Attention, Walmart Shoppers!

For those who might not get the allusion in my title above, it’s the phrase used on a PA system in the store to announce special sale items and so on. It’s often used as a prop in comedy routines. But it may take on a new meaning in light of an April 11 CIO Story blog item, which says in part,

“Walmart and its IT contractors are driving down standards in the tech industry in the U.S. by using H-1Bs visas excessively to keep costs low. Walmart is among the companies seeking an increase in the H-1B cap,” commented Greg Penner, the vice chairman of the Walmart board of directors

Is this a case of a rogue director, an egregious misquote, or what?

To me, what is more interesting is the paragraph that follows the one above:

Efforts are being initiated by Congress to raise the H-1B visa cap and also restricting its use by offshore outsourcing firms.

This of course is exactly what I’ve been warning about: The unwarranted focus on the IT service firms, oblivious to the industrywide nature of the abuse, will be used as an excuse to INCREASE the H-1B cap (and to create additional H-1B workaround visa programs, such as automatic green cards for foreign students, extension of the OPT period and so on).

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28 thoughts on “Attention, Walmart Shoppers!

  1. When it comes to driving down standards, everyone thinks of Walmart first!

    Reminiscent of the scene from “Animal House”:

    Otter: … I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!
    Bluto: We’re just the guys to do it.
    D-Day: [stands up] Yeah, I agree. Let’s go get ’em.
    Boon: Let’s do it.
    Bluto: [shouting] “Let’s do it”!
    [all of the Deltas stand up and run out with Bluto]

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  2. Hi Norm,
    I’m a big follower of your blog and newsletter, but I’m not sure I agree with you here, having worked very recently for a Fortune 100 company that uses H1-B’s (and the L-1 categories) from onshore/offshore agencies (specifically Cognizant and TCS). The system allows companies to be very, very careless and even lazy regarding staff augmentation. The workers can be ordered up on short notice, almost like ordering pizzas. Thus Cognizant, TCS and others have created an easy revolving door with always-available pools of guest workers.

    Requiring real companies to acquire the visas makes it much more difficult for them; most ordinary companies do not want the legalities or regulatory challenges involved.

    I do agree with you about the automatic green cards, however.

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    • Which “ordinary” companies do you know of that don’t hire H-1Bs? Maybe you have in mind companies like Google, Facebook, HP, Oracle, Cisco, Intel, IBM and so on? They hire tons of H-1Bs — and they are pushing Congress to allow them to hire even more.

      Keep your eye on the prize, Mary. Please re-read the last paragraph of my posting today. Focus on the IT services firms which bring us an INCREASE in the H-1B cap. Presumably that is NOT what you want.

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      • Hi Norm,

        I meant ordinary companies similar to Walmart…the ones you listed are primarily tech companies developing and supporting software as core to the business, so of course they want more H1-B’s. My company is, like Walmart, primarily non-technical although technology is, of course, critical to the success of its core businesses.

        Sorry I can’t name or describe the company; I’m under legal restrictions.

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  3. http://www.bloomberg.com/news/articles/2014-06-06/penner-becomes-wal-mart-board-heir-after-investing-walton-money

    Greg Penner, the grandson-in-law of Wal-Mart Stores Inc. founder Sam Walton, became heir apparent to the chairman role today after spending almost a decade investing the family’s money as head of a venture firm in Silicon Valley.
    ……..
    By elevating him to the newly created vice chairman position, the Waltons are betting that Penner’s technology experience can help guide the company into a new era of e-commerce and smaller-format stores.
    ……..
    Penner is the son of two sex therapists in Pasadena, California….

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  4. It’s a misquote and summary [without giving any credit to Computerworld] of a Computerworld Story on April 7 about reaching the H1-B Cap. The Walmart – H-1B quote is from an AFL-CIO report criticizing Walmart’s use of H1-B.

    http://www.computerworld.com/article/2907056/h-1b-cap-is-reached-with-high-number-of-visa-requests.html

    ‘”Walmart and its IT contractors are driving down standards in the tech industry in the U.S. by using H-1Bs visas excessively to keep costs low,” said the AFL-CIO, in its report. Walmart was contacted but had not yet responded.

    Walmart is among the companies seeking an increase in the H-1B cap. Greg Penner, the vice chairman of the Walmart board of directors, is listed as a supporter of FWD.us, a group lobbying for an H-1B visa cap increase, the union noted in its report.’

    My guess [with no real evidence] is that CIO Story is a Chinese IT consulting outfit [and magazine] doing business with Chinese companies operating in the U.S., probably mainly working in the Chinese language. I can’t do better than to let them speak for themselves:

    ‘About Us

    CIO STORY is the gateway for enterprises in Technology. We makes an incisive study of the IT trends and equips leading businesses with insights and deep analytics based on the success stories of technology vendors that have scaled up by acclimating path-breaking business strategies and solutions.’

    The main interest here would be that they might be quite happy to have the Indian firms restricted, more visas for Chinese firms like them, and for all other companies. You noted earlier some rivalry and tension between Indian and Chinese H-1B camps.

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    • Yes, that About Us blurb seems to support your theory.

      So, when I wondered aloud whether it was an egregious misquote, I didn’t know the half of it. Amusing sidebar to the continuing H-1B story.

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      • ‘About Us’ – It’s funny how with a limited command of English they are still able to produce a credible version of the impressive sounding IT jargon designed to snow CEOs and other execs.

        Here’s a related theme – the Trans-Pacific Trade Agreement, which advanced today in Congress with an agreement for fast track status. It would offshore more jobs, and some are saying that Obama intends to put lots of extras into it making it easier to move foreign workers into the U.S.

        One Congress member feels that TPP advocates are not dazzling him with brilliance.

        http://thehill.com/policy/finance/236345-dem-trade-officials-baffling-lawmakers-with-bullshit

        “Rep. Mark Pocan (D-Wis.) on Thursday accused the Office of the U.S. Trade Representative (USTR) of “baffling” Democrats “with bullshit” in an effort to advance President Obama’s trade agenda.”

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    • Bill, thanks. But I just clicked on that AFL-CIO report itself from the link in the Computerworld story, and it is worth a look:

      http://www.aflcio.org/content/download/152961/3843901/file/Walmart+and+Tech+Industry_4115Final.pdf

      Title: After Decimating U.S.Manufacturing, Wal-Mart Takes Aim at the Information Technology Sector

      Bullets:
      Summary of Key Findings
      · Walmart is lobbying for a massive increase in the number of H-1B visas. Walmart or Walmart
      principals back FWD.us and Compete America, the major lobbying groups working to triple the
      availability of H-1B work visas.
      · Walmart filed 1,800 petitions (certified LCAs) for H-1B visas in IT-related occupations between
      2007 and 2014. These H-1B visa holders work for Walmart in areas like software development,
      collaborative applications, data management, system maintenance, and other IT fields.
      · Between 2007 and 2014, IT contractors have filed almost 15,000 petitions (certified LCAs) for H-
      1B visas for work placed in Bentonville, Arkansas, home to Walmart’s headquarters and
      information technology center. Walmart is a known client of these controversial outsourcing
      contractors, including Infosys, Cognizant and Wipro.
      · Walmart is driving down standards in the tech industry in the U.S. by using H-1B visas and
      contractors excessively, and violating the spirit, if not the letter of the visa program. This keeps
      costs low and allows for IT guest workers to be paid less.
      · Walmart and its outsourced IT operations at contractors do not hold up their end of the
      immigration bargain: they rarely apply for green cards for H-1B visa workers. In some years,
      they submit no green card applications at all.
      · Walmart and its IT contractors have made Bentonville, Arkansas, a high H-1B visa-density area
      for IT guest workers. Walmart and its IT contractors are clearly availing themselves of high
      quantities of H-1B visas for tech workers in Bentonville, suggesting that Arkansian STEM
      graduates, and STEM students generally, are likely overlooked in favor of IT guest workers that
      are paid below market wages and have few rights.
      · Walmart’s key vendor Infosys was prosecuted for committing visa fraud in 2013—for using B-1
      instead of H-1B or other visas. Infosys paid $35 million in a settlement with the U.S.
      government.

      I would just add, as usual, that paying H-1B less drags down the entire competitive scale, so means they also pay Americans less.

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      • A member of my family was living in the Bentonville area and applied for a job at Wal-Mart as a network engineer. He is a MS level engineer and doubly certified CCIE – networking and security (at the time fewer than 2,000 worldwide). He as deemed to be “unqualified” by Wal-Mart HR; perhaps a better description should have been “overqualified” or “too expensive”. I never realized that Wal-Mart was such a big user of H-1Bs. Sam would not be happy.

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  5. > This of course is exactly what I’ve been warning about: The unwarranted focus on the IT service firms, oblivious to the industrywide nature of the abuse, will be used as an excuse to INCREASE the H-1B cap (and to create additional H-1B workaround visa programs, such as automatic green cards for foreign students, extension of the OPT period and so on).

    I have long wondered how someone could argue that there is widespread abuse of the H-1B program by the IT service firms but that we need to increase the H-1B cap. I can see better now that those who argue this are going along with the myth that there is a widespread STEM skills gap. I posted links to commentary on that at http://econdataus.com/skillsgap.html a while back and, if you google “STEM skills gap” (without the quotes), you can see that the myth is still strong. I liked Professor Hal Salzman’s description of the “shortage” during the March 17th Senate hearing at http://www.judiciary.senate.gov/meetings/immigration-reforms-needed-to-protect-skilled-american-workers . In regards to the H-1B cap being met in less than a week, he said something about a similar thing happening with half-price television at sales on Black Friday. There isn’t enough of a supply to meet the demand for half-price televisions but that doesn’t mean that we have a shortage of televisions.

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  6. Many of those selected in the lottery will not report for work on October 1. Some will be left waiting in their home country because the positions for which they were “needed” do not exist and so there are no documents to qualify for stamping. Others were never intended to be used immediately; they are being kept for future use.

    There would not be the over-subscription of the quota is there were a “use it or lose it” – and the “lose it” was permanently revoke the petition approval. EIther show up for work at the earliest opportunity or the approval should be null and void.

    The one excuse I as a woman find most offensive is “I’m pregnant or have a child and am not ready to go to work; I just want the visa for the future.” This deprives a legitimate worker and employer the opportunity to fill an actual position.

    I have never seen any statistics about the use of approved visas verses time from the initial application which can be at most 6 months in advance of the supposed need. Since H-1B selectees self report that they have yet to use their approval even more than 6 years after initial selection, there are many more potential workers than those in the 6 latest quotas.

    There are a lot of simple administrative fixes that would solve the supposed requirements not being met problem.

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    • I agree, there is no purpose to the H visas. Norm says “mend it don’t end it” but there are already other visa categories for geniuses and such. The L visas are another matter, there is some point to a business being able to bring in a foreign worker to the US, but the numbers and time should be extremely limited – though I’m willing to let companies BUY more time, say paying the prevailing wage for the position week by week for the permit, not to the worker.

      The only “mend” I can see to H-1B is if they are willing to pay at least 50% over prevailing wage, over and above all the category adjustments that Norm has discussed.

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  7. I did some study into these numbers. I downloaded the FY 2011 H-1B LCA database in 2012. AFL-CIO says 381 LCAs were certified for Wal-Mart, my count shows 417. Several of these LCAs were for 5, 10, and 15 H-1Bs on one LCA. You can specify up to 999 H-1Bs on one application. The application must match the actual visa petition.

    LCA_CASE_EMPLOYER_NAME STATUS Sum Of TOTAL_WORKERS
    WAL-MART ASSOCIATES, INC. CERTIFIED 491

    These LCAs were mostly for Bentonville, AR, but Wal-Mart work locations in every state were included.

    Another query to count the TOTAL_WORKERS in Bentonville from all contractors (166) for 2011 reveals:
    STATUS LCA_CASE_WORKLOC1_CITY LCA_CASE_WORKLOC1_STATE
    Sum Of TOTAL_WORKERS
    CERTIFIED BENTONVILLE AR
    3117

    It is obvious that more H-1Bs are employed from consulting companies than directly from their base client (Wal-Mart). This is how the client stays out of the headlines. This supports my observation that primarily Indian consulting companies are the big abusers of the H-1B visa program. It isn’t just the big ones (Wipro, Infosys, etc.), it is also the thousands of small recruiting companies across the US. The small consultancies are often subcontracting to major consultancies so that the true number of H-1Bs is hidden. You really have to download these databases from http://www.flcdatacenter.com/CaseH1B.aspx and run some queries to understand the dynamics of the H-1B invasion.

    The AFL-CIO story counted LCAs, not TOTAL_WORKERS, so their numbers are understated. Every one of Cognizant’s 35 LCAs had either 20 or 25 TOTAL_WORKERS on each LCA. The TOTAL_WORKERS field must be summed. This is where the media gets everything wrong (intentionally?)

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    • Points on accounting methods well stated. But as to your comment, “This supports my observation that primarily Indian consulting companies are the big abusers of the H-1B visa program.” I’m not sure how to parse this sentence. Are you saying the mainstream companies use H-1B responsibly, as claimed by the industry lobbyists?

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      • @Matloff: Re: Are you saying the mainstream companies use H-1B responsibly, as claimed by the industry lobbyists?

        No, to the contrary. I have been working in IT for 40 years, 25 years as a consultant. There has never been justification for H-1Bs in the IT industry. Since the mid-80’s (corporate mergers, acquisitions, downsizing, rightsizing, S&L debacle) there has been a glut of unemployed IT people. I was in Houston and saw tens of thousands of layoffs, including IBM. This occurred in every city of the country and has repeated many times (dot.com implosion, jobless recoveries, Wall Street collapse, …). I have drawn statistical correlations between BLS layoff statistics and H-1B LCAs. There have been many news reports of over 500 applications per day for one IT job ad.

        Wal-Mart is unusual in directly applying for H-1Bs (although their consulting contractors provided thousands more). In the public eye, Wal-Mart can get away with this fraud because Bentonville is a little town with few native IT people. Still, I have applied there many times and never got a response.

        I worked at State Farm Insurance in Bloomington, IL, which is another small town with an industrial giant. The IT department was about 75% Indian. State Farm applied for only 5 H-1Bs in 2011, but 682 certified LCAs were filed by consulting companies across America for Bloomington for 1003 TOTAL_WORKERS. In previous years these numbers were much higher.

        This pattern is repeated across America. If you apply for a job in America, 19 times out of 20 an Indian will respond. It is like calling the Help Desk and you get the same level of service.

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        • The Fortune 500 company I worked at did the same thing. They contract with TCS, HCL, etc. and tell them how many positions they need. TCS and HCL are the entities that apply for the LCA. This “hides” the fact that the Fortune 500 is truly the end user of all the H1-Bs.

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          • I know that many people believe this, but I don’t think hiding is the main motivation. Instead, they simply want short-term workers, easy come, easy go.

            In any case, the reason SCE and Disney are different is that they explicitly replaced their American workers by the foreign ones.

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    • If it will help you, I have the 2014 and 1st qtr 2015 data online where you can view maps, or a report simultaneously via many different options.

      http://keepamericaatwork.com/media-page/

      You are right though, you need to pay attention to the workers wanted, and also something that I think most journalists miss is the spelling, and the various organizations run from one address.

      http://keepamericaatwork.com/2015_company_map.php

      Click on the link above and click on the dropdown and start typing “IBM” and pay attention to what is in the dropdown

      They actually have 5 different companies.

      Like

      • @Virgil: I kept getting runaway script warnings. The map never resolved, I lost patience and killed it. My wife’s Family Farm game may be overtaking the WiFi. I know I shouldn’t have picked 2014 Computer Analyst to start with. I should have started with Pilots or Railroad Engineers. I need a bigger PC.

        Your site is beautiful, though.

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        • Thanks,

          The data is pretty intensive as there are about 600,000 rows in the 2014 data.
          2015 only has about 90,000 rows so far so it should work.

          Don’t even try and load the computer jobs as there are so many for 2014 that it will kill your session.

          The easiest way to view all occupational groups for 2014 is via this video I created

          Like

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