NNTP-Posting-Date: Fri, 17 Jan 2003 06:56:22 -0600
Date: Fri, 17 Jan 2003 06:59:22 -0600
From: gary drummond
X-Mailer: Mozilla 4.78 [en] (Win98; U)
Subject: Re: High Tech economy in the US
X-Abuse-and-DMCA-Info: Please be sure to forward a copy of ALL headers
X-Abuse-and-DMCA-Info: Otherwise we will be unable to process your complaint properly
NCS Radio wrote:
> I don't think we need more investment right now. Look at all the plants
> that are running at 50%-70% capacity. They don't have a NEED to invest
> capital even if they had it. What they NEED is an increase in demand. Once
> the demand pushes utilization up, then they need capital to invest.
Let's call this the "trickle up" theory...
Demand means disposible income, which means you have a job with money
left over from taxes. More demand means more people need to be working.
The current high tech industry is outsourcing support and manufacturing,
which means less jobs are available, resulting in less demand.
Less demand prompts mangement to cut costs, thus since only high tech
and managers are employed, to cut costs, replace up to 15% of the
techs with H1-B employees, which avoids telling the IRS/Government
that you are replacing US workers.
Loss of jobs by techs means less income which results in lower
demand for other products. This results in other companies implementing
the same cost-cutting ideas, which propagates through the rest of
There are even ways to get around the 15% limit. This is a true story.
1. Don't hire perm employees, use contractors to design and implement.
2. After everything is documented, and all procedures are standardized,
contract for H1-B employees to replace the "expensive" contractors.
Where I WAS working they did this, and now they have 2-H1-B contractors,
1 US perm and 1 US contractor. Our largest customers were banks, which
now just transfer 50% of the H1-B's salary back to India to their
families. Oh, I forgot to mention the 9 people who monitored the
networks were replaced by a contract with another company in India.
Management looked good because they cut the budget, but their
customers and local businesses will have to cut costs...