Posted on 12/26/2002 9:38:29 AM PST by FlyingA
H-1B
Some facts:
1. The economy was tubing before George JR even was elected, and way before he was sworn in as President! It started tubing in the middle of July, during the election, and basically Clinton did nothing, but campaign for his wife, and count the silverware and select furniture (and young female aids) in the White House to take with him to his new "home" in NY.
2. The boom of the 90s was in fact 90% smoke and mirrors. It was built to flip (a principle that you can find numerous articles about). Buy low, make everything look good, and then sell high before it all implodes. A very select few made millions off the scam (and it went past the point of being a business model, to the point of being turned into a scam similar to pyramid scams).
3. The IT field was already dead and flooded with H1bs by this time. IT Companies had already pushed as much of their capabilities offshore as fast as they could by July of 2000. The stage was more than set for the fall of the IT industry. And in fact had already started the decline in 98, but had been made to appear to be OK by fancy accounting.
4. A Congressman best summed up what happened in the 90s during the Global Crossing hearings with the remarks to their former CEO: "You bought what you didn't need, with money you didn't have, and wrote checks for it knowing that they would eventually bounce. You played a shell game with the money, fixed the books to make things look OK, paid yourself huge salaries and bonuses, and made a huge personal fortune out of it, and then jumped ship before it all came crashing down, leaving everyone else to go down with the ship."
Face it, H1b, the 90s was an artificial boom (scam) created by a few top executives with some "get rich quick" schemes that netted them fortunes (and we will never know how much they really made because the majority of it went into offshore accounts that the Government can't get to, or if they can, they won't blow the sources over a fraud case) and left most of the people holding an empty bag. And, the worst part is that everyone seen it coming, knew it was coming, knew it couldn't be stopped, and still ignored it because they "wanted to believe" that the good times would never end. And they really didn't end until the Government stepped in and forced the CEOs, CFOs, and top execs to be personally, punitively, and criminally liable for the financial statements of their companies in July of 2002. What you will find, as very interesting reading, are all the revised financial statements listed on or about Aug 14 2002, on the SEC.GOV site. Most Corp's had filed by July 2002, showing great profits trying to boost their stock value (another important factor in "built to flip"...make things look good). Then, all of a sudden, they (CEOs, CFOs) could go to jail for, let's call it a lack of accuracy in their financial statements, and they quickly corrected the filings, showing the real situation (which by the way they knew all the time anyway, because they had been running two or three sets of books), which was none to bright needless to say. In a nutshell, during the 90s, illegal fraud had become so wide spread that it had become accepted as normal business practices. But, that ended also.
And now we are paying for the eight years of neglect. Paying with an economy that is in shreds, fear of foreign terrorist attack, companies that are still shoving infrastructure off shore as fast as they can, and definitely not enough jobs to go around. It took eight years to get in this mess, and will take a lot longer to get out because now the laws prohibit faking a recovery with fancy accounting. If there is going to be a recovery, it is going to have to be a real recovery, built on true growth, not "smoke and mirrors" and "fancy fraudulent" accounting. A real recovery built on tangible increase not fancy accounting. And, it takes a lot longer to build something good than it does to make something look good. I have a feeling it will take another 3 or 4 years before this mess is finally fixed.
Correct, there are not 4 million holders of H1-B visas, I apologize for causing any confusion there. The number of certified H1-B visa requests reached that number in Oct 2001. See 45
Become more managerially aware by taking management courses at night; go to workshops that teach new SD tools; branch out EARLY into new languages and dialects being developed. Finally, develop new ideas and, if they are not taken up by your employer, start your own company: software is almost unparalleled in terms of the absecne of barriers to entry.
What is not right, however, is the expectation of $100/hour developed in 1990s, whereas a Ph.D. in mechanical engineering with 20 years of experience makes only $95K/year. When people do not want to take paycuts --- this is more typical in the unionized shops, of course --- the companies prefer to lay off or sell themselves, lock stock and barrel.
Inflation is not caused by workers demanding higher wages. This is a popular misconception.
The money has to be printed before it can enter circulation, for example, to pay the wages. There would not be pressure for higher wages if money in circulation were not consistently and predictably devalued. Printing money causes inflation, not demand for higher wages.
Sound advice.
What is not right, however, is the expectation of $100/hour ...
Which brings me back to CEO/CFO greed.
According to a study from William H. Mercer, an executive pay consulting firm, the average total direct compensation (salary and bonus plus long-term incentive grant values) for CEOs was $5.2 million in 2000, up 13.7% from the previous year. (*)
There is not a shred of evidence that significant compensation of executives has really improved company performance across America. What's probably going to happen now, in reforms, just like companies have their annual accounting audits and their tax audits. What's going to happen now is that there's going to be a performance audit as compared to pay. We've looked at companies now for some years and we've done these executive report cards. (*)
Currently, "a CEO who gets a bonus or profit sharing [worth tens of millions of dollars] in 1999 for good results doesn't have to give any money back when profits turn down in 2000 or 2001," Lewin says. "There's something wrong with that picture." (1)
I am sorry if I did not make that point absolutely clear: the salary of programmers, with small barriers to entry into the profession --- to put is bluntly, you have a great pool of them --- us unsustainable.
In contrast, CEOs is the market for talent, which is very thin. You can make the same comparisons of escalation of salaries of basketball players and movie stars. Incidentally, when was the last time you heard people complain about an excuse for an actor, Sandler, getting $30M per movie?
In other words, the structure of our industry and supply of talant is such that the CEO salaries escalated. The same forces are at play here as in the case of programmers: people are trying to get MBA degree en masse; after some time, the ranks of middle managers will be saturated (might take a while).
Comparisons with the average worker's salary is the Marxist theory of value; it is the favorite criterion in Europe.
As for the compensation-performance association, it is a difficult issue even to agree on what constitutes performance. The options are designed to align the interests of the manager with those of the firm --- so-called agency problem. Compensation is explained mostly not by perfromance but by the thin supply of talent in the economy that exploded in 1990s.
If the stadium and team aren't subsidized with my tax money, and they can find enough people to pay the money to advertise/watch them perform, I have no problem with athletes/actors/owners etc. making as much as they want. Adam Sandler's movie bombs - his salary take on the next one goes down.
That's not what the CEO does. In fact, the athlete/actor is more comparable to the factory worker than the CEO. The team owner/production studio is the CEO in your analogy. The CEO's talent is not comparable to an athlete's or an actor's. And CEO's are not held responsible for poor performance monetarily. At least they haven't been over the past 2 decades.
However, if there is a shortage in the CEO talent pool here in America - I suggest we open THAT field to H1-B applications immediately. Of course, we will need to take care of the cronyism in the boards first.
Comparisons with the average worker's salary is the Marxist theory of value; it is the favorite criterion in Europe.
Greed good ... personal responsibility bad.
People do not wonder about the latter because they attribute the salary to talent. When it comes to management, however, most assume that managers are there by being political and no talant is required. That's just a misunderstanding of management; when viewed as talant much like actors and basketball players, there is nothing surprising or unusual happening in the market for CEOs.
Explain to me again the need for H1-B programmers?
I an not sure I understood this point. Could you please explain when you have a chance?
When Jordan or Sandler start laying off people by the thousands while they're collecting millions displaying their talent...I'll bitch about them too.
When it comes to management, however, most assume that managers are there by being political and no talant is required.
I could have told you Jeffrey Skilling was a crook years ago. And I was sick to read about genious Fastow's creative financing skills when he was top dog.
When boards hire CEOs based on talent and long term health of the corporations - these CEOs don't receive exhorbitant compensation. When they do receive exhorbitant compensation it is exactly because managers are there by being political and no talant is required.
You can sit with these guys and know if they are more interested in what's good for their companies and their workers, or what's good for themselves. Good business skills is almost an anathema to self-promoting celebrity CEOs.
You want to get rich on the excesses of American entertainment - do it in sports or Hollywood but stay outside of the board room where serious work is done.
An actor or athlete is less interested in the long term viability of the "corporation" than his own compensation based on his marketability as a celebrity - well that does describe the worst CEOs out there.
But the athlete/actor is not responsible for the high level management/financing of the entire organization, or the livelihood of the other employees. He is the product, or the producer of the product.
The CEO doesn't produce anything. He is the person responsible for the high level management/financing of the entire organization, AND the livelihood of all the employees.
So the continue application for H1-B programmers while programmer unemployment is rising and salaries falling is unrelated in your book?
OC, I thought I already clarified that point: you are relying on aggregate data, whereas H1B addresses specific pockets of the programmers market. You can have a fall in the aggregate and a rise in one stratum.
Somehow, that doesn't surprise me. It also doesn't surprise me that CEOs and their worshippers would chose celebrity athletes and actors to compare themselves to.
The CEO doesn't produce anything.
That is a common misconception of services. He renders a service to the firm, wihhc is perishable but critical.
He is the person responsible for the high level management/financing /marketing/operations/personel/....
of the entire organization, AND the livelihood of all the employees. Exactly. He must therefore be paid considerably more than Michael Jordan, but he is not.
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