In Search of Cheap Labor in Tech: Behind the H1-B Visa Scenes

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IT workers of Southern California Edison get laid off – with a twist

In April, 2014, it emerged that Southern California Edison, a utility with about 14,000 employees at the time, was planning another round of layoffs. Most of them would be in its Information Technology Department, which had 1,800 employees and 1,500 contract workers. SCE admitted to the plan but told the LA Times that it hadn’t finalized the number. State Senator Alex Padilla then told the paper that as many as 500 employees and 500 contractors would be let go.

Laying off workers and outsourcing some functions was part of its “ongoing efforts to act as cost effectively and prudently as possible in operations for its customers.” These efforts at the IT department would “enable an increase in quality, speed and capabilities while lowering costs,” SCE explained. “By better leveraging the knowledge, skills and expertise of industry vendors, SCE will adopt a proven business strategy commonly and successfully used by other top U.S. companies.”

Namely laying off American employees and bringing in cheaper H1-B visa holders from India.

IT workers in the process of getting axed often sign severance agreements that contain non-disparagement and confidentiality clauses that bar them from discussing the situation in public. Plus there are fears that if they discussed the situation publicly, they might be blacklisted and not find another job. But now some of these affected SCE employees have talked to Computerworld.

SCE confirmed having hired Infosys, in Bangalore, and Tata Consultancy Services in Mumbai, two of the largest users of H-1B visas, to provide the H1-B workers.

“They are bringing in people with a couple of years’ experience to replace us, and then we have to train them,” one longtime IT worker told Computerworld. “It’s demoralizing, and in a way I kind of felt betrayed by the company.”

The H-1B program “was supposed to be for projects and jobs that American workers could not fill,” another worker said. “But we’re doing our job. It’s not like they are bringing in these guys for new positions that nobody can fill,” he said. “Not one of these jobs being filled by India was a job that an Edison employee wasn’t already performing.”

Some of the affected SCE employees have been training their replacements either at the office when the Indian workers are already here or via Web sessions with people in India. And these Indian tech workers didn’t have the skill levels of the American people they’d be replacing, the sources told Computerworld.

Ron Hira, a public policy professor at Howard University, and a researcher on offshore outsourcing, called it “one more case, in a long line of them, of injustice where American workers are being replaced by H-1Bs”:

Adding to the injustice, American workers are being forced to do “knowledge transfer,” an ugly euphemism for being forced to train their foreign replacements. Americans should be outraged that most of our politicians have sat idly by while outsourcing firms have hijacked the guest worker programs.

The majority of the H-1B program is now being used to replace Americans and facilitate the offshoring of high wage jobs.”

On the surface, it shouldn’t be this way. To obtain H-1B approval from the Department of Labor, the company has to “attest” to a whole laundry list of things (PDF), including: “Working Conditions: The employer attests that H-1B, H-1B1 or E-3 foreign workers in the named occupation will not adversely affect the working conditions of workers similarly employed.”

“The SCE case is clearly one where the hiring of the H-1B is adversely affecting the wages and working conditions of American workers,” Hira said. “There isn’t a clearer cut case of adverse impacts – the American worker is losing his job to an H-1B.”

There are other issues as well, Computerworld notes: H1-B workers are mostly “under 35 years of age, according to government data, and the SCE workers interviewed said many older workers were being laid off.”

This has been happening in all kinds of tech companies and IT departments, and it has been happening for years, though it has largely been kept quiet by restrictive severance agreements. Another element in the great mystery of why wages in the US have been losing ground.

What has sort of kept a lid on it is the limited number of H1-B visas given out each year, though companies have been clamoring for more. Just how much corporate demand is there?

US Citizenship and Immigration Services opened the lottery for H1-B visas for fiscal year 2015 on April 1, 2014. On April 7, it reported that it had already reached the statutory cap of 65,000 visa petitions for the general category and 20,000 under the advanced degree exemption. But tech companies have been lobbying in Washington to get this raised. Because the Holy Grail in business is cheaper labor. And bringing in cheaper labor puts downward pressure on wages for everyone else.

The housing market has been healed by the Fed’s bold actions, we’re told incessantly. And now there’s a new mantra: instead of a home, let them buy toxic, rent-based, synthetic structured securities. Read…  The American Dream Dissipates at Record Pace

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  50 comments for “In Search of Cheap Labor in Tech: Behind the H1-B Visa Scenes

  1. matt
    Feb 5, 2015 at 2:16 pm

    This is exactly why Walt Disney World Laid off 500 I T workers in Orland last Friday and stated they where out sourcing the jobs to save money

    • mike
      Feb 8, 2015 at 2:03 pm

      that is interesting. got any more info on this such as a link? send this to Sen Session and-or GRassley, the heads of the Immigration committee and to the president. also send to your reps from your state. the lawmakers need to know what it is like on the ground, bs what the IT corporation lobbyists tell them.

  2. Mark B
    Feb 5, 2015 at 3:30 pm

    Unfortunately this has been going on for many, many years. I started my engineering career in the 1980’s and have watched this happen over and over starting in the early 90’s. A big part is cost, but another unspoken reason is control. Its a lot easier to push around someone on an H1-B visa than a US citizen.

    I’ve worked with many foreign born engineers (who were almost uniformly very good) and they knew that they couldn’t rock the boat because their visa was tied to the job and therefore the company. Until they got their green cards, they couldn’t quit or risk getting fired (which meant having to leave the country).

    I remember many away-from-work conversations with H1-B engineers who were pulling their hair out over idiotic management decisions. I stopped asking “why don’t you speak up in the meetings?” because I knew the answer; “don’t want to risk my visa”.

    Good engineers typically have big egos and strong opinions. Sit in a design review meeting with a good team and it often gets pretty intense. Management, on the other hand, doesn’t like conflict, so having visa holders on the team puts a damper on things. This isn’t the fault of the foreign born engineers, I’d do the same in their place.

    Unfortunately it also means you get bad designs because you’re really not hearing what’s going wrong. Both space shuttle disasters are case in point of what happens when you try and suppress strong opinions.

    IBM (where I started my career) went down this path early, thinking they can bring in new hires and replace the older, more expensive engineers. Problem is, a lot of stuff doesn’t get written down. “Why was this part designed this way?” “Why was the software structured in this way and not that?”. Its all based on the trial and error of the existing engineers (i.e. experience) and its not something that’s easily transferrable. And how is IBM doing now?

    Quick story:
    The power grid in a small town is experiencing problems and the current crew can’t figure out what’s happening. Someone remembers the engineer who designed it is still around and in a retirement home. They go pay him a visit and as they start explaining the problem, he starts nodding his head and says “I know what the problem is”. So they drive him to a substation and help him over to a relay box he points to. He pulls out a hammer and whacks the box on the side. Immediately the lights stabilize and everything’s back top normal.

    Management is happy and tells the engineer to send them a bill for his services. A couple of weeks later they get a bill for $1000. “A $1000 for hitting a box? No way, you need to itemize this”. A little while later, they get another bill:
    1) Whacking box with hammer: $5
    2) Knowing where to whack: $995

    IBM has no one left who knows where to whack.

    • Feb 7, 2015 at 9:15 am

      Amen, we are putting our “masters” out of work and letting the “apprentices” learn at the expense of our country.

      One thing that people need to understand.
      It is no longer just the tech guys and gals getting hammered.

      I’ve been mapping all occupational groups for 2014 and 2015 and by this I mean, I take the LCA application that must be completed to bring in a temporary worker and I draw maps using that data for each occupational group.

      You can find them in the left hand sidebar at Keep America At Work and I bring this up, because if you believe your job is safe no matter what occupation you work in, you better think again.
      Doctors, Lawyers, Teachers, Pharmacists
      The list goes on and on.
      So far the only jobs that aren’t being heavily targeted are those making less than 35,000 per year and I believe that is because there is no pie to split up when you factor in the worker and the agency bringing them in and whatever other layers there might be

    • idic5
      Feb 8, 2015 at 2:10 pm

      Very interesting write up. I will second a motion from an above reply for you to send this info (even copy-paste it) to oBama, you reps/senators, and to sessions and grassley, the imm heads/ they get their info from IT corporate lobbyists (how else would they know , to give the lawmakers their due)?

      ANother point I ‘d make that is related to yours about control of the employees , with which I agree also, is that is now EASIER for companies to get people from Mumbai than it is from “Peoria” since their HR hiring practices and channels are so well greased, enabled and built out.

      I found this with my son’s work at a place in Illinois, They needed a few pedestrian c++ pgmrs for the coding phase of a product and after a few clicks and a week later, boom, Indians were over there. It was probably easier than putting the solicitation out for an american, interview and the whole 9 yds.

      So if companies need to expand, they need the H-1b caps increased.

      But we should reduce them to force companies to hire the kids coming out of college and others in america.

  3. Petunia
    Feb 5, 2015 at 4:13 pm

    If you want to know why women don’t want to work in tech, work with foreign engineers. Surprisingly the Europeans were worse than the Indians and the Asians. All of them have very strong cultural biases about women in the workplace. These companies using these engineers can expect to lose their technology to the foreign countries where these engineers originate. I saw it many times and cannot understand why they are short term greedy and long term stupid.

    • John S
      Feb 5, 2015 at 4:40 pm

      Because many of these companies are just like mine, the upper management is in their 60s and they just want to squeeze out a few more good quarters with good bonuses before they ride off into the sunset.

    • Mark B
      Feb 5, 2015 at 5:13 pm

      That’s true. One company I worked for had office in Cairo Egypt (now that was a brilliant idea). I’m a guy and I hated working with the male engineers over there. Arrogant doesn’t begin to describe it. Fortunately that office also had a number of female engineers, who I quickly recruited on to my projects. They were really good (probably because they had to try that much harder) and *much* easier to work with.

      • John S
        Feb 5, 2015 at 9:51 pm

        Hey Mark B, I liked your story about IBM. Especially since my company is tying its future IT systems to IBM. I can’t wait to see how that works out. If past experience is any indication, we will be using our legacy stuff for decades to come while millions are flushed down the toilet on software that doesn’t work.

  4. NotSoSure
    Feb 5, 2015 at 5:25 pm

    I am going to present a point of view that’s bound to be unpopular. I was on the H1B two years out of college, but by my third year I was already earning 6 figures and this was a couple of years after the dot com crash. The point of views expressed IMHO are often too simplistic. What Mark B fails to mention above for example is that often the ones who make the really bad design decisions are ….. Americans because as you all know this is a country where the ones who speak loudest wins.

    The problem with IT is that bad design decisions essentially creates an inertia i.e. a system often interacts with other systems and those systems too have to account for bad decisions made in other systems. Pretty soon all the systems become fragile and hard to maintain. People are afraid to touch the code base and pretty soon very few new lines of code get written while the salary counter keep ticking. In that case what’s management to do? Well since few lines of code will be written anyways, may as well hire cheaper labor no?

    The other thing that often goes unsaid is that the attitude of some American workers are just horrible. For example: in my old company, people would take quite a lot of company time “going to the dentist”, “fixing car problems”, etc, etc. I mean once a month is probably fine, but in several teams, some people would do this once a week (where they’ll be gone for 4 hours), and they don’t try to make up the time. Add to this the whole “working from home”. It’s not a surprise that Marissa Mayer ended the whole practice at Yahoo when she found out that people “working from home” didn’t even bother logging in.

    The best American engineers are really good, but that’s true for other nationalities as well. In fact if you look at the top engineers in Silicon Valley, the list of nationalities often looks like the United Nations.

    • Petunia
      Feb 5, 2015 at 5:50 pm

      Your comments about American tech workers taking a lot of time off really surprised me. My recollections are that I owned hundreds of pairs of underwear because I didn’t have time to do laundry. My stockings were bought by phone and shipped to the office because I was never home. At one point, I got a call from the accounting dept because I hadn’t cashed a pay check for three weeks and they wanted to close the month. Another time the office manager sent back my time sheet because nobody could possibly have worked that many hours. One 4 day stretch, 24*4+the rest of the week with overtime, on salary. All this was normal.

      • NotSoSure
        Feb 5, 2015 at 7:04 pm

        @Petunia, I wasn’t saying ALL American workers are doing this because obviously there are plenty who are not. I included that part about Yahoo and Marissa Mayer as an example of a major company where the attitude seems widespread. And if there’s one why can’t there be others?

        My boss repeatedly told me: “If your work can be done at home, what’s preventing it from being shipped to country ….” You can’t have your cake and eat it too.

        And BTW hopefully I don’t come across as anti American. Nothing is further from the truth. I was educated in the US and most of my mentors have been Americans of various nationalities. I am pretty much a product of the USA and I am proud of it.

      • Mike Richey
        Feb 6, 2015 at 8:58 pm

        Hmmm…so you are kind of confessing that you are disorganized? Yes I agree many American are extremely disorganized and being lazy on top doesn’t help either. You kind of agree with “not so sure” I don’t know if you realize that or not.

    • idic5
      Feb 8, 2015 at 2:18 pm

      The issue of US companies using H-1b has little to do with the relative ‘quality’ of each nation’s engineers. It is, rather, the fact that
      -H-1b’s are captive with little discretion to up and quit if things go south, thus making it s one way win for IT corporations
      -companies HR hiring practices are increasingly becoming dependent on H-1b
      -companies have eviscerated their training depts so that they can use cheaper H-1b
      -that companies use H-1b over americans despite the law proscribing this … this is not good for the country as the country invests collectively millions of dollars in the education and training of its citizens and then when they do not get those middle class jobs for which they were educated, and get something less, even sometimes having to recv variations of federal welfare, it is a losing scenario for the country as whole.

      THis was my case along with hundreds of my american IT cohorts who were replaced by H-1b.

  5. Richard Hill
    Feb 5, 2015 at 5:44 pm

    There is a huge resource that is being ignored. Young people 16-20 yrs. old. In Switzerland there is an apprenticeship program for IT jobs. Result: flow of new cheap USA IT workers. Plus less youth unemployment. Plus better social cohesion. Plus less community spend on academia.

  6. williamwilliam
    Feb 5, 2015 at 5:59 pm

    Regardless of who’s superior, American born people are losing jobs to H1Bs. It’s rampant. It’s wrong, and illegal, at the current rates. Proponents think it’s free market dynamics at work, which is false because it’s a system rigged against American born IT workers.

    • Petunia
      Feb 5, 2015 at 7:01 pm

      The quality of work is really important. My experience was that anyone educated in India or China had inferior skills because the schools there are diploma mills. They show up and do what you tell them. Don’t define a problem and tell them to solve it because they won’t. They are afraid to fail and show no initiative to innovate. If you push the issue they will insist it can’t be done. The Obamacare website is an example, outsourced.

      • Mike G
        Feb 6, 2015 at 12:38 am

        I’ve seen these cultural issues in IT as well. These are all gross generalizations with individual exceptions, but here are the recurring issues in my personal experience —
        If you have a standardized, well-defined task and no surprises they’ll do it pretty well, but if there’s some unexpected complication they can’t, or won’t, handle it.
        If they don’t understand something they’ll skip over it and say nothing, so you find out later, sometimes unpleasantly, that a task wasn’t really completed.
        If they have to analyze a complex problem and come up with a solution, they are all at sea. They don’t seem less intelligent, so I don’t know if this is cultural reticence or a product of rote education methods, but it’s a real and frequent issue.

    • Mary
      Feb 6, 2015 at 8:26 am

      It is a system rigged against those who cannot work for cheaper cost. Just like a baseball game is always rigged against the weaker team. What a surprise!

      • williamwilliam
        Feb 6, 2015 at 10:25 am

        Wrong. The requirements for the foreign born candidate are much lower for the American born candidate. Who form the US is getting high paying IT jobs with sub-$1,000 degrees at schools with names that can not be pronounced?

  7. Mary
    Feb 5, 2015 at 7:21 pm

    The jobs belong to the investors, not to random people doing the job. It is obviously for the investors and the managements to decide whether to hire a californian, a texan or a German or an Indian. Who said that everybody has to hire an American, especially when the Americans cannot compete on a cost basis?

    • williamwilliam
      Feb 6, 2015 at 10:27 am

      Because as citizens, you expect some protection of your culture, borders, and language with a business environment to protect workers. H1B is meant for jobs that do not have Americans available.

      It’s about abuse of H1B, not about who’s the lowest paid. Read the article again.

    • Salamander
      Feb 7, 2015 at 5:11 pm

      Mary, you realize that you are the product of a long running indoctrination campaign, right? It takes generations of MBAs to arrive at a place where your point of view seems self evident. No, it is not for investors to decide who has the right to work within the borders of a nation state. The fact that it is increasingly so in America is simply a measure of the perversion and corruption of our democracy.

  8. Vespa P200E
    Feb 5, 2015 at 8:31 pm

    Globalization at its worst for US workers and best for Indian workers for chance to work and live in land of milk and honey…

    I spent 3.5 weeks in India in May 2000 looking for pharma contract manufacturers and it was very challenging biz trip. I flew every 2 or 3 days and my local host had me sit on 1st class (cleaner toilets was the reason even on a jet) and always shotgun when traveling in a car. I can see why armies of Indians would want to leave India.

    I see more and more Indians at my company’s IT dept and can’t imagine how Indian IT outsourcing companies can get away with so many H1B visas since there is annual ceiling. Add to this the IT workers working remotely in India… Reality is that other jobs beyond call center can also be outsourced. Alas what career options will be viable for my kids?

    • Duderino
      Feb 6, 2015 at 8:13 am

      Teach them investing, money management and how to run a business, rather than how to look for a job. What academic qualifications do hedge fund managers, options traders need anyway? They need to figure out things on their own, instead of waiting for instructions on what to do, how to do. Once you have that, you don’t need to give a **** about academic qualification.

  9. Vendetta
    Feb 5, 2015 at 8:58 pm

    The sooner this practice ends the better. It seems unlikely any time soon given the same incessant drive by a corrupt govt to kill opportunity in the US. 13 years ago I was in the exact same spot… having to train foreign workers while management prepared to fire all the software engineers that were American and open their new shop in india. I left before the axe dropped but the dot com implosion was the perfect excuse for companies to layoff hundreds of thousands of American IT people and start up shop in india or elsewhere. I lost pretty much everything I had worked for the previous 20 years…. I regained some of what I lost since then in a different industry but my trust of government/corporate policy was destroyed permanently.

    So called free trade and outsourcing is exactly what Jefferson was writing about here

    “Single acts of tyranny may be ascribed to the accidental opinion of a day. But a series of oppressions, begun at a distinguished period, and pursued unalterably through every change of ministers, too plainly proves a deliberate systematic plan of reducing us to slavery.” – Thomas Jefferson

    • Cummings
      Feb 6, 2015 at 8:28 am

      Newsflash! You don’t have to be oppressed once you leave the company. You chose to be oppressed when you lined up to suck up at a desk every day. That was not the kind of oppression Jefferson was referring to.

  10. Silicon Valley Engineer
    Feb 5, 2015 at 9:30 pm

    Foreigners are no better then Americans in technology, for the most part i see culture plays a bigger issue. In general American culture is very business oriented and is driven towards good results. Because it stems from individuality and requirement for people to grow and learn, this doesn’t exist in some cultures.

    This idea of sending jobs overseas is because someone in management is happy to make a bonus over the next few years because of all the savings. They just didn’t tell the higher ups that the results by the 2-3rd years will cost them 2x as much to resolve. By then its not their fault…stupid, short sided, greedy management.

    If you come from a culture that is based on a cast system, those people will apply it here as well. Give them a management job and you’ll never see hire anyone other than there culture. In fact they happen to have 100 relatives or friends that get hired without a hiring process. And as mentioned any existing engineers especially females will be pushed out. I’ve seen entire departments that were once a diverse group 7 years earlier are now almost entirely Indian. Who protects Americans? Not management, not the company, and not Congress.

  11. Paulo
    Feb 5, 2015 at 9:52 pm

    @ Mary

    re: The jobs belong to the investors, not to random people doing the job. It is obviously for the investors and the managements to decide whether to hire a californian, a texan or a German or an Indian. Who said that everybody has to hire an American, especially when the Americans cannot compete on a cost basis?

    It has been my very long experience that if employees feel ownership and take ownership of their jobs, responsibilities, and relationships with customers, they do much better work and the company prospers. If it is all for the investors, then why should anyone working at said firm give a shit?

    • Mary
      Feb 6, 2015 at 8:19 am

      Well, they will give a shit to keep their job or to get more bonuses or dividends if they have stock options or whatever appraisal scheme exists for the company.

      Of course, you are right that if employees can feel motivated with a sense of ownership. How to keep them motivated and productive is an HR issue, on which I have no expertise. But they don’t have to be necessarily American for that. That’s my point.

  12. rjohnson
    Feb 5, 2015 at 10:05 pm

    The number of H1-Bs is far larger than the 65,000 cap.
    From wikipedia

    “Universities can employ an unlimited number of foreign workers as cap-exempt. This also means that contractors working at but not directly employed by the institutions may be exempt from the cap as well”

    My personal view from tech-land is that h1-b abuse in IT, programming as well as in the hard sciences of pharma, chemistry and physics is rampant. I’ve walked into one too many tech-companies and seen a sea of Indians and Chinese. I know many good people who can’t find work at those very same companies.

    After the recent wage-fixing scandal in silicon valley and the complicit support of the trend by the Justice Dept, I see little hope for Americans in the technical arts.

    Rig a bank, steal some cash, walk scott free is the new American way.

    • Vespa P200E
      Feb 6, 2015 at 12:33 pm

      Biggest joke is that the CEOs of tech companies like MSFT, Fakebook and GOOG are all lobbying in DC for higher H1B ceilings and better yet for them unlimited. Why? ‘Cos H1B are more like cheap submissive indentured servants.

      I recall getting into a cab at SJ the SillyValley airport in 2002 in depth of last tech slowdown and my cabbie was recently laid off H1B Indian trying to make ends meet worried about the prospect of getting kicked out of US along with his family.

      Also is it me or are there more Indians working and living in tech cities like Seattle/Bellevue WA and SillyValley? My RE friend tells me Fremont and San Ramon/Dublin is becoming de facto Little Indias…

  13. CrazyCooter
    Feb 5, 2015 at 11:26 pm

    For those arguing the cost basis, one only needs to look at the US Government which is intentionally (in my mind) trying to dilute the US workforce, both through illegal immigration at the low end and as this article goes, through H1Bs at the high end. Obamacare and healthcare costs in general are another perfect example of disadvantaging US labor in a global market. Costs are just *retarded* and nothing gets done but driving them even higher.

    Despite the fact a hot global currency war is underway, overheads in the US, coupled with “flight to the dollar” (for a while) will absolutely crush the US labor market (and the 1980s labor participation rates which will sport butterfly collars soon) as the US dollar soars.

    The H1B visa crap is the same old story of management vs labor that has been told, retold, lived, and relived for hundreds of years.

    If anyone reading this comment is really prepared to take advantage, they should be looking at the global labor market and packing off to where real opportunity lies, which will NOT be where everyone else is hanging out (and getting outsourced).

    I did my homework and narrowed it down years ago to Alaska or New Zealand (although I would consider Iceland at this point). I moved to Alaska, and while it was bumpy, I have a very secure, rewarding career doing what I love and really making a difference with a group of people who appreciate what I bring to the table every day.

    In summary, step (1) realize a train is coming, step (2) make a conscious decision to get out of the way, but most importantly step (3) realize trains have to stop so build a train station.

    Stop pissing about the train and instead use your energy to look at where to build the train station.

    I learned this lesson from what I feel is the greatest engineer ever, James Eades, when he build the bridge across the Mississippi to ensure his town got the railroad. A great deal of insight is to be had for engineers who know that story. The man lead a fascinating life.

    http://en.wikipedia.org/wiki/Eads_Bridge

    Regards,

    Cooter

    • CrazyCooter
      Feb 5, 2015 at 11:36 pm

      The wiki is really lacking, but this proved out to be a much better narrative (for those with an interest in reading):

      http://www.pbs.org/wgbh/amex/eads/filmmore/pt.html

      I suppose maybe Netflix for the DVD is an option too, if it is available.

      Regards,

      Cooter

    • Cummings
      Feb 6, 2015 at 8:33 am

      Thanks. Not that I am ready to migrate to New Zealand or Alaska yet, still the only sensible comment among all the bitching and whines.

  14. mick
    Feb 6, 2015 at 12:18 am

    Hey, remember when everyone thought tech was a safe industry to get and keep a high paying job? The concept is dead, there are no safe jobs. If you think you have one, you’re mistaken.

    • williamwilliam
      Feb 6, 2015 at 10:37 am

      Agreed. But the dilemma for many parents of college-age children is how do you maximize their earnings at age 22 when they graduate? Tech jobs are still highest paid at that age.

      For my four kids (bi-lingual), they will attend college in Europe (low cost if not English classes) or community college here with an option to ‘transfer up’. My children know I’m serious because I have a language tutor to perfect my second language in preparation for their enrollment. I’m over 40.

      • Vespa P200E
        Feb 6, 2015 at 12:43 pm

        Good points.

        I entered the hardware tech field in 1986 after getting an engineering degree from UC. My starting salary was $30k which was pretty decent back then. I graduated in bottom of my class but got 2 offers thanks to internships.

        My oldest daughter graduated from HS 1 year early and attending community college/JC. My youngest daughter is going to regular and alternate high schools with the goal of graduating 2 years early and attend JC like her sister. I met 3 young people who graduated from UC Berkeley engineering after attending JC thanks to the “quota”.

        My oldest wants to attend college in Germany or Switzerland due to literally free tuition in Germany with many classes taught in English. She was in these countries twice with me in 2014 tag along on my biz trip and now wants to learn German.

        • williamwilliam
          Feb 6, 2015 at 2:29 pm

          Regarding Germany universities, Carol Becker, Dean of Faculty and Professor of the Arts at Columbia University NYC, revealed in an interview that Berlin is the best value for universities now. I was shocked.

          https://www.youtube.com/watch?v=hp7YwAGNfR4

          This is data university presidents know but not the American public. I went to airbnb.com to see how cheap Berlin apartments are… 1/3 of Paris apartments. Great city.

  15. Tool
    Feb 6, 2015 at 7:35 am

    It is well known that business management lacks the intellect to understand the difference between paying someone more to develop or maintain software / systems versus a burger flipper…both are just jobs after all.

    Americans just need to get used to working $10 – $12 per hour in tech / stem jobs.

    Once that is accepted then all will be great and outsourcing for that cheap labor will decline (sorry H1B’s – you must realize that you are just tools being taken advantage of).

  16. ERG
    Feb 6, 2015 at 7:43 am

    If the H1B problem went away tomorrow, it would be replaced by age discrimination between Americans. In the American IT service/consulting business, it happens all the time. You cannot separate management from their insatiable need to save on labor costs. The two are inextractable.

  17. LeftCoastIndependent
    Feb 6, 2015 at 10:31 am

    Well, what do you know ? When the off-shoring of blue collar manufacturing jobs happened years ago, the Cons and white collar Dems turned a blind eye at it. Looks like karma is finally catching up. And did you see the price of Levis go down when they moved manufacturing to Mexico? NO ! Or Dewalt tools when they did the same? NO! Freightliner trucks? NO! And on and on. Over 60,800 manufacturing companies have off-shored since 2000. Welcome to the club folks. The middle class sellout rages on. And you keep voting for the same politicians that sell you out. Suckers !

    • Steve in Flyover
      Feb 6, 2015 at 12:32 pm

      And you have identified the current US business paradigm.

      -Cut costs with cheaper labor, cheaper materials, reduced quality

      then,

      -Charge the same price. Management pockets the increased differential.

      Such a deal. As long as you are management, and not a former manufacturing engineer or worker, or a consumer paying more for less.

  18. Julian the Apostate
    Feb 6, 2015 at 11:39 pm

    Wow. This really touched a raw nerve.
    I don’t really have a dog in this fight, as I’m technologically challenged, so just some observations. Ben Franklin said a man who lives by his wits should not go broke from want of stock.
    When I first entered the job market one would go to the Personnel Office. At some point it switched to Human Resources. This irritated me. I found it dehumanizing. Recently I became an “asset” and I have an Asset Manager. See the progression, from “person” to property.
    Mary’s comment about the investors “owning” the job is the modern paradigm, but gosh I always thought it was a voluntary trade to mutual benefit.
    I never compete with others but only myself. My rule at the workplace is “make yourself indispensable”. I have never been fired, and never filled out a resume. While the work ethic is not quite dead it IS on life support. In the immortal words of Art Carney in Roadie-“everything will work if YOU let it.”

    • Mary
      Feb 7, 2015 at 3:20 am

      Hi Julian, yeah, it is voluntary, on both the employee’s part and the employer’s part. That’s what I am saying. The employer needs to get the task done and you have the skill and time to do it. Hence, you enter a contractual agreement be it a one-time payment or a monthly payment. If you don’t want to do the job (because you got a better one, or you got enough money via a windfall whatever) your employer will not force you to do it unless you already signed a contractual agreement to do it for a stipulated period of time. It is still voluntary trade. I don’t think there is an employer in America who abducts you from your home and puts you on a factory floor to work.

      Just like the you don’t owe service to the employer if you don’t want the job, your employer does not owe you the money if he does not need your service. Whether he wants to get the job done by someone better or cheaper or he is just abolishing the task is irrelevant.

  19. ERG
    Feb 7, 2015 at 12:52 am

    I think there are several reasons why we’ve arrived at the current paradigm. It is a somewhat recent development; I am just old enough (55) to remember when it was not so prevalent. ‘Greed’ is too general an indictment and is always with us anyway, so it has to be something more specific than that. Rather, there has to be a reason why greed has been intensified.

    I’ll venture a guess as follows: it was when the concept of a pension went the way of the Do-Do and the 401k came to town with all its connections to the stock market and the financial sector. That put us all in the same boat and focused management’s attention on NOTHING ELSE but that frikkin’ quarterly report for the SEC. The balance sheet is all management cares about because that’s all Wall Street cares about. Their careers, salaries, and bonuses are based on it. How else would you expect them to react? But, wait, there’s more fuel for that particular fire…

    Combine that with how our demographics have changed in the last 30 years. The baby boomers are retiring and need their second homes, medical care, and time on the golf course.

    What happens next? How does that ‘pressure’ roll down hill?

    The office arrangement at a typical publically owned business goes from an inconspicuous building in the downtown area of a large city where mid-level employees have an office with four ‘hard walls’ and a secretary…to a lower rent facility in the suburbs where everyone under the level of vice-president sits in a windowless cubicle – with roommates – and has to produce their own work.

    Additionally, while the PC has been a great democratizer of the workplace, allowing individuals levels of office productivity unimaginable in the recent past, it has also made those individuals eminently and easily replaceable when their hourly billing rates gets too high as they progress in their careers. The result is an organization that is very thin at the top and fat at the bottom because, ur, um, it HAS to be.

    Think this happens only in IT? Guess again! We all have 401ks, remember? The influence of the same driving force naturally results in the same response to it – everywhere.

  20. Julian the Apostate
    Feb 7, 2015 at 1:50 pm

    Hi Mary thanks for the clarification, you and I are on the same wavelength. ERG, I think the problem entered the system when companies became ‘publicly owned’ with a CEO and a board of directors. To quote Ted Bell “Search every park in every city of the world and you will never, never see a statue of a committee.” When a large company gets cut off from the mind that created it it starts to drift. Of course the Death Tax makes it nearly impossible to hand down a generational company, even assuming one of the progeny was able and willing to take on the task. So the vision of the founder gets cut off and in the executive suite it’s every dog for himself.

  21. ERG
    Feb 7, 2015 at 9:57 pm

    Respectfully, JTA, I don’t think that explains it.

    Public ownership has been around a long while and what we’re addressing is a recent development. Maybe the last 20 to 30 years? It did not used to be this way. I’ve literally watched the transformation over the course of my own career.

    IMHO, the pressure to make money with all the ensuing deleterious consequences – the subject of this article and comments are only one – has intensified due to a perfect storm of Wall Street becoming the go-to ‘ATM’ for politicians, the baby-boomers need for support as they grew/grow older and, last but certainly not least, government making the environment under which business operates ever more difficult – EXCEPT if your business is banking or finance.

    These drivers feed on and reinforce each other, resulting in dismal prospects any normal middle-class person can see and feel. One only need do two things to arrive at this conclusion: go food shopping or look for a job.

    That being said, I do not believe the path we are on is sustainable. This is a race to the bottom – just don’t ask me how bad it will get before something is done to reverse it.

    I have no idea.

  22. Julian the Apostate
    Feb 8, 2015 at 7:02 am

    ERG I agree that these things are of recent development but keep in mind that these things are done incrementally over time. Vladimir Lenin’s two steps forward one step back. Once these parasites smell blood in the water, everything accelerates, and even people who haven’t been paying attention begin to notice. By then it’s too late, and the endgame is upon us. We are so encrusted with barnacles that only a complete overhaul in dry dock would repair the damage. There is not in today’s reality the political will to do it. One of these days, very soon, they’re going to kick the can and break their foot. Thanks for the lively discussion!

  23. ERG
    Feb 8, 2015 at 2:06 pm

    Well said.

    Everyone knows down to the marrow of their bones that this can’t go on indefinitely.

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