How Mary Kay Cosmetics Admits Being Not Willing to Pay Market Wages for IT

ByPrimary Researcher

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Executive Summary

  • Companies routinely state they need H1-Bs so they can access skills for innovation.
  • In truth, their quotes make it clear that their real issue is they do not want to pay market wages.

Introduction

Companies have been lying about their need for skills while being caught red-handed admitting the actual issue with not having the floodgates opened on controllable and lower-paid H1-B, student visa, and other foreign visa programs are that they are opposed to paying market wages for their labor. This is explained in the following quotation.

Training employees in IT would seem to be a win-win for both worker and employer. And often that is the case. However, extensive training creates other issues. “You take a $45,000 asset, spend some time and money training him, and suddenly he’s turned into an $80,000 asset,” says Mary Kay Cosmetics CIO Trey Bradley. That can lead to another problem. New graduates trained in cutting edge technologies become highly marketable individuals and, therefore, are attractive to other employers.145

Again, it is clear that Bradley is not willing to pay the salaries paid by other firms. The main issue is money, not skills.

An Incentive/Pretext to Hire H-1Bs—Moreover, employers in such a situation then often turn to hiring H-1Bs who, due to their de facto indentured servant situation, cannot “jump ship” after acquiring a hot skill. Or, often the H-1B has the skill at the time of the hire, in which case the employer can avoid the salary premium for the skill via Type I savings. – University of Michigan Journal of Law Reform 

One wonders if CIO Trey Bradley believes in markets? Because we hear repeatedly from companies that they favor markets. However, when a market results in a higher wage paid to workers, very quickly the dedication to the purity of markets quickly evaporates. One also wonders if Trey Bradley thinks that he should be allowed to get paid more if he becomes more marketable because he has desirable skills. Or would Trey Bradley support importing H1-B CIOs if he becomes too marketable?  

Mary Kay Cosmetics receives our Golden Pinocchio Award for its anti-market logic when it comes to paying market wages for IT talent. 

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Conclusion

The hypocrisy of the companies that support H1-B is genuinely offensive. The typical CEO now makes more than 360 times the average worker in their companies, when the multiple was close to 20 times back in the mid-sixties. Any amount of compensation is justified for executives. Still, as soon as IT workers are paid at the prevailing market rate, it becomes necessary to create a false story around an IT labor and skills shortage, so that the H1-B program can be justified, and the money obtained from paying less to cheap imported labor can be funneled to the executives in the company.

References

http://heather.cs.ucdavis.edu/Mich.pdf