A major reason why US domestic workers will not fight back against abusive H1-B practices is the fear of being called racist.
This article will describe this scenario and why the charge is unfounded.
A primary inhibiting meme for standing up to the Indian takeover of IT, to the H1-B abuses, to corporations using the H1-B program to replace domestic workers at lower rates, to Indians who target US domestic workers to be removed so they can be replaced by other Indians they know, is being called racist.
The United States is an interesting country. The previous generations that lived in an built the US, beat both the Japanese and the Nazis in WW2, put a man on the moon, developed one of the best and largest national road systems and a large middle class.
The current inhabitants, however, burst into tears if a person even begins to use the “R-word,” much less calls them a racist. Under the current concept, there is only response to being accused of racism — acquiescence.
If another party uses the R-word, this means that the entire argument must be ceded to the person who used the term.
There is no response to the R-word, the recipient of the word is required to sit in a corner for several hours, and then later to repent in some type of public forum.
How Racism Works in India
India never rose to the level of discrimination of racism — India is several hundred years prior in its development to discriminating on the basis of race. Indians discriminate on the basis of tribe and caste distinctions.
This video shows the caste in India system.
This video explains how the caste system on partially based upon the lack of a social security system in India.
Bringing Indian Modalities to the US
The way Indians function in the US and Europe and Australia is basically how they function in India. India is a place with extremely limited resources, and there are basically countless divisions, and it is expected that you support your family or your tribal affiliation. For people that grew up in developed countries, it is a very foreign concept. That is the Indians don’t function as individuals, they function as a group to block out other groups. This is why the more Indians that come over the bigger the problem will be.
Many IT workers are well paid, if they were smart they would support an organization to curtail the H1-B program. If I were to develop a strategy it would be to publish on the program’s real outcomes. I do a lot of work on IT media analysis. And my conclusion is that all the IT media entities do is refect the interests of the funding entities — which is big vendors, consulting firms, etc. So they don’t cover the reality of what is happening.
The MoveOn.org Petition
I offered this petition to one IT worker I discussed this topic with.
The response to this was interesting.
I don’t have any problem with US companies hiring Indian programmers, architects, etc.
I HAVE A HUGE PROBLEM WITH THE INDIAN CONSULTING COMPANIES/RECRUITERS.
I have no idea – at all – about how to stop the tsunami of Indian recruiters. That is what I’d like to stop.
Re: the Move On petition – there is no way in Hell I’d sign that thing – it smacks of racism and I would never
ask our “President” to stop foreign workers from coming here.
MoveOn.org as Racist?
Looking at this petition, it is difficult to see where the racism is. In fact, it calls out many important technical details of the H1-B program and nowhere is race even discussed. Furthermore, MoveOn.rog is actually a democratic sided grassroots organization. See this link.
This proposes that a street close to a Trump tower be named Barack Obama Avenue. MoveOn.org is filled with people who would probably commit suicide if they found out someone thought they were racist.
Accusations of racism stop what is pressing legitimate points against the H1-B program. In order to fight for jobs for US domestic workers, and to fight against the abuses of the H1-B program, it is necessary to break from this concern of being criticized.
SAP has essentially announced they practice age discrimination.
How a major media outlet incorrectly covered SAP and served to support their spin.
This article covers how a cover story created by SAP (and other tech companies) is being used to engage in age discrimination. The article will provide evidence that the reason for this discrimination is like other employment initiatives in tech companies, too reduce labor costs.
Age Discrimination 2.0: Hiring Those Millenials and Younger
It has become quite common to emphasize hiring Millenials, and younger. SAP has a program called SAP Young Professionals Program targeted towards hiring youth.
The SAP Young Professionals program was launched by the SAP Training and Development Institute in the Middle East-North Africa (MENA), a region with a high level of youth unemployment, where it can be very difficult for young people to find suitable work despite having excellent educational credentials. The program now runs in 22 countries across the globe, with 2,132 graduates to date. The SAP certifications that the graduates attain are suited to the demand in the local markets for SAP-related skills. Graduates of the program almost always stay within the SAP ecosystem, where they have a competitive edge with their certifications and training on the latest SAP innovations. – SAP
Something that SAP does not mention, is that you can bet that SAP got this employee cheap! And this is a big part of the youth movements (and corresponding age discrimination) in tech companies.
Interestingly, I could not find a single program focused on hiring older employees.
In an article published by Bloomberg that reads like it was paid for by SAP, SAP again makes their interest in hiring younger employees apparent.
Instead, Plattner, 75, wants to shake up SAP once more and make it the employer of choice for the young and hungry. And with just a few years until he hits self-imposed retirement, Plattner is showing no sign of slow-walking the rejuvenation in his quest to protect a legacy of disruptive software mogul.
Surprisingly, there is actually some pushback quoted in the article.
The Union Voice on SAP from Germany
Labor representatives are complaining that SAP is trying to squeeze out expensive, older employees who helped drive SAP’s early success. “Hiring more young people is good and right,” said Eberhard Schick, a member of SAP‘s workers’ council, who joined the company in 1997. “But you shouldn’t forget about the seasoned employees — they deserve a career perspective and training opportunities.”
Interestingly, there is a labor representative in Germany. If this were the US, this quote would not exist, because there is no labor representative for SAP in the US. Most Americans that work in IT don’t have any idea what the history of labor and labor versus corporations actually is. Unions, not corporations fought for a 40-hour work week (corporations opposed it). Unions, not corporations fought against child factory labor (again corporation supported child labor). Child labor is still a huge problem internationally. It is only not much less of a problem in the US, Canada, Western Europe, Australia/NZ because corporations were fought against to make the practice illegal.
*While researching this article I was shocked to find that child labor has crept back into the US through migrant farm labor.
But child labor doesn’t happen only abroad. In the United States, labor laws allow children to work in agriculture at much younger ages, for longer hours, and under more hazardous conditions than children in other industries. This means that a 12-year old can work 50 or 60 hours a week in fields, exposed to toxic pesticides and extreme heat, and it’s legal. – Human Rights Watch
The US prefers if employees have no voice, with only 12% of the population belonging to a union.
There is a direct relationship between the unionization in society and the income equality in that society. In the US, executives have taken the money that would have gone to workers if the unionization were higher, and have paid much of it out in executive compensation. For those that think unions lead to communism, the US was a capitalist society back in 1960, at the heights of unions. And it was a far more equal and more sustainable society. Furthermore, nearly every national health statistics (health care outcomes, % of people in prison, infant mortality rates, etc.. was better in 1960 than it is today.Wealthy executives prefer that people focus on education rather than on unions.
Why is this?
Because unions are effective in raising wages overall, while education is not.
In the US, wages stopped growing in roughly 1970, even though productivity continued a rapid increase. Why? Each year the population became more educated. However, education could not counteract the effect of the decline in unionization, greatly reducing the bargaining power of workers. If the US had the same education level as in 1970 (far lower) but had maintained its unions, it appears that as wages were tracking productivity up until 1970, US wages could be twice what they are now. Instead, all of that productivity was placed into the pockets of the wealthy. Major financial interests do not want this graphic seen or understood — which is why they focus on ancillary issues as we cover in the article Why the Gender Pay Gap is Discussed But Not Overall Pay.
Returning to the quote from the labor representative from Germany, Bloomberg had no comment and simply moved on to the next topic.
Plattner’s alma mater, IBM, demonstrates that change is arguably less painful than failure to act. IBM faces several lawsuits accusing it of firing older workers, with one former vice president putting the number of employees let go in the last few years at 100,000, a figure that IBM disputes.
It is a company that is constantly shedding its domestic employees to hire in India and has a horrible internal culture. The message boards around IBM illustrate great anger from former employees and disgust at what IBM has become. IBM, once one a truly innovative company is now just a fleecing operation that pretends it can do things it can’t do. IBM has been shedding experience employees for at least two decades, but how has this improved IBM? If anything, this is at least partial evidence to not do this, rather than evidence that it should be done. The entire paragraph quote from Bloomberg above is illogical. The only evidence presented by the Bloomberg author that IBM has benefited from shedding more experienced workers is that they have received lawsuits for age discrimination. Is that a good thing? Is that a reason to do something, because you get sued for doing it?
Secondly, how many employees has IBM let go in the past few years? If IBM disputes the 100,000 figure, then they should provide the figure they have let go. Years ago, IBM stopped reporting its number of employees per country for the precise reason that they could hide how much they are now increasingly a company based in India.
SAP’s Moving to the Cloud and Needs Different (Read: Younger) Employees?
The hard choices facing SAP are emblematic of the industry’s shift toward selling products in the cloud, which allows companies to implement new software faster and cheaper than products that need to be installed at a customer’s own data center. It’s a move that will require fewer people, and with different skill sets than many of those now at SAP.
The idea that SAP is moving to the cloud is simply false. SAP is actually moving to simply mark up the cloud services of other cloud providers as we covered in the article How to Understand SAP’s Upcharge as a Service Cloud, and massively up charging the customer for “going through SAP.” Therefore, the rest of the paragraph is also false. SAP is not moving to younger employees because their delivery mechanism is changing. SAP has an 85% margin on its support, and in fact, most of the margins are in support as covered in the article The Giant Margins for SAP and Oracle Support, and SAP has outsourced most of its support staff to India, precisely to obtain these margins. The fact is that SAP’s margins have virtually nothing to do with the cloud discussions, it is the overseas workers that allow SAP to have the margins that it does.
Notice that there is none of this analysis in the article. The Bloomberg author simply repeats whatever SAP tells him. This perpetuates several falsehoods:
a.) that SAP gets significant revenue from the cloud it operates (untrue as it marks up other cloud service providers) and…
b.) that it is warranted in shedding older workers because it needs to improve its margin to what it was in the 2011 time period.
“Transitions like these cause disruption and take time,’’ said Anurag Rana, an analyst at Bloomberg Intelligence. “But SAP has a portfolio of good products that should help the company stay relevant in the long term.”
Has Anurag every used an SAP product? If so, he would know this statement is not true. SAP has a very well known ERP system, but the system is quite aged at this point and SAP’s new S/4HANA application follow on to ECC is a regression in many ways. Secondly, companies that purchased ECC faced enormous costs and often ended up purchasing other SAP products like APO, BW, PLM, SRM, that is products that are truly horrible. But again, Anurag works for Bloomberg, and so he has a specific script he needs to read if he intends to keep working there. Most IT analysts have never touched an SAP application in their lives, but this does not stop them from making highly confident statements about these topics.
Age Discrimination as Necessary Because of German Eating Non-Innovative Pretzel Eaters?
Hasso makes a curious observation about German culture.
German complacency has long been one of Plattner’s pet peeves. As far back as 2006, Plattner vented his anger by lamenting how Germans lack the drive to be successful and risk being eclipsed by more innovative countries including the U.S., India and China. “We’re happy sitting in front of a television, munching on pretzels,” Plattner said at the time. “Some things in this country are beyond fossil.”
Eating pretzels and watching televisions has not seemed to limit Germany’s ability to be innovative and historically innovative in areas ranging from chemicals to automobiles to specialty manufacturing. I wonder if Hasso thinks innovation only occurs in software. If we measure Germany’s innovation in software, it is weak — but this is primarily because of SAP’s lack of innovation, as outside of SAP Germany’s software industry is small, so SAP is the cause of the innovation problem in the German software industry.
This is expressed also by Ahmed Azmi.
Just because SAP is lacking innovation does not mean Germany is the same. Germany has been leading the world in so many fields for so long. The fact is that Germany is trailing in software BECAUSE of SAP.
The Logical and Profit Basis in Age Discrimination
Ageism has an entirely logical basis. Companies are looking for passive employees who will go along with whatever the company wants. Older employees are less likely to go with the program. As companies in the US have become more hierarchical, and the compensation paid by US companies to executives has greatly exceeded the compensation paid to workers, there is less of interest on the part of companies to accept any critical thinking on the part of employees.
Looking past what amounts to a bunch of false information, it is quite apparent where the money that is wrung out of employees goes. This money is shifted upwards.
In past days I thought that ageism, at least in technology, was primarily based upon skills. That is generally the presentation by companies, and I was influenced by this presentation. However, I have since learned to question anything proposed by billionaires as it typically is entirely backward engineered for what makes them the most money.
Seeing how companies function, it is clearly about finding people who will tow the line. It’s actually disturbing how much work is done by the under 30 set in companies. They are super motivated, but it is also inefficient, because younger people make a lot of errors, and it is difficult to know what is true at that age. It took me a lot of time to develop certain skills, and I did not have them when I was 30. I was a lot easier to trick at 30 — I have been a skeptic most my life, I keep figuring out new things all the time (as I quickly approach 50 this September). There are pathways I would have followed just five years ago, that I would never follow now.
There is another bias in that more senior positions are often really just sales positions. SAP has a ton of VPs, and most of these VPs are just doing sales or engaging in some type of Game of Thrones political intrigue. And if you don’t want to do sales, most of the senior positions are not available. You can work on the basis of your skills when you are younger, but as a person ages, it becomes more about being a political animal. You can’t be simply a technical problem solver — that is there are a few positions for this, but most have a political component.
Unsurprisingly, companies do not discuss the logic for hiring passive and servile workers, even though this is clearly at least part of the motivation for hiring not only younger workers, but also workers that lack citizenship, such as the enormously abused H1-B program. Again, there is not a single company that will discuss their motivation for hiring H1-B workers are based upon lowering wages, even though it is firmly established that H1-B workers not only work for lower wages, but they also lower the wages of the US domestic IT workers. Here again, the media is complicit in expressing every single H1-B visa holder as “highly skilled” even though most H1-B visa holders do not meet the description. Most are moderately skilled, not highly skilled. The Indian media, much like the US media is continually referring to H1-B visa holders as highly skilled without any thinking or debate on the topic.
The Bait and Switch in Later Career Employment
There is a highly dishonest aspect to shedding older or more seasoned workers. A primary reason that younger workers make an effort to get ahead and to get skills is that they believe they will be able to have a long career from doing so. However, by shedding them as they become more expensive and less compliant, this creates a bait and switch on the young employees. That is companies that shed these workers once they reach their “used by date” don’t deserve the motivation of the younger workers they are hiring the first place. For this reason, it should be better publicized that these firms view their employees as disposable parts, to be discarded long before their effectiveness begins to wane. And as unionization has declined so much in the US, companies can get away with just borrowing workers, and discarding them, and they can count on media entities — owned by other billionaires to talk up how this supports “real innovation.”
And for younger workers who are hired because of age discrimination, they should remember something, people have a tendency to age.
Age discrimination is popular in IT because IT companies believe that it is profit-maximizing.
Age discrimination replaces workers who will be far more likely to question authority and how have the experience to contradict the false information provided to them by the company with those that lack the experience to do so. The graphics presented in this article clearly demonstrate that companies have little interest in increasing the standards of living for workers and are on a constant quest to bring in non-citizen workers, shed older workers, and shed workers in the developed world and exchange them for workers the undeveloped world (while still having access to the same customers in the developed world). In order for this to be effective, companies need complicit media entities, which nearly all major media outlets are. This prevents these questions from being asked and allows their propaganda to be repeated through their coverage. IT media not only does not discuss what is actually occurring the serve as a megaphone for the exact programs that help reduce wages for workers.
The major media entities don’t even have to be convinced by enormous companies like SAP to repeat false information to their readers. Those that own major media outlets are themselves elite entities. Bloomberg is owned by Michael Bloomberg, who has a net worth of $55 billion, making him the 6th most wealthy person in the US. Hasso Plattner is worth $14 billion. They already agree on hiding the information about how companies manipulate labor even if they have never met in person. By the time Trump leaves office, the US will have unprecedented levels of media consolidation as his FCC is repealing the restrictions on vertical integration in media.
The 2016 US Democratic Primary which pitted Hillary Clinton against Bernie Sanders was rigged by both the DNC and by the opinion-shaping media. This is happening again as the 2020 race heats up. Why? The media is owned by billionaires who will lose if Bernie Sanders is elected. Therefore, they use their control over media in the political sphere the same way they use their control over media in the business sphere — to present only what they want to be true, and what they want to be discussed and the options they want to be selected. In fact, this topic was barely covered in the DNC friendly networks (CNN, MSNBC) and could primarily be found on the opposition network (Fox News) and RT (funded by Russia), and this video is by Tulsi Gabbart, who stepped down from the DNC in opposition to this rigging.
This is the outcome of media consolidation.
There is no difference between the US media that covers politics and the US media that covers IT and business, it is controlled by the same entities and reflects the same elite opinion.
The Overal Trend
This article has focused on SAP, but this is only because Brightwork focuses on SAP and we easily happened to find sources and articles for SAP. In reality, Oracle, Deloitte and many other companies in IT are doing the same thing as SAP. This is an industry-wide movement to help these companies decrease their cost of labor, and to produce a cover story to distract from what they are actually doing and the reasons they are doing it.
When assessing media ownership and consolidation in both the United Kingdom and United States, it becomes clear that while there are hundreds of different publications and broadcasters, there is only an illusion of choice, and that freedom from government control and the competitive nature of the free market have failed to truly allow diverse media content and regulate media conglomerates, who now possess an extraordinary amount of power and influence. In the United Kingdom, 70% of national newspaper circulation is controlled by three different companies, leading the Media Reform Coalition (2014: 1) to claim that concentration has “reached endemic levels and is undermining the quality and diversity of output on which citizens rely.” Meanwhile, in the United States, just six companies control 90% of the media: a stark difference from 1983, when fifty companies controlled 90% of the media (Lutz 2012).
The Curran et al. (2009) study found that Americans were less informed about hard news than countries such as Denmark and Finland, where public sector broadcasters had a larger share of the audience.
Moreover, it found that public service models “minimize the knowledge gap between the advantage and disadvantaged” in comparison with an American-style private ownership model, and therefore “contributes to a more egalitarian pattern of citizenship”
While one cannot establish causation, it is possible that one of the factors that has contributed to low voter turnout in the United States and high voter turnout in Denmark is the differing media coverage of hard news in the private and public led media spheres. This insinuates that private media ownership has a negative impact on media content overall, as the content is increasingly failing to fulfil its function of promoting informed citizenship and democratising information to the public at large.
A further criticism of the privately owned media models is that they are often beholden to big business, due to their reliance on advertising to maintain a profitable venture (Herman and Chomsky 1998). The implications this has for media content stems from the “corresponding influence of advertising values on the news production processes” (Mullen and Klaehn 2010: 218), namely, a conflict of interest could easily arise due to potential discrepancies committed by advertisers. It is entirely plausible that the private media’s reliance on advertising could mean that negative content about the advertisers are omitted from public debate, and that “the probability of an event/issue becoming news is: inversely proportional to harm the information might cause investors or sponsors” (McManus 1995, cited in Rolland 2006: 942). This theory is supported by a scandal that rocked The Telegraph newspaper after it was alleged by a former employee (who resigned over the issue) that The Telegraph contrived to omit damaging reports about HSBC’s banking practices out of fear of losing out on lucrative advertising deals. According to Peter Oborne (2015), “you needed a microscope to find the Telegraph coverage” of reports that HSBC had been participants in a global tax evasion scheme — an issue that was perceived by most other national broadcasters and newspapers as hugely important. Therefore, this illustrates that the reliance of private media outlets on advertising revenue can have a damaging impact on media content through omission of stories that are clearly in the public interest.
This video explains the problems with the US political system.
With some slight adjustments, it can be used to explain a similar problem in the IT industry.
The Problem With the US Political System
In shorthand, the US political system has been hacked by monied interests who have succeeded in converting a government that was supposed to have a degree to participation to where the participation is facia. The fascia of participation is maintained because, without a facia, the system would lose its legitimacy, which is, of course, a major part of its power.
The video does a superb job of showing that the percentage of the electorate that favors a law being passed has no correlation with whether it is passed. This is because legislation is passed based upon financial power.
The Corrolary with IT
The state of IT is very similar, all that is necessary is to move around the primary interest groups, and the video could just as easily be applied to IT.
Voters = Business Users
We need to convert voters to business users. Business users ultimately have to use the software that is purchased but has close to no control over what software is purchased. This is because the decision making has been delegated to a specializes group called IT.
Representatives = IT
The US was never a democracy and the term democracy is not used in either the US Constitution or the Bill of Rights. It is a representative system of government or a republic.
The founders of the US opposed democracy on the grounds that it would lead to the masses being able to be lead by a demagogue to execute policies that were popular, but ultimately bad for the system. The only democratic aspect of the US political system are referendums that have direct voting. But these are rare compared to the decisions that are made through the representative process.
A representative is someone who is elected to execute the will of the electorate. That is in theory.
Similarly, the business has IT make decisions for technology under the idea that IT has specialized knowledge. In the US political system, the problem is that the representatives are responsive to money rather than to the electorate. A representative system only works if that system cannot be gamed by non-electorate based forces — which is unfortunately exactly what has happened.
Lobbyists = Sales People
Lobbyists are instruments of corruption. In a system that was about the representation of the electorate, lobbyists would not exist. There is already a system for influencing representatives, it is called voting. However, lobbyists and lobbyist money is designed to minimize the influence of voters on their representatives.
They bring the interests of the elite to bear on the representatives, pivoting the representatives away from representing the electorate to representing whoever is paying the lobbyists. Lobbyists don’t care what is true, they push any message in return for money.
In the IT space, lobbyists are salespeople. Salespeople are hired to get customers to buy things that are bad for the company, but good for the people that work in the IT department. Their role is to corrupt the IT decision makers by any means necessary. Salespeople frequently talk about how they are the voice of the customers. However, having worked with them, this is clearly false. Salespeople are expert at highlighting areas that are strong and hiding areas that are weak in applications from customers. Like lobbyists salespeople will laud their relationship with their customers, but these relationships have a specific purpose — to sell software, and the stronger the relationship, the less appropriate the software needs to be to get purchased.
As a lobbyist, it is virtually impossible to keep one’s job without lying, and then lying about lying, and the same is true of sales people. Their job is to get the sale, by any means necessary. Both lobbyists and salespeople see their roles as essential and normally have a blind spot about lying, preferring to adopt the idea that either “everyone is doing it,” or “there is no objective truth.”
However, the end result of their activities is that the entire system is pivoted away from the representatives (IT or political) from representing the interests of either the voters or the business users. Like lobbyists, those salespeople that are most successful in turning IT decision makers against the interests of their companies are paid the most.
A final end state of corruption is attained through decades of small incremental degradation of the system. After enough decades pass, eventually, the system becomes so obviously corrupt that it requires reform. This is where both the US political system and IT is currently. Those inside of the system is so used to corruption that they barely question it. Those looking inward toward the system can’t believe how the people on the inside who benefit can’t see how dysfunctional the system has become.
Bonded labor is illegal in the US. However, Indian companies are engaging in bonded practices.
What this means for labor practices in IT in the primary IT markets.
There have been shocking things happening in the area of human bondage which is entirely due to Indian labor practices being exported to the US by Indian companies. We will begin this article discussing IT recruiters, move onto H1-B Visas, and then discuss labor bondage.
Indian Conformity the US Law and the Laws of the Countries of the Primary IT Markets
We began to notice unconscionable contracts from Indian IT recruiters several years ago. These contracts were like nothing we had ever seen and when the questioned these contracts we were told by the recruiters that they had many subcontractors working underneath them.
“Softech is a case in point. Owned by Krishnan Kumar, Softech has filed 32 lawsuits against employees in Gwinnett County, Georgia. Many of those lawsuits name workers who complain that they quit because they weren’t being paid. Yet most of the workers ended up on the losing end, through settlements or mediations or in court.
Kumar declined to be interviewed. But in court testimony and legal filings, he says he sues former workers to recoup the financial damage their departures cause his company – damage he routinely values at $20,000.
Virginia attorney Rajiv Khanna, who represents employers and employees in immigration matters, considers the financial shackles “an immoral, unethical and very probably illegal control of the workforce.””
And in this quotation.
“Of nearly 200 H-1B labor violation investigations completed by the Labor Department in the 2013 fiscal year, seven companies were cited for imposing – or attempting to impose – illegal penalties on workers who quit
In at least three of these cases, CompSys made workers headed to the US sign bonding agreements requiring them to pay hefty fees if they quit. They had to sign another document once they arrived, agreeing to pay $15,000 more if they quit before the end of their contracts.
“It is an artificial handcuff on workers,” said Paul Weiss, a labor attorney in New York who represented workers in some of the CompSys cases. “To impose such a draconian requirement is unconscionable.””
We found very similar types of if not illegal, completely inappropriate clauses in the contracts of Indian recruiters. When we explained the deep problems with the contract, the Indian recruiting firm both attempted to get us to speak on the phone (we think to remove the paper trail) and then proceeded to lie to us about the contract.
And the largest firms are also implicated, like TATA consulting, as the following quotation attests.
“Binding workers to their jobs in various financial ways is not limited to small-time labor brokers such as Softech, which had 81 petitions for H-1B workers approved between the 2011 and 2013 fiscal years.
Global giants such as Tata Consultancy Services Ltd, part of India’s Tata group, also have made workers sign restrictive employment agreements before they leave India for the US, according to interviews with several workers and company documents submitted in court.
With more than 16,000 H-1B petitions approved between the 2011 and 2013 fiscal years, Tata has been one of the top users of the temporary visas, according to US Citizenship and Immigration Services records. Tata clients have ranged from tech giants such as Cisco Systems to retail firms such as Walmart.
In interviews, workers said Tata demanded that they pay penalties if they quit before their contracts ended.
A native of Haryana, a northern state outside New Delhi, Kaushik started working for Tata at age 24 in India. Five years later, in 2012, the company transferred him to South Florida. Just before his departure, Kaushik said Tata required him to sign a contract promising not to quit his US job.
Over the next two years, Kaushik says Tata contracted him out to work 14-hour days without overtime pay as a computer programmer for Carnival Cruise Lines in South Florida. He was paid $60,000 a year, even though programmers in the Miami area then earned a median annual salary of $98,000, according to the Bureau of Labor Statistics.
“I worked from 9am to 11pm almost every night and never got paid overtime,” Kaushik said. “I thought, ‘Why am I working with this company?’
After Kaushik gave the company a week’s notice in early January, a Tata human resources representative declined to provide him with proof he had worked for the company – essential for maintaining his visa status in the United States – according to Tata emails Kaushik shared with CIR. The company also stonewalled him when he asked for the $7,000 he and the company had contributed to his retirement fund, Kaushik said.”” – The Guardian
TATA’s Defense: Contracts That are Originally Signed in India but for the US Market are not Subject to US Law
And TATA is using the defense that since the contracts are signed in India, (where pretty much anything goes) the US courts do not have jurisdiction, even though most of the life of the contract is carried out in the US!
“Yet in 1997, a state appeals court panel in San Jose sided with Tata’s lawyers, who had argued that the contracts were beyond the court’s jurisdiction because they were signed in India.”
Understanding the History of Bonded Labor
Apple publishes the following rules for suppliers.
“For example, Apple’s supplier code of conduct says companies that provide services to Apple “shall not traffic persons or use any form of slave, forced, bonded, indentured or prison labor”. The company reports that last year, it conducted 27 audits into allegations of bonded labor at its suppliers, most of them offshore.” – The Guardian
Notice the terms “bonded” with “indentured” in the description.
It is important to understand that those that bond labor have historically attempted to keep the bonded laborer from paying off the bond. This is explained in the following quotation.
“For instance, a laborer may begin with an initial debt of $200. While working and unable to leave, this worker needs a shelter, food and water. The employer tacks on $25 per day to the debt to cover those expenses. Consequently, the employee only grows his debt while continuing to labor for his debtor, and repayment is impossible.
Oftentimes this debt is passed down from generation to generation, making it eerily similar to chattel slavery in the 18th and 19th centuries. Migrant laborers are particularly vulnerable to this form of enslavement. In their home countries, migrant laborers contract with labor agencies and employers for a destination country, looking for an economic opportunity. These situations are ripe for exploitation because agencies and employers hold a debt or a bond over these employees.
Still, this particular system of slavery is deeply entrenched around the world. It’s most common in India, Pakistan, Bangladesh and Nepal. In fact, the majority of the world’s slaves live and work in India in a form of bonded labor.” – End Slavery Now
Bonded labor was engaged in in the post Civil War period in the US when African Americans supposedly received their “freedom” and after the Emancipation Proclamation. This tends to not be taught in high school or college courses on history in the US, and the teaching of this history can sometimes get the presenter of the information as classified as “anti-American.”
“Following the Civil War, former slaveholders and white Americans needed labor for their workforce, so they found new ways to force African Americans to work. Whites arrested and charged African Americans and then fined them for their various crimes. Former slaves had little money to afford such fines, so white businessmen forced the emancipated slaves to take on debts in exchange for paying them. These former slaves then had a bond over them, and employers exploited the situation so that the debt could never be repaid.” – End Slavery Now
After the Northern influence left the US South, what is referred to as “slavery by another name” increased. And the system converted to bonded labor rather than slavery. Bonded labor sounds much cleaner than slavery.
This is a powerful animation. It describes a world which bonded labors live currently globally. This a very difficult video to watch.
Apple’s Constant Opportunities for Coerced Labor
The term bondage or human bondage is the same as debt peonage and is often used in conjunction with the term slavery. It is interesting that Apple has this comment in their contracts because Apple is well known to profit from what amounts to sweatshop conditions in its contract manufacturers. Apple does not need to personally exploit any worker.
In China, there are contract manufacturers lined up to offer Apple coerced labor.
In India (and in Indian companies in the US) there are firms lined up to offer Apple bonded labor.
In the US there are a large number of US workers in PR willing to tell any lie to defend anything Apple does.
International Trade: Good for Increasing the Diffusion of Coerced Labor?
Previously it was extremely uncommon to hear about coerced labor in the modern era in the developed world. However international interactions have changed all of that. All of those practices that the developed world congratulated themselves for moving past are now creeping back in.
The dirty little secret is that not everyone is so opposed to labor coercion. It might not be something that one advertises on their dating profile, but it is irrefutable that many people in many countries are actually quite amenable to slavery and coercion, as long as either they or their family members are not the coerced individuals.
There are those that say that exploiting labor is always a negative. But that can be a shortsighted view. One must consider how that money from exploiting labor is spent, and much is spent in boutiques of great status and that allow one to demonstrate one’s class and style. Therefore perhaps one should be careful to not judge labor exploitation too harshly.
International interactions were supposed to lead to some type of more flexible and open capitalism, but the interactions with the less developed world are constantly bringing coerced labor and bonded labor into the companies that operated in the developed world.
Apple has hundreds of billions of dollars in offshore accounts untaxed, and it can take its choice of entities, primarily from the undeveloped world offering them bonded labor, which can allow Apple to squirrel away even more money. What a fantastic system! Apple can succeed in both barely paying taxes, and having an army of coerced laborers working for it.
This is one of the best books written on the history of slavery and notice the title Inhuman Bondage.
It means that a person works under a bond and that they are not free until they have paid the bond. Human bondage is strongly related to human trafficking. Often people are moved to locations where they are unfamiliar and made to work off the bond.
Time to Reduce Onerous Regulations on Bonded Labor to Accommodate Indian Companies?
This is “bonded” labor, and while bonded labor was made illegal in the primary IT markets, but it still very common in India to this day. The Indian influence in the IT labor markets has brought the practice back to shores where it had been eradicated. This goes back to the repeating pattern we have observed of Indians bringing labor practices from Indian to their new countries. And the people they are putting into bondage are not the domestic population, but other Indians. The fact is that bondage labor is accepted as a practice in India. Therefore, it seems perfectly natural to extend the practice to the primary IT markets, even if it happens to be illegal in those countries.
Entities Trying to Stop International Bonded Labor (i.e..Not Apple, WiPro or Infosys)
The website Anti-Slavery.com covers this topic of human bondage in great detail.
“Debt bondage occurs when a person is forced to work to pay off a debt. They are tricked into working for little or no pay, with no control over their debt.
Most or all of the money they earn goes to pay off their loan. The value of their work invariably becomes greater than the original sum of money borrowed.
Puspal managed to leave thanks to the great support her family received from our project partners, but usually that it is extremely difficult. People bonded by debt face coercion, violence and intimidation if they try to leave.
Bonded labour has existed for hundreds of years. Debt bondage was used to trap indentured labourers into working on plantations in Africa, the Caribbean and South-East Asia, following the abolition of the Transatlantic Slave Trade.
Bonded labour is most widespread in South Asian countries such as India and Pakistan. Often entire families have to work to pay off the debt taken by one of its members. Sometimes, the debt can be passed down the generations and children can be held in debt bondage because of a loan their parents had taken decades ago.
Bonded labour flourishes because of poverty and widespread caste-based discrimination. Limited access to justice, education and jobs for discriminated groups makes it difficult to get out of poverty.”
The Importance of Silence on the Topic of Indian Bonded Labor
India is the 12th most income unequal country in the world, and bonded labor has been highly effective in keeping India at that level of inequality. It is normally felt by many in India that it is better to not discuss bonded labor as keeping it quiet is both better for national pride and can help motivate no change in this area.
Indian Respect for Freedom of Speech and of the Press
India has historically never had any freedom of speech or of the press. This is how India has remained as the twelfth most income unequal country in the world. This inequality is why India is such a hotbed for bonded labor. To maintain this level of income inequality, suppression of freedom of speech is necessary. And most Indians will oppose this article. Opposing even the right for it to be written. Again freedom of speech is part of US law, not Indian law, and the established preference is for Indian law…..but not in India, in the US. India cannot change internally because India has very low freedom of the press. According to Reporters without Borders, India ranks 138 out of 180 countries in press freedom. Articles written in the Indian press have a distinct stamp of being censored or self-censored, and there is no India media outlet that is prominent or read outside of Indian readers.
Indian IT companies are not only engaging in H1-B Visa fraud, but they are also bringing Indian nationals into the US and under conditions of human bondage. US companies certainly know this, and seem to continue to hire IT resources through Indian companies. But companies like Apple are nice enough to declare to IT suppliers that they don’t want bonded or coerced labor (in the US). Which is odd, because Apple is fine with coerced labor if it is in China. The primary issue is that Apple is fine with coerced labor (that is why they went to China in the first place), but Apple prefers that the word coerced is not used. Coercion and bonded labor….and perhaps full-on slavery is perfectly fine, but it is the usage of these terms that is offensive.
If the US does not enforce its labor laws, then they do not exist. Indian firms have demonstrated such a pattern of violating US labor laws that there should be many investigations opened against Indian firms. The reason? The evidence is clear that Indian firms in a very unique way are engaging in bonded labor. That bonded labor is through a contract which is originated in India, but it is carried out in the US.
Part of the idea of IT workers from India being allowed to work in the primary IT markets was that these companies were going to obtain the skills they needed. However, there is now a great deal of evidence that many of these skills are falsified. But furthermore, because of the influence of Indian IT companies, US labor laws are being degraded, and the impact is that not only Indian workers are being subject to highly inappropriate contracts, but Indian companies seek to place domestic workers under these same contracts, contracts that are set up under Indian labor standards and practices rather than US labor standards and practices.
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This is an excellent video that shows the estimates of slavery that currently exists in the world. The topic becomes more complex when one includes bonded labor. Bonded labor can be a difficult distinction from slavery. Indian immigrants are paid well compared to people with the same skills that work in India, but they are in many cases still controlled by a bond or by the H1-B process, that makes them subordinate to their employers. Employers are constantly looking for labor that can be bonded or enslaved.
Internationally, Indians have demonstrated a pattern of discriminating against non-Indian workers.
With the growing concentration of Indians in IT this is a problem for domestic workers worldwide.
The following are quotations from Quora. Before we get into our own analysis, we wanted to provide quotations on the topic that we had nothing to do with creating. These quotations are consistent with our experiences working in IT. And this will illustrate a convergence of observation on this point.
Indians as Discriminating Against Other Indians
The following is a description of how they normally see the discrimination begin. This observation was written by an Indian.
“Many Indians in IT firms don’t just discriminate at the national level, many of them discriminate on a religion, race or caste-level. It usually starts like this.
They first look at your name in the resume. Is it a “cool” sounding Brahmin name? (like Anand Gopalakrishnan). Or is it a Punjabi name? (Parminder Singh). Or perhaps, it’s a Telugu name (Sudheer Reddy). Or does your name sound totally unheard of, hard to pronounce and possibly from a lower caste? (Pazhanimuththu Kanakadas). Godforbid, hopefully it isn’t a Muslim name (Imtiaz Khan), an Indian Christian name (David Kamaraj) or a Chinese name (Pang Pang).”
This illustrates that even Indians that are not in the right caste or have the right religion from the dominant group receive discrimination. The employment in the US for instance of Indians is not from all parts of India. It is very concentrated in specific areas of India and from specific castes, with Bhraman being the dominant caste.
Typically the US anti-discrimination laws are centered on race. However, Indian discrimination is more complicated than racial discrimination. Indians have a complicated discrimination modality that is sub-race and is a combination of Indians from specific areas and beyond that caste. Indians prefer a type of scenario which they had back in India. So the preference is from Brahmans to be at the top of the organizations. For most outsiders, their divisions are invisible, as each of the groups is seen as “Indian” by Western eyes (or at least all by the most trained). But for Indians, these divisions are highly important. They determine who can be hired into what role, how they relate to others, who have status over others, and so on.
Domestic workers who get Indian bosses normally don’t enjoy the experience. Indian standards for labor are terrible in India and abuse is common.
Dealing with Abusive Indian Management Approaches
“If you are Black, Asian or from the middle-east, the answer is obvious. Racism.
If you are white, it’s not so much the case that hiring you is expensive, as it is that you are a flight risk. American locals wouldn’t take kindly to the authoritarian and abusive management style of Indian managers and Indian managers are aware of it.”
Indians do not create environments that non-Indians want to work. They are hostile environments. The major Indian consulting companies, for instance, Infosys, WiPro, HCL, Cognizant, and TATA or TCS employ mostly Indians in the US but are only occasionally subject to well-known discrimination lawsuits. Various Indian firms play settlements to the US Department of Justice, as covered in the following quotation.
“The settlement, which the U.S. Justice Department said was the largest in a case of alleged civil fraud over visas, was filed in U.S. District Court for the Eastern District of Texas.
Infosys, India’s second-largest IT services exporter, agreed in the settlement that it committed civil violations of U.S. employment law, but it was not required to admit and did not admit widespread further wrongdoing.”
India has never developed a system of regulations that protect employees. Bonded labor is considered normal and acceptable in India. India does not have what those in the developed world would consider a functioning government. The Indian government is so corrupt it has made no progress on a host of quality of life issues since the British left India over 73 years ago.
India’s population continues to grow, but things are getting worse, not better. Indian income inequality has increased over the past several decades. Even issues like water management are a massive problem.
More than 600 million Indians face “acute water shortages,” according to a report last summer by NITI Aayog, a prominent government think tank. Seventy percent of the nation’s water supply is contaminated, causing an estimated 200,000 deaths a year. Some 21 cities could run out of groundwater as early as next year, including Bangalore and New Delhi, the report found. Forty percent of the population, or more than 500 million people, will have “no access to drinking water” by 2030. – Technology Review
India cannot manage water because India is not a national government in the sense the US, New Zealand or Germany have national governments. This gets to the dysfunctional nature of India’s government, which places it as in danger of being simply a failed state.
This is the Failed State Index. Let us review the definition of a failed state.
A failed state is a political body that has disintegrated to a point where basic conditions and responsibilities of a sovereign government no longer function properly. – Wikipedia
India very close to being a failed state. Its next-door neighbor Pakistan, is a failed state. When Indians immigrate to European based countries they are receiving a massive upgrade. Those people that get out of India have a constant series of request from family members and members of a similar tribe to get them jobs in the US. This is why US workers are targeted by Indians.
Indians see it as their duty to get jobs for family and tribe members in the US to get them out of India. Imaging being pressured by family members and by friends to get them to the US. The social pressure in Indian society is intense.
Indians need to solidify their position in the US, to reduce job threats, they feel more comfortable and protected if surrounded by other Indians.
The Indian Rights Over Non-India Derived Countries
Indians who emigrated to European based countries think they are obtaining rights because they are so amazing, but what they do not realize is that they are leveraging systems of regulations and laws that they had nothing to do with building. All they did was jump on an airplane, and this allowed them to benefit from hundreds of years of European based progress. However, Indians don’t actually see it this way. To their mind, they earned all of the benefits that were created by entirely different cultures. And furthermore, they see believe that more Indians also deserve this. As for improving conditions in India, this is well known to not be possible. As for fighting for union rights in India, this will also never happen. But Indians will migrate to European based systems and both benefit from and at the same time degrade the labor rights within those countries. They have done this by both bringing discrimination into the labor markets where they have migrated and by acting as recruiters and creating contractual documents that are inconsistent with the labor standards in these countries.
Evidence for this degradation of labor standards is found in how Indian recruiting companies offer contracts to domestic employees that are entirely contrary to US employment norms as we covered in the article Contract Clauses to Watch Out for In Indian Professional Service Agreements. This recruiting company that was profiled in this case study not only offered this contract but then lied about the clauses within the contract.
When Indian firms are caught violating US employment law, they pay out fines. When the US Government receives these funds, they do nothing for US domestic workers, they simply consume the funds. However, the damaged parties are actually the domestic worker, not the US Government. The fines are never enough to alter behavior.
Breaking the H1-B Laws and Easily Paying out the Fines
However, at the fines imposed of 1 million dollars or 34 million dollars paid out occasionally, Indian firms can afford to pay out fines indefinitely. That is they can see it as a cost of doing business.
None of the Indian firms in IT have employee compositions that look anything like the typical demographics in the countries they operate outside of India. However, each of these firms could argue that because they are terrible companies to work for that only nearly no Americans would want to work there. However, even though they freely discriminate, the US does not bring actions against them. This allows the Indian firms to continue acting as they always do.
How The Major Indian Consulting Firms Displace Domestic Workers from Jobs
When Infosys, WiPro or TATA sell a project in the US or Europe it means that the team will be primarily Indian. Domestic workers lose jobs when this happens. There are many companies like Cisco, IBM, Oracle, and HPE that are founded in the US and in their heritage and in their perception but are highly Indian. And domestic firms that become Indian seem to go in one direction. That is they become progressively more Indian. IBM stopped reporting employment by country because IBM has been laying off domestic workers in primary markets for IT services (US, Europe, Australia, Canada) and replacing them with Indian workers. Intel has been classifying Indian workers as domestic to also, hide the fact that Intel is becoming increasingly Indian.
The Importance of Hiding the Speed of the Transformation
Companies that become strongly Indian hide that fact from both customers and from the general public and this leads to a great underestimation of the degree to which domestic companies are becoming strongly Indian. IT media seems to think this issue is not worth covering, and they represent the interests of the employing companies over the workers. Indians see this massive takeover of US and Europe IT as a very positive development and as a success. However, every job consumed by an Indian worker is taken from a domestic worker. The reason being that India primarily offers workers. There is close to zero demand generated from India in IT.
Companies like Accenture or Deloitte do not sell consulting projects in India, they use Indian workers to displace domestic workers in the primary IT markets.
This is the same modality of commerce as is found in the Middle East in construction projects. Indian (and Pakistan) construction workers come over to various Middle East countries and displace workers in those countries. However, in those cases, the workers do not become Saudi or Dubai citizens. They eventually go back to India.
There is little “trade” between the primary IT markets, the primary IT markets are either importing Indian workers, who eventually become citizens or outsourcing work to Indian firms in India. There is simply no getting around these are jobs that would ordinarily be performed by domestic workers. Indian workers in the primary IT markets do not “make the pie bigger” for non-Indian workers. They take a slice out of the pie, and an increasingly large slice. And once that slice is taken, it grows to a larger and large slice.
Indian Workers and Income Inequality
Furthermore, the jobs taken from the domestic worker not only transfer wealth from the domestic worker to the Indian worker, and make the work environment hostile for the other domestic workers, they also increase income inequality in the domestic location. Through the H1-B program US companies have booked far more profits than they would have if they had not had the H1-B program, and that is what is undiscussed in the Indian media. That this leads to higher income inequality in the US and in the other primary IT markets.
How The Indian Bias Against Non-Indians Extends to Indians in a Tribal Manner
“So is there a bias towards Indians while hiring for IT positions in Indian-run companies? Definitely. And that too, it’s a bias only towards a small sub-section of Indians.”
For the domestic workers, it is not particularly material if Indians discriminate against Indians that are not part of whatever the in group appears to be. This is because the majority of Indians that immigrate to developed countries discriminate against the domestic population within that country. It cannot be said that because Indians discriminate against other Indians as well, that discrimination is not an issue. When Indians discriminate against the domestic population they are in violation of US anti-discrimination laws. The problem is one of perception and unequal treatment of who can claim discrimination. That is discrimination is only discrimination if the discrimination is undertaken by some groups. Other groups demonstrate high levels of discrimination can’t be charged with doing so. At least that appears to be the logic.
The Indians in the US are actually from a very small part of India, and the Indians from this region treat the H1-B program as their property. This region not only claims the vast majority of H1-B visas versus the rest of India, but the vast majority of H1-B visas versus the rest of the world. If this region has not rigged the H1-B system, one has to ask why this pattern exists.
Where Are Indians in the US Primarily From in India?
Most Americans have no idea where different Indians are from, are unaware of the regional or other differences in India.
To most Americans any Indian is simply “from India” and that is the end of it. However, the Indians that come to the US for IT work are from one specific area according to not only this commenter but others we have interviewed.
“If you take a count of the total people hired in US in IT, you will find that 90 to 95% of them are from Andhra Pradesh in India. I have worked for several companies in the bay area and other states and in spite of my experience and skills was always threatened by an incapable Telugu manager, Lead or candidate who only wanted to hire people of his caste. As if this was not enough, most of the Indian recruiting companies in the Bay Area are run by Telugu people who prefer to hire people from their region/caste and also work hand in hand with hiring managers to give a commission off the rates they make. This is very well known and widely practiced in companies such as CISCO and many others in the bay area. There are instances when my recruiting company told me that my resume didn’t stand a chance because the other recruiting company that was working with this client was bribing managers to get their folks in. The result you see is incompetent inexperienced people who get hired for low rates, the cuts off salary goes to the recruiting company and hiring manager. No guessing how this has affected the IT job market. Really surprised this crap has been going on for the last 10 years or so and nothing has been done about it.”
No doubt this article will be unpopular, but this is extremely specific information. What is the motivation to make this type of information up? It seems there is very little incentive.
It is literally unheard of for people to bribe people to get people into a company, but the topic of bribery repeatedly comes up when describing Indian hiring. And this apparently is a point of contention for other Indians.
“Absolutely, sometimes you can even find Indians who got frustrated by this because they are born in the wrong part of India.”
And this gets to not only the discrimination against Indians but the fact that there are enormous numbers of Indians who want to come to the US (or Europe, or Australia), but can’t because they are not in the right group.
There are roughly 146 million jobs in the US, and if Indians could have their preference, all of those jobs would be filled by Indians, and given the situation in India, the only limitation is the inability of Indians to take those jobs.
The number of US jobs (or Europe or Australia, etc..) that are made available to Indians is the number that will be taken.
No matter how many jobs are consumed by Indians, even if all of the employees in all of the developed countries were consumed, it would still not satisfy the demand for jobs in India. India has a larger population than the US, Western Europe, Australia, Canada, and New Zealand combined. That is all the places that Indians would like to work, by a very large margin.
The speed of transformation of IT in the US to highly and in some cases predominantly Indian is breathtaking. IT departments now bear no relationship to the racial composition of the rest of the companies where the IT departments are housed.
How to Domestic Firms With Previously Domestic Labor Become Indian so Quickly?
Indians like to propose that they are so skilled that companies become Indian after the first small number of Indians are hired because of the demand for skills. This is a rather curious position that Indians are not only more skilled than any one group but than all other groups. And that further Indians from one part of India are also more skilled than all of the other Indians from other parts of India.
However, this following quotation brings up a different reason.
“I have worked in Silicon Valley in both startups and big companies and my experience is the same as what the question says: Indians will ONLY hire other Indians and, like other people mentioned, they will only hire Indians like them. This is true most of the time with Indians who arrived in Silicon Valley to work or to go to University to study. The next generation, the Indians who were born here, is more Americanized and therefore more attuned to the principles of fairness and judging somebody on their merits, not on who they are related to or who are their friends with.”
How Indians Proliferate More Indians
This is an entirely different commenter than the commenter from the previous quotations. This commenter goes on to describe a pattern of infiltration that occurs after the first Indians begin to work at a firm.
“I can tell you it is something that is recognized and spoken by everyone here. I have friends from all ethnic groups (Latino, Chinese, Japanese, White) and they all say the same thing: once an Indian is hired in a position of relative power (say middle management) a constant stream of resumes from his family or friends will come and, after that, most of the group will be Indian. I, like other people who answered, also have very good Indian friends and they themselves say the same thing: Indians have a long-running tradition of nepotism and cronyism and they do the same here in Silicon Valley. It is not uncommon to go to a startup run by Indian management or a big company with Indian managers and see their relatives working there (the second cousin, the brother-in-law, the wife, the son and so on). This, of course, is not a problem, if people were qualified for the job they do. Sadly, in a lot of cases that is not the case, they get the job because a relative got it for them.”
Why would nepotism and cronyism be so consistently attributed to Indians who immigrate to other countries? This further brings up the question of what happens when Indians are hired? Does the hiring of a few Indians necessarily mean that many more Indians will soon be working at that company?
Indians are renown for falsifying their resumes. The Indian term for this is “spicing” the resume.
How Highly Skilled Again?
In the Indian media, they routinely use the term “highly skilled.”
However, while that is the description of an H1-B Visa, and the original logic of the program, only a small fraction of the H1-B Visa holders fall into this category.
At Brightwork we have received repeated requests from people in India who are recent college graduates with no special skills to sponsor them for an H1-B Visa. The concept among Indians is the H1-B program is a system to be scammed.
At several SAP consulting companies we found large scale resume falsification on the part of H1-B Visa holders.
At one consulting firm the H1-B Visa holders have a particular incentive to falsify their resume as if they did not get staffed, they would have a high likelihood of being let go, which could very likely mean having to move back to India.
However, the H1-B program was never passed into law under the concept that just about any Indian who has an education would be able to qualify for one. The H1-B Visa is viewed in India as the best opportunity to improve one’s condition in life. Therefore, the incentives to do what is necessary to stay are extremely high. This is not to say that domestic resources do not also have an incentive to be successful, but with a domestic resource, their jobs are not tied to their citizenship or their rights to stay in the country. To a worker from Denmark or Italy, it does not improve their condition all that much if they stay in the US or go back home.
But to Indians, it is a major upgrade in their lives and in the lives of their families. Nearly every H1-B Visa holder’s goal is to move to become a citizen. As one moves through the various stages to citizenship, the ability of the employer to control them decreases. And their pay and other freedom increase.
Experiences from Singapore With Those Discriminated Against by Indians
Indian behavior of immigrants is similar the world over.
This following quotation is from a commenter from Singapore.
“They created a lot of new manager roles so that they can send their friends in. 5 years ago, we had 1 manager and 15 guys. Now, 7 guys with 3 managers! (The rest left of moved). They force people out by abusing their power. Every year, they have to publish a organization chart. When they realized that all the managers are Indians,(In Singapore, they are not the absolute minority, but definitely low in numbers.) they gave an organization chart without picture! No one will notice that right? Except we are the only region in the world that does not have a picture on the organization chart! So in the end, Indian managers are definitely having some big problems. But due to the political correctly, they can do it. But we can’t point it out. “Racialism “ I guess.”
It is not possible to know the race of this commenter, but most of Singapore’s population is ethnic Chinese. Therefore, it is curious that it may also not be possible for an ethnic Chinese Singaporean to call out this behavior for fear of being called racist.
India is a strongly hierarchical society that allows for very little questioning. Europe based countries would need to have their clocks turn back hundreds of years to approximate the lack of participation from the lower levels that are allowed in India.
Reinstituting an Indian Caste System Within Non-Indian Companies
India has a very rigid caste system that is originally based upon Hinduism where each group comes from a different part of the body as explained in the video above. Nearly all of the Indians in the US come from the higher castes and therefore are very accustomed to a rigid social hierarchy, to indifference to those lower on the social hierarchy and to being at the top of the social hierarchy.
The comfort level of Indians with a caste system is found in how Indians attempt to recreate the caste system in their workplaces in the countries to which they migrate. This is only made obvious in the later stages of their control over an organization, as the following quotation explains.
“Once Indians have taken over an organization, they would establish a caste system of Brahmin priest caste as senior managers. The Brahmin would act all civilize as vegetarians non-meat eaters while appointing lower caste Indians as middle management along with the Sikhs. The middle management Indians would be the ones who brutalize workers and do the bullying while the Brahmins just smiles and silently approve their discriminatory behavior. The organisation will turn into a caste system as follows:
Middle caste Indians + Sikh Indians
Harassment of non-Indians staff, in particular, sexual harassment, is not uncommon. Non Indians are deprived of career opportunities while bully to quit just so the Indians can import more Indians into the workplace using immigration loophole.”
The description above sounds horrible. It is the exact opposite of meritocracy and is essentially reinforced through Indians stacking the deck with as many possible Indians as possible. This reinforces a strategy used by Indians where they use their numbers to act as a “block.” In the US the domestic population tends to act as individuals. Certainly, there are various cliques and “networks.” For example, it is well known that when executives from Oracle begin working at a software vendor, that company can have a number of Oracle resources come over that form an Oracle clique at the new vendor. Oracle employees are so known for this, and so known for worsening the condition of companies that they migrate to, ex-Oracle employees are a considerable liability.
However, the descriptions of Indian behavior in their new adopted homes indicate that they form a semi-cohesive unit that discriminates in favor of more Indians at the expense of the domestic population. This is without considering how Indians generally make the companies they work for hostile to non-Indian workers in more subtle ways. This commenter brings up this point.
“In the end they aim to take over our IT industry and replace all workers with Indians.”
Yes, and what is stopping this?
Indians Acting as a Block Against Domestic Workers
If Indians act as a block and there are what amounts to an unlimited number of Indians who seek to leave India as they cannot make a comparable living in India when does this stop? The answer is it never does, not until domestic workers stand up and put a stop to it.
Currently, Indian companies like Wipro and TATA are known to be hostile to non-Indian workers, but companies like IBM and Oracle are so high in Indian concentration that they are considered less appealing to domestic workers. There is not a single domestic US company that increases its percentage of Indian workers in a significant way, that stays equally appealing as a work environment for domestic workers.
Let us review, the domestic workers in any country are supposed to be the first labor poor to pull on for workers. But Indian employment is changing that. Indians in India claim superior job rights over US citizens. And apparently, a very high percentage of the Indian workers in the US agree with this sentiment as it helps them increase their concentration in the companies they currently work.
High Percentages of Indians is Now Bocking Out Non-Indian Employment in IT in a Major Way
“I started noticing that 99% of the interviewing managers at a particular client, a large corporation, were Indian. I also started noticing that 99% of all my fellow vendors were Indian as well. I thought it was strange but I was new to servicing a client in the Bay Area. After ages of watching top-notch candidates get rejected with no reason or false reaons, especially my white and asian candidates, I knew something was up. The candidates all said the feedback (when we got it) made no sense, that the interviewer was rude to them, that the interview was impossibly short, heavy accent was challenging, questions were surface level etc. They were just staging these “interviews” to try and cover their rears, so they could hire their fellow Indians.”
Again, this is another very specific charge. Any interview can be rigged simply by the questions asked to one candidate versus another if the intent is to only hire the Indian candidate.
Can a Domestic Worker be Successful in a Predominantly Indian Company?
If you have read this far, you can probably guess the answer to this.
“So, because of this, Indian based consulting companies like TCS, HCL, Tech Mahindra, Wipro have taken over major corporations and just ignore (or just pay off) any discrimination lawsuits thrown at them in the USA and Canada but, continue to discriminate.
Unless you’re Indian, don’t even think about applying to Microsoft, Hewlett Packard, Adobe, many federal and state gov’ts, Google, Apple, T-Mobile, Dell, etc.
If you happen to land a job with a predominantly Indian company, they will sabotage you out of the picture.”
And then this comment, which seems to be nearly the same comment, but is from a different commenter.
“Check out Cisco, it’s no longer American company, but an Indian company. After years of quiet layoffs of American workers and replacing them with Indian workers. The CTO of Cisco, possibly a successor to John Chambers, is from India, has no computer science degree, and got famous for bungling a high flying project on bad data and poopooing iPhone while at Motorola.
Same thing with Qualcomm, Microsoft, Motorola, VMWare and many smaller IT department around the country, including Target and Ebay. The latter was recently hacked while their Indian IT workers slept on their jobs.”
This is another common comment, that Indians seek to undermine non-Indian workers already in companies. This is a very serious claim, but our experience on projects backs up this claim. We have observed the following phenomena working with many Indians.
If the Indian is your boss: He makes life very difficult for you.
If the Indian reports to you: He undermines you.
If the Indian is lower in the hierarchy, but not a direct report: He begins pleasantly but looks for some way to undermine you.
Being Setup to Lose by Indians
For domestic workers, there seems no way to win against Indians. This another point of emphasis. The Indian worker does not need to be in a position of power over the employee. They can work to undermine them to look less capable then they are. It appears that the motivation is to have the domestic worker leave, and this allows an opening for the Indian workers to recommend another Indian, which then strengthens their hand within the company. The Indian worker does not see the job they have as a merely a job. Rather it is a strategic possession to be expanded to others in the “in group.” The strategy is the group who is able to get more of their people into the company end up winning.
This following quote from a different commenter describes the exact same thing.
“I can personally vouch that your average Indian IT engineer is very ethnocentric, clannish and completely un-american in every sense of the word.
They do whatever they can to make sure that life for you (as a non-Indian) in their team becomes so hellish that you leave on your “own accord”. I’ve seen many of my friends just move on to other companies confronted by similar minded Indians. Some of them entirely left IT altogether.
I think they have completely decimated non-Indian diversity at the workplace and they want every company to resemble Oracle and Cisco, both of them are almost 100% Indian now with a few token whites and other folks (nevermind that they are fighting lawsuits by well-meaning professionals regarding their hiring practices).”
This includes yet another statement that Indians make a concerted effort to force out non-Indians.
Indian Dominance in IT Recruiting
Indians have not only taken over IT jobs, but they have also taken over IT recruiting and forced out domestic IT recruiters. Our email inboxes oftentimes the recipients of IT recruiters that are primarily Indian. This takeover of IT recruiting has occurred over even a shorter period of time than the takeover of IT employment. It is now uncommon to find domestic IT recruiters. The only conclusion is that the domestic IT recruiters have been forced from the market.
Secondly, when we compare the rates offered by Indians recruiters, the rates are always lower than for domestic recruiters.
This is a shocking and unanticipated outcome of the H1-B Visa program. Originally intended for highly skilled candidates, now nearly anyone qualifies. And Indian immigration and workplace discrimination has not only reduced the domestic employment in IT, but domestic employees must now mostly go through Indian recruiters, many of whom are calling from India. It would be unsurprising if Indian recruiters prefer to place Indian candidates.
Rigging Job Descriptions for H1-B Entry
It is difficult to not notice how specific many IT job descriptions have become. Many job descriptions essentially describe a candidate that does not exist. There is a rule about H1-B Visas that the job description must be published for a certain amount of time, and then evidence shown to immigration that no individuals could be found that would fit the job description. This is very easily managed by creating such a ridiculous job description that no domestic candidates qualify. Now, the job can be opened to a candidate from India who will add those qualifications to their resume. There is no validation of the skills listed on the resume, they are essentially self-reported.
This is the problem with the continual comments by Indian resources that the entirety of Indian immigration to the US under H1-B is based on skills. Skills can be added to resumes if the people filling out H1-B Visa applications simply declare that the individual from India has those skills. This is explained in the following quotation.
“Most people who apply for H1B have a Indian 3 year degree education which I strongly believe is no better than a High School Degree in United States.
These 3 year degree holders take a 2 or 3 month computer training and land in United States stating fake experience.
There are thousands of companies in India which aid these people file a H1B petition and secure visa. These IT companies where potential H1B aspirant claims to have worked for, exists only on paper. They answer verification phone calls from USCIS or US embassy, have a web site and a physical address but there is NO actual Programming or Development done by this companies.
After landing in the United States, the same people, put 7 or more years of experience in the United States to get job.” – Petition2Congress
Which led a commenter to state.
“Therefore, the bottom line is that we don’t need Fake IT Professionals who make up their fake degrees and fake resumes and take away our real jobs which is not acceptable at all. And I request the US Senate, The US Congress, The Homeland Security, and the USCIS and Labor Law departments to take the needed steps and right measurements to stop all these fraudulent workers, “
This quotation on a similar matter was from The Guardian from back in 2014.
“Labor brokers providing Indian high-tech workers to American companies have hijacked a professional visa program, creating an underground system of financial bondage by stealing wages and benefits, even suing workers who quit.
About 840,000 people from around the world work in the United States on temporary visas, intended to help companies seek uniquely talented employees for specific jobs. In the tech realm, labor brokers often sponsor the visas, then contract out the workers to technology companies or government agencies to build databases, test software and complete other technical projects.”
Once one investigates it turns out H1-B Visa fraud is incredibly common. Again from The Guardian.
“It has been the source of the vast majority of India’s fraudulent documents tied to H-1B visa applications, according to a June 2009 cable from the US State Department unearthed by WikiLeaks. Inflated work experience was a typical problem, the cable said, adding that of 150 companies in Hyderabad investigated by the US Consulate, 77% were “fraudulent or highly suspect.””
Wikileaks released a document that was internally sent out from the consulate in Chennai on this topic with the following quotation on this topic.
“India wide consular operations are among the busiest in the world. Some states such as Gujarat and Punjab are traditional sources of migration out of India and faudulent applications from these areas are more common than from other regions of India. The state of Andhra Pradesh, in particular, its capital of Hyderabad, has been identified as a large center of documentary fraud which affects all Indian posts. An opinion poll published in the popular Times of India in January 2007 noted that 37% of the 1.1 billion Indians would emigrate if they had the chance.
Most of India’s fraudulent applicants come from specific and easily defined regional areas within each consular district. These states have some of the most mobile populations in India and the largest concentrations of expatriate communities overseas, including in the United States. In New Delhi, cases originating from the Punjab comprise the majority of its IV and fraud caseloads, while the same can be said in Mumbai with Gujarat. Chennai and Hyderabad’s fraud workload comes principally from Andhra Pradesh.
B1/B2 visa fraud is the most commonplace. Regionally-based fraud rings throughout the country, but especially in Hyderabad, continue to produce fraudulent documents for visa application and travel purposes. Some visa “consultants” and travel agents specialize in fraudulent experience letters and fake document packages, which include passport copies of false relatives, bogus financial documents, and affidavits of support.”
India scores 140 out of 180 countries in press freedom.
Indian Respect for Freedom of Speech and of the Press
India has historically never had any freedom of speech or of the press. This is how India has remained as the twelfth most income unequal country in the world. This inequality is why India is such a hotbed for bonded labor. To maintain this level of income inequality, suppression of freedom of speech is necessary. And most Indians will oppose this article. Opposing even the right for it to be written. In fact, on a different topic and Indian employee of IBM did not like something published at Brightworks, and essentially claimed the right to state that it should not be published as we cover in the article Should an IBM Employee Determine What a Research Entity Publishes?
Again freedom of speech is part of US law, it is respected in Europe and countries based on European systems, not Indian law, and the established preference is for Indian law…..but not in India, in the US. India cannot change internally because India has very low freedom of the press. According to Reporters without Borders, India ranks 138 out of 180 countries in press freedom. Articles written in the Indian press have a distinct stamp of being censored or self-censored, and there is no India media outlet that is prominent or read outside of Indian readers.
Indian Immigration Beneficial for India?
Given the enormous transfer of wealth to people from India to the US, many of whom falsely qualified for H1-B status, one might think that India has greatly benefited. Well first, India’s population is around 1.34 billion, so as even though IT in the US and in the other primary IT markets have become swamped with Indian labor, it is still a tiny fraction of the population in India. But one must also include all of the outsourced IT work in India and the jobs that only exist because of the IT connection to the primary IT markets.
However, India’s income inequality is getting starkly worse as the following quotation attests.
“As of Nov 2016, India is the 12th most unequal country in the world.  The richest 1% of Indians own 58.4% of wealth. The richest 10 % of the Indians own 80.7 % of the wealth. This trend is going in the upward direction every year, which means the rich are getting richer at a much faster rate than the poor.” – Wikipedia
India a vast country either tied with or greater than China depending upon the statistics used, those with access to the international IT market is still a small percentage of India. IT in India is similarly concentrated in just a few cites like Hyderabad. India already had debilitating income inequality before the rise of Indian IT workers. And India’s income inequality is growing rapidly. Could it be that the income flowing into a small percentage of Indians some of who work overseas and some of who work in India is actually hurting India’s political stability? That is the IT industry creates a class of IT-based wealth that is distinct from the rest of India? When one looks at India, there is no way that the impulse to leave India will be moderated by Indians. The flow has to be restricted within the primary IT markets. In this way, the combination of overseas Indian IT workers and Indian based IT workers is increasing the income inequality in both India and the primary IT markets of the US, Western Europe, Australia, and Canada.
Finding Other Groups As Frequently Accused of Discrimination as Indians
Brightwork Research & Analysis is a research entity. We are known for tackling issues that almost no one else will. We approached this topic as a research question, and we found damning evidence against Indian employment or workplace discrimination that is only reinforced by what we have seen on many projects. This Indian employment discrimination is not merely limited to the US but is found in Asia and in Australia, in Europe and in Africa. The standard defense by Indians will naturally be that this is all a racist illusion by a white author. However, Indians are being accused of discrimination worldwide. And they are being accused of discrimination by non-whites. If this is all a giant racist conspiracy, it is not only extremely widely reported, but the same reports are coming in from many different areas. All of the quotations in this article were obviously not written by the author.
Companies in IT globally are becoming Indian at astonishing rates. IBM has so aggressively fired domestic workers and hired workers in India and Indian workers that they refuse to publish their employment by country. However, IBM has kept its rates where they were previously, which has allowed them to mask the overall decline of the company. It seems impossible for this to happen without something underhanded occurring. It is very difficult to find a field that has in the space of a few decades switched to dramatically over to a new group of immigrants. And not only a group of immigrants (which has never happened in US history) but a group of immigrants primarily from one part of India.
We could find no other race or group that was as frequently accused of employment or workplace discrimination as Indians. For these observations to be false, there would have to be a vast conspiracy to promote the reporting of accusations against Indians and no other group.
The author has witnessed this discrimination first hand, and we receive new reports of discrimination quite frequently.
This hostility of work environment against domestic workers in areas ranging from Singapore to Australia to the US to Europe and elsewhere is part of how Indian workers are continually pushing domestic workers out of IT employment. There are two sources that dispute the demonstrated discrimination against non-Indian workers.
Indians: Indians will often say that all of these independent observations are incorrect. The strategy only works if it is not declared. If Indians were to say that they intend to bring practices of nepotism and discrimination over to the countries they immigrate to then the game would be up.
Indian Companies: Most of their statements revolve around disputing that they violated the employment laws or visa laws in the countries of the primary IT markets, or hiding the massive rise in Indian employment.
Indian workers and employing companies use terms like skills when describing H1-B quotas and hiring, but this is an oversimplification of the actual factors that are driving H1-B and the highly disproportionate hiring of Indian workers. It is clear that other terms like income inequality, lower pay, job loss for domestic workers, the creation of hostile work environments for domestic workers and workplace discrimination by Indians against non-Indians needs to become more publicly associated with importing Indian workers.
Most Indian and many Americans have no idea that the rights they enjoy are because they were fought for by unions. Indians made no such improvement to living conditions in their country. This is one reason they seek to exit the country and to gain entry into countries where this had been done for them. Major media outlets hide the union battles that have been fought in the US, because the behavior on the part of companies was so appalling, and because major financial interests do not want people thinking in terms of unions.
Notice how the share of income changes depending upon how strong and prevalent unions are. In IT there has been a dramatic transfer of income away from domestic workers and towards the top 10% and to Indian immigrants. This has lead to dramatically fewer opportunities for domestic workers. This is the point of the H1-B program — it is not about skills, it is about altering the income distribution away from domestic workers.
The major financial entities and employers want people to think that they don’t need unions. That unions are an organizational unit from a different era. If unions had maintained their strength from the 1960s, its unlikely that the H1-B program would have ever been allowed.
The Undeniable Evidence of Indian Discriminatory Behavior
The evidence is piling up that this is a pattern that is applied by Indians globally. Indians bring their culture from India seek to use lower standards to undermine the standards in the countries to which they immigrate. Indians that migrate to the US or Europe will not stay in India and fight for changes in how women in India are treated, fight the corruption in India, fight for higher labor standards, but what they will do is immigrate to countries that have made these gains, benefit from these gains, but then undermine the workers in the developed world. As such, Indian workers are a threat to all domestic workers, regardless of how “cuddly” they present themselves in one on one interactions.
From this, it is not difficult to predict that it will be very difficult for domestic workers to become employed in IT. This is because these jobs are increasingly going to be reserved for not only Indians already in developed countries but for future Indian immigrants and for Indians children of current Indian immigrants. If the pattern holds then the children of Indian immigrants will also be highly prevalent in IT. Once most of the jobs are held by Indians, it will become very difficult to break into the field due to Indian workplace discrimination.
How Indians Rely on Not Being Called Out on Cheating
What this comes down to is cheating. And unless domestic workers begin to call out this cheating, the cheating will continue. Naturally, the entities performing the cheating do not want to admit to the cheating and want to continue as business as usual. Therefore they will adhere to the “skills” argument and most likely throw ad hominem or personal attacks at those that point out the cheating. Literally, the entirety of the Indian takeover of IT jobs in the major IT markets is based upon one central hypothesis….that Indians have superior IT skills to all other workers — (not only the domestic workers but workers in the Andhra Pradesh region of India). On the basis of this argument, these workers essentially are demanding that most of the IT jobs in the major IT markets be handed over to these workers and that they are granted citizenship rights in the major IT market countries. However, once the topic is investigated, it becomes increasingly difficult to accept the premise of these arguments.
Consulting companies nearly always rig software selections so that the vendor they make money from wins.
As this is fraud on the part of the consulting firm, it is by its nature criminal.
IT consulting is normally all about sales and billing hours. The best way to maximize billing hours is to get clients to implement the most complicated and expensive applications. To do this, consulting companies pretend to be independent software vendors, which ultimately leads them to be selected.
An RFP is how requirements are documented to know what is needed when evaluating different vendors. However, as explained in the book How to Rig an RFP to Maximize Billing Hours consulting companies normally do not allow customers to select from vendors that are the best match for the requirements. This is because it would be detrimental to billing hours. Therefore, the RFP must be rigged so that the software selection results in the “right answer,” the right answer is implementing the software that the consulting company has resources it can bill for. This is known in the industry and considered entirely normal. The consulting company engages in fraud when they declare to their client that they will help them select the best vendor for their requirements. What they mean is they will select the best vendor for the consulting company.
IT consulting is filled with misrepresentations that should qualify as fraud. Many IT consulting companies engage in behavior that should be subject to not only civil but to criminal implications. Software selection fraud is just one of the many areas by which IT consulting firms routinely defraud their clients. The consulting companies do a double disservice to their clients because even after they leave, the customer is stuck with software which was normally selected only because of the needs of the consulting company. Consulting companies walk out of clients all the time, and perpetuate the same fraudulent tactics on their next clients. Having worked in IT consulting for decades and with many different firms (as an employee, as a sub-contractor, as just another consultant reporting directly to the end client) there is not one of the consulting companies that we would trust to do a software selection. IT consulting companies are dedicated to doing what they can to get the most out of the software selection for themselves while leaving the least benefit for their clients.
Consulting companies nearly always greatly exaggerate their capabilities to customers.
Consulting companies routinely engage in behavior which is criminal as it violates fraud statutes.
IT consulting is normally all about sales and billing hours. Having worked on IT projects for many years, it has been extremely rare to find projects where the capabilities of the consulting company have not been greatly exaggerated by the partner level resources.
Fraud Versus Puffery
Fraud is when one misrepresents a product or service. One this is sold, and something else entirely, of lower value, is delivered. For IT consulting companies it is common to lie about the following areas.
A Unique Methodology: Nearly all consulting companies state that they offer a special or unique methodology for implementation. We reviewed many consulting methodologies in the article The Real Story on IT Implementation Methodologies. Our observation was that there was nothing special about any of them and that they were primarily designed to sell IT projects.
Special Resources: Exaggerating the training and expertise of resources is extremely common in IT consulting. Resources often have skills listed for which they have only a passing exposure. At one consulting company resources that had performed demos, altered their resumes to state that they had participated in full implementations for customers they had only prepared a demo. Sometimes the exaggerated skills are added by the resource themselves, and sometimes they are added by the consulting company.
Pretending Public Information is Specific to a Consulting Company: IT consulting companies will often overstate the degree to which they have contributed to their area versus how much they have taken material available from published books and articles.
Timelines: It is highly common for consulting companies to exaggerate the speed at which they can implement software.
IT consulting is filled with misrepresentations that should qualify as fraud. Many IT consulting companies engage in behavior that should be subject to not only civil but to criminal implications. Furthermore, IT consulting companies use these same fraudulent tactics and patterns against US government agencies.
It is common for software vendors to inflate their revenues and profits just prior to an IPO.
Learn why in many cases this can qualify as criminal intent.
When software vendors are about to make an initial public offering, they will in many cases cook the books to make the revenues look as good as possible. The crime to be committed is fraud.
How Do Companies Artificially Inflate Revenues and Profits?
There are many tricks to revenue inflation.
Push Off Expenses: It is very common for companies to push expenses until after the IPO. This makes the company look more profitable than it is. They do this knowing that they will incur those expenses later. Furthermore, some of those expenses may be necessary to be incurred pre-IPO, and pushing them after the IPO can have negative implications for operations.
Bring Forward Deals: Deals can be brought forward, depriving post-IPO timeline of those deals. This is quite common.
Push Harder for Short Term Bad Deals: Software companies can lower their standards of sale, which will increase sales…in the short term, but which will reduce the long-term viability of the implementations.
Push the Sale Force Harder: This also has the consequence of increasing short-term sales before the IPO, but can cause long-term damage to sales as more experience salespeople leave post IPO, making it more difficult for the company to meet its long-term sales increases.
Not Pay Out Sales Compensation that Was Agreed To: The incentives to bait and switch on sales compensation pre-IPO can be tempting. The reason being that salespeople take a high percentage of their income in bonus. And bonus plan can be altered while the salesperson is working, which is different than what was agreed to in the sales compensation plan originally. In extreme cases salespeople with a large amount of money due can be fired, to keep from paying bonuses, keeping more cash in the company, and again inflating actual revenues.
Software vendors employ a variety of tactics to inflate revenues and profits prior to an IPO. Some of the tactics are unethical, but others are illegal and fall into the category of investment fraud, and are therefore criminal in nature.
It is common for software to provide false information to customers.
Learn why in many cases this can qualify as criminal intent.
Software vendors normally present themselves as providing information about their software. However, many software vendors lie so extensively about their applications that is provides an entirely false impression as to what the software can do. The crime to be committed is fraud.
It is curious how infrequently the term fraud is used in software, but it should be used quite frequently. If a company that manufacturers refrigerators lie about what the refrigerator can do, that is very easily called fraud. But because software tends to be more esoteric, it is infrequent for the term fraud to be used, even when it fraud and therefore criminal. In analyzing statements by vendors we repeatedly find false statements contained in marketing documentation. It is considered very normal in the software industry to mislead customers, and in the past when we have supported sales efforts when we have pushed back on false statements, we have often been accused of doing things that would “lose the account.” In the head of a sales pursuit entirely false statements are justified on the basis of attaining the sale. The truth or falsehood of a statement often falls to the wayside.
The false statements made by many software vendors qualify as fraud and therefore is in fact criminal. Yet it is virtually unheard of for criminal investigations to be opened against software vendors by the government. Even in cases where customers have been completely lied to, the most the software vendor will face is a civil suit and no criminal implications.
Software vendors operate in an unregulated market. Many vendors feel, and are accurate in feeling, that they are immune from the repercussions of providing false information to customers. This is because we do not define fraudulent information as criminal if it is part of the process of selling software.
SAP and Oracle do not follow the established rules of enterprise software.
Both of these vendors use monopoly power to block out other vendors.
Many people like to pretend that SAP and Oracle operate under the generally accepted rules of the “free market” enterprise software segment, but this is far from the case. SAP and Oracle practice most extreme form of commercial software tactics and behaviors, pushing up against the legal rules, and far beyond what is generally considered ethical. With open source software anyone can use the software, and in most cases, it is free to use. Commercial software charges a license fee to use the software. However, SAP and Oracle aren’t regular commercial software vendors. This is because a typical commercial software vendor would sell its software for a license fee, but allow its software to be used with any other software. This is the logical basis for allowing commercial software in the first place.
Why is Commerical Software Allowed?
Commercial software is allowed as it is intended to compensate the software development entity for their investment. The intent of commercial software licenses was never to allow larger and vendors with more resources to “block out” other vendors from environments where they predominate. However, SAP and Oracle develop exclusionary products that reduce interoperability and use a variety of legal and account control tactics all designed to push the purchases of the company to SAP and Oracle.
Why Does SAP Make Integration so Difficult?
SAP has routinely made integrating other applications to SAP far more difficult than it needed to be, and encouraged the large consulting companies to talk down non-SAP software in favor of SAP software. (An easy task as SAP consulting partners make so much money on SAP consulting.)
Oracle’s Monopolistic Acquisitions
Oracle has used aggressive acquisitions to control the purchases of their customers. SAP has used the centrality of its ERP system to limit choice on the part of customers, while Oracle has done the same thing, but using its control over databases. SAP introduced S/4HANA, which was the successor to their most popular ERP application, and which had for decades worked with a variety of databases, and made the new version exclusive to SAP’s HANA database. SAP has created a number of technical arguments as to why this was better for customers and why it was necessary (a subject we cover in depth in the article How HANA is Used to Block out Other DB Vendors).
We have analyzed these in detail and concluded none of them are true.
SAP and Oracle use the commercial software model, but they do not follow the rules of commercial software. They follow a model where the commercial software is used to extract monopoly rents from customers.