American Elephants

Just What You Thought! Silicon Valley Billion-Dollar Firm Pays Illegal Workers $1.21 an Hour. by The Elephant's Child

About those Silicon Valley claims that they just can’t find enough talented STEM workers in this country:

Although there is a surplus of American high-tech workers, high-tech companies continue to clamor for more guest-worker visas to lower the wages of their workers. Companies like Microsoft have lobbied for massive increases in foreign workers even while laying off 18,000 American workers.

Electronics for Living is a billion-dollar manufacturer of computer peripherals with sales of $727 million last year. They apparently have an operation and employees in Bangalore, India. The company decided to install a new computer system and imported eight workers from India to do this work. The first arrived in September 2013, and the last left in December of that year.

The workers continued to be paid at their Indian wages plus  an apparently tiny bonus, in rupees, or 74 Indian rupees an hour. In American dollars, their total pay was $1.21 an hour. Oops! Temporary or not the were completely covered by both federal and California minimum wage law, the latter calls for at least $8.00 an hour and time-and-a-half  for overtime. At least one of the workers was forced to work 122 house in a week, but details for the others are not available.

They were busted, but while both workers and corporation were egregiously violating the Immigration and Naturalization Act. they got off with a minor slap on the wrist. The Dept. of Labor figured the difference between $1.21 and the state’s minimum of $8.00 an hour plus the missing overtime payments came to about $20,000. Labor did double that figure, and each worker got about $5,000 or $40,000 all together. And they added in a $3,500 administrative  fee to the total. Electronics for Living  said “We unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards.”

When India-based Infosys was called into court for multiple violations of the INA, they were smacked with a $34 million fine. The two cases are separate, but if you look upon whines from Silicon Valley about their inability to find satisfactory STEM graduates in this country with a bit of a jaundiced eye, you cannot be blamed.

Importing foreign workers pushes the wages for available jobs downward. Massive increases in guest-worker visas will cut off opportunity for American workers to enter the middle class through technology jobs.

The Biggest Election in The World. A Sweeping Victory For Free Markets. by The Elephant's Child

India’s remarkable parliamentary election has lasted for five weeks and counted some 550 million ballots. Indian voters have given  a landslide victory to Narendra Modi”s Bharatiya Janata Party. Mr. Modi will be the first Prime Minister to govern without a coalition in nearly 30 years, and he has an unusual mandate to enact market-opening reforms that had stalled under the government of Prime Minister Manmohan Singh.

The losing Congress Party had ruled India for most of its 67 years. Under Sonia Gandhi, the Congress Party kept to its old political strategy of doling out benefits to the poor and discouraging foreign investment. Growth was below 5% which to most Indians felt like a recession. The Indian work force was growing by 12 million a year, but only two million new jobs were being created. That would feel like a recession. As the Wall Street Journal said:

Mr. Modi’s record offers reason for optimism. As governor for 13 years of Gujarat state, he was the archetypal energetic executive, forcing through approvals of new projects and welcoming foreign investment. Gujarat now accounts for 25% of India’s exports, and the poverty rate has plunged. As the son of a tea-seller, Mr. Modi also has a gut sense of the economic aspirations of ordinary Indians.

India’s growing middle class has been exposed to the broader world and wants more opportunity. He appealed to this class in his campaign, and emphasized the difference between an older generation who “died for independence” and a younger India that “will live for good governance.”It looks like far more Indians found his record appealing. India is celebrating Hope. The Wall Street Journal adds:

More importantly, Mr. Modi will need to build ideological consensus to reverse India’s deep-rooted distrust of markets. Riding herd on civil servants is possible in a state of 60 million people like Gujarat, but it is impossible in a fractious nation of 1.2 billion people.

Richard Epstein, Hoover Institution fellow and  Law professor who often works at the confluence of law and economics visited India for the first time in January. His account of his attempt to buy a local phone so he could make an occasional call to family back in the United States is a far better demonstration of the crushing weight of the enormous Indian bureaucracy and its civil servants, than anything I could write.

The American media hasn’t paid much attention to this sweeping victory of conservative, free-market, and anti-Islamist forces. Modi is moving quickly to dispel fears that his pro-Hindu leanings would sideline minorities.

“The age of divisive politics has ended, from today onwards the politics of uniting people will begin,” Modi said. “We want more strength for the well-being of the country … I see a glorious and prosperous India.”

“I want to take all of you with me to take this country forward… it is my responsibility to take all of you with me to run this country,” he added.

Congratulations to the Indian people on a remarkable democratic election. We wish you well for the future. May your hopes be well-rewarded.


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