I, Cringely » Blog Archive A lesson on IT labor economics from Memphis – I, Cringely – Cringely on technology:
My recent series of columns on troubles at IBM brought me many sad stories from customers burned by Big Blue. I could write column after column just on that, but it wouldn’t be any fun so I haven’t. Only now a truly teachable lesson has emerged from a couple of these horror tales and it has to do with U.S. IT labor economics and immigration policy. In short the IT service sector has been shoveling a lot of horse shit about H1B visas.
It’s worth the read. He goes on to point out that even though the big guys who depend on service income try to maximize the billable hours they can charge to their customers, and claim they are in desperate need of more H1B’s, you have two companies in Memphis, Tennessee, that cancelled their five-year contract with IBM after only two years.
When ServiceMaster announced its decision to cancel its contract with IBM and to in-source a new IT team, the company had to find 200 solid IT people immediately. Memphis is a small community and there can’t be that many skilled IT workers there, right? ServiceMaster held a job fair one Saturday and over 1000 people attended. They talked to them all, invited the best back for second interviews, and two weeks later ServiceMaster had a new IT department. The company is reportedly happy with the new department whose workers are probably more skilled and more experienced than the IBMers they are replacing.
Where, again, is that IT labor shortage? Apparently not in Memphis.
About that database monitoring problem, ServiceMaster hired DBADirect to provide their database support from that high tech hotbed, Florence, KY. The first thing DBADirect did was to install monitoring tools. Remember IBM didn’t have any monitoring running on the ServiceMaster database.
How can a company 1/100,000th the size of IBM afford to have monitoring? Well, it seems DBADirect has its own monitoring tools and they are included as part of their service. It allows them to do a consistently good job with less labor. DBADirect does not need to use the cheapest offshore labor to be competitive. They’ve done what manufacturing companies have been doing for 100+ years — automating!
Even today IBM is still in its billable hours mindset. The more bodies it takes to do a job the better. It views monitoring and automation tools as being a value added, extra cost option. It has not occurred to them you could create a better, more profitable service with more tools and fewer people. When you have good tools, the cost of the labor becomes less important.
Which brings us back to the H1B visa issue. Is there an IT labor shortage in the USA that can only be solved with more H1B visas? Not in Memphis and probably not anywhere else, either.
There’s certainly a shortage of imagination, absolutely a shortage of integrity, and neither shortage is saving anyone money.
I was a missionary in Latin America for many years, my wife is from Honduras, my ex-wife is also Hispanic, my children are all then Latins by legal definition anyway, and I have seen real poverty. I want prosperity overseas and prosperity here.
The best way to do that is to let everyone everywhere conduct their own business without fear and without anybody else, or everybody else, or a majority of everybody else, telling them how to do it, what they can or cannot do, or how much money the political power brokers will let them keep.
Truly free trade brings prosperity to all sides; a government monopoly on the rules of the game brings miserable poverty.
Collective “rights” are no rights at all, and lead only to setting up rules-makers that say, “Trust us. I’m from the government, and I’m here to help you”. See, the Golden Rule that respects individual natural rights works best for each of us and for all of us.
- Is there an IT labor shortage in the USA that can only be solved with more H1B visas? (betanews.com)
- An IT labor economics lesson from Memphis for IBM (cringely.com)
- Cap on US H1B visa reached (news.in.msn.com)
- LinkedIn CEO: Let US Companies Bring In More Overseas Employees (LNKD) (businessinsider.com)
- For richer or poorer (ireport.cnn.com)
- Tough times for Infosys employees, here and abroad (thehindu.com)