Posted on 06/19/2021 9:02:46 AM PDT by jroehl
Dear All,
Two terms we throw around here a lot when discussing H-1B visas are outsourcing and offshoring. While it’s easy to conflate the two, they are not the same, even though both describe tactics used to displace American workers.
Outsourcing occurs when a company contracts a job to a third-party. For example, in 2015, Disney outsourced their IT operations to Cognizant and HCL. Like many other Fortune 500 companies, Disney concluded that their American W-2 employees were expensive, undeserving, and expendable. So, they laid them off and outsourced the jobs to third-party IT staffing firms operating in the U.S.
What’s more, these firms earn huge profits through labor arbitrage. They hire workers at lower salaries and then lease them to clients, like Disney, at a premium. The H-1B visa program provides a pipeline of cheap labor that fuels the labor arbitrage game and oddly, this is all very legal. Firms get away with not paying H-1B workers market rates because the U.S. Department of Labor (USDOL) has set two of the four prevailing H-1B wage levels in the labor condition application (LCA) far below the median wage. Hence, it should come as no surprise that 60% of H-1B positions certified by the USDOL were below the median wage levels.
A recent article in the Jacobin titled “Take Me to Your Leader: The Rot of the American Ruling Class,” by Doug Henwood describes how prior to the mid-1970s, America’s top executives were largely preoccupied with sales growth and prestige, and that much of their compensation was derived from a paycheck as opposed to stock options. Today, executives are largely compensated in stock and in their ongoing quest to increase “shareholder value” they’re preoccupied with maximizing profit and finding any efficiency that allows them to goose the bottom line. Wall Street loves this behavior and richly rewards executives who follow it. Those who don’t are punished by the “markets.”
While Wall Street may abhor red, they do love seeing blood. Specifically, companies that divest themselves of employees and their associated costs. Dr. David Weil, a professor at Brandeis University, and a recent Biden administration nominee to serve as the next Administrator of the Wage and Hour Division of the USDOL coined the term the “fissured workplace” to help explain this phenomenon. From hotel workers to office custodians, many companies use the fissuring model to circumvent paying market wages and benefits. They simply hire workers through third-party staffing firms. Albertsons, the nation's second-largest supermarket chain decided to outsource its delivery service jobs to DoorDash, a company known for its exploitation of gig workers, and 50% of Google's employees are contract workers —hired through third-party firms. In IT, we have the examples of Disney, Southern Edison, AT&T, Vanguard, etc., all outsourcing jobs to third-party firms that are heavily dependent on the H-1B visa program to in-source cheaper, indentured labor. Given that the H-1B visa program is the pipeline through which a lot of cheap and easy to exploit labor enters the country, expanding it will only exacerbate the fissured workplace and accelerate the pace of outsourcing.
Offshoring occurs when companies send in-house jobs overseas to low-cost countries like India. Just like outsourcing, offshoring provides companies an opportunity to reduce labor costs. Proponents of the H-1B visa program like to argue that if access to the H-1B is restricted in any manner, companies will, as Britta Glennon argues "just offshore the jobs" because it is an issue of "accessing talent". However, these useful idiots will never admit this has nothing to do with finding the talent capable of doing the work. Rather, it is about finding cheaper and more compliant workers. If there is indeed a talent shortage, then why are American IT workers required to train their contractor replacements in order to collect their severance?
But, here’s how outsourcing and offshoring intersect with one another in the IT industry: once a U.S. company like Disney decides to outsource its in-house IT operations to a third-party H-1B dependent IT firm like Cognizant, the next phase is to offshore these jobs overseas, to India! Firms like Cognizant greatly increase their margins if they can eventually shift jobs abroad, as the labor costs and wages are significantly cheaper than even what H-1B workers are paid. Tony Morosini, a former IT consultant said it so eloquently in a Medium post:
"Here’s what everyone is missing in the media. When the consultant on the H-1B visa comes to America to work for a large US client, the goal of his or her employer is NOT to just staff this person at the client. That is only the tip of the iceberg. The real goal is to employ a lot of people back in India, who will report to and interact with the person here in the US on the H-1B. For every person here on an H-1B visa (or an L-1 Visa as well if memory serves me correctly), the goal is to have five more working for this person back home in India. This is referred to as the “Onsite/Offshore” model and the desired ratio is usually 1:5."
What Morosini’s saying is that for every one H-1B visa worker who comes to the U.S., five US jobs are offshored. In essence, the H-1B visa program is the stalking horse of offshoring. Taking over America’s white-collar jobs is big business, too. It’s estimated that business process outsourcing operations brought India $7.9 billion in revenue in 2020 despite numbers being down due to Covid-19 .
It is a straw man argument to claim it will lead to more offshoring if the U.S. government restricts H-1B visas. Jobs are already being offshored and it is the H-1B that facilitates this!
Dozens of examples that refute the myth that restricting H-1Bs will lead to more offshoring, abound. In 2015, the University of California San Francisco laid off 49 American IT workers and outsourced their jobs to HCL, a H-1B dependent IT outsourcing firm. Eventually, the plan was for HCL to offshore these jobs to their offices in India. The LA Times reported on this and the headline read: How the University of California exploited a visa loophole to move tech jobs to India
One of our activists recently sent us a JP Morgan Bank internal document from last year expressing grave concerns about the Trump Administration's H-1B reform rule changes (already gutted by the Biden administration). You can see a screenshot of the document here, and what’s quite telling is this line:
"Overall, we expect slight adverse financial impact, but the news suggests an increasingly stringent visa environment for offshore ITS firms that could hurt stock sentiment."
"Stringent visa environment for offshore ITS firms"! As I said, Wall Street rewards offshoring American jobs, and this is what the executives at JP Morgan Bank really fear. How will they explain the situation to the analysts when they can no longer wring anymore blood from the stone?
I long for the day when shareholders realize that the quest to maximize profits and efficiency hurts companies in the long run. What’s gained in efficiency is eventually lost in innovation. Moreover, despite the rosy picture painted by the business process outsourcing literature, offshoring does not equate to savings. In a white paper by Planetmagpie.com problems with offshoring include:
1) Communication issues
2) Lower productivity
3) Managerial problems
4) Minimal or no real cost savings
5) Higher risk of data loss and IP/identify theft
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In Solidarity,
Kevin Lynn Founder U.S. Tech Workers
“Hello, my name is Steve.” said with a thick subcontinent accent, “Thank you for calling technical support....”
Good weather.
Generous welfare system.
Minimal police presence.
Entry level jobs destroyed.
Companies driven out of business by taxes and regulations.
Horrifically inadequate education.
Free health care with priority over normies in the ER.
That's just off the top of my head.
Of course they don’t.
Cheap foreign labor is what they want.
In Kanadahar, True-dope’s gubmint provides incentives to companies that hire ‘new Canadians’ but nothing for native born Canadians of European descent. If you speak English in Kanadahar, without an unfathomable accent, you best not quit your job or get fired because you’ll be SOL to get back in the workforce. ‘Diversity is our strengths says True-dope!
Yes but look at all those Fortune 500 companies that changed their twitter profile to a rainbow flag for fag month or pretend to know what Juneteenth is! Surely they are good people who care about Americans
Lax drug laws
Lax vagrancy enforcement
The US needs more legalized-marijuana states...
1. If I have to contend with graduates of an American university who can't even write coherent English, then why not hire some dude from China or India or Nigeria who speaks/reads/writes English as a second or third language? It's pathetic when you can't even rely on Americans to outperform their foreign-born peers even in areas where they SHOULD have a distinct advantage.
2. How many unemployable Chinese and Indian nitwits with useless college degrees did you see out there burning down U.S. cities last summer? I'll bet the terms "equity" and "diversity" and "systemic racism" can't even be translated into Chinese, Japanese, Hindi or even Arabic.
I rest my case.
What the LEFT especially, and most politicians in general, fail to realize is that this is a DIRECT results of their tax policies from LBJ on. 'Tax the rich' meant increasing taxes on pay and the inevitable logic of switching compensation to less-taxed areas. This also changed the business taxes as there are increased taxes / reduced deductions in that area for 'highly compensated' employees.
Gee, who could have seen this course of events?
I didn’t learn what percentage of workers in America aren’t Americans. I thought the title indicated I might.
For too long the Republican party has been in the thrall to free market absolutists. The only thing that mattered was the economy. Free trade, outsourcing, and open borders. All of it was great because it made companies richer.
The problem is it doesn’t matter how great the economy is if you don’t have a country anymore.
“U.S. Companies Really Don’t Want to Hire Americans - And We Have the Proof”
As the saying went “It’s all about the Benjamins”
Bobs are by far the worst IT people on the planet. The entire IT department at my corporation probably has murder contracts out on me and my coworker. Nothing they do doesn’t cost hundreds of thousands of dollars, multiple groups of cronies and years of development time. Everything is overcomplicated and buggy, inefficient, and poorly designed. My partner and I have taken it upon ourselves to take back projects from IT especially where they touch the manufacturing floor and our oracle stuff. We have literally without exaggeration on multiple occasions been on webex meetings with India where they proposed half a million dollars and a year of engineering time for a simple system that we literally coded and had working while we were on the call. We stunned everybody when we demo’d it at the end of the phone call. After a few of these projects done quickly, practically for free, and without the usual bugs with normal engineering techs capable of maintaining said systems, the CIO has taken notice of the millions wasted on IT. Don’t trust IT, they are bilking you. They are not cheaper coming from India, they just have the advantage of the people who pay for it do not understand the technology, and are wholly ignorant of what they are actually paying for.
I have always thought that having to hire foreigners because they were smarter proves our education system if broken
I didn’t understand what a ripoff they are until we started taking their projects away
Irwin Feerst tried to remedy this entire hiring-of-aliens problem. He nearly won presidency of IEEE (engineers) before the “deep state” of big corporate power squashed him.
That was 40 years ago.
And, those very same corporations continue to hire foreigners for USA based jobs, while exporting as many jobs as possible too. We know about a major electronics company founded in Palo Alto (and beneficiary of many USA government contracts) that has actually refused to even extend a ten minute courtesy interview to the TOP level American grad(s) of the LEADING university program in its industry. But, the place routinely hires from Communist China, India,, etc.
The whole thing is sickeningly anti-American. It is tragic that a corporation cannot be prosecuted for treason but it would never be anyway, since it buys so many politicians to advance its business (prevent anti-trust and other prosecutions, provide USA taxpayer funding for “investments” in other countries, keep and protect the entire H1B hiring fraud system, protect it in international trade and tariffs cases, protect it insofar as possible regarding its intellectual property rights and claims, even protect it from having to pay out on unemployment, etc.)
Fortunately, I am no longer in the tech industry - and I have had decent luck hiring Americans over 55 who grew up in relatively "normal" times. But that generation is rapidly aging out of the work force, and things are about to get very difficult.
Your case is solid. I do not recall seeing any Chinese lives matter or Indian lives matter movements burning down cities.
Those were mostly all USA born and raised people. Many white Americans are in the BLM movement.
I have also not seen many Chinese or Indians in American prisons. They are mostly USA born and raised people populating our prisons. Some people are just busy working instead of committing crimes.
Isn't it a GOOD idea for employees to have an ownership stake in a company? The company would probably be run very differently if the lowest employees on the corporate ladder had a stake in the company's fortunes.
This reached the point of absurdity back in the 1980s in the U.S. auto industry. If you were a UAW worker on an assembly line at GM or Ford, you were better off owning Toyota or Honda stock in your pension fund than GM or Ford stock ... mainly because the terms of your union contract made your employer a bad investment compared to the others.
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