How Final IT Project Costs Continue to Spiral Upward Even with H1-Bs Visas Workers

ByPrimary Researcher

Executive Summary

  • Companies demand increasing numbers of low cost and low cost per hour H1-B workers.
  • However, the costs of projects continue to spiral, and increasing numbers of companies look to stab their customers on projects.

Introduction

Companies can’t stop clamoring for more and more H1-B workers.

However, the costs of projects continue to rise and rise in the level of waste and fraud as the US becomes increasingly corrupt.

How the H1-B Visa Program Helps Facilitate Labor Exploitation

Labor exploitation is a significant component of corruption. As the H1-B program has metastasized into a massive cheap labor sink that almost no one realizes the number of H1-B workers that are imported to the US every year. We cover this in the article How the H1-B Program Understates The True Number of Yearly H1-B Visas. Corrupt IT companies, that we cover in the article The Brightwork SAP Corruption Deception Quadrant are continuing to increase their markup on labor.

This is explained in the following quotation.

 In 2011, an antitrust attorney did a report on how we overpay for government contracting.

In service of ‘shrinking government,’ policymakers chose to set up a system where instead of hiring an engineer as a government employee for, say, $120,000 a year, they paid a consulting firm like Booz Allen $500,000 a year for a similar engineer. The resulting system is both more expensive and more bureaucratic.

Here’s one example I grabbed from a public government contracting schedule. The rate negotiated by the government’s General Services Administration for Boston Consulting Group is $33,063.75/week to get a single relatively junior contractor.

Most top tier management consulting is useless. It boils down to telling executives they should raise prices or avoid taxes in a fancy way, helping one faction in a corporation win an internal battle against another, or aiding a cowardly leader do something he or she knows she should do but is afraid of doing without outside validation. It’s highly overpaid make-work, which is why the movie Office Space resonated.

This corruption wasn’t that bad until the 1990s, when Bill Clinton and Al Gore introduced their ‘reinventing government initiative,’ which transferred large amounts of government work to overpaid private contractors. They bragged the size of government didn’t grow, even as they were building a slothful, incompetent, and highly corrupt shadow government in place of the relatively functional public system they took over. – BIG (Matt Stoller)

And what was that contractor paid for that week?

Why is this type of margin considered acceptable, and where were the government controls to limit it?

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Conclusion

There is now no margin on labor which is considered offensive. As we cover in the article How Infosys Violated B-1 Visa Law and Charged Clients a 98.6% Margin, Infosys obtained close to a 100% margin on workers and thought it to be entirely normal. The major consulting firms demonstrate no ethics, just a desire to stab their customers.

This corruption makes it is increasingly expensive to do anything. Yet notice the lack of connection between wages and the costs of contracts. There is no connection. Stabbing customers is the new hot business model, much like the old business model. And H1-B visas are a big part of this model.

References

https://mattstoller.substack.com/p/why-new-york-city-is-on-the-verge

https://www.pogo.org/report/2011/09/bad-business-billions-of-taxpayer-dollars-wasted-on-hiring-contractors/