Tech firms battle US job protection laws while importing workers

By Jacqueline Emigh | Published February 5, 2009, 10:31 AM

On the one hand, importing more foreign workers into the US for lower wages than US workers might earn, would save companies money. On the other, exporting US workers to foreign soil could save them money too.

After coming under close scrutiny by a US senator around its policies of importing employees into the US, Microsoft on Tuesday joined with IBM and several other high tech firms in fighting a "Buy American" provision -- appearing in the pending economic stimulus package -- which is designed to protect American workers.

For its part, IBM has reportedly launched an internal program called Project Match, aimed at exporting some of its thousands of newly pink-slipped employees to the United Arab Emirates and other countries, where they would work for much lower wages than in the US.

Directly after Microsoft's own announcement of 5,000 job layoffs, company CEO Steve Ballmer got a letter from Sen. Charles Grassley (R - Iowa), who has often criticized the tech industry's use of H1-B, a visa program aimed at importing workers into the US when qualified Americans are not available to fill specialized jobs.

In light of Microsoft's layoffs, Grassley demanded to know whether the company would keep its imported H1-B hires instead of finding qualified American replacements.

"Our immigration policy is not intended to harm the American work force. I encourage Microsoft to ensure that Americans are given priority in job retention. Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times," according to the senator.

Microsoft has been leading a tech industry effort seeking increases in the H1-B cap.

Last fall, though, a report from the US Bureau of Citizenship and Immigration Services showed a 20% violation rate in the H1-B program, citing violations that included fake degrees, forged documentation, and imported visa holders not getting paid the prevailing US wage, for example.

Together with Sen. Richard Durbin (D - Ill.), Grassley then filed legislation to reform the program by requiring employers to prove that an H1-B worker would not displace an American.

Then, on Tuesday of this week, Microsoft's name showed up on a list of companies signing a letter sent to Senate leaders opposing the "Buy American" provision in the Senate version of the emerging economic stimulus plan. The Buy American plank would require manufactured goods used for projects funded by the economic stimulus bill to be produced in the US.

But "enacting expansive new Buy American restrictions would invite our international partners to exclude American gods and services from hundreds of billions of opportunities in their stimulus packages and perhaps to adopt Buy Local rules or raise other barriers to American goods more broadly across their economies," argued the companies in opposition.

"The Buy American provisions of S. 336 are as unnecessary as they are harmful," according to the letter signed by Microsoft and eight other organizations, including IBM, AT&T, Oracle, Cisco, Lockheed Martin, the Technology Association of America, the Aerospace Industries Association, and the Coalition for Government Procurement.

At the same time, IBM has come under attack from its own employee union for the Project Match program, which is encouraging laid off IBM workers in the US to apply for jobs with IBM overseas. "Project Match will help former employees to locate potential job opportunities in growth markets where your skills are in demand," an internal IBM e-mail reportedly said.

IBM is providing Project Match participants help with obtaining visas to work abroad and financial compensation for moving costs, according to Lee Conrad, national coordinator for Alliance@IBM, who received the document from a recently laid off worker.

But Conrad told a local newspaper in IBM's home base of Westchester County, NY that the exported workers will be paid according to much lower pay rates in their new countries of residence.

The e-mail document offers to put former workers in contact with IBM hiring managers in countries that include the United Arab Emirates, Brazil, Nigeria, Romania, the Czech Republic, and South Africa.

Comments

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They are hiring from outside to keep the profit margin up. Where do you think those huge salaries and bonus packages come from? While they keep sending jobs ($$) and training ($$) and technology ($$) overseas the US unemployment rate continues to rise. Dollars go overseas and with them the ability to support families and recirculate money in the local economy. This is plain and simple about corporate greed and high pay for CEOs and etc. It's time to stop the lies and coverups. All bailout money should be directed into American business, American products and services, and American workers paychecks.

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|But "enacting expansive new Buy American restrictions would invite our international partners to exclude American gods and services from hundreds of billions of opportunities in their stimulus packages and perhaps to adopt Buy Local rules or raise other barriers to American goods more broadly across their economies," argued the companies in opposition.|

I can see why they might want to exclude American gods.

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People seem to miss a few things here. People like Microsoft are hiring from outside of the us, not to pay people less, but because the talent they require actually does not exist locally. An organisation like Microsoft only employ the very top people in their field. By hiring the best people in the industry. By forcing these organisations to narrow their talent pool to the US only, you're essentially forcing that company to fail. It actually costs Microsoft considerably more to hire an employee from OS than it does locally.

The other thing that people do not realise is that people relocating from overseas to work for someone like Microsoft are giving up much more than local employees and are at far greater risk. If an employee from OS is sacked, they have as little as 10 days to leave the country. Could you imagine packing up your whole life and moving it in 10 days? It's expensive and disruptive. What about children? They're forced immediately out of their school, their country and away from their friends. Is that fair on them? In contrast, it's a million times easier for a US employee. Trust me... if they've been working for Microsoft, they'll get another job in around 10 seconds.

Anyone who is supporting Sen. Charles Grassley's view in regards to Microsoft in my opinion does not know the real issues at stake. The fact is, the US employees really aren't going to be overly hurt by the sackings and by forcing these organisations to hire only from within the US, you are going to hurt the company in a big way. Not because they're going to be spending more on employees, but because they are going to be less efficient, innovating less and producing lower quality products.

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"but because the talent they require actually does not exist locally."

How do you know this? And why doesn't it exist locally?

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Absolute nonsense.

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What a load of crap. The idea was to be using a nonunion work force that speaks (for the most part) English. Some of the best code writers I know speak their own Russian very well and English like a 3 year old with downs syndrome. They have mad skills and make a crap wage in their own country but not speaking decent amounts of English isn't a liability there. Microsoft has never darkened their doors save for those times when its a cease and desist order for making changes to the kernel in support of proprietary software which MS said couldn't possibly be done. I guess at times "the best" are also the incapable.

Microsoft has made boatloads of cash by keeping Joe-jobs offshore. If they're pulling in a home grown Brainiac they either need him/her or want him/her off the market. On a shelf in your organization also means they are not going to be used against you. Not everyone is a corporate simpleton DaEagle. While you're at it you might as well laud all the others for their sparse use of the American work force too. Bottom line is you're making how much less with operational costs of 1200% more per man hour? Anyone using purely American workers is either a permanent attachment to the government teat or heavily leveraged by other portions of the labor being offshore. There is no middle ground here. Besides there is only a market for that $100 unionist toaster when there's no other choice allowed. If MS were not doing such and wanted to keep the profit margins as they have been, imagine the actual cost of developing, packaging and warehousing the MS product line.

The only thing any of these companies can say for themselves is Capitalism. The corporate entity itself is who comes first and through that the shareholders. The Socialist model on the other hand wants to make these products a break even for the masses by placing the cost differential on the shoulders of business which is why under those conditions the shareholder has to be the government who can do without seeing a profit from their investment. They have the ability to just go get more from the tax payer when deemed necessary.

Change you can count on. Protectionists being unionists or being greased by such.

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20% violation rate?
Implement an OSHA style fine schedule - The department manager pays out of their own pocket. If the fine is re-embursed, both parties get fined triple.
That will limit the little games involved in 'who is responsible?', and 'the fine is not my problem, it is company money/policy.'

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the more I come across these kinds of stories, the more I feel like becoming a mofo terrorist and utterly destroying these companies that sh*t on American workers all for the almighty buck. What's really sad is these execs are trying to pocket more money, which has very little value to it anyways. It's nothing but paper..monopoly money... Here's the deal.. any company that wants to outsource or move overseas, fine!!! Here's the penalty...Any software, or product you produce overseas and you wish to sell it over here in America, you have to pay a HUGE tariff or tax on it. Make is absolutely a negative outcome for companies that wish to sh*t on American workers and see if they continue to do it. If they try to go through a loophole, let them receive the fury of having their companies burnt to the ground and disbanded forever.

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The rape of America continues. Thanks IBM. So... exactly how much are the IBM execs getting paid? Instead of outsourcing the worker bees... let's outsource the Queens... let the fat bas****s get by on a meager salary, lousy benefits, and zero incentives for a while. Then you pink slip 'em and tell them they've been outsourced to a foreigner who's willing to work for even less. Yeah... I'd love to see their faces.

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Until the trade deficit is zero or in the favor of the US, then I don't think any company's complaints will hold much ground. The US has to stop or severely reduce the bleeding of America's wealth overseas.

I'm not against H1B Visa employees, but the companies hiring them need to be taxed higher per employee so that they are a last resort. Same with taking jobs off shore to India or wherever. They need to be taxed even greater.

As it stands right now, Americans are the last resort for jobs, because they are typically more expensive and won't let a company take a dump on them with regards to health benefits and working conditions.

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You make a good point.
Perhaps something similar to an import tax or tariff for offshore work rather than/as well as product? Makes sense to me, a lot of companies have already found the shortcomings of offshoring (subpar work, communication bariers, etc.) & are bringing back jobs, but not enough. I think that making it less appealing to offshore jobs would definitely help.
As you say, H1B Visa employees aren't so much an issue, at least they're here, spending much of their wages (and depending on status, possibly taxes & medicaid/soc sec) in our country, and it's not like just anyone off the street can get one (bachelors equivalent required), so it's for skilled/professional workers. The cap on the number issued helps too, unlike offshoring.

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