BusinessWeek exposes how Industry really uses H-1b workers

Listening to Compete America one would think that H-1b workers are the "best and brightest" in the world, contributing to "U.S. global competiveness." But as the 1/31/08 BusinessWeek article "Are H-1B Workers Getting Bilked?" exposes, H-1b are being used by Indian consulting firms to bring in cheap labor, driving American consulting firms out of business, and displacing highly-skilled U.S. workers.

First, Indian consulting firm Patni undercut American workers when DOL approved the labor condition applications for a "prevailing wage" of $44,000 per year. This is far below the "$45 to $80 per hour" that the Yoh study found to be the average for U.S. workers with "high demand" skills, such as "Database Administrator" and "Application Developer."

What Patni didn't disclose was that the $44,000 "salary" presumed that their workers put in lots of overtime. Their base pay was only $11.72 an hour - they were expected to reach their "salary" by working overtime. But even with 23 days of overtime, one H-1b's annual pay worked out to only $35,305 in 2004.

As State Farm in Bloomington Illinois was laying off their American staff, the LCA Database reveals that Patni Computer Systems was bringing in hundreds of Indians on H-1b visas - many placed at State Farm. As mandated by the U.S. Congress, the Department of Labor rubber-stamped these LCAs (labor condition applications) for wages as low as $27,000 for computer programmers. H-1b workers must have a minimum of a BS degree and specialized skills.

Many of the LCAs were filed by Dayanand Allapur, Vice President HRD 617-914-8367. Patni's main number Cambridge, MA is 617-914-8000

Among the Americans who lost their jobs was George Moraetes. He reports having "seen 4 - 5 H1-b's living in a one bedroom apartment" and that the same pattern of H-1b usage was employed by GE.

Contrary to helping the U.S. remain "globally competitive," the top users of the H-1b program are Indian consulting firms. They are transferring U.S. jobs and technology back to India and increasing the U.S. trade deficit. Without the H-1b and L-1 visa programs much of this loss of U.S. tech leadership would not be possible.

Patni is headquartered in Mumbai, India. Their website provides roadmaps for transferring manufacturing offshore: http://www.patni.com/

The U.S. Congress needs to wake up to the imminent threat posed to the U.S. economy by shipping our manufacturing to China and now services to India. Or economy cannot sustain this growing trade deficit and gutting of U.S. infrastructure.

Patni Computer Systems H-1b settlement fails to compensate American Worker victims

As reported by AHN Media Corp:

Patni Computer Systems Inc. has agreed to pay $2.4 million in back wages as part of a settlement with government authorities who claim the company underpaid employees recruited under the H-1B employment visa. . . Patni is one of the nine IT companies that U.S. legislators last month asked to explain their use of the H-1B visa. The issue with wages is that under the H-1B work visas, companies are supposed to pay the workers it brings into the country the prevailing U.S. wages for those jobs so that foreign labor doesn't unfairly compete with American labor for jobs. The company, which has about 13,000 employees, was awarded 1,391 H-1B visas in 2006.

MATH REALITY CHECK: $2.4 million / 13,000 = $185 per employee. This is an insignificant penalty for Patni, which earns $350 million in annual revenue.

PATNI IS A BODYSHOP: They produce nothing of value. Instead they displace American workers at American companies. According to their July 2006 SEC filing:

“We derive a significant portion of our revenues from a limited number of clients in a few select industries. In 2003, 2004 and 2005 our largest client and one of our principal shareholders, General Electric, accounted for 41.2%, 31.7% and 22.1% of our revenues and our second largest client, State Farm Insurance, accounted for 17.4%, 14.9% and 11.5% of our revenues.” . . . Our attrition rates have been high due to a highly competitive labor market in India. . . . We are currently cooperating with the US Department of Labor with respect to compliance matters related to our past and present labor practices. We estimate the liability to be up to $2 million. . . . Most of our employees are Indian nationals. The ability of our software professionals to work in the United States, Europe and in other countries depends on our ability to obtain necessary visas and work permits. As of December 31, 2005, a majority of our software professionals in the United States held H-1B visas . . Wage costs in India have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, which has been one of our competitive strengths. . . Presently, we benefit from the tax holidays given by the Government of India forthe export of IT services from specially designated software technology parks and special economic zones in India.”

According to eWeek the settlement will go to only 600 Patni employees: "The department is committed to vigorously enforcing the H-1B provisions that guard against employers undercutting American workers by underpaying temporary foreign workers," said Secretary of Labor Elaine L. Chao, in a statement.

If true, then what about the other 12,400 employees? The LCA database reveals that Patni has applied for over 13,000 H-1b workers, with median wage of $45,000. That means that 6000 Patni “best and brightest, BS degreed and highly skilled” are earning less than $45,000 salary.

The real victims were the 13,000 American workers who were displaced by Patni’s unfair competition. The U.S. Congress has known for the past decade that the H-1b program is displacing U.S. workers, that the prevailing wage is a sham, and that there is no requirement to not displace qualified U.S. workers. Congress has compensated the Japanese interned during WW II. When will U.S. tech workers receive similar reparations from Congress?

When has Elaine Chao ever acted on behalf of displaced U.S. workers? In every H-1b abuse case, and reimbursement goes to the foreign workers, ignoring the collateral harm to U.S. workers.

The Programmers Guild identified Patni as #27 on the list of the lowest-paying H-1b employers. When will Chao go after the top 25?