There is good news and bad news for IT professionals. The good news is that unemployment in the occupation is trending downward after a chaotic three years between 2002 and 2005. The bad news is that while lobbyists such as Harris Miller claim a worker shortage of programmers, the U.S. Bureau of Labor Statistics (BLS) begs to differ in their 2006 occupational outlook guide.
According to the
BLS "
Employment of programmers is expected to grow more slowly than the average for all occupations through the year 2014. (...) Another factor limiting growth in employment is the outsourcing of these jobs to other countries. Computer programmers can perform their job function from anywhere in the world and can digitally transmit their programs to any location via e-mail".
It is naieve to believe that only programming jobs are at risk of offshoring. As reported in prior blogs and other publications, higher level functions are now being completed offshore. So while countries like India have rational trade policies protecting their lucrative software industry, the United States is allowing jobs of all kinds and throughout the value chain to vanish. We have a trade policy that is both weak and not enforced.
Debunking an IT Worker Shortage
By Roy Lawson
Many of my blogs and public statements dispute an IT worker shortage. Today I provide actual government data from the
BLS which is both current and complete. I am able to get real-time data from the BLS detailing the unemployment rates gathered during the monthly household survey for the past 5 years. This research comes after months of researching the core problems facing IT workers.
Although I believe the unemployment rates are artificially low, we are making an apples to apples comparison proving that unemployment amongst the Math and Computer (IT) occupations is much higher than the average of professional and managerial occupations, and way higher than healthcare -a third occupation to give you an example of low unemployment and a true "worker shortage". Please view the image below. Note that the blue graph is healthcare, red is average, and beige is computer and math occupations.
Non-Seasonal Unemployment Rates:
Computer and Math Occupations vs
Average Managerial and Professional vs
Healthcare Occupations
Range: Jan 2000 to Dec 2005
As one can clearly see from the end of 2001 and beyond, computer and math occupations had an unemployment rate much higher than average. These high unemployment periods also coincide with higher caps on the H1-B visa. Based upon this knowledge I propose reforming employment based visas so that only occupations with below average unemployment rates are eligible for the visas.
This proposal would prevent companies from replacing American workers with cheaper foreign labor when unemployment rates are high, and would divert those workers to where they are most needed. I would propose an additional "stop-loss" of 3.5%, meaning professional and managerial occupations that rise above that should also be ineligible for employment based visas (H1-B). This would prevent the average unemployment rate from rising too high and would give employers an incentive for retaining their American workers.
Although this would not spell an end to our labor woes because of the latest trend of offshoring, it would provide relief to an especially hard hit occupation. What is unfortunate is that organizations like the ITAA (headed by Harris Miller) argued during the times we faced the highest unemployment rates that there was a "worker shortage". This data proves that argument patently false. It begs to question what data they based their argument on, which we coined "shortage shouting".
*Raw data is available real time at the BLS and can be accessed through their web based series report. The graph above utilized the following series codes across all years:
LNU04034028
LNU04034021
LNU04032215
If you have an interest in the household survey methodology it is here: http://www.bls.gov/cps/eetech_methods.pdf
If you need an explanation on how occupations are classified the data is here: http://www.bls.gov/cps/cpsaat11.pdf
You can follow some other views on Harris Miller, the race in general, and participate in a discussion here:
GOTV: A Virginia Belle talks about Harris Miller
Irony is king in the Virginia U.S. Senate race pitting Democrat and former lobbyist Harris Miller against incumbent George Allen. Miller is attacking Republicans for delivering weak reform proposals to corruption usually involving lobbyists --Miller's full time job just a few weeks ago as President for the ITAA; a powerful tech lobby group. The Irony is that Democrats have started attacking George Allen for links to another lobbyist, Jack Abramoff, which is expected to have a political toll this election for some Republicans.
Although any gifts or donations from lobbyists to
our elected representatives is an outrage and should be stopped, I have no reason to believe that George Allen was acting any differently than other politicians. I fail to see the logic in replacing a person on the recieving end of lobbyists with the actual lobbyist who was once trying to influence our government in a way unfair to the average American without the money to gain such access to politicians.
The bottom line is that we need lobbyists to start leaving Washington, and certainly not running for U.S. Senate. I am going to stop short of endorsing a candidate in the Virginia race because I believe that is up to Virginia voters, but I think that they should know what they are buying into when it comes to Harris Miller.
The proposals of both parties stop short of meaningful change; politicians like Trent Lott are already on TV complaining about the possibility that they may be eating at McDonalds. I hope they do start eating there because maybe they run into regular people, and start seeing and talking about regular people's issues first hand. Regular people can't afford to wine and dine our politicians at 5 star restraunts, and they certainly can't afford $2000 campaign donations.
Any real change would involve an outright ban of donations from corporations, registered lobbyists, and be limited to $100. That would make for interesting politics where the 30 second attack ads are now unaffordable and politicians are forced to discuss the issues.
Speaking of discussing the issues, Harris Miller continues to dodge questions and refuses to make a statement on his positions while a lobbyist for the ITAA. Specifically, the issues of offshoring and guest worker visas. Should Miller announce that he was not espousing his views, rather the views of corporations he represented, and then share his actual views I might change my oppinion of him. Right now he is simply a former lobbyist and president of the ITAA to me.
FastCompany declares that "
Offshoring is good for America" despite evidence to the contrary. I clearly believe that Marcus Courtney of
Washtech, a Washington based IT union, who argued against offshoring made a better case against the trend than Ashok Soota, Cofounder and managing director of MindTree Consulting in Bangalore, did in favor of the trend which he would like to call "OneSourcing".
Regardless of what type of spin you would like to put on offshoring, what is clear is that there has been a net loss of IT jobs in the United States. These jobs require high skill and are an important factor our nation's ability to compete and innovate.
Marcus Courtney advocates that we follow the lead of India, who have seen rapid growth in their IT services the past 3 years.
According to Marcus Courtney "
one issue that is very different between India and the U.S. is the questions around market access and export driven policies. India has a national policy around IT that it be export driven. Most of the software services generated in India are exported. It is not consumed in the domestic market. In the U.S., what is happening is that services that were once done in the U.S. domestic market are increasingly getting done overseas only to be imported back into the U.S. Our national policy should be different. (...) The U.S. should follow India's lead in creating a national policy around tech that just doesn't let market outcomes dictate everything. This can not only promote more fair competition but also avoid a race to the bottom in core labor standards."
Although we expect companies like FastCompany to side with Indian corporations over the interests of America, it is still unfortunate that they make such unfounded claims.
I thought I would help Harris Miller with his PR. Although MLK was very important to our nation and deserves a holiday where people don't actually show up for work, Harris Miller finds the time to throw another softball. His risk: the bigot vote. I doubt he was counting on them anyways (unless there happen to be bigots who also support offshoring American jobs).
So although I like what he says about Dr. King and this holiday, when should we expect him to defend some of his past positions as a lobbyist? Enough of the softballs Harris Miller. Let's play politics.
"Today we celebrate the life and work of an American hero, Dr. Martin Luther King, Jr. His dream of an America free of racism and bigotry made it possible, as he said, for us 'to transform the jangling discords of our nation into a beautiful symphony of brotherhood.' Even today, Dr. King gives us hope that we can face the problems that divide us today, and have the virtue and determination to unite as a nation. "Dr. King's faith, his dedication to the principles of justice and equality, and his steadfast resolve in the face of hatred and violence serve as inspiration to all Americans. Dr. King led America through a time of many wrongs, and gave our country the strength we needed to work through the extreme divisiveness and conflict that had plagued our own nation. Today we honor him and pledge to continue his work in the years to come."
The Harris Miller campaign seems in no hurry to inform the voters of his platform in his bid for the US Senate in Virginia.
While ignoring hot issues like offshoring and guest worker programs that he supported while a lobbyist for the ITAA, he starts his campaign off with a
slow-pitch: Miller calls for legislation to prohibit data brokers from selling an individual's cell phone calling record except for legitimate law enforcement, homeland security, or national security reasons.
As long as the Miller campaign is playing political softball -no whiffle ball, I have some other issues he may want to consider for his platform:
- Ban on puppy juggling
- Pledge to oppose terrorism
- Strong opposition to child pornography
- Voter rights
I think the goal of the campaign should be to pick topics that nobody opposes, and then act indignant about some fake advesary who opposes those things.
Sure cell phone privacy is important, but it isn't a controversial issue and unrelated to why he should be the next US Senator from Virginia. Miller should pick some tough issues and argue in favor of those. Let's see how he handles pressure, and if he will defend offshoring American jobs to cheap foreign destinations.
More to come on Harris Miller, assuming he puts his campaign into gear --any gear. Right now it looks like he is in park and still has the emergency brake set. It's kind of like worm racing.
"Nick" Narendra Mandalapa, an Indian national living in New Jersey and the owner of Cybersoftec, Inc., was arrested last week for fraudulent labor attestations used to acquire visas for workers on the H1-B visa program. According to some of the victims who have now formed a
Yahoo group, more than 300 Indian and Pakistani workers along with their families now fear being forced to leave the country.
According to U.S. Immigrations and Customs Enforcement (ICE) they "
have seized $5,724,592 in assets from the suspect's bank and brokerage accounts in a massive immigration benefits fraud investigation". According to ICE computers and documents from the corporate address of Cybersoftec, Inc were seized. ICE believes that "
at least $2.1 million dollars came from fees paid by individuals seeking fraudulent benefits".
One immigration official involved in the investigation said that "
Immigration benefit fraud is a multi billion dollar business and can not be tolerated. This type of fraud not only steals jobs from legitimate workers but it also provides individuals to illegally enter the United States and creates a risk to national security and public safety". This type of fraud has been claimed but largely ignored in the past.
Unfortunately, the illegal activities of Cybersoftec may cause undue hardship for victims. One
anonymous person who alleges to be a victim of Cybersoftec claims that he was harrased for three months by the company with promises of getting both an H1-B visa and a greencard. He claims to have paid the company $5000 for SAP training and the filing of an H1-B visa. According to the same source the company then asked for an additional $10,000 to process the greencard application, which he refused to pay.
It is against the law for companies to require workers to pay for or reimburse any of the H1-B related expenses. When this blogger asked members of the Yahoo group "
lawsuit_against_cybersoftec" in how the scam works a group member going by the alias "rippedofbycs" said the following (Message 1137):
The H1B approval notice - form I797 has 2 parts. The approval notice is sent to the employer by the USCIS and the USCIS doesn't even send a copy to the employee.
The instructions on the approval notice reads that the top part is to be kept by the employer and the bottom partis to be sent to the employee. However some employers like Cybersoftec keeps both the top part and the bottom part and don't send a copy to the employee.
What happens as a result is that the H1B employee gets stuck with his employer. If he needs to change job or to travel outside of US or to even go back to his home country (and return), he needs theH1B approval notice, to show his valid status.
I hope USCIS realizes this fraud some day.
As more information on this scam and the investigation unfolds, this blogger will continue to follow the story. What is becoming more evident is that the H1-B visa program is filled with loopholes that cause the program to be easily exploited. The victims include both Indian workers who find themselves to be indentured servants, as well as American workers who see a decline in job opportunities and wages.
Washington Post staff writer Mitra Kalita's confirms what groups such as the
Programmers Guild and
IEEE-USA have claimed for some time now: high level software engineering and management jobs are not immune from offshore outsourcing. Her January 11th 2006 article: "
India's New Faces of Outsourcing" reveals drastic changes in business that raise questions about the future of the IT profession in the United States.
Kalita profiles Approva Corporation, a company based in Virginia that has facilities in Pune India, and writes that "
outsourcing has evolved in unexpected ways. In the past, U.S. companies gave the marching orders to workers in India. Now, young Indian developers (...) and expatriate Indian business leaders are helping India gain a more equal footing".
A highly skilled Indian employee of Approva is also interviewed. Constancio Fernandes started out as a programmer and is now the Director of Engineering at the company's Pune facilities. According to the article Fernandes said that "Most of the companies in the U.S. used to see Indian companies as sweatshops" but since then "The changes have been phenomenal".
According to the Washington Post "
Fernandes represents a generation of Indian workers that is redefining outsourcing from call-center and back-office work into higher-level management and strategy jobs -- areas that Americans workers have often regarded as safe from overseas competition". American IT professionals have claimed for years that high value jobs are not immune from offshoring. Many companies are doing all their software development in India, with architecture, design, and support soon to follow.
The trend to move engineering and high level jobs to India is not limited to a few companies. Kalita writes that "
At least five companies from Northern Virginia -- all run by Indian emigres settled in the Washington area -- have opened offices in Pune". Unfortunately the staff in Virginia "works mostly in sales, marketing and management" meaning that the highly skilled technology and engineering jobs once done in the United States are now done abroad.
This article should be a wakeup call to not only American IT professionals but also U.S. policy makers who need to be thinking about how to prevent a brain drain of these high-level jobs. Their blind faith in free markets and trade of services is proving to have dire consequences for the IT industry as a whole. We can only hope that our government does not allow American technology services to follow the path of American manufacturing.
SiliconIndia has reported that the Minister of State for Information Technology, Shakeel Ahmed, said requests from foreign nationals for employment visa for jobs, for which a large number of qualified Indians is available, will not be considered. In short,
foreigners aren't welcome to apply for working visas in India.
That's right, the Indian government is shutting out Americans who want to find employement in the IT field -in a country where most of the world's IT jobs are now being created. San Jose had its run, and now Bangalore appears ready to reign king in technology. Unfortunately it appears that not even Bangalore is an option for displaced techies now.
Back in the United States Indians use up the vast majority of H1-B and L1 worker visas to gain entry into American technology jobs. While the United States has a worker surplus and India by all accounts has a shortage, the Indian government locks out foreign workers and the US government floods our own market with low-cost workers.
This is further evidence that American workers are getting a raw deal when it comes to outsourcing of American technology jobs. Although I question the decision of the Indian government, I can understand them wanting to protect the jobs of their citizens. Why is that such a difficult concept for American politicians to grasp? When American technology workers are unemployed at above average rates, it is time to decrease the amount of worker visas issued.
Once again we can rely on the Indian press and not the American press to report the facts on outsourcing American jobs.
OutlookIndia, and Indian online zine, reports that Senator John Kerry (D) is refining his statement on offshoring.
He is reported to have said that "any company has a right to make an economic decision that it wants." "What I opposed was the non-economic choice made by some companies with an eye on tax benefits. I was worried about loss of pension and healthcare benefits". The Senator was also said to be meeting with Indian BPOs to get a "first hand understanding of business outsourcing".
I must say that I am not pleased with Democratic leadership who won't listen to their constituents on this issue. Instead of getting a first hand understanding of business process outsourcing on that side of the globe, Senator Kerry should be speaking with the Programmers Guild, the IEEE-USA, and other groups that represent technology workers.
I would even go far as to suggest that the Senator read the Indian press if he wants a true account of offshoring. They understand the full impact of the practice and in fact are
locking out foreign workers from participating in the Indian Business Process Outsourcing (BPO) workforce. I think that may be called "protectionism", but it's only a dirty word when Americans do it.
We are in an economic war for control of the technology sector -the Indian and Chinese governments know this and the American government has no clue. We will be surpassed without leadership who understands these issues and has a commitment to maintain American supremacy in technology.
Now going back to some comments made by John Kerry: I have a newsflash for the Senator. Pensions don't exist in the IT sector; they are a relic of a union past. My children will probably never hear the word "pension" spoken unless it is in a history class. As far as insurance, that is the least of our concerns at this point -so let me make this absolutely clear: WE WANT OUR JOBS.
My only advice to Senator Kerry is to remember what party he is in and who he represents. If he wants to turn on those who supported him the most --like Max Baucus has recently done, I can assure him that he can kiss any chance at the White House goodbye. Just follow what will be the demise of ITAA lobbyist Harris Miller (D) in the Virginia Senate race. Harris Miller is a prequel of what is to come for Democrats who turn against the party base.
UPDATE: According to Baucus's office, AP has issued a minor correction. The news service says that Baucus "did not say he supports outsourcing of white collar jobs from the United States, but said instead that outsourcing is a reality." I just discovered this in another blog and felt that it would not be responsible if I didn't alert readers to this. I have not been contacted by the Senator's office as of yet but I would welcome their statement on this. My original blog is below.Original Blog:According to the Associated Press,
Senator Baucus supports offshoring American technology jobs to India. Apparently he was influenced by Thomas Friedman's book because he was quoted as saying "But
the world is flat and we must work harder to better retrain our people".
Apparently the Senator believes that technology professionals should throw in the towel and enter other fields. What would he say to those in debt to their eyeballs because they pursued a degree in a field that the US Senate sold to India? Go further in debt? Quit your career and become what?
The Senator, and most politicians for that matter, don't care about
our economy -meaning the working class. If they did we wouldn't be running record trade deficits, and they wouldn't be pretending to be powerless over the situation.
They are very concerned, however, about
their economy. The economy that sends jobs to India and makes CEOs even wealthier. This is the economy driven by corporate interests and powerful lobbyists like Harris Miller, for example.
I can't imagine any self-respecting Democrat voting for a person who supports sending American jobs offshore. There is no evidence suggesting that sending high paying and high skilled jobs away is a good thing. They made that argument with NAFTA, CAFTA, and PNTR with regards to manufacturing -and just look at what a sorry state American manufacturing is in today. You must look very hard on the shelves of Wal-Mart for anything made in the USA.
Do we want the IT field to follow the path of manufacturing? Is it in the interest of the United States that these jobs vanish? Max Baucus is unable to make any compelling argument in support of offshoring. He digs up misconceptions produced by the ITAA, that have been proven baseless time and again.
The trade policy of this nation is nothing short of wreckless. But what do we expect from politicians who listen to lobbyists and not their constituents? This government has become so infested with corruption we no longer know who to trust. I won't be satisfied until corruption is purged from the Congress and the executive branch of our government. Until then, we are stuck with those who would sit on their hands while our jobs are shipped offshore. And I must assume that some lobbyist made a back office deal with Senator Baucus at our expense.
"But he is a Senator. He has stature and respect that in itself demands our trust", you say. Nonsense. Trust is something that Congress must earn. Until they can prove that they have integrity and do something about the corruption within, they get no confidence or trust from me.
ITAA's Harris Miller Steps Down; Senate Bid Looming
Harris Miller just stepped down from the ITAA, presumably to run for the US Senate as a Democrat from Virginia. But who is Harris Miller? I'll bet you will soon see him in pictures surrounded by children and puppies, and he will look like a real nice guy. But there are some skeletons in this mans closet. Skeletons that have haunted the tech industry for years now.
The answer to the question "Who is Harris Miller?" is simple.
Harris Miller is a lobbyist for the tech industry. He is an
immigration lawyer who claims to be an expert in technology. He is a former director of the ITT Technical Institute, and now stands
accused of insider trading in a class action complaint for dumping ITT stocks. He would most likely prefer to be called an "activist" since the latest scandals have sullied the word "lobbyist". But let's be clear, Harris Miller stands for the interests of big business. He is backed by big donors. He is a
lobbyist in the purest form.
The tech industry first came across our friend Harris Miller when we heard of a "shortage" of high tech workers. According to the ITAA and Miller, the United States was in dire need of cheap foreign labor. And before you know it, this powerful lobbyist got exactly what he asked for in the form of increased H1-B visas. What we have now is nearly 2 million fewer IT professionals over the past 5 years; 400,000 of which lost their jobs after the official end of the last depression.
Miller will claim to be a friend of immigrants. But in reality, with Harris Miller leading the ITAA they
lobbied against bills that would have protected immigrants on the H1-B visa program. Or should we say indentured servant program, thanks to Miller. You see, groups like the Programmers Guild and IEEE-USA asked Congress to make it easier for workers on the H1-B visa to transfer from job to job because the system required these workers to leave the country if they ever lost their jobs or were fired. This looming deportation created fear in the guest workers, enabling companies to pay them well below wages of Americans even though a law required them to be prevaing wages (see the
Miano report). Many companies still don't obey that law to this day, after all nobody is going to do anything about it anyways.
Not suprisingly the transgressions of Miller against labor go very far back. Harris Miller made his name in labor arbitrage when his firm, Immigration Services Associates, was hired in the 1980’s as a consultant/lobbyist for the
National Council of Agricultural Employers. In 1982, the Council raised a million dollars for the campaign of George Deukmejian. “Between 1983 and 1990, Deukmejian began shutting down enforcement of the state's historic farm labor law. According to the UFW “Thousands of farm workers lose their UFW contracts. Many are fired and blacklisted".
In 1995 right as the tech boom was starting Miller joined the ITAA. And true to his form, history repeated itself with renewed calls of labor shortages only this time in the tech industry. What followed was a massive downsizing of the IT workforce. The worker visa programs pushed by Harris Miller even enabled a new phenomenon to occur: offshoring.
Harris Miller has come to personify the problems seen in the high tech industry. I believe that he deserves a large amount of credit for the challenges we face today. The tech capitol of the world is soon to be Bangalore India and not San Jose California. Indian BPO companies like Infosys and Wipro are expanding rapidly and gaining market share within the United States, while companies like EDS and IBM are losing money and laying off American employees. Harris Miller paved the way for this to occur on a path built upon American workers and their families.
Anyone as vehemently anti-worker as Miller does not belong in the US Senate. This man is the wrong choice for Virginians, the Democratic party, the most importantly the United States of America. Groups such as the Programmers Guild have worked hard to undo the harm caused by Miller -without the help of billion dollar corporations like the ITAA has. I can't imagine what a vote in the US Senate, in the hands of Harris Miller, would mean for high tech workers, and especially our nation.
I would encourage the Democrats in Virginia to find themselves a better candidate to back in the primaries. Harris Miller is not a person the Democratic party should associate with, especially when the integrity of our elected officials has come into question. Give Virginia a Senator who will bring integrity and conviction to their office. Find a candidate with unquestionable loyalty to this nation and her people.
