Lucas and Mithas say their research proves that corporations use foreign-born IT professionals as a complement to, not as a cheaper substitute for, their American workforce. But the data does not provide any explanations for why employers would pay non-citizen IT workers more. Lucas and Mithas have their own theories. For one, they think companies recruit foreign IT professionals for skills or expertise that they can't get from American workers, whether it's a stronger work ethic, multi-cultural experience, or willingness to travel.
In addition, as an academic I'm very disturbed at the appalling lack of even-handedness on the part of the Maryland authors. Their statements to the press do not jibe with their own findings, and their coverage of previous research is severely one-sided. I'll cite three (of many) examples: ...
Moreover, the authors do not mention at all the fact that two Congressional-commissioned employer surveys have found that H-1Bs are indeed often paid less than comparable Americans. These surveys are far more relevant than regression analysis (the tool used by the authors, myself and others), as regression can only attempt an indirect, approximate answer to the questions at hand. Employer surveys address this question directly, and thus are very important. It was unconscionable for the Maryland authors to omit discussion of these official employer surveys. In short, this paper was not the evenhanded treatment that is expected in academia.
Europe’s Social Welfare, and Ours. Thomas Geoghegan, a labor lawyer in Chicago, is the author, most recently, of “Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life,” to be published in August. Why wouldn’t you want to work to 67 in Europe? To an American it still seems like paradise. Even the Germans who are so famous for “cutting back” are hardly East of Eden.
They still golf, cut out by lunch on Friday, and can still hit a two month stretch in spring of four “four-day” weekends. That still leaves five to six weeks of vacation, and of course they use their sick leave to the max. Who’d want to retire from that?
Not only is the pace more fun — compared with us, they have a far better chance of being in high skill jobs, being engineers, or even being subsidized to make art on the public dime. As a German labor official said years ago: “We should be working less and less, and our work should mean more and more.”
And here’s a corollary: if they are pacing themselves, they should be good to go at least to 67 without burning out. It’s not just longevity: the whole place is set up for not using people up. That’s why at every income level, people in a social democracy are healthier. So far as I can tell, that’s a part of the European left’s response: “We’ll go a few more years but we’re going to pace ourselves a little better.”
At any rate, it’s ridiculous to write off social democracy because the French might raise their “legal” retirement age from 60 — say, to 62. (Since the “effective” or actual date the French retire is now 58, it means they’d probably have to work to 60.) Are they really working longer? French women get two years of paid maternity leave, per baby. So do other European women. Throughout Europe paid paternity leave is spreading too. Over there they’ve got time-out rights, of which we have no idea.
And even cut back, public pensions will remain high – typically about 60 percent of income vs. our 40 percent here. And in Germany and elsewhere, they have high personal savings rates in part because they get so many public goods for free (health, education, nursing care, decent public transport, free nursing home care) — goods for which our old and young go deeply into debt. ...
Also important — the Europeans are in labor unions which have pushed for private pensions to make up the cutbacks in the public ones. Finally, these “legal” and “effective” retirement ages vary a lot in both Europe and the U.S. In Germany right now, the “legal” is 65 but “actual” is 62. So if the “legal” goes to 67, it just means that Germans will really retire at 64 instead of 62.
So far as I can tell from my clients, when the U.S. goes from 65 to 67, it means that lots of people will actually retire at 84 instead of 79. And after 84, we have some of our old people trying to live on just $600 a month in Social Security. Maybe after they get over their mocking of Europe, some in our U.S. press would like to look into that.
One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by using offshore tax havens. Indeed, it's estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes -- leaving the rest of us to pick up the tab. And with cash-strapped states all across the country cutting vital services to the bone, it's not like we don't need the money.
You want Exhibit A of two sets of rules? According to the White House, in 2004, the last year data on this was compiled, U.S. multinational corporations paid roughly $16 billion in taxes on $700 billion in foreign active earnings -- putting their tax rate at around 2.3 percent. Know many middle class Americans getting off that easy at tax time?
In December 2008, the Government Accounting Office reported that 83 of the 100 largest publicly-traded companies in the country -- including AT&T, Chevron, IBM, American Express, GE, Boeing, Dow, and AIG -- had subsidiaries in tax havens -- or, as the corporate class comically calls them, "financial privacy jurisdictions." ...
Washington has been trying to address the issue for close to 50 years -- JFK gave it a go in 1961. But time and again Corporate America's game fixers -- aka lobbyists -- and water carriers in Congress have managed to keep the loopholes open. ...
But the bill would end one of the more egregious examples of the double standard between the corporate class and the middle class, finally forcing hedge fund managers to pay taxes at the same rate as everybody else. As the law stands now, their income is considered "carried interest," and is accordingly taxed at the capital gains rate of 15 percent.
The issue was famously brought up in 2007 by Warren Buffett when he noted that his receptionist paid 30 percent of her income in taxes, while he paid only 17.7 percent on his taxable income of $46 million dollars.
As Robert Reich points out, the 25 most successful hedge fund managers earned $1 billion each. The top earner clocked in at $4 billion. And all of them paid taxes at about half the rate of Buffett's receptionist. Closing this outrageous loophole would bring in close to $20 billion dollars in revenue -- money desperately needed at a time when teachers and nurses and firemen are being laid off all around the country.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America's banking giants to either forgo their access to the public teat they receive through the Federal Reserve's discount window, or give up the insanely risky, casino-style bets they've been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street's most lucrative profit centers: Five of America's biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan's trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.
As it neared the finish line, the Restoring American Financial Stability Act was almost unprecedentedly broad in scope, in some ways surpassing even the health care bill in size and societal impact. It would rein in $600 trillion in derivatives, create a giant new federal agency to protect financial consumers, open up the books of the Federal Reserve for the first time in history and perhaps even break up the so-called "Too Big to Fail" giants on Wall Street. The recent history of the U.S. Congress suggests that it was almost a given that they would fuck up this one real shot at slaying the dragon of corruption that has been slowly devouring not just our economy but our whole way of life over the past 20 years. Yet with just weeks left in the nearly year-long process at hammering out this huge new law, the bad guys were still on the run. Even the senators themselves seemed surprised at what assholes they weren't being. This new baby of theirs, finance reform, was going to be that one rare kid who made it out of the filth and the crime of the hood for everybody to be proud of.
Then reality set in. ...
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