> In a move that could spread to other universities, about 80 information tech workers at UC San Francisco are facing layoffs and have begun training their replacements — lower-paid tech workers from an Indian outsourcing firm.
Is there any evidence that paying more for IT workers results in better quality of service?
It probably won't succeed to complain about this on the basis that the result might be poor, if the real problem is that outsourcing firms are abusing the H1B visa to reduce wages.
It's a fairly nonsensical concept, though. There's always someone who's harmed, and someone else who benefits. Why focus in particular on current employees? What makes them so much more deserving than future employees (who are hurt by the visa), or current customers (who benefit)?
the intent and spirit of law is that the companies are hiring H1Bs for positions that could otherwise not be filled in sufficient quantity by Americans. Companies and Customers win, and American labor should experience no measurable harm. Not that I would but one could even argue that the way that AppleGoogleFacebookMicrosoft use them to hire students is even okay since they probably cannot fill the volume they need with American STEM grads.
This end-run with the outsourcers is a particularly egregious perversion of the law because they're bringing H1Bs with the intent to fire and replace Americans. There's also an angle of age-ism where they are firing older IT professionals in their 40s, 50s, 60s who have accrued higher pay-grades , and replacing them with less productive but much less costly young foreigners. Only losers are employees who need quality IT help, but who cares about that.
The purpose of the law is to prevent the labor market in general and the H1-B workers in particular to be exploited. The purpose of H1-B is to make it possible for employees with extraordinary skills to work in the United States.
Over time, companies have figured out ways to use intermediaries and others means work around the legal controls to exploit immigrant labor.
If you work in the technology industry, this should concern you, as allowing organizations to do this sort of thing is ultimately reducing your compensation. If you don't believe me, look at the salaries & benefits (which are often public record) at regulated or government organizations that require US citizen labor. Line employees tend to make more in those environments.
> H1B applier must certify no current American employees harmed by the visa
HCL and Cognizant likely already had a pool of employees with valid H1-Bs ready to be deployed at vendor's location. As those workers were new to HCL and Cognizant, it's likely that no HCL and Cognizant employees were harmed.
Disney outsourced the contract, and HCL and Cognizant emerged as the highest bidder. To go after Disney you'd have to prove that it's somehow illegal to use third-party vendors for parts of the operation.
When US companies (and universities) can operate and profit by operating in other countries, like India. Why should we not allow employees from other countries (like India an China) to seek employment in US, if they can do the job better and at a competitive price point. Why should it be just a one sided gain model that always benefits US employees.
So you're saying deepening the labor pool doesn't push wages down?
If you're going to advocate policies that reduce the compensation middle class workers can receive, don't be shocked when they vote for a candidate promising to stop free trade agreements. A government exists to protect the quality of life of its citizens.
You link a Wikipedia article about a highly contentious issue among economists and expect to be taken seriously?
It is almost universally the case that when someone says "economists think X" they actually refer to a group of academics belonging to a specific school of thought which defends that particular position. Not that scholarly consensus does not matter, just a reminder that in certain fields those questions become so highly ideological that you simply cannot treat them as a math question on which you can definitely rule one thesis or another.
Actually there are plenty of things - like rent control - that aren't much debated among economists. Economists almost universally reject the lump of labor fallacy.
In the overall economy it's considered a fallacy, but in the small or subset of the economy (like highly skilled IT people) there is not that consensus. Empirical evidence bears this out too.
You're putting the economic aggregate above the people left behind. If we had a solid safety net, it wouldn't be a problem, but there's a reason poverty and drug abuse leading to death is an epidemic across the US.
Opinions like this is what caused Brexit to occur, and what will probably get Donald Trump elected.
> economic aggregate above the people left behind.
Since it's a positive sum game, you could share the gains with the few people who lose out from immigration or trade, or automation (which is probably more important than the others) and still have some left over.
Or yeah, you could get all protectionist and watch the economy whither.
You have no idea how much of the value currently created by immigrants creating businesses would be lost. And if the answer is a big minus for the US, don't you think it's important that we talk about it? And not the "lump of labor" fallacy?
Jobs are not a zero-sum game. The more smart engineers we get in Silicon Valley, the more innovative companies get built. Many startups are led by immigrants.
Of course it pushes wages down for people currently capturing rents. Similarly, ending Jim Crow pushed wages down for white workers. Was that a bad thing?
If the market price for a job is $X, but domestic workers get $Y > $X because men with guns stop domestic consumers from buying from foreign workers, then the domestic workers capture a rent of $Y - $X.
The rent is taken from domestic consumers.
In much the same way, Jim Crow/Davis Bacon/similar laws are also a form of rent seeking.
To you they are funny brown people who pull "our" wages down. To me, they are simply Kadambari, Ankur or even "that drunk lady from Bar Stock Exchange last night". Your faceless economic threat is for me a nice lady who loves her dog or the new office boy who is surprised when a firang speaks Hindi.
Because those companies are US companies, their very existence is a byproduct of this political community's stability, of the infrastructure that was paid with taxpayer money, sometimes of the direct subsidies of the US states and their federal government and generally speaking by the direct or indirect economic activity that US citizens generates.
Simple as that. There is a social contract that exists and that holds together the civic tissue of this country. Of course, some companies are going to try cheating it. That's fine, it is the reason we also have law enforcement agencies.
In the case of UCSF, a public University that almost exclusively relies on public funding to survive. I think people have an overwhelming amount of reasons to be pissed off.
> Because those companies are US companies, their very existence is a byproduct of this political community's stability.
Engineering talent (in US and other countries) is also a byproduct of that society's investment into educating its children. Arguably graduate education is also funded by tax payer money in these countries. So when US firms hire an engineer from India or China, they essentially are getting an engineer without funding his education.
> There is a social contract that exists and that holds together the civic tissue of this country. Of course, some companies are going to try cheating it.
Seeking merit (searching for a person who can do the job at a competitive price point) is not cheating. If UCSF does not offer good courses at great prices someone else will. That someone else could very well be a Indian or a Chinese university.
For an IT worker it's not that hard. The main conditions are being paid a minimum amount (it's about 15 lac/year, last I heard), registering with the police every 180 days, and other details like that.
The 15 lac/year requirement doesn't even apply to ethnic chefs and language teachers.
Ah, the thing I'm remembering is the Economist noting that there's no path to citizenship. Every H1B my companies have ever employed became a citizen of the US.
("15 lac" is 15 lakh is 1.5 million rupees, which is around $22,500 at the moment.)
I agree and its wrong. India should have a path to allow for long periods of staying and working in the country and provide for a valid path towards citizenship. Thats the only way India can be a country that can attract and retain smart global talent to enable its companies compete globally.
I rarely see in coverage of these mass replacements what kind of positions are being affected, just "IT workers". The article says they're mostly back-office staff but I don't know what that means at UCSF. Are these software engineers, systems admins, middle-managers, etc? Are they low level help-desk positions? Or is it a broad mix across the entire IT hierarchy? How does the answer in this case compare to other recent incidents (e.g., Disney)?
I don't ask to insinuate "lower-skilled" workers deserve to be replaced or should have prepared for it; I'm merely trying to get a better grasp on the scope of these recent outsourcings.
It probably means some of their developers, the ones who glue systems together --also maybe the sysadmins for mundane things but will probably keep key people like LDAP/Auth dev, InfoSec, network architect and then move all the other routine operational stuff off-shore.
What I don't get from these articles is why are they only talk about outsourcing IT services and how it hurts US employees? Outsourcing manufacturing to countries like China also hurt employment - I don't see this to be much different than that. Comoanies should do whatever it takes to keep them profitable and in this era of globalization, the competition is not only from companies based in US but worldwide.
As an aside though, I do feel that H1-B visa is being misused. I know a couple of friends who recently completed their MBA from reputed colleges in US but weren't able to get the visa due to the cap since Indian outsourcing companies nabbed majority of them. I feel there should be a separate category for visas for students who study in US so that they get a fair chance to participate in US workforce. Also, this will encourage talented folks worldwide to come to US since their future no longer will be decided based on a lottery
On your first question, I think the issue is that Americans have gotten accustomed to the loss of manufacturing sector jobs, but the argument had always been that we were slowly switching to a service and/or "knowledge" economy. The kind of outsourcing described in the article challenges the claim that Americans are competitive even in those employment sectors.
As an aside, UCSF is not a company, so your point about anything-goes competition is in this case a non-sequitur.
It isn't a skills problem, its a salary problem. Cost of living in the US is astronomical compared to any of the nations you import IT labor from. The only leg up the US (still) has is that there is no accountability in bad business done overseas - if you get crap products from your outsourced developer team, you don't have a floor to go down the elevator to where you can yell at a project lead in person.
Those get filled out fast. What do you do with the rest of international students. How would you explain a talented Joe who is in South Africa to come to US to do his Masters if he has no guarantee that he will get a visa?
Well, it's the same way that highly paid professionals like tenured professors, lawyers, scientists, politicians tend to be liberal when it comes to cross border labor --because they believe their positions are secure, due to structural quirks, but if these positions were open to competition as manufacturing and call center as well as help desk and software development are, you'd likely see them change their outlook toward these things.
Professors are extremely open to international competition already. Universities can get cap-exempt H1B visas for professors and these visas. The same is true for non-profit research organizations, e.g. scientific research labs.
From my time in academia, it seemed like a wildly disproportionate number of professors were born overseas. I have only 1 coauthor who was born in the US.
Your hypothesis that these folks would change their outlook based on greed and rent seeking seems to be falsified.
It's merely anecdotal, but I observed no particular disparity in views between tenured professors (those at the end of the tournament) and graduate students (those at the beginning, currently in vicious competition with all the foreigners surrounding them).
It's merely anecdotal that if you want to get any chance of success in academia you have to exactly toe the line: a graduate student expressing "disparity" (dissent) would be out in no time.
To me, in some ways, it's not all that different from the people whose jobs get replaced by off-shoring or by remote workers --they will seldom say "no" to training the exact people who will be taking away their jobs. It's like a weird Stockholm syndrome.
The initial qualifications expected of the typical manufacturing worker: has high school diploma or GED, passes piss test, and can handle 8 hours of 'put nut A on bolt B', and will be trained on the job. The typical qualifications expected of an IT worker are more like: BA in related field or additional 4 years work experience, passes background check, might have collected industry certificates, will have a 'manager' but won't keep job if individual 'needs to be managed', and will self-train on evenings/weekends. Unlike manufacturing, not every high school graduate with clean urine can get an entry level job in IT. That assessment is from years knowing auto industry workers in the Midwest and aerospace industry workers in the Pacific Northwest - friends and family in both, and 20 years of my own work in IT.
I don't get your point. If someone sitting in India can do the same job at much lesser price, which is a similar premise to outsourcing manufacturing jobs, why not let the company do that. It doesn't matter what qualifications an American worker who will be replaced has as long as the worked in India can do the job adequately (and to similar standards).
> I feel there should be a separate category for visas for students who study in US so that they get a fair chance to participate in US workforce.
I don't think "studied in the US" is a good abuse prevention measure. I know several H1-B visa holders who are exceptional developers, who came to the US straight after an undergrad in a foreign country. One way to prevent abuse is to put a cap on per-company H1-B quotas or have higher regulatory standards for companies that apply for a ton of them. Right now it is really easy for large consultancy companies from India to submit a ton of applications and send the folks who win the lottery over.
I have worked in many companies with H1B workers, and the old adage always applies: "You get what you pay for." I don't mean this as a dig against H1B employees, but UCSF will definitely notice a substantial drop in quality of H1B work quality compared to their American counterparts.
That's my experience as well. Considered opening an office in Bangalore as I was thoroughly impressed by some candidates I had interviewed. Performance on the job was significantly different... like by several orders of magnitude.
I'm sorry, but why is that salary out of the question? Assuming he's actually worth his salt, he could make that at Google, probably easily, as an executive. Do you propose replacing him with someone who's worse, simply because they're paid less?
There is absolutely no way a university is able to accurately judge the valuation of its chief information office vs competition. And no business at scale ever operates that way. Once your enterprise (including schools) is old enough, and the politics drop the meritocracy, all it takes is knowing the right people to be guaranteed gratuitous compensation regardless of job performance.
Even without that, the only way you are going to weigh alternative candidates for any chief officer position would be to poach from competing businesses with the same department chair titles. The market is so limited on people who ever get those kinds of jobs anywhere to begin with that it is unreasonable to expect to ever be able to accurately claim if they are or are not "worth it". Success is more about aligning with the overall vision of the business and not causing conflict more than individualized performance. You could be worth a tenth your salary but as long as the other officers like you and the board does too you are set as long as you don't break anything.
According to PayScale [1] he's making 3x the median for a CIO. In understand that $150k seems crazy low but even at the high end of those numbers he seems overcompensated.
Again, maybe he's not a 'median' CIO. UCSF is one of the top medical schools in the country. Just because they're not a tech company doesn't mean they don't know how to compensate someone to run a mission critical IT infrastructure.
1. He's not just CIO, he's also a Vice Chancellor.
2. Median pay for the US is a poor proxy. Using your same site, the median pay for Software Engineers is $80K/year. It doesn't reflect market (CA) or expertise (healthcare).
Item one: if he were worth his salt, he wouldn't be replacing eighty sysadmins with offshore contractors.
Item two: That is a staggering salary. UCSF is a school, not a major technology company. UCSF honestly doesn't _need_ a CIO who's worth half a million dollars a year.
While the 'school' is a biological powerhouse with immense amounts of and complicated and cutting edge genomic/biological data being produced daily. There are more professors than students at the 'school'.
It's complicated. The school is actually part of UC, but the hospital system (UCSF Medical Center) is a separate company. Many people don't recall this but over a decade ago UCSF and Stanford merged their hospitals, renegotiated the contracts with their employees, then split the hospitals again.
In any organization, nothing raises employee morale more than listening to someone who makes 10X what they do talking about "cost pressure" and "tightening belts" and "doing more with less".
The UC system stopped serving students way back in 1992, I was there, when I went to UCI in 1990 the tuition was 500 a year, by the time I graduated in 1994 the tuition was up to 17k a year. At this point things have degraded so badly there are very very few Californian students who get to go to these schools, they make far more money admitting foreign and out of state students. The UC exists to serve the Regents and their administrators, the professors and students are irrelevant to the Regents.
Well, if we want to see the long declines in healthcare costs we all love so much continue, we are going to have to accept these sorts of capital efficiencies, now aren't we?
As someone on an H1 visa (although not working for an outsourcing company, but rather in a product org), this makes me mad. Not only due to the job losses, decline in quality, but also it will ruin a lot of people's lives who now have to attend daily status meetings at 9pm PT. In addition, these outsourcing companies don't even bother to hire local folks for the "onsite" positions. Even those positions need to be imported from India. That doesn't make any sense and I am not sure why the USCIS do not reject those applications.
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[ 3.2 ms ] story [ 151 ms ] threadThis should work out well...
It probably won't succeed to complain about this on the basis that the result might be poor, if the real problem is that outsourcing firms are abusing the H1B visa to reduce wages.
This is why there are different connotations between "outsourcing" and "remote workers". One implies the lowest bid.
http://www.orlandosentinel.com/business/brinkmann-on-busines...
H1B applier must certify no current American employees harmed by the visa. But that isn't transitive from the outsourcer to Disney. :(
This end-run with the outsourcers is a particularly egregious perversion of the law because they're bringing H1Bs with the intent to fire and replace Americans. There's also an angle of age-ism where they are firing older IT professionals in their 40s, 50s, 60s who have accrued higher pay-grades , and replacing them with less productive but much less costly young foreigners. Only losers are employees who need quality IT help, but who cares about that.
Over time, companies have figured out ways to use intermediaries and others means work around the legal controls to exploit immigrant labor.
If you work in the technology industry, this should concern you, as allowing organizations to do this sort of thing is ultimately reducing your compensation. If you don't believe me, look at the salaries & benefits (which are often public record) at regulated or government organizations that require US citizen labor. Line employees tend to make more in those environments.
HCL and Cognizant likely already had a pool of employees with valid H1-Bs ready to be deployed at vendor's location. As those workers were new to HCL and Cognizant, it's likely that no HCL and Cognizant employees were harmed.
Disney outsourced the contract, and HCL and Cognizant emerged as the highest bidder. To go after Disney you'd have to prove that it's somehow illegal to use third-party vendors for parts of the operation.
If you're going to advocate policies that reduce the compensation middle class workers can receive, don't be shocked when they vote for a candidate promising to stop free trade agreements. A government exists to protect the quality of life of its citizens.
Do you know what the current population of the US is compared to 100 years ago? And yet, we're much better off now.
Economics is not a zero sum game.
https://en.wikipedia.org/wiki/Lump_of_labour_fallacy
Here are a few companies founded by immigrants or their children:
http://www.forbes.com/sites/stuartanderson/2011/06/19/40-per...
It is almost universally the case that when someone says "economists think X" they actually refer to a group of academics belonging to a specific school of thought which defends that particular position. Not that scholarly consensus does not matter, just a reminder that in certain fields those questions become so highly ideological that you simply cannot treat them as a math question on which you can definitely rule one thesis or another.
Opinions like this is what caused Brexit to occur, and what will probably get Donald Trump elected.
Since it's a positive sum game, you could share the gains with the few people who lose out from immigration or trade, or automation (which is probably more important than the others) and still have some left over.
Or yeah, you could get all protectionist and watch the economy whither.
And if it does whither, that's a choice the US citizenry might be satisfied with.
Right, it'd take a while.
[1] http://elections.huffingtonpost.com/2016/forecast/president
Are you 12?
The rent is taken from domestic consumers.
In much the same way, Jim Crow/Davis Bacon/similar laws are also a form of rent seeking.
To you they are funny brown people who pull "our" wages down. To me, they are simply Kadambari, Ankur or even "that drunk lady from Bar Stock Exchange last night". Your faceless economic threat is for me a nice lady who loves her dog or the new office boy who is surprised when a firang speaks Hindi.
Perhaps that does warp my opinion.
"to secure the Blessings of Liberty to ourselves and our Posterity..."
Simple as that. There is a social contract that exists and that holds together the civic tissue of this country. Of course, some companies are going to try cheating it. That's fine, it is the reason we also have law enforcement agencies.
In the case of UCSF, a public University that almost exclusively relies on public funding to survive. I think people have an overwhelming amount of reasons to be pissed off.
Engineering talent (in US and other countries) is also a byproduct of that society's investment into educating its children. Arguably graduate education is also funded by tax payer money in these countries. So when US firms hire an engineer from India or China, they essentially are getting an engineer without funding his education.
> There is a social contract that exists and that holds together the civic tissue of this country. Of course, some companies are going to try cheating it.
Seeking merit (searching for a person who can do the job at a competitive price point) is not cheating. If UCSF does not offer good courses at great prices someone else will. That someone else could very well be a Indian or a Chinese university.
Alternative view to that is that any entity seeking public funds should be frugal with those funds.
Would you accept a tax and tuition increase to double (or triple, or quadruple) everyone's pay at UCSF?
The 15 lac/year requirement doesn't even apply to ethnic chefs and language teachers.
("15 lac" is 15 lakh is 1.5 million rupees, which is around $22,500 at the moment.)
I don't ask to insinuate "lower-skilled" workers deserve to be replaced or should have prepared for it; I'm merely trying to get a better grasp on the scope of these recent outsourcings.
As an aside though, I do feel that H1-B visa is being misused. I know a couple of friends who recently completed their MBA from reputed colleges in US but weren't able to get the visa due to the cap since Indian outsourcing companies nabbed majority of them. I feel there should be a separate category for visas for students who study in US so that they get a fair chance to participate in US workforce. Also, this will encourage talented folks worldwide to come to US since their future no longer will be decided based on a lottery
As an aside, UCSF is not a company, so your point about anything-goes competition is in this case a non-sequitur.
Every year 20K visa are earmarked for exactly this - see http://www.immi-usa.com/h1b-2015-2016-masters-quota-determin...
It will hurt US workers in the long run because Indians are known for their hiring bias[1,2].
> This will encourage talented folks worldwide to come to US
Come to US for layoffs? XD
[1] http://www.computerworld.com/article/2692372/former-infosys-...
[2] https://www.quora.com/Is-there-any-bias-among-Indians-of-hir...
http://www.h1base.com/visa/work/july%202008%20cap%20exempt%2...
http://www.visapro.com/h1b-visa/h1b-cap-exempt-employers.asp
From my time in academia, it seemed like a wildly disproportionate number of professors were born overseas. I have only 1 coauthor who was born in the US.
Your hypothesis that these folks would change their outlook based on greed and rent seeking seems to be falsified.
I don't think "studied in the US" is a good abuse prevention measure. I know several H1-B visa holders who are exceptional developers, who came to the US straight after an undergrad in a foreign country. One way to prevent abuse is to put a cap on per-company H1-B quotas or have higher regulatory standards for companies that apply for a ton of them. Right now it is really easy for large consultancy companies from India to submit a ton of applications and send the folks who win the lottery over.
Taught me a lesson. Interviews can be gamed!
Should probably start with this guy's pay first. He was paid over $460,000 in 2013.
http://compensation.universityofcalifornia.edu/reports/2013-...
The number of administrator jobs and their outrageous pay in public school system is shameful. Just look through the above PDF.
Even without that, the only way you are going to weigh alternative candidates for any chief officer position would be to poach from competing businesses with the same department chair titles. The market is so limited on people who ever get those kinds of jobs anywhere to begin with that it is unreasonable to expect to ever be able to accurately claim if they are or are not "worth it". Success is more about aligning with the overall vision of the business and not causing conflict more than individualized performance. You could be worth a tenth your salary but as long as the other officers like you and the board does too you are set as long as you don't break anything.
[1] http://www.payscale.com/research/US/Job=Chief_Information_Of...
2. Median pay for the US is a poor proxy. Using your same site, the median pay for Software Engineers is $80K/year. It doesn't reflect market (CA) or expertise (healthcare).
Item two: That is a staggering salary. UCSF is a school, not a major technology company. UCSF honestly doesn't _need_ a CIO who's worth half a million dollars a year.
Low risk, public sector jobs shouldn't be paid premium salaries.
The UC system should face significant fines for this move.