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.


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.


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.


Guestworker Economics

2007-Mar-01

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.


Resource Management

2006-Dec-30

I’m finally employed again (at least for a few months) after two years of unemployment. For the last six years all of my jobs have been short term as the corporations find they can pay 30% less if they bring someone here from offshore, or save 70% if they move the whole job offshore.

The money they save does not go into lower prices for you or higher wages for employees or even higher stock prices or dividends for stockholders. It goes into higher salaries and golden parachutes for the top executives. Because only the top executives are human beings whose lives and futures matter.

It can be difficult to sit in a meeting listening to my boss discuss which “resource” they will bring in after I’m gone. But that’s life for a contractor. We are not employees we are not human beings, we are “resources”, we are entries on a spreadsheet. If you fire a human being you feel some moral responsibility if as a result of your choices they go bankrupt, lose their house, have to take their kids out of college because they can no longer afford tuition, or even die ten years earlier because they couldn’t go to a doctor in time because they lost their health insurance. It would be unconscionable to do that to a fellow human being…

But we are not human beings. We are “resources”. And resources can be “managed” without the slightest thought that there are human consequences.

But it’s not just us contractors…the day I came to the company on my previous contract with them, I got there the same day that hundreds of permanent employees had to decide whether they would take a layoff or take a job with the Indian contract agency which could, if it felt like it lay them off without a moment’s notice. Because permenent employees are not human beings either, they too are merely “resources”.

I sit here in “H1B row”, a boiler room where ancient, battered desks are piled together as tightly as they can be, no privacy, so space, not even the tissue-thin partitions that they have upstairs in the cube farm where the “permanent” (snicker) employees sit and ponder how it came to be that they no longer have any career path and will be stuck in their jobs until they too are replaced by guest workers.

And I guess the H1B guestworkers are somehow even less than less than human. They guy next to me from India was told if he lasted two weeks he could expect to stay out his contract, so after two weeks he signed a lease on an apartment. The next day at three o’clock in the afternoon they dumped him.

But no matter. What happens to us has no moral consequences. Not as if we were humans to be treated with concern and dignity. We are commodities, to be traded across borders like so much meat on the hoof.

And whether you realize it yet or not, your turn is coming. The elite at the top, the top one tenth of one percent, are the only humans, the only ones whose lives matter. The rest of us are merely “collateral damage” along the path to corporate profits.

Enjoy your holidays while they last.


Claire, Jobs, and Immigration

2006-Oct-23

Immigration is a wedge issue that could break up the Republican Party between the plutocrats who reap staggeringly huge profits by replacing American workers with those making much less, and the American workers (many of whom happen to have voted the Republicans into office only to find themselves betrayed and see their jobs disappear). It could have much the same effect on the Democrats, who already lost many of their numbers when they started favoring the bosses over the union rank and file, at which point we began to see the Reagan Democrats defect.

This country has two political parties, and they are NOT the Republicans and Democrats. They are the Plutocrats, the top one tenth of one percent, those whose annual income is over three million dollars a year (supported by their toadies, sycophants, and suckups), and on the other side Those of Us Who Have to Work for a Living, the 90% of us who make eighty thousand dollars a year or less. The top 0.1% just make it look like there are other parties by getting us to fight over issues like whether two gay guys ought to be able to get married and have abortions.

Immigration and jobs are just two sides of the same issue. The more immigration, the more people there will be fighting over available jobs (ever fewer as companies keep on downsizing) and the lower wages will be (and the lower benefits will be, the lower safety standards will be, the quicker unions will die, and the easier it is to discriminate against Blacks by firing them and replacing them with folks who are, um, less Black). And, on the other hand, the less immigration we have, the better the wages the employers will have to pay, the better benefits they will have to offer, the more they will have to give in to unions, and the harder it will be to discriminate racially. That’s called capitalism. The more competition, the better capitalism works, including for workers.

So the Republican Party has had outright warfare between the fatcats at the top, represented by BushCo who wanted to open the borders, and their working class rightwingers who see themselves laid off and replaced, losing their homes, their medical care, their kids’ educations… And the Democrats are not far behind, with the DLC Dems trying to open follow the Republican lead in opening the borders, while their union members see all the factory jobs gone and their hopes for computer jobs destroyed by the flood of guestworkers.

In all this, there is the sickening realization that illegal immigration, guestworkers, and offshoring are all the same thing, just slightly different ways for the rich to make themselves obscenely rich by destroying the lives of those in the middle and working classes.

And even more sickening is the spectacle of watching the Plutocrats find ways to con the gullible into going along with it. To con the Right, they use distraction: “Don’t look at what we are doing to your jobs, watch us send your kids off to die”. And to con the stupid and gullible of the Left they play the race card: “You must be a racist if you don’t support turning factories into sweatshops and construction jobs into deathtraps!”.

Into this mess and imminent tragedy, it is enlightening to see how any politician will try to skirt the issues and avoid the obvious pitfalls…

On immigration, Claire says,

… people who break the law should be held accountable. … Claire does not believe we need any new guest worker programs undermining American workers. While building a fence along the border in some of our most porous areas is an appropriate first step, rampant illegal immigration will not be resolved until this Administration stops taking care of special interests who care more about access to cheap-labor than they do about securing our borders.

Personally, I am encouraged she is coming down on the side of the 90% rather than being one of the sycophants and suckups who support the 0.1% at the top and then try to find feeble excuses for being suckups.

On jobs, Claire isn’t bad, but could do much better:

Reduce Government Waste and Spending

Uh, this doesn’t create jobs, it gets rid of some, even if it is a good thing…

Block the Outsourcing of Missouri Jobs. … by cracking down on corporate loopholes, which reward companies that ship American jobs overseas

Good. Most folks don’t realize that our laws encourage and reward offshoring with massive tax breaks. But will she really resist the temptations to be bought off?

Promote Educational and Job Training Opportunities for All Missourians.

Uh, sorry, but kids are abandoning math, science, computers, and engineering because they see their parents getting laid off for years at a time from great jobs with no future job in sight except “Welcome to WalMart”. There is no reason to train anyone here for jobs that are no longer being offered to Americans. This is just a pork-barrel handout to universities. Bring back the jobs and then we will fill the colleges to train for them. Or better yet, tell the damn corporations to go back to training like they used to instead of demanding workers train themselves at their own expense. (I used to be a corporate trainer.)

Support Fair Trade Policies

Everybody says that. I’m waiting to see results.

Raise the Minimum Wage

Yea, yeah, but $6.50 is still a pittance when the CEOs are getting $40,000,000 a year and $400,000,000 golden parachutes. Just a tiny bandaid on a gaping wound.

Support Renewable Energy and Alternative Fuels

OK, this could be a WPA program that really accomplishes something.

Support Small Businesses

OK, but just supporting the SBA is a token, not an answer. We need a whole lot more.

So, all in all, her heart’s in the right place, but she needs to go a lot further. We need to cut down on illegal immigration by going after those who hire them. Just one day in jail for each illegal worker (and it would be the CEO, not the flunky hiring manager) and the problem would disappear.

And we need to get rid of guestworkers. The companies claim they are hiring them because they are the “best and the brightest” who supposedly have skills that are beyond us. If that is true them pay them at the 95% level instead of the 17% pay level.

And other countries have tariffs to discourage offshoring, and so should we.

These are not rocket science. The issue is whose side are you on, that of the top 0.1% or the 90%.


Stealth Immigration

2006-Jun-02

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.