve been making a quarter of what I did before, mostly getting short term jobs fixing what the guestworkers screwed up.

Well, eventually I will have to actually retire. Or will I?

Every year, when it comes time for the next H1B guestworker lottery, we get weeping and wailing from the Fortune 500 about how they need an infinite number of foreign guestworkers because when my fellow boomers retire there will be fewer American workers replacing us.

But they are lying, because I will never be able to retire, and neither will many of my fellow boomers. We will have to work until we die in our tracks, because we are being forced out of jobs with retirement benefits into jobs with no benefits, being forced to take jobs that pay half to a fifth of what we used to get paid, if we can find jobs at all.

I have friends who used to be computer geeks who are now nurses, truck drivers, or working at grocery stores. They could still do the jobs that are now being done by guestworkers or offshores, but no one wants to give them medical or retirement benefits, and no one wants to give them any training (they’d prefer to hire someone who lies on their resume).

So we are doomed to have a huge number of unemployed or underemployed older workers being a drain on the economy rather than a boost. And all the cost savings from hiring cheap foreign labor go to the upper management., not into lower prices for consumers, nor higher dividends for stockholders, nor better wages for remaining workers.

Is there now a significant lack of skilled IT workers in the U.S.?

Executives are being told by their hiring managers that there are not skilled workers in the U.S. and they must seek H-1Bs to fill positions

How economic conditions affect retirement decisions

Younger workers struggling to find a job now have something else to worry about: older workers with little choice but to keep working, even in a weak labor market.

Comfortable retirement a fading dream for many

She’s already put off retirement several years. Now, she says she may have to stay on the job four or five years more.


Bollywood Journalism Coming to a Newspaper Near You!

2008-May-22

Looks like our neighbors in Kansas City are about to learn about outsourcing, as the Kansas City Star offshores its advertising department to Bangalore:

Now, as if this weren’t enough of a blow, the kicker is this: the employees will retain their employment until after their replacements – who are being flown in, and put up here in Kansas City – have been trained by the displaced employees.

Right now it’s just the advertising department, but offshoring other critical departments will follow. Those of us in Information Technology have been predicting it since our careers started being decimated a decade ago. We’ve seen our friends evicted, forced to take jobs making a quarter of what they were making before, lost healthcare, kids not able to go to college…and no one would listen…because the journalists still had their jobs so they didn’t see any reason to pay attention to us. Now it’s their turn.

Americans have a terrible tradition of “rugged individualism” that assumes we are individually responsible for our destinies rather than all in the same lifeboat together. To us, every man is an island and none is part of the main, and when the bell tolls, just shout “Fuck you, Jack, I got mine!” So when our neighbor is laid off, we assume it is just their own damn fault. There are no looming threats until we ourselves are at risk.

Well, now that those who write the newspapers may finally see their own families at risk, maybe they will start to listen.


H1B Auction

2008-Mar-18

Congress is about to try to repay all that corporate cash they are receiving by trying to give the corporations as much cheap labor as possible to lower our wages. Bill Gates just testified before Congress that the world will end if he doesn’t get a massive increase in H1B guestworker quotas:

Congress’s failure to pass high-skilled immigration reform has exacerbated an already grave situation. … Last year, for example, Microsoft was unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that we wanted to hire.

He claims he would be able to hire more Americans if only he could get those “highly qualified” foreign candidates. Of course those Americans might not be paid as much as the H1Bs:

These jobs are very, very, very high-paying jobs.

Wow! We must be paying H1Bs a whole, whole, whole lot for them to be “very, very, very high-paying”! (If he is telling the truth. Otherwise he is lying through his teeth.)

Let’s assume Bill is honest. One problem with the H1B program is that it is a lottery. If there are more applications that slots, then the slots are given away by random chance instead of allowing Bill to get the H1Bs he needs so desperately. And by random chance too many of those slots are given to H1Bs who are low-paid and untrained instead of to those who are “highly qualified” and “very, very, very” highly paid.

We can fix that! Easily. Just turn the H1B lottery into an auction. And I think we can simplify the process so that even poor Americans could administer it.

  • Each H1B application has an LCA (Labor Condition Application) filled out, many by email. This becomes the official application after the Department of Labor certifies it after looking for obvious errors.
  • Each H1B LCA must be placed online by the Department of Labor in a publically available place prior to the auction.
  • The LCA will have an Rate of Pay that will constitute what the employer is willing to pay the H1B.
  • The Rate of Pay must match or exceed the Level IV (Fully Competent) Wage Rate as determined by the Foreign Labor Certification Online Data Library. No other source for wage rates will be allowed. The FLC Data Center library has an updated list of prevailing wages for all appicable job classifications for all areas of the country. (It drastically understates wages that major employers actually pay, but it is a minimum standard until a better national standard can be determined.) If an H1B candidate is truly “highly qualified” and “very, very, very” highly paid, then surely they can reach the lesser standard of “fully competent”.

The only thing new so far is the demand that LCAs be made publically available before the H1Bs are given out, in order to make the process publically transparent to the taxpayers and voters. We now have all the information we need (Employer ID number, date of application, Level IV prevailing wage, offered wage, work location) to conduct an H1B auction. The auction part is the simplest part. I can write the code to conduct it automatically in five minutes:

-----------------------------------------------------------------------------
UNTIL quota reached or run out of valid applications
    for each occupation_code
        eliminate occupation_code if no more applications left for occupation_code

        for each area_code
            eliminate area_code if no more applications left for area_code

            the winner is MAX(offered_wage above prevailing_wage)
             
            if there are ties
                winner is employer with fewest wins so far

                if there are still ties
                    winner is employer with earliest application_date

REPEAT until done
-----------------------------------------------------------------------------

Benefits:

  • Easy: Little needs to be changed in the current process. The code to conduct the auction is incredibly simple and transparent.
  • Diversity: Currently the system is being gamed by IT groups flooding the process with applications and getting most of the H1Bs simply by filling up the lottery. Now each occupational category has a fair chance, and proportionately fewer IT jobs will be taken. And each geographical location will have a fair chance instead of just the major areas that pay most. So more of the country can see the wonderful benefits of H1Bs instead of just IT folks in major urban areas.
  • Transparent: With LCAs visible, anyone could duplicate the process to ensure it is operating correctly. With LCAs visible, anyone can see by auction time if an LCA is for a job where there are tons of available American applicants, ensuring that the Microsofts of the world are speaking the truth about the lack of Americans in that category, and whether the job classification and offered wage are appropriate. Even more transparency could be obtained if the resume of the H1B candidate were included with the LCA…)

If this modest suggestion were adopted, I wonder how many H1Bs would really be found to be needed.


Layoffs Up

2008-Jan-31

From Financial Week:

Layoffs coming, and in large numbers, survey finds
January 28, 2008

Corporate executives are poised to start making substantial cutbacks in their staffing, according to a new forecast by employment consulting and legal firm Career Protection.

In fact, the firm is predicting a 37% increase in layoffs this year over last

On the other hand

Wipro to hire more freshers
19 Jan, 2008, 0000 hrs IST, TNN
BANGALORE: Continuing with its focus on recruiting more freshers, Wipro … has given out job offer letters to 14,000 rookies from engineering colleges for FY09. It is also stepping up focus on hiring non-engineering graduates and has made 3,500 offers to BSc graduates. …

“We have been inducting non-engineers for 10 years now in small batches but decided to ramp up the number last year. Last year, we gave offers to 1,500 BSc graduates, we have hiked the number to 3,500 for next fiscal.” These will be from the BSc Maths, Physics and Chemistry streams.

In Q3, Wipro made a gross addition of 4,900 people of whom about 2,500 were freshers. For the nine months till December 31, 2007, it has added 15,500 people including 8,000 freshers. Total head count now stands at 79,832 employees

Apparently, they need to lay us off over here so they won’t have to lay them off over there…


Desperate Shortages?

2007-Nov-12

Every time corporations want to increase the quotas on guestworkers they repeat the same tired old lies about a supposed “desperate shortage” of workers in some field or other. Actually under capitalism there can never (by definition) be a labor shortage in any field. Any temporary shortage is quickly followed by a rise in wages and benefits until the shortage is alleviated. No wage increase, no shortage.

So should you send your kid to college to study science and math and engineering to alleviate the “desperate shortage” showed by current lowering enrollments in those fields? Hmm:

…the fact is that university enrollment in science programs has historically risen and fallen in almost perfect correlation to the opportunities in the job market.

…the U.S.-born scientist as a practical matter really only has access to the scientific job market in the United States, whereas his or her European counterpart has access to opportunities in the United States and the European Union.

…if there were indeed an undersupply of scientists, you?d see hyperinflation of salaries, which of course is simply not the case in any field of science. For example, a graduating Ph.D. in physics at Lawrence Berkeley National Laboratory in California currently receives a starting postdoctoral salary between $39,312 and $55,788. The other national laboratories and the National Institutes of Health offer similar salaries. According to the laws of labor economics, if there is no hyperinflation of salaries, then there can be no labor shortage. However, I do think that there is a shortage of U.S. citizens who are willing to spend 10 or more years to get a Ph.D. in physics for a starting salary of $39,312 a year.

…we were able to identify only 11 African American Ph.D.-level physicists with career positions in the major DOE-funded national laboratories. This was out of a total of 3200 Ph.D.-level physicists employed by the laboratories. Out of the top 20 physics departments, there are only two African Americans in tenure-track faculty positions. What we conclude from this analysis is that foreign nationals are preferred over African Americans in hiring at these facilities.

…the income of a foreign national with a J-1 visa, typically used for postdoctoral appointments, is not subject to U.S. income taxes. This puts the foreign national at a 15% salary advantage compared to the U.S. citizen in the same postdoctoral position.

My daughter went to a high school whose purpose was to persuade kids to major in science, math, and engineering. I’m glad she resisted the temptation. She’s better off.