California Outsourcing Bill: Read the Fine Print

One point I’ve been harping on in my comments on the H-1B work visa is that abuse of the visa pervades the entire industry, quite contrary to the common view that I call Intels Good, Infosyses Bad (IGIB). The latter refers to a view that the Indian outsourcing firms such as Infosys are the main abusers of the program while mainstream firms such as Intel use it responsibly. So for those readers who might get excited by a new bill just passed by both houses of the California state legislature, I suggest you consider the details. A victory maybe, but a small one.

The bill was sparked by news that the University of California, San Francisco, a medical branch of UC, had contracted to bring in foreign IT workers in the by-now-familiar pattern: The foreign workers would replace American UCSF employees, but not before the Americans trained the foreigners. Subsequently, after some experience on the job, the foreign workers would take much of the work overseas, where it would be performed from then on.

Later 60 Minutes ran a piece on the matter, of which I was quite critical. Now in defense of the show, I could say that at least their airing of the issue, however misleading, did get the state legislature to finally take action. The body had considered doing so in the early 2000s, but in the end they lost their resolve.

But as the old saying goes, “The devil is in the details.” Here is what the bill says:

The bill would specify that nothing in its provisions would preclude the University of California and the California State University from contracting with a contractor or subcontractor that utilizes workers in offshore operations in circumstances that do not directly result in the displacement of an employee of the University of California or the California State University.

In other words, the bill would allow UC and CSU to gradually phase out their American workers, provided it’s done by attrition. So the current workers (those remaining after last year’s firings) are fine, but as they retire, move to other employers (or likely even other UC/CSU jobs), Americans would not be able to apply to fill the openings, just as I have been warning.

As I have been saying, this stems from too much a focus on the word replace; whether a foreign worker is hired to replace an American or instead of an American, either way the result is that Americans don’t have access to that job. Indeed, UC President Janet Napolitano stated that UCSF would have been fine if it had just gradually phased out the Americans via attrition, rather than replacing them.

So the U.S. tech industry PR people, by deft use of one simple word, has been able to distort the entire conversation, resulting in what I regard as a mainly useless California bill.

I know some readers will disagree. “We finally got those guys!”, some will shout. But actually, those guys got YOU.