Saving Our Economy

My fetid brain | May 16, 2003 | Harpseal

[Euro-American Scum]

If you want to be a standard IT worker, you're going to be treated like a textile worker, because you are now a dime a dozen. Create, innovate, do something different: that's what the market will reward.

Now that's something I can agree with. The only future for displaced IT workers is to show the kind of imagination you mentioned. The problem is, technical expertise and innovation do not necessarily go hand in glove.

[Feldkurat_Katz]

The new globalist world will be divided into three casts - those who own the wealth and hire others, those who are lucky or creative and can command high wages and the rest

As Wilhelm Roepke pointed out, in order for a society to be stable, a worker should be a property owner (say, owner of a house and a garden,) otherwise the workers have nothing to lose and go Communist. It may happen in the world you described.

[dark_lord]

...There is legal recourse for what you are alleging, and yet not once have I seen someone seek redress.

Suppose you do want to seek legal redress? Let's take a look at the problems:

(1) Try finding a lawyer to take this on continency. Good luck. They want money up front and by the hour. But you are unemployed, right? And what is going to be your payoff? This is not like a personal injury suit.
(2) If you win, what do you get? A job with the prospective employer you just sued and won? Oh, that'll be great. Talk about a hostile work environment.
(3) And how do you prove your case? Most corporations aren't hiring H-1Bs directly. No, the H-1Bs work for body shops (mainly Indian) who then make the workers available for contracts. The corporations have figured out is cheaper to hire workers on 3 to 6 month contracts rather than as full time employees. Try basing your case on saying that they should hire you instead of contractors. Good luck.

Legal redress is useless -- for the most part, everything being done is legal (for the American companies.) For those Indian bodyshops, they have all kinds of legal violations, but you don't have "standing" to make a case against them. The government does (specifically the Labor department) but does not seem interested.

[Afronaut]

People in IT support are the new Landscapers. Soon to ALL be replaced with foreign replacements for 1/2 the cost. Corps. Do not care about keeping the users happy and serviced. In fact they don't care about the users at all!

[Mr. Bird]

(1) Try finding a lawyer to take this on continency. Good luck. They want money up front and by the hour. But you are unemployed, right? And what is going to be your payoff? This is not like a personal injury suit.

Labor attorneys will work on contingency, especially if the prospects of a solid win are good. Absent that, there are several non-profits (including the AFL-CIO) that would be willing to take a legitimate case pro bono. See below for what the attorney can get in a contingency arrangement

(2) If you win, what do you get? A job with the prospective employer you just sued and won? Oh, that'll be great. Talk about a hostile work environment.

More than likely, the award would be the offer of a job as well as lost wages and opportunity costs for the wronged citizen. The plaintiff could likely argue that a hostile work environment would work against the judgement, and a typical award in lieu of employment would be 5,000 hours of wages, on top of those lost.

(3) And how do you prove your case? Most corporations aren't hiring H-1Bs directly. No, the H-1Bs work for body shops (mainly Indian) who then make the workers available for contracts. The corporations have figured out is cheaper to hire workers on 3 to 6 month contracts rather than as full time employees. Try basing your case on saying that they should hire you instead of contractors. Good luck.

The H1B holder is either a regular, full-time employee of the American corporation, or they are not employed in the U.S. Your scenario may be valid, but it is not described in accurate terms.

[dark_lord]

The H1B holder is either a regular, full-time employee of the American corporation, or they are not employed in the U.S. Your scenario may be valid, but it is not described in accurate terms.

On the contrary, it is completely accurate. The way it works is this. A company (call it "Indian Consulting") hires H-1Bs. Thus they are full time employees -- of "Indian Consulting" -- which operates in the US as as US based corporation.

Other American corporations then post contract jobs where they need someone for 3 to 6 months as an hourly contractor. The contract is offered to "Indian Consulting", which then staffs one of their H-1Bs on the jobs. The American corporation has clean hands, legally -- the H-1B is not their employee at all. But once on the job they can continue to extend the contract, continuously, even for different work. This process is called "change orders". So they can in effect have someone who works for them for years, just like an employee would, but who is technically not their employee, but is rather an employee of "Indian Consulting".

However, the contract may be for $50/hour to "Indian Consulting", which then pays their H-1B employee an hourly wage as a "W-2" (not 1099). If for any 2 to 4 week period that H-1B cannot "get staffed" on a contract -- back to India they go. Cost to American corporation -- $100K per year; but they pay no Social Security, no health benefits, no 401K, no bonuses, no fringe benefits whatsoever, plus they can dump the person at any time and either ask for a replacement or simply terminate the contract. This is good business for the American corporation. No HR problems. No worries about being sued for any reason if they want to get rid of the contractor.

"Indian Consulting" violates a bunch of laws -- just spend some time talking with the H-1Bs. Mainly, they lie to the US consulate about having jobs lined up "that no American is qualified to do". They lie to the H-1Bs to get them on board. They pay them late -- sometimes 12 weeks in arrears. They make them take mandatory "training" and then deduct the cost from their salaries. All kinds of stuff -- these H-1Bs are taken advantage of in so many ways. Yet each one of them takes a job away from an American because no matter how low the American is willing to go for the job in salary, "Indian Consulting" can beat the cost. And remember -- the American corporation using the services of "Indian Consulting" likes it because they have a flexible labor pool. Need 10 people tomorrow? Just pick up the phone, no interviewing required, no paperwork at all. Need to lay off 30 people for a month to make the quarterly budget? Just pick up the phone, and whoosh -- tomorrow 30 less bodies show up.

[varon]

The republicans and the democrats both want american factories to be closed and replaced by foreign ones,......

Look on the bright side at all the industrial pollution that will eliminate in the USA. Now, that should make someone happy, at least ;-)

[Mr. Bird]

Thanks for the clarification. That makes sense.

[doosee]

A step in the right direction would be for US companies to pay the missing overhead that H1Bs dont account for now. SS, medicare, workers comp et. al. That one equalizer in the law would make most companies conclude that it isnt worth the bother to import.

[wku man]

Amen, bro. Great post.

Scouts Out! Cavalry Ho!

[harpseal]

Thank you for your kind words. I have given a great deal of thought to the issue of Nurse H1B visas. If we are to allow any H1B visas then this may be a field where we could allow such for a very limited amount of time until the economics of paying for the additional nurses needed could be worked out. If the nurses are so vital then the economy must find a way of paying sufficient wages to attract people to the field. There can be a lag time that H1B visas can help with but I would prefer that regular immigrants who will stay and be productive citizens be used to fill these slots. Certainly there is no shortage of people waiting to get into the USA.

[harpseal]

See my comments regarding the Nursing shortage and H1B visas. First, I would much prefer if a health care facility needs additional nursing staff they go with regular immigrants who will stay in the USA and become citizens here. Sponsoring an immigrant this way makes a great deal more sense from the nation's standpoint we get an educated productive citizen who has a reason to invest and spend in the economy where they will live. H1B visas if used at all should be a very very temporary measure only used until the schools have enough time to turn out a sufficiently trained staff and the health care regulators can accomodate the higher cost structure for the industry.

Being a nurse requires some considerable sacrifices. Nursing staffs need to be there 24 hours a day seven days a week. There are some not inconsiderable risks in the profession including such things as an accidental needle stick (see HIV and many other diseases). That requires compensation.

The starting salary for an associate at a top law firm is six figures for someone just out of school. I ahve heard many argue that Chelsea Clinton getting a starting salary of six figures is reasonable. Some teachers in CT make over $75,000/year.

With nursing one is talking of a hard dangerous job that requires education and training the pay should be commensurate with the demands. It is probable that the attorney for your operation makes more than any nurse employed there. That may or may not accurately reflect what the free market for wages would reflect. One may also be certain that the MD's attending the patients make much more than the nurses. Usually MD's have better hours and working conditions. Nurses need malpractice insurance and continuing education. That will tend to increase the cost of employing a nurse.

The unreasonable health care regulations are the big problem here and that is where your focus should be not on maintaining a harmful program such as H1B for other than a very very short term amelioration of a longer term problem.

[Lazamataz]

BTTT

[snopercod]

Now I'm scared. I've just started doing AutoCAD drafting on a contract basis, but haven't been to an accountant yet. What does 1706 say? Am I screwed?

[snopercod]

Re: your #44. Bravo! My wife works at a hospital where less than half of the "customers" pay. The other half pick up the tab and then bitch that "the free market has failed".

[harpseal]

I would suggest you consult your tax attorney for detailed information as how it is applied to draftsmen. But in general as part of the tax reform act of 1986 they repealed the "usual business practice exemption for determining who exactly is a contractor in these named fields. I do not give tax advice but it really screwed up teh market for people who had been independant contracts in the IT area.

[harpseal]

Good to see you posting again. I guess signing onto Free Republic is not so attractive any more when compared with the attractiveness of your bride. Say hello to technochick for me also.

[B-Chan]

Hillaire Belloc made much the same point: that our system should be called proletarianist rather than capitallist, since it is based upon the existence of a majority class of proletarians ( = people who have no means of generating income except selling their labor). As Belloc points out, Marx was correct in saying that the working class has nothing to lose but its chains; unrestricted, capitalism always tends toward a monopoly of capital and credit and a spiral of ever-lessening wages. In the end, when jobs vanish and wages drop below subsistence, those with nothing but their labor to sell are left with nowhere to turn but to the Reds; revolution, riot, and ruin follow as the 'workers' vanguard" expropriates the monopolists and centralizes all capital and credit under the control of the all-powerful State. Therefore we see that any society in which the majority of the people have nothing but their labor to sell is not a capitalist society, since the very bedrock of that society -- the average citizen -- possesses no capital at all.

A truly capitalist society would be one in which capital (= property capable of generating income) was distributed across the majority of the population instead of being concentrated in the hands of a small number of industrial giants and financiers. This is why Belloc and others advocated the revival of the Guild system, a syndicalist, distributist political economy in which industry would be controlled and regulated by guilds made up of small independent capitalists. The guilds would regulate prices, limit competition, and manage capital on behalf of the industry as a whole, with their purpose being to maintain the widest possible distribution of capital across the population and thus eliminate the existence of the proletarian class altogether. No proletariat, no eventual communist revolution.

[snopercod]

Thanks. Now I understand. I was working as an independent contractor in the early eighties, and well remember TEFRA. Based upon TEFRA, the IRS came up with a long list of conditions that one had to meet to be an "independent contractor" for tax purposes. I thought this was some new thing...

[waterstraat]

I think Bush's economic plan is great and may well produce jobs, but for whom?

and bush's plan may also help corporate profits in the short term, due to much lower labor costs, less business expenses, less regulation in china and india, cheaper building rent, no epa regulations, etc.