Visa Switch and Bait

A bit off the international scene, unless Florida is another country.

Disney World in Orlando, Florida has laid off some 250 tech workers.  Behind-the-scenes programmers and computer operators (Americans) were laid off and  replaced by Indian techies with H-1B visas. The visas have been given to out-sourcing companies, including HCLA America hired by Disney to provide the new workers. 

H-1B visas are intended for high-level professionals who, it is said, will take on jobs for which no Americans are available. In this case, the Americans were not only available, they were actually working. A humiliating requirement of the severance package was that some of the laid-off workers had to train their Indian replacements. Naturally there was a confidentiality clause. Congressional hearings on increasing the number of H-1B visas seems to have prompted the revelation.

Looks like Scrooge McDuck heads human resources at Disney.

Margaret Steinfels

Julia Preston at the NYTimes

 

Comments

[BabelFish]

I taught business ethics for many years. The best quote I encountered, and used frequently, was from Justice Hugo Black: "Ethics is knowing the difference between what you can do and what you should do."

Every scummy move done like this is covered by the everlasting 'responsibility to the shareholder'. Unless your shareholder is some heartless bastard of an institutional investor, most of them would far rather keep Americans employed.

[LeaNder]

"The program has created a highly lucrative business model of bringing in cheaper H-1B workers to substitute for Americans,” said Ronil Hira, a professor of public policy at Howard University who studies visa programs and has testified before Congress about H-1B visas."

There is one basic economic rule. Maybe I didn't get too interested in economy in my post-grad studies in economy and law after that. It wasn't the only thing I disliked by the way. But the usual way to cut expenses versus gain is to deal with matters on the level of the necessary work force.

Since it is a basic law in economy you cannot ever avoid having people exploit available loops in the system.

Seems that over here some of our giants use EU loophole in comparable ways. They hire an engineer in one of their branches in e.g. Bulgaria where he is maybe paid a third to a half of his German colleague and then bring him to Germany under these conditions.

No doubt the shareholders applaud such matters.

http://www.marketwatch.com/investing/stock/dis

[Fred]

This has been going on for a long time. Disney is only the latest to be highlighted for doing this.

[Tyler]

Let's see who's going to waddle in here and defend more immigration.

As Fred said, this has been going on for years, and is pushing Americans out of STEM jobs and part of the reason why wages haven't changed in a decade or so: because the company will just hire Patel and force him to work for a pittance.

[Origin]

It would seem to me that there is a solution to this problem.

There needs to be a law that prohibits confidentiality agreements concerning layoffs and gives American workers who have had their jobs taken by a person coming in on an H-1B visa a federal cause of action granting them damages in the amount of 1.5 the difference between their former wage and the wages of the H-1B employee for the duration of the employment of the H-1B worker plus six months after the worker ceases working with a $3,000 minimum recovery. Also, and most importantly, make the cause of action carry reasonable attorney fees. This will start a micro legal industry that will enforce the thing and in the end, the true purpose of the H-1B visa will be accomplished and the corruption stopped.

[ThePanzer]

And thus capitalism continues to eat itself. These corps individually think it's a great move to replace high price workers with low price workers. Of course the new low price workers may not be able to afford whatever product the company is churning out.

"No problemo! We'll trust that high priced workers at companies other than ours will get our products!"

But what happens when at the macro level ALL of the companies replace high priced workers with low priced workers? Eventually you hit a point were market demand collapses due to in affordability. In this case the new cheap Indian IT workers most likely aren't making enough to fly to the US to go to the theme park.

Capitalism has inverted Henry Ford's mantra to pay his workers enough to afford his products. The new mantra is, apparently, to pay no one enough to afford your goods. It reminds me of the old south park episode with the underwear gnomes and their business model:
Step 1: steal underwear
Step 2: ??????
Step 3: profit!!!!

[Margaret Steinfels]

Yes, Henry Ford comes to mind. Pay your workers enough so that they can buy what they are building and you are selling.

What if Unions encourage their members to boycott Disneyland? Would they? (Not that the Disney workers were unionized, but they should have been.)

[William R. Cumming]

There is a FUNDAMENTAL FLAW in US immigration policy. Part of federal immigration law is civil law and part criminal law. The latter is used to keep workers from protesting.

And one CONSTITUTIONAL PROVISION IS OF SIGNIFICANCE. YOU MUST BE BORN IN THE U.S.A. TO BE PRESIDENT.

Say hey--Ted Cruz?

[GulfCoastPirate]

Tyler wrote: 'Let's see who's going to waddle in here and defend more immigration.'

First of all H-1B visas don't go to 'immigrants'.

Second, you'll be the one to defend it. You'll do it by voting for the hypocritical Republicans who on one hand rail from the mountaintops about illegal Mexicans, err, 'immigrants', while on the other hand refuse to vote for the simplest solution - throwing the offending employers in jail.

Your depth of your hypocrisy and that of the Republicans you vote for on this issue is staggering.

[Babak Makkinejad]

Ironic, really, that you mention Ford.

It was at Ford that McNamara and other proto-Quants began their careers at fixing labor costs - an engineer is an engineer is an engineer as is worth all of $ 7.50 per hour.

So began the rise of the MBAs, the Quarterly Reports to the Shareholders, and shredding of the social contract (so to speak) with the employees across the United States.

It was clear to me a decade ago, watching the stampede to outsource work to India (and later China, Egypt and the Philippines) and to take advantage of the international labor arbitrage that it will not end as well as its instigators expected.

For the American business leaders, just like McNamara, have assumed that people are the same all over the world. To wit, they have assumed that the positive qualities that they find every day in US among the almost exclusively male Euro-American programmers and hackers - such as dedication to the subject matter, work ethic, creativity, knowledge sharing - can be obtained in China or Egypt, or India in a-dime-a-dozen fashion.

About specific item that you have identified in your post; things like that have been going on for more than a decade now. Nothing new there.

[Dismayed]

I'm finishing up retraining for another career mostly with online classes through Coursera and edX. Both of these organizations were developed by Americans working in American institutions and the majority of participating universities are American. However, the majority of students in STEM classes are not. Irrespective of Americans' alleged increasing aversion to STEM, there are more than a billion each of Indians and Chinese as well as many people from other parts of the world. The numbers alone ensure that their STEM-capable subset will dwarf ours, and I expect that most would immigrate to the US in a heartbeat given the opportunity.

If we had a rational and fair (to Americans) H-1B program, we would merely be training our competitors, but with the current regime we (or rather the professors) are training our replacements. I'm ok with the former: it's good for humanity as a whole and a balance must be struck between selfish interests and the greater good. The latter (current reality) is at best stupid.

If our Congressmen had a shred of loyalty to America as a nation rather than as simply a productive economic unit, if they actually saw themselves as STEWARDS OF OUR CIVILIZATION instead of as paid lackeys of an international corporate elite, they would decisively rein in the H-1B program so that it served its original purpose of providing for skills either not found in America or not quickly learned by Americans. We have a large and well-educated workforce. There are very few billets that fall in that category.

If you've read this far, please bear with me for a concluding comment. Neither the students nor the professors are to blame for our H-1B problem. I certainly don't blame foreign students for either wanting to improve their skills or for wanting to come here. Our society is more successful than theirs. But it is their societies who should be rewarding their can-do, the expression of which America has substantively facilitated. Finally, the professors are all stand-up people who have generously donated their time and expertise. They have handed me gold on a silver platter for next to nothing, and I am very grateful for it.

[GulfCoastPirate]

Origin wrote: 'It would seem to me that there is a solution to this problem.'

The simplest solution is to throw the employers who break the law in jail. In this case it sounds like the 'employer' is a US subsidiary of a foreign firm so someone representing that firm is in this country. That person knows this is illegal and not the purpose of those visas. Throw the sucker in jail. Then deny the foreign firm the ability to conduct any business in the US. This crap will stop quickly.

[Margaret Steinfels]

Nothing new? Perhaps.

On the other hand, you'd think that the consumerist icon that is Disney and Disneyland would want to maintain its squeaky clean image. Now Cinderella will lose her scrub job and be thrown into the street.

Henry Ford: that's not all McNamara remade. Would Ford have approved? I doubt it.

[Amir]

Same thing goes on in U.S. medical world, and I was a beneficiary of it. It is somewhat more complex though, as most American grads do not want to go to Camden NJ, Baltimore MD or Bronx NY.

Nevertheless, the endebted and endentured USMG's have to compete with FMG's. The latter graduate without any loans to repay. The former has to play ball as the sword of Damocles, in the form of financial ruin, is hanging above their heads.

This competition to the bottom, decreased the clout of the USMG's (FMG's have no clout to begin with as they are dependent on their employer for support of their visa) thus inhibiting reform from inside by physicians who are connected to their own community and leads to hypercommercializiation of medical care in U.S. (Where approximately, Nexium costs 10x more than The Netherlands, Joint replacement 3-5 x more, heart surgery 5-8 x more). This has lead to a situation that we now refer to patients as "clients" and hotel PR officers are hired with 7 figure salaries to market a healthcare system.

This whole "Globalism" drive, enriches the managerial classes and impoverishes the U.S. Citizens.

[Amir]

This is called a race to the bottom: someone in 19th century made an extensive tractate on this.

[Tyler]

GCP,

Glad to see you have no clue what you're talking about, as per your usual.

H1-B, while a non immigrant visa, can be turned into a immigrant visa after a certain amount of time has passed, and allows for chain migration as well.

No fool worst than an old fool - I don't vote for Republicans if they're not good on immigration. I've never voted for Juan McCain, and I'm all for throwing Zuckerberg and the rest into prison for hiring illegal aliens.

Your hypocrisy as you embrace "minorities" from the 87% non Asian minority Whitopia you live in so you can ride around on your moral high horse is staggering, old man.

[HankP]

Margaret -

Disney only has a squeaky clean image if all your information comes from their PR department. They've been anti-union since their inception. My sister works at a Disney subsidiary, employees refer to Disney as "Mousewitz".

[Tyler]

Origin,

Technically, the law surrounding the use of the H1-B prohibits companies from doing this, but one of the ways they get around it is by posting a job opening with ridiculous requirements and a starting salary of 30K or so, which no engineer is going to take.

Then they turn around and say "WELP WE CAN'T FIND ANYONE" before hiring a bunch of Indians and Chinese at slave rates.

http://www.cis.org/miano/immigration-lawyers-admit-h-1b-employers-discriminate-against-americans

http://www.cis.org/PayScale-H1BWages

[mbrenner]

We should bear in mind that HiB visas can only be issued in accordance with stipulated regulations as interpreted by federal officials. In other words, these abuses occur due to the permissive norms and rules laid down by people who are accountable to their departmental or agency heads - and ultimately to the President. These abuses can occur only because those authorities want them to occur; that includes The Chosen One who occupies the Oval Office

[Tyler]

Babak,

Like I said in the "Atlantic" blog post recently: The mentality that dominates foreign policy in thinking that all cultures and societies are alike is the same plague that dominates domestic policy as well.

People are not widgets. As Sen. Jeff Sessions said: "A country is more than a spreadsheet."

America is not a bazaar with a flag and a song.

[Tyler]

Posted from your 87% Non Asian Minority Whitopia I'm sure.

I've never voted for a Republican who was pro-immigration (Juan McCain), and I'd be more than happy to start throwing employers into prison, but the Cocoa Messiah has pretty much shut down any sort of immigration law enforcement whatsoever (when they're not suing the states for trying to stop the flow, of course).

You know nothing about me, and your hypocrisy on this matter is as usual, as staggering as your complete ignorance.

H-1Bs are non immigrant visas that can be converted to immigrant visas. A disingenuous tact by you - like saying that K visas (Non immigrant fiancé visas) aren't immigrant visas. Furthermore H-1Bs allow for chain migration as well, and thanks to new rules now H-1B spouses can work as well.

You're outta your league, Donny.

[HankP]

Tyler -

I will. Immigration is a big net plus for the economy. All the evidence says that it doesn't displace native American workers. And even a casual perusal of US history shows that this nation was built on immigration. We're never going to deport 11 million people, one way or another they will be brought into legal compliance.

Besides, as GulfCoastPirate says H-1B visas have nothing to do with immigration. That's all about corporate greed.

[The Beaver]

Same thing goes on in some Canadian businesses - the one that I know of and have had a bad experience with is the Royal Bank of Canada. Some 18 months ago, someone changed all the settings of my preferences for my investment accounts and left a note on-line that I had given my agreement through a phone call at home. What that person didn't know was that during that period I was in Europe , thus no way to contact me by phone. Afterwards I was told by someone else that the back-office personnel was outsourced to India and they were being compensated for the number of clients that they've managed to switch from paper statements to on-line viewing.

Another example is the CSR for Air Canada for lost/missed luggage in India: "Mam, your luggage was sent to Winnipeg and you can drive there to pick it up "
Yes, silly I can drive from Montreal to Winnipeg to pick up my luggage !!!

[different clue]

This H1-B visa gamesmanship is oh-so-exquisitely legal as described by Tyler above.
The only way to stop this gamesmanship would be to ban entirely the H1-B visa program.

I am not in a computer field and I can't ever imagine being displaced by an H1-B visa holder in particular. But if I were, and I were "asked" to train my replacement, I would try to train my replacement in subtle wrong ways . . . so that I would leave a trail of subtle sabotooge after my departure. Hopefully every last one of the displaced tech people at Disney did just exactly that.

Yes, the more honorable thing would be to loudly resign and quit. But that would cost you any unemployment insurance support till you found another job, and also Disney would make very sure to blackball every tech worker who did that to make sure that they never found any job anywhere in their field ever again. Maltraining my replacement would be the best I could do.

[different clue]

Perhaps a popular movement to boycott this Disney facility until it fires every one of the H1-B visa holders and hires back every one of the fired American tech-workers would be useful, especially if it could cause Disney so much economic pain that they actually had to give in to it.