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American Workers: Modern Day Buggy Whips

by John Brandt

The average worker has no idea that the corporate raiders of the 21st century are no longer in an office on Wall Street. They are in the boardrooms and executive offices of every corporation in the country...

I once watched a movie called "Other People's Money". It was about a small company that was mixed up in the world of the 1990's corporate takeovers. The company is owned and operated by good people. This small company doesn't understand that the financial world has passed them by, and that they are perfect for a takeover. Without any debt, a fully vested retirement plan, good worker benefits and steady revenues, they are a dream for a takeover shark. In steps a corporate raider, played by Danny DiVito.

During the proxy fight, the raider makes a very eloquent speech about the last company to make buggy whips. The hostile crowd of stockholders becomes subdued and quiet during the speech. They quickly come to understand that while the Buggy Whip employees were loyal, hard working and made the best Buggy Whips in the world, with the invention of cars, buggy whips just weren't in demand anymore. The buggy whip company finally folded and those last stockholders had worthless paper and lost their money. The once hostile crowd votes to take the money rather than watch the slow death of their investments.

The average worker has no idea that the corporate raiders of the 21st century are no longer in an office on Wall Street. They are in the boardrooms and executive offices of every corporation in the country. The "American" worker is fast becoming a commodity, bought and sold, or more aptly put, sold out as fast as a snow cone in Phoenix in July.

Now I'm going to tell you a story about some "average American" workers and how a Fortune 500 company committed a terrible fraud. Unlike Enron, who screwed stockholders, customers and employees, these people were just a bit smarter. Even though it is an American company, the only people they hosed were the American workers. These workers were all IT professionals ranging in age from 25 to over 50 and experience from 3 years to over 20. Very hard working, talented, and dedicated to their jobs, they failed to see the big picture.

During 1998 and 1999, Y2K efforts were in full swing and IT professionals were in high demand. The dot-com rage was in full bloom and most major Fortune 500 companies struggled to keep good people. This large retail video rental company was an exception. They seemed to be throwing good people out the window, and little did I know, they were way ahead of the times.

They had hired a new Vice President of IT. Aside from the fact that this person's last four positions had all involved multi-million dollar budget overruns, failed projects of every size and shape, and two bankruptcies, he was put in charge. He immediately hired an outside contractor from Miami to perform the entire Y2K effort.

I became aware of what was really happening during the initial Y2K build up. The contractor supplied a single supervisor and scores of low-level coders to modify programs to be Y2K compliant. They utilized a little know law at the time called the "H-1B Visa".

This visa allowed companies to hire foreign workers "temporarily" and was originally designed to fill a gap with educated, highly technical workers with very specific talents. It could only be used when an American worker could not be found to fill the position. The intentions were good, but the loopholes were many and enforcement was non-existent.

I quickly found that the contractor had listed programming jobs with the workforce commission in Florida for "entry level programmers" at an average of 20K per year with at least 3 years experience. I was a little confused because I knew no one would ever answer that ad. Then the lights went on. They didn't want anyone to answer it.

I looked up the H-1B laws and soon found that it required the employer to pay prevailing wages, but it didn't specify how the company was to verify the prevailing wage. It said that the employee must work for only that company, but it didn't say that the employees couldn't be sub-contracted out, nor did it say how the government was to verify the "prevailing wage."

When I made some phone calls, I found that the US Department of State was in charge of issuing the visa. US Immigration and Naturalization was in charge of verifying the visa. The Department of Labor only verified that the Visa was issued by Commerce. The Department of Commerce was in charge of verifying the prevailing wage based on information provided by the company requesting the H-1B.

No one was in charge of enforcement and there were no regulations to verify that what the company said was a prevailing wage was accurate. Then it made sense that they never employed any significant staff in Miami and were fearless at being caught violating this law.

They brought workers in from India with 3 months experience in the form of a "training program." They never worked in Miami, and as soon as they touched ground, they were put on planes, trains and automobiles bound for other cities like Chicago and Dallas where the billing rates were a minimum of $70 per hour.

I was amazed at the size and scope of the Y2K project they were given because more than 95% of the software on the systems was "off-the-shelf" and already Y2K certified. Even though there were about 500 custom programs on the systems, only about 20 to 30 contained any dates at all, and less than 30 would require modification and testing.

Certainly, modifying and validating 30 programs would have taken our current staff at least a month to do. If the entire staff had worked on it full time the cost would have been somewhere in the $50,000-$100,000 range, including overtime. Boy, that's a lot of money to spend all at one time.

The video rental company allocated space for the H-1B's in a bullpen area. Within a few weeks, they went from a project manager and a project lead to over 40 people, eventually brining in more than 60. Within a few months, the current staff of programmers and analyst started dropping like flies. Bear in mind that none of them were fired.

Most were being given extra duties, unreasonable deadlines and just being generally shoved out the door. Within 6 months, over 45 people left. Slowly, the Indian workers were being moved into those positions. Those who were being thrown under the bus were even training some of the Indians.

When I asked about the Y2K project, I was informed that every executive had a bonus program so that if there were few Y2K related issues, they got bonuses. So I decided to follow the money. During the next 2 years, the original 45 American workers would have cost 8.6 million in salary and benefits.

The H1B contract was 12 million while the Indian workers total pay would be somewhere close to 1.5 million. Corporate bonuses for the Y2K project totaled 4.5 million during the same period. That means that the company decided that it was much better to pay 7.9 million more, in order to "save money."

Executive perks included all expenses paid "business trips" to Orlando, Miami and Augusta during the Masters for them and their families. The executives certainly couldn't afford to pay for these vacations themselves. Their salaries were a mere $24,000 per month plus stock options. Ah how I love these days of new math. I just hope my children have learned that 2 plus 2 equals a buggy whip.

John McHugh of HP said that HP could no longer recruit skilled engineers in Silicon Valley. Did they move Silicon Valley? Didn't HP lay off 32,000 people when they bought Compaq? If these workers were so unskilled, why did HP decide to buy the company they had built? Are you really looking at the technical talent located there?

He probably is using the same method as his boss, Carly Fiorina. She followed his statement by saying "There is no job that is America's god given right anymore." I'm thinking that Article II, section 1 of the Constitution would disagree with her, seeing as how you have to be a citizen to be President.

Although God didn't write the constitution, I'm thinking that the law would require it. Maybe she's trying to get the citizenship requirement dropped so that someday we can have Aaaaanolllllldddd in the Whitehouse. Of course, we'd have a problem understanding his accent. But then again, we already have that problem with our President.

So the next time you hear someone say that they can't find qualified "American" workers, just think of yourself and your fellow American workers as "Buggy whips." Then check the math.

Of course, I wouldn't know. I'm just a flunky programmer.

John Brandt - iStudio400.com has spent the past 26 years in programming, analysis, systems design and development in positions ranging from programmer to Chief Technical Officer. He has extensive experience in every facet of IT, including supervisory and management of small, medium and large projects. As an ad-hoc writer over the past few years, his years of experience and the vast array of clients and projects give him a unique perspective on management, labor, labor relations, outsourcing, insourcing, visas and the other legal issues involved in the hi-tech world of today.

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