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Dino Perrotti's picture
Dino Perrotti

American Engineering Careers

American Engineers vs. tech management: H-1B battle: Round 1 - US citizens WIN!

It came right down to the last seconds of the bout, about midnight of the lame-duck session of the 2006 United States of America Congress.  Senator Boehner (R-OH) took one last shot, trying to slip an H-1B increase into the India Nuclear deal.  American engineers were on the ropes. 

The committee was in a closed-door session late Friday night. Engineering careers were about to be knocked out for good.  Members of various groups from the left and the right were frantically calling their representatives.  Family members of engineers from around the country were calling senators, many for the first time ever.  Last Friday night, the major news media didn't even cover this fight but it continued until Saturday morning.  There was only a small mention of the India-Nuke bill on the news later that night.  But the fight was still going on behind closed doors.  Early Saturday C-SPAN displayed only, "India-Nuke Deal passed" for several hours, with no details.  It wasn't until the next morning that anyone even knew who won the fight.  The next morning engineers in America woke to the good news,  "No increase in the H-1B cap!".  The first battle was won with a whimper of inaction.

How did US citizens actually get representation in congress?  Was it the message, "Enough is enough - No more war against the middle-class" that Americans sent their representatives last election?  Was it that Senator Biden (D-DE) wanted the Democrats to take credit for an H-1B increase next session so they can get all those big campaign contributions from tech companies?   Maybe time simply ran out and they all wanted to go home.   Sadly, absolutely nobody believes that Congress genuinely did not want to hurt American engineers and the middle class any further.

So, what's next?  What's Round 2 going to be?   Tech companies have a lot of engineering work to develop this year.  The CEOs and high-level managers are now meeting to discuss their options, which include:

1) Outsource more
2) Endure next year while lobbying congress for more H-1Bs
3) Engage engineers in America


Option 1: The Outsourcing Risk

If management outsources any more, then they will have to move major operations overseas.  Cisco has recently committed over 1 billion dollars and 6,000 jobs to their India operation. Many other companies will follow suit.  Executives are trying to avoid moving themselves to countries such as India, but for many it will be inevitable.

The problem with outsourcing is "control".  How can you outsource your knowledge base?  Remember Eigor the hunchback, when he asked Dr. Frankenstein to give him a new brain to make him smarter?  Eigor didn't realize that if his brain was replaced, that he would no longer exist.  This is what companies are doing when they outsource their main engineering functions.  How can you declare yourself an American company when all your manufacturing is done in China, all your engineering is done in India, and there is a skeleton crew of managers in some office park someplace in America? The fact is that you are an Indian company, because that is where your brains are.  That's fine, but how does that support the argument that America needs to outsource to compete?  It doesn't.  It only supports the argument that corporations have lost their civic pride and sense of responsibility.  In other words, outsourcing directly hurts a large amount of American citizens and only helps the very wealthy few who control American companies.

This short-term view of engineering has caused a major disconnect between tech management and their engineering staffs today.  While companies concentrate on sales and marketing, their engineering departments are becoming non-existent in this country.  Often during down time, engineers will innovate new products or they will create devices and methods which mitigate risks that management never even knew existed.  This is called "skunking" a project, which means doing something that wasn't directly asked by management, but needed to be done nonetheless.  When engineers are not part of the core team, they will only do what is asked of them.  They will not "care" for the company's welfare.  This induces various risks including a possible "sudden collapse" of all engineering and product development.

Basically, it is impossible to outsource engineering without the risk of losing control of your business.


Option 2: Lobby Congress for more H-1Bs
 

A major lobbying effort is being mobilized as you read this.  K Street is currently full of tech company lobbyists who are transferring their funds from Republicans to Democrats.   There will be a major battle next year between American engineering organizations and tech companies over the H-1B cap.  There will be a huge push to dramatically increase the cap.   But now engineers are getting organized through organizations such as the Programmers Guild the CWA and others.  In addition, Americans are fed up with their representatives working for corporate interests and against the interests of the U.S. citizen ("The War on the Middle Class").  With major news outlets such as CNN with Lou Dobbs and others bringing this issue to light, representatives cannot simply slip an H-1B increase into another unrelated bill when nobody is looking.  Everyone in the business knows that there really isn't a shortage of American engineers, just a shortage of willingness by corporations to pay them a fair wage.   Everyone in America will be watching congress' behavior next year.  Only CEOs and their wealthy board members want an increase to the H-1B cap and Congress should not be working for them.

It will be tough for congress to get an increase without suffering the wrath of the voters.


Option 3: Engage engineers in America

There is a huge pool of engineers in this country.  There are displaced engineers who left the profession completely or have been underemployed.  There are college graduates who are ready, willing and able, but require some time and training.   But mostly, there are engineers seeking a better relationship with management.

There are engineers who long for a change in the way they are treated.  They yearn to be part of the team in a broader sense.  They simply want control of their project and the respect they deserve.  If companies went back to competing with "each other" for American engineers, then they would start offering these things to them, instead of finding ways to avoid confronting them.  If one major tech company decided to use that approach, every engineer in the country will want to work there, regardless of pay.  In addition, when engineers feel appreciated and in control of their project, they work at a very high level.  When an engineer feels that he or she is just a small cog in a big machine, personal productivity slows to a crawl.  Today, you'll find engineers working like robots on only small tasks, when they are capable of much more.  This is because management, for the last several years, has decided to control projects by assigning small tasks to individual engineers.  When in reality, managers need to only manage the engineers, and let the engineers manage the project. 

 
There are few unions for engineers who can deal with tech companies on the behalf of most engineers.  But unionizing is not even necessary if corporations returned to valuing their engineers as the innovators and braintrusts of the company.   Everyone knows how to hire an engineer when you need one, just offer them more.  It could be more money, more benefits, or more anything really.  But what engineers truly want is more loyalty and most of all, more control.  And the latter, as it happens, is the one thing that management does not want to give up most.  But if they did, they would find a surge of productivity from their engineering teams.  They will most likely find that  they do not even need any more engineers once they've engaged their own engineers a little bit more.

In any case, one way or the other, sooner or later, management will need to ask their engineers once again, "Can you make this for me?".

The difference is, next year, the engineers will reply, "What are you going to do for me?"

Related News and Opinion:

What People Are Saying

The point with politicians

The point with politicians is that they have completely lost accountability to the public. There is very little difference between the parties. Pelosi? Boehner? The president? The rest? Not much difference, definitely less than one level of standard deviation from the politician class norm. They do not care about enforcement, what they carfe about is reelection, and fundraising.

A big problem is that body shops import people with "Critical" Skills, an affidavit is signed saying cannot be found here from a citizen.

There are restrictions saying that the person with the H-1B must be paid the prevailing wage for the area. When has that happened? Not.

Next, when a body shop has an H-1B come off assignment, and go on the bench, and he has to find a menial job, perhaps working at a gas station, while waiting for his next assignment (unpaid by the body shop). The law says no job, no visa, back to the home country. That does not happen.

The truth is that most offshoring deals devolve into the same mess. One-to-one body replacement, one body in your chair in America, replaced with one body in the vendors facility in India.

My own observation working in the industry for a couple of decades is that A. Americans do not accept the difference in people and cultures, so do not recognize things do not go as you think they should. B. That outsourcing to an offshore vendor in India is at the end of the boom, India does not have the technical expertise to provide all things to all people, although vendors will tell you they can. You will pay for a Sr UNIX Sys Admin and get an undergrad literature student, with a few week training course. "Restart Apache, how do I do that?".

Yeah. Good deal. But it DID reduce labor costs. Of course, no project work can be accomplished because your Senior people onsite have to pick up the slack. SO big win.

That is my $0.02

Lots of interesting

Lots of interesting comments. I'm not so sure why everyone is so concerned about H1B visas. I think the bigger concern is the outsourcing to the workers who are still in India. That's where it makes a lot of business sense to the managers since the offshore wage is so much less. I pay $28/hour for offshore workers and $68/hour for the same Indian workers onshore. The onshore rate is comparable to a full time employee but the offshore rate is obviously much cheaper.

I'm not really concerned about losing my job to anyone who's physically in this country. I'm concerned about them outsourcing the whole department to India.

I would like to recommend to everyone interested in this subject that you read The World is Flst. And keep in mind that there will always be a need for people physically in America to work with the business and design solutions. The actual implementation of those designs can then be outsourced and you can manage the offshore team to make sure that they deliver the right product on time and of the right quality.

Additionally, I would like to point out that if your company tries to buck this trend and hire only American workers, then they will be at a competitive disadvantage to all of the other companies in your industry that outsource. The companies that outsource to India are realizing cost savings and they're getting more work done since project teams can now work in two times zones and get projects done more quickly. Any company that tries to forego outsourcing these days will be at a disadvantage and will have to explain to shareholders why they are not as profitable as their competitors.

Lastly, although I don't want to see the loss of American jobs, I understand that with the rise of the internet I am now competing for jobs worldwide. In the old days, you only had to compete for jobs within your town. Then, with the rise of telecommuting, people could work from home anywhere in the country. Now companies can hire people anywhere in the world. It sucks to realize that your company may want to hire someone in India at half your salary, but then again, why shouldn't they be able to do that if they want? When you hire someone to cut your grass, do you go with the most expensive service you can find or are you willing to hire the kid down the street for half the price? Like most companies, your goal is to find a worker who can do an acceptable job at a low price point.

In the long run, salaries should even out world-wide and hopefully we'll all have a higher standard of living as a result. But the transition will be painful. The best thing you can do is to get a job where they need you to physically be in America. That goes for your kids too - get them jobs as Doctors or Lawyers or Taxi Drivers or Salesmen - jobs that require a lot of personal interaction during normal working hours. Jobs that can be done offshore will be done offshore and that includes engineering, accounting, software development, phamarceutical development, etc.

Good luck to all of us.

For every indian worker

For every indian worker hired one less American citizen is left unemployed, are these Senators dumb? If this goes on like this their state won't be able to buy a cup of coffee, since all the work is gone and the general population doesn't have income so they don't pay taxes and without taxes... well, you know...

If indian workers want to work, then do so in THEIR country, start their own "Cisco" or "Microsoft", stop stealing our jobs from our American companies.

Good stuff is expensive, cheap stuff is, well, CHEAP.

When the last manager and executive job is transferred to india, then they will see the crap they've done, until then greed will consume them, and the time will come that india with the knowledge that they gained from US will start their own companies and crush our own, or should I say theirs.

I agree with the comment above, if the product is developed in india and produced in india IT'S AN INDIAN COMPANY, no buts or ifs.

If this goes on, someday we might turn into india, with no middle class and india might just be outsourcing to us petty jobs.

It doesn't make sense that

It doesn't make sense that outsourcing or importing labour is better than recruiting local (i.e. US) unless there are issues other than salary. An unemployed American will take a job at a lower salary rather than being unemployed, even if receiving welfare benefits. It goes against human nature to be a welfare case. People want to feel that they are contributing. So what is driving this. My gut feel it has more to do with the "nanny state" and related laws that drives this.

Answer these questions:-

How hard is it to fire an unproductive US employee vs telling your outsourced partner to replace the employee in their country immediately.

How much more power do you have over an immigrant vs an American that will run to a lawyer on the slightest whim and take your company to the cleaners because they have been "wronged". Thee judicial system is a basket case and Justice does not seem to belong in the vocabulary of the judges.

So IMHO it is the laws that have been enacted to protect the employee in the US that are actually damaging the employee.

I am an employer in my country and I always think twice about increasing head count because as an employer we have no rights at all when compared to the employee. Even if the company fires an employee for a good reason and makes one mistake (as an example giving the union 24 hours notice for ONE meeting instead of 48 hours) then the company has to re-hire the legitimately fired employees at a huge cost.

Basically it is give and take. Many employees think it is their right to take and forget that they have been employed to give as well.

Historical employee abuse (19th century as an example) have created these protectionist laws but times have changed and the laws must change along with them.

Finally, corporate greed is at the heart of ANY capitalist economy. But some companies do not follow this philosophy and a good example currently is Google which seems to really appreciate their US employees. By the same token those employees do far more than is required of them on their employment contracts.

If you want to fight it you have two options:-

Do not re-elect your representative if they are going against your beliefs.

Shop with your feet. If a company is abusing the H-1B, or any other, process then ensure you do not use their services. They will soon get then message. You can even create an "American Enemy" website and post their names on it along with the facts. You have the right to choose or have you forgotten that.

As an aside, it is not just about the money, but about the offering. Toyota is about to become the number 0ne car seller in the US and Japanese wages are not the cheapest in the world. Maybe they listen to what thier customers want just a little more. Makes you think a little, doesn't it.

"Isn't there some way to

"Isn't there some way to uphold the constitution?"

There is, but, it gets noisy, loud, and very destructive. And, its the last measure when there is nothing else to loose. Its mentioned in the 2nd Ammendment...

Still wondering what I'm talking about? research 1775 and the docuemnt that Thomas Jefferson submitted to George 3...

Of course this is a very

Of course this is a very emotional issue for all those concerned, the U.S worker does not want to lose his job, while foreign worker (hint hint Indian), wants to move to the U.S and make his pot of gold. A lot of the people here seem to be blaming corporate greed here, and let me tell guys something, the very fabric of America ( if I may be so brutal ) lies on the rock of corporate greed, the quest for profits, for gods sake its called a bloody capitalistic society. As one of u guys remarked indians tend to hire only indians, even if they are unqualified, frankly speaking such things are good for the american worker, hiring unqualified workers hurts the company most of all, and if the practise goes out of hand, you guessed it, it will lead to bankruptcy or at the least harshly reduced profits, tata indians. One thing that I havent noticed is that while engineers have beeen whining and saying that if such and such wasn put in place then american engineers will blow the competition off,
what has happened to that enterpunerial spirit, all the tech companies were created by enginners, maybe the engineers should quit whining and start their own firm and put into practise what they believe will get the best out of engineers. And just to be fair to the foreigners, Americans always plead free trade when they want their companies to enter a foreign market, regardless how badly local producers will be affected, surely you dont think that such things are just a one way trip. So,
if American engineers are really worth it, then no mumber of H-1Bs will take them away, but if they arent they will go the way of the Dodo, but come on you engineers take the fight to them on the business side not by running to some silly side, show them you are more creative, more innovative, and just get the job done better.

Last I heard,RINO Spector

Last I heard,RINO Spector wants to increase H-1B from 60,000 to 350,000/year.(of course,the 60,000 hasn't been a limit).
I can't add much to the above comments,but agree that America is becomming a consumer nation,and who will have the money to purchase these products if the middle-class continues to lose jobs,and we continue to import uneducated/unskilled poor immigrants?

To Whom It May Concern: I

To Whom It May Concern:

I would like to express my recent experiences and labor condition in regards to I.T Field in U.S. and especially in Bay Area California. I have been working in Computer Systems Consultant field for last 8 years and have finished my BS and MBA in computer field from U.S. institutions.

Recently I had many interviews related to my field and some of them were perfectly matched with my background and skills set but I was unable to get consulting position. I had very disturbing experience with Cisco also that I cannot express in short detail. I have outlined reasons below. In order to restrain my personal bias opinion about some specific group of people, I have validated with many recruiters in bay area, my colleagues and other professionals.

Disturbing Hiring Patterns in I.T. field

รขโ‚ฌยข Software application and related fields are dominated by Indians nationals now.
รขโ‚ฌยข Companies with majority of Indians tend to hire Indians only.
รขโ‚ฌยข When I get call from Indian recruiting agency it is obvious that hiring manager or team is Indian in a company.
รขโ‚ฌยข From my experience and after talking to many recruiting agencies, Indians will always hire Indians only.
รขโ‚ฌยข I have visited many companies and noticed that in companies like Cisco and Oracle Indians are segregated by floors or in separate buildings and if you donรขโ‚ฌโ„ขt belong to this group then you are automatically disqualified.
รขโ‚ฌยข Indians are involved with political parties especially with Democratic party to influence opening up H1 Visa for Indians only and H1 visa is not given to other national in large such as European or Middle Eastern or African etc.
รขโ‚ฌยข There is a general misconception that there is shortage of I.T. professionals but in fact there are plenty of candidates belongs to other ethnic groups that have limited chance now.
รขโ‚ฌยข Cisco, Oracle and Microsoft are one of main companies that discourage employees from other ethnic background. There is no rule, law and nothing can be proved against these hiring practices.
รขโ‚ฌยข If you belong to White, black or any other ethnic group then you have no future in I.T. field.
รขโ‚ฌยข One out of ten Indians in a company will be qualified and other has jobs because of nepotism, network and connection and they will be trained to perform a job even they are not qualified for.

Sincerely Yours

Many companies engaging in

Many companies engaging in outsourcing are "global companies" vs "american companies", and they're rightly so because they sell products/services globally, not only to US domestic market.

Most "emerging markets" are in areas like China, India, East Europe, etc. Leaving emotions and patriotism aside, what is wrong with hiring people in countries where your active or potential clients are?

I work in such a global company and our number of staff is proportional to our revenue from each country.

Sooner or later more jobs will be created in those countries: not only manufacturing, IT or accounting, but also front office jobs such as sales/marketing, risk, business development.

Wake up, this is not a trend that you can simply put a stop on, unless you go back to a self-sufficient stage where you only make/sell for Americans.

I am a tech worker IN INDIA.

I am a tech worker IN INDIA. And let me bring one entire different perspective. Today every engineer seems to be having problem with H1b increase but please be patient and read two entirely different perspectives below.

(1) If US does not increase [or even decrease] H1B, as mentioned many times CxOs would still look at bottom line and *would outsource* jobs. On the other hand if H1Bs are increased then in short term there could be some jobs loss. But legal H1B workers would pay all the taxes, social security contirbutions [Which they are not eligible to get back, especially the case with indians], and all other taxes. Plus they would spend almost all the money back in US. And this money could be used to buy the products/services made by replaced citizens.

In medium term it would create cost pressure on developing countries as all the good and talented people would love to get to US and thus salaries in offshore countries like India and Russia would have to be increased or the output quality would be very less and hence in my view outsourcing as a whole would loose its attractions and companies would restart hiring Americans back. Of course this is my gut feel.

(2) Why does developed society is so against their job loss. In globalized world when money can move freely why cant people ? I remember in 1991 when coca-cola came to India its AD-Budget was bigger then the largest local cola company and hence local cola company had to sell its entire operations to Coca-Cola which resulted in lots of job losses for local-cola companies. And this is just one example !! All the companies in west want the full market access to sell their iPods, Laptops, Mobiles, Cars, Foods, Movies, Music, Aeroplanes in emerging market like China, India and want to take the profit back to their country but when some developing countries people want to work in that company then all the issues of VISAs, Security are brought in !!!!

West has lots of capital and east has human resource... let there be free movement of both and not just money !