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America First: The White Collar Workers Who Got Outsourced

Feb 15

Your liberal friends want you to believe everyone who voted for Trump are racist, low paid, middle-aged white dudes from the Midwest. It’s nice and clean when you put it into that box. It fits the narrative they are selling really well.

 They don’t want you to know about the black female in California who lost her high paying salaried job to an H1B worker. Or the Asian-American male and female who lost their jobs, as well. Or the 60-year-old plus Hispanic male who lost his job. Those folks also are hoping ‘America First’ takes off.

This from the New York Times (I think this is still ‘real’ news, the NY Times?):

Audrey Hatten-Milholin, 54, was notified in July that she would be laid off from the University of California, San Francisco, at the end of February after 17 years in its technology department. Along with eight others, she filed a complaint in November with California’s Department of Fair Employment and Housing, charging that replacing her and others with “significantly younger, male” workers “who will then perform the work overseas” was discriminatory.

“We are at a disadvantage as Americans,” Ms. Hatten-Milholin said. “They look at it like, where can we get it cheaper? And for U.C., it’s not here.”

From the same article:

In other words, it’s true that cheaper labor helps employers increase profits and grow, and having more skilled workers in the United States contributes to economic innovation. But at the same time, individual American employees do face more salary pressure from newcomers who will work for less. And in some cases, they risk losing their jobs entirely, especially older employees who earn higher salaries.

After 11 years working in the I.T. department of Northeast Utilities, a Connecticut-based company now named Eversource Energy, Craig Diangelo was among 220 employees laid off in 2014. Before leaving the company, he was told he needed to train his replacement if he wanted to receive his severance.

Mr. Diangelo, who is now 64 and was receiving $130,000 a year in salary and bonus, said he trained an employee from the Indian outsourcing firm Infosys who was an H-1B visa holder making $60,000 a year. There was also a team of workers in India making $6,000 a year that shadowed him on the computer.

There’s a reason Tech companies are screaming as loud as they can for the current administration to expand the H1B program and it’s not because they can’t find candidates for their jobs. The candidates are there, but the companies don’t want to pay the salaries of the American candidates who are available!

About half of all the H1B’s issued annually go to outsourcing firms. What are those? These are basically companies who perform modern day indentured servitude. They find a foreign worker with great skills who desperately wants to come to America, pay them a very good rate as compared to where they are coming from, but much less than a similar American worker. Since the outsourcing company holds the H1B, they basically have this person at the lower rate for six years.

The tech companies get great talent, for a much lower wage than a similar American worker. Everyone is happy. Well, almost everyone. Miss Hatten-Milholin and Mr. Diangelo from above, they’re not too happy, they are really hoping this America First thing takes off.

If you really dig into what the new administration is trying to do with the H1B program it’s not to eliminate it, it’s to bring it up to an equal footing of the American worker. If the American worker gets paid $100K to do the job, you also have to pay the H1B worker $100K for the same job. The theory being if everything is equal American companies will hire American workers. Or, in the case where a true shortage exists, then hiring H1B workers will make sense without limits.

Ah, equality, it’s what I love about America. There are at least two sides to every story, this side rarely gets shared.

2 Comment to “America First: The White Collar Workers Who Got Outsourced”

  1. Tim – I work in the IT staffing industry as well and in my city, we have a definite shortage of skilled software engineers and data folks in particular. Although it happens some, most of the clients in my city turn to H1 candidates when they don’t have local talent they can find/hire, not to find cheaper. That does factor some though, since everyone wants that local talent, the strong demand has driven up salaries considerably, often to the point that they price themselves out.

    What I worry about, is if salaries continue to grow as quickly as they have, some bean-counter in finance or procurement will make an aggressive push to offshore. Won’t need to worry about the H1 visas if you suddenly have a surplus of local candidates. Of course, they’ll see a rapid deflation in their market value though.

    Ultimately, I think it is a slippery slope to think we can over-manipulate the market without down-stream consequences.

    jasen
    Feb 15, 2017
    • Jasen,

      Really great comments. Years ago when I first started recruiting in the Auto industry we saw the same thing on the CAD design side. The market actually did a pretty good correction on this and you’ll see rates today that we were paying fifteen years ago. It’s fairly simple economics. If a certain job is paying a crazy wage, it’s just a matter of time until either people will find their way into that field, or technology solutions are developed to fix the problem. I don’t see this administration taking well to offshoring IT jobs in mass. I’m guessing a ‘new’ job tax of some sort would come into play pretty quickly!

      Also, some of this is companies just being stupid. San Fran is the single most expensive city in the world, now, to employ a software engineer. Stop putting the jobs in San Fran! Put them in Austin, Nashville, St. Louis, Chicago, Detroit, etc.! Again, a market adjustment we’ll continue to see grow.

      T

      Feb 15, 2017

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