Article 43

 

Workplace

Monday, August 12, 2019

Team Players

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Great Teams Don’t Need Star Players

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August 11, 2019

It’s tempting to believe that the very best team efforts come from recruiting the very best talent. But RESEARCH from Carnegie Mellon’s Anita Williams Woolley suggests otherwise. Having talented people on your team helps, but Woolley found that group members SOCIAL SENSITIVITY - the ability to identify and respond to social cues is much more important. What else helps? Groups that encourage equal participation, rather than deferring to one or two dominant players. And one recipe for team failure? Encouraging members to compete with each other.

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Why do teams of talented individuals so often underperform? The emerging science of “collective intelligence” may have the answers.

This is an edited extract from The Intelligence Trap: Why Smart People Make Dumb Mistakes.

Iceland should never have made it to the Euro 2016 men’s football tournament. Four years previously, they were ranked 131st in the world. Yet they knocked out the Netherlands in the qualifiers, and then as the smallest nation ever to reach the championships, drew with Portugal and Hungary, and then took down Austria. But their biggest scalp was England, a team packed with star names. So how did they do it - and what lessons can be learned from their unexpected success?

Many organisations employ highly intelligent, qualifed people in the assumption that they will automatically combine their collective brainpower to produce magical results. Yet such groups often fail to cash in on their talents, with poor creativity, lost efficiency and sometimes overly risky decision making. And exactly the same dynamics that brought Iceland their victory, and England their defeat, can help us to understand why.

Lets first consider some more general intuitions about group thinking.

One popular idea has been the “wisdom of the crowd” the idea that many brains, working together, can correct for each others errors in judgements; we make each other better.

Some good evidence of this view comes from an analysis of scientists’ journal articles, which nds that collaborative efforts are far more likely to be cited and applied than papers with just one author. Contrary to the notion of a lone genius, conversations and the exchange of ideas bring out the best in the team members; their combined brainpower allows them to see connections that had been invisible previously.

Yet there are also plenty of notorious examples where team thinking fails, sometimes at great cost. Opposing voices point to the phenomenon of “groupthink” - first described in detail by the Yale University psychologist Irving Janis. Inspired by the Bay of Pigs disaster in 1961, he explored the reasons why the Kennedy administration decided to invade Cuba. He concluded that Kennedy[s advisors had been too eager to reach a consensus decision and too anxious about questioning each other’s judgements. Instead, they reinforced their existing biases.

Sceptics of collective reasoning may also point to the many times that groups simply fail to agree on any decision at all, reaching an impasse, or they may overly complicate a problem by incorporating all the points of view. This impasse is really the opposite of the more single-minded groupthink, but it can nonetheless be very damaging for a teams productivity. You want to avoid “design by committee.”

Testing group intelligence

The latest research helps us to reconcile all these views, offering some clever new tools to determine whether or not a group of talented people can tap into their combined ability.

Anita Williams Woolley has been at the forefront of these new findings, with the invention of a “collective intelligence” test that promises to revolutionise our understanding of group dynamics.

Designing the test was a Herculean task. One of the biggest challenges was designing a test that captured the full range of thinking that a group has to engage with: brainstorming, for instance, involves a kind of divergent thinking that is very different from the more restrained, critical thinking you may need to come to a decision.

Her team eventually settled on a five-hour battery of tasks that together tested four different kinds of thinking: generating new ideas; choosing a solution based on sound judgement; negotiating to reach compromise; and finally, general ability at task execution (such as coordinating movements and activities).

Unlike an individual intelligence test, many of the tasks were practical in nature. In a test of negotiation skills, for instance, the groups had to imagine that they were housemates sharing a car on a trip into town, each with a list of groceries - and they had to plan their trip to get the best bargains with the least driving time. In a test of moral reasoning, meanwhile, the subjects played the role of a jury, describing how they would judge a basketball player who had bribed his instructor.

And to test their overall execution, the team members were each sat in front of a separate computer and asked to enter words into a shared online document a deceptively simple challenge that tested how well they could coordinate their activities. The participants were also asked to perform some verbal or abstract reasoning tasks that might be included in a traditional IQ test - but they answered as a group, rather than individually.

The first exciting finding was that each teams score on one of the constituent tasks correlated with its score on the other tasks. In other words, there appeared to be an underlying factor (rather like the underlying brainpower that is meant to be redirected in our general intelligence) that meant that some teams consistently performed better than others.

Crucially, a group’s success appeared to only modestly reflect the members average IQ. Nor could it be strongly linked to the highest IQ within the group. The teams weren’t simply relying on the smartest member to do all the thinking.

Since they published that first paper in Science in 2010, Woolleys team has veriified their test in many different contexts, showing that it can predict the success of many real-world projects. They studied students completing a two-month group project in a university management course, for instance. Sure enough, the collective intelligence score predicted the team’s performance on various assignments. Intriguingly, teams with a higher collective intelligence kept on building on their advantage during this project: not only were they better initially; they also improved the most over the eight weeks.

Woolley has also applied her test in the army, in a bank, in teams of computer programmers, and at a large financial services company, which ironically had one of the lowest collective intelligence scores she had ever come across. Disappointingly, she wasnt asked back; a symptom, perhaps, of their poor groupthink.

Behaviours that help

The test is much more than a diagnostic tool, however. It has also allowed Woolley to investigate the underlying reasons why some teams have higher or lower collective intelligence - and the ways those dynamics might be improved.

One of the most consistent predictors is the team members social sensitivity. To measure this quality, Woolley used a classic measure of emotional perception, in which participants are given photos of an actor’s eyes and asked to determine what emotion that person is supposed to be feeling, with the participants average score strongly predicting how well they would perform on the group tasks.

Woolley has also probed the specific interactions that can elevate or destroy a team’s thinking. Companies may value someone who is willing to take charge when a group lacks a hierarchy, for instance - the kind of person who may think of themselves as a natural leader. Yet when Woolley’s team measured how often each member spoke, they found that the better groups tend to allow each member to participate equally; the worst groups, in contrast, tended to be dominated by just one or two people.

The most destructive dynamic, Woolley has found, is when team members start competing against each other. This was the problem with the financial services company and their broader corporate culture. Each year, the company would only promote a fixed number of individuals based on their performance reviews - meaning that each employee would feel threatened by the others, and group work suffered as a result.

Since Woolley published those first results, her research has garnered particular interest for its insights into sexism in the workplace. The irritating habits of some men to mansplain, interrupt and appropriate women’s ideas has been noted by many commentators in recent years. By shutting down a conversation and preventing women from sharing their knowledge, those are exactly the kinds of behaviours that sabotage group performance.

Sure enough, Woolley has shown that at least in her experiments in the USA - teams with a greater proportion of women have a higher collective intelligence, and that this can be linked to their higher, overall, social sensitivity, compared to groups consisting of a larger proportion of men.

Does self-worth sabotage?

Woolleys work provides good evidence that individual talent may matter far less than the overall group dynamics within a team. To fully understand Iceland’s success and England’s defeat, we also need to explore how an individuals perceptions of their own talent can influence those group dynamics and the overall collective intelligence.

Various studies have found that inflated beliefs of your own competence and power can impair your abilities to cooperate within a team. And this means that groups of high-flying individuals often fail to make good and creative decisions, despite their individual experience and talent.

An analysis of Dutch telecommunications and financial institutions, for instance, examined behaviour in teams across the companies’ hierarchies, finding that the higher up the company you go, the greater the level of conflict reported by the employees.

Crucially, this seemed to depend on the members own understanding of their positions in the pecking order. If the team as a whole agreed on their relative positions, they were more productive, since they avoided constant jockeying for authority. The worst groups were composed of high-status individuals who didn’t know their rank in the pecking order.

The most striking example of these powerplays - and the clearest evidence that too much talent can be counter-productive - comes from a study of star equity analysts in Wall Street banks. Each year, Institutional Investor ranks the top analysts in each sector, offering them a kind of rock-star status among their colleagues.

These people often flock together at the same prestigious firms, but that doesn’t always bring the rewards the company might have hoped.

A study of five years’ data found that teams with more star players do indeed perform better, but only up to a certain point, after which the benefits of additional star talent tailed often. And with more than around 45% of the department fillled with Institutional Investors picks, the departments appeared to become less effective.

We see exactly the same dynamics in many sports. The social psychologist Adam Galinsky, for instance, has examined the performance of football (soccer) teams in the 2010 World Cup in South Africa and the 2014 World Cup in Brazil. To determine the countryҒs top talentґ, they calculated how many of its squad were currently on the payroll of one of the top 30 highest-earning clubs. They then compared this value to the countrys ranking in the qualifying rounds.

In line with the study of the Wall Street analysts, Galinsky’s team found a curvilinear relationship; a team benefitted from having a few stars, but the balance seemed to tip at about 60%.

If we look back at Icelands unexpected victory against England, it’s clear that the quality of the individual players was undoubtedly better than it ever had been. But although many worked for international football clubs, just one of them at the time (Sigursson) had a contract in one of the top-30 clubs. England, in contrast, had pulled 21 of its 23 players from these super-rich teams, far above the optimum threshold.

Humble leaders

All this research provides a couple of tips that could be applied to any team to improve performance. The first is in hiring: look for people with that social sensitivity rather than simply employing the person with the best individual performance. For the group as a whole, it may turn out to be far more valuable particularly if you already have lots of high-flying members.

The second is to ensure that the leader displays the kinds of behaviours they expect within the team. Various studies have found that traits like humility can be contagious. If the leader is willing to listen to others more constructively, rather than dominating the conversation, and admit his or her mistakes, the team as a whole can begin to nurture those dynamics that increase the overall collective intelligence.

After Iceland’s unexpected success at the Euro 2016 tournament, many commentators highlighted the down-to-earth attitude of Heimir Hallgrmsson, one of the teams two coaches, who still worked part time as a dentist. He was apparently devoted to listening and understanding others풒 points of view, and he tried to cultivate that attitude in all of his players.

Team-building is a must for a country like ours; “we can only beat the big teams by working as one,” he told the sports channel ESPN. If you look at our team, we have guys like Sigurisson at Swansea [Football Club], who is probably our highest-profile player, but hes the hardest worker on the pitch. If that guy works the hardest, who in the team can be lazy?

David Robson is a senior journalist at BBC Future. This article is an extract from his recent book The Intelligence Trap: Why Smart People Make Dumb Mistakes.

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Reading the Mind in the Eyes or Reading between the Lines?
Theory of Mind Predicts Collective Intelligence Equally Well Online and Face-To-Face

By David Engel, Anita Williams Woolley. Lisa X. Jing, Christopher F. Chabris, Thomas W. Malone
Published: December 16, 2014
Plos One

Abstract

Recent research with face-to-face groups found that a measure of general group effectiveness (called collective intelligence) predicted a groups performance on a wide range of different tasks. The same research also found that collective intelligence was correlated with the individual group members ability to reason about the mental states of others (an ability called Theory of Mind or ToM). Since ToM was measured in this work by a test that requires participants to read the mental states of others from looking at their eyes (the Reading the Mind in the Eyes test), it is uncertain whether the same results would emerge in online groups where these visual cues are not available. Here we find that: (1) a collective intelligence factor characterizes group performance approximately as well for online groups as for face-to-face groups; and (2) surprisingly, the ToM measure is equally predictive of collective intelligence in both face-to-face and online groups, even though the online groups communicate only via text and never see each other at all. This provides strong evidence that ToM abilities are just as important to group performance in online environments with limited nonverbal cues as they are face-to-face. It also suggests that the Reading the Mind in the Eyes test measures a deeper, domain-independent aspect of social reasoning, not merely the ability to recognize facial expressions of mental states.

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Monday, July 01, 2019

Long-Term Unemployment Elimination Act

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As the economy approaches full employment, one of the persistent challenges remains finding jobs for those Americans who want to work but have been unemployed for a very long time. 

In May 2019, 1.3 million Americans fell into this category, which means they have been unemployed for more than six months and that does not even include all the people who had been looking for a job and then dropped out of the labor market altogether. Long-term unemployment can lock workers out of the job market, as research shows that employers are less likely to hire applicants with long gaps in their work history.
- Long-Term Unemployment Elimination Act

New Bill Will Get the Labor Market Running on All Cylinders

Mark Paul and Dean Baker
The Hill
June 28, 2019

For years, economists have been saying that were at, or “awfully close” to, full employment. The most recent numbers put the headline unemployment rate at 3.6 percent - the lowest rate we’ve seen in nearly 50 years. This is welcome news.

Relatively low unemployment means there are far fewer people looking for work who can’t find it. But low unemployment doesn’t affect everyone equally. When the unemployment rate dips to low levels, the people who benefit the most are those who have been at the back of the queue - black workers, Hispanic workers, immigrants and other disadvantaged workers in the labor market.

If we go back just five years, when the overall unemployment rate was 6.3 percent, the unemployment rate for blacks was 11.4 percent. Today, it is 6.2 percent, a drop of 5.2 percentage points. While this is still far higher than we should accept, it does represent progress.

The benefits of low unemployment go beyond just allowing more people to get jobs. It also gives more bargaining power to those workers who have jobs. We have seen this impact, as wages have at least modestly outpaced prices for the last four years, allowing workers at the middle and the bottom to see gains in living standards; though its barely putting a dent in the decades of stagnant wages for most workers.

According to the predictions of Federal Reserve officials a few years ago, these levels of unemployment were simply unsustainable. Importantly, this highlights a long and ongoing battle within the Fed over just how low unemployment can go if we are to avoid spiraling inflation.

Historically, the Fed has chosen to prioritize stable prices over full employment, resulting in decades of persistently weak labor markets that force millions of workers to remain idle.

But in this recovery, these economists were beaten back. This was in part due to pressure from groups like the grassroots labor and community coalition Fed Up, and, in part, the result of then-Fed Chair Janet Yellen’s willingness to hold off on rate hikes until there was actual evidence of inflation, which remains below the Feds target.

With these data points in mind, it would be easy to think that the labor market is running on all cylinders. But it’s not. Many groups of workers are still struggling to find employment and decent wages.

Nearly one-in-four unemployed workers have been out of a job for at least 27 weeks. These 1.3 million long-term unemployed workers, plus the millions of other people who have dropped out of the workforce or are underemployed, highlight the failures of the labor market.

Thankfully, some in Washington have been paying attention. Last week, Sen. Chris Van Hollen (D-Md.) and Sen. Ron Wyden (D-Ore.) introduced the Long-Term Unemployment Elimination Act.

The bills aim is simple: Put an end to long-term unemployment. Importantly, the bill would provide much-needed funding to generate real job opportunities for the long-term unemployed through new mandatory federal funding to local workforce development boards and community-based organizations.

The jobs, which would last a year on average, will not only provide non-poverty wages to workers but will also provide the necessary wrap-around services to ensure success. This will help workers overcome some barriers to employment including transportation and childcare costs.

Targeted job creation, rather than tax cuts, which are the oft-proposed Republicans’ answer to such economic challenges, has a proven track record. First, instead of relying on the myth of trickle-down economics, programs such as these provide funding to employ all workers affected by long-term unemployment.

Importantly, the legislation also includes the millions who have been out of work for at least 27 weeks but aren’t counted in the official unemployment statistics.

Many will argue that now is not the time for such measures. After all, the economy is running hot. But they’re missing the big picture.

First, by putting in place the Long-Term Unemployment Act during a relatively strong labor market, the program will have a bit of time to get up and running. Second, by scaling up the program now, itll be ready to quickly ramp up when the next recession comes, which it inevitably will.

Democrats can decry Trump and the Republican party all day, but they need to take concrete steps to show workers that they can offer an economy that works for all.

As 2020 presidential candidates start offering their economic messages, we’ve seen many of them get behind the idea of a job guarantee. This program is no job guarantee, but it takes important steps toward ridding our economy of unnecessary unemployment that is costing not only economic output, but peoples lives.

Mark Paul is an assistant professor of economics at New College of Florida and a fellow at the Roosevelt Institute. Dean Baker is senior economist and co-founder of the Center for Economic and Policy Research.

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Long-Term Unemployment Elimination Act

By Senator Chris Van Hollen
June 2019

Long-Term Unemployment Elimination Act

There is no question that we have made important progress in rebuilding our economy since the Great Recession of 2008. But instead of helping forgotten men and women, President Trump and the Republican Congress have trained their sights on helping the biggest corporations and the very wealthy above all else. Senator Van Hollen believes there is a critical group being left behind: over one million Americans who are long-term unemployed. He is teaming up with Senator Wyden to introduce an innovative federal program that would generate real job opportunities for people who have been unemployed for six months or more, getting them back on their feet and into the workforce. 

The Problem: Too Many Men and Women Left Behind by the Economic Recovery

As the economy approaches full employment, one of the persistent challenges remains finding jobs for those Americans who want to work but have been unemployed for a very long time.  In May 2019, 1.3 million Americans fell into this category, which means they have been unemployed for more than six months and that does not even include all the people who had been looking for a job and then dropped out of the labor market altogether. Long-term unemployment can lock workers out of the job market, as research shows that employers are less likely to hire applicants with long gaps in their work history. 

This group of jobseekers cuts across all communities, ages, ethnicities, and occupations. In 2018, for example, 56 percent of long-term unemployed workers were younger than age 45, while the remaining 44 percent were 45 and older. Long-term unemployment is linked to lower wages for workers - even years after they do find a job and it reduces the economic potential of the entire U.S. economy.

Because of the normal churn in the economy, there will always be some unemployment. But the long-term unemployment rate should be near zero. This plan takes direct action to achieve that goal.

The Solution: Focused Funding to Create Jobs and Support Workers The Long-Term Unemployment Elimination Act recognizes the transformational power of work. It would provide targeted funding to local areas to generate work opportunities and get these Americans back into the workforce.

- The jobs would generally exist for one year. This would provide enough time to accomplish valuable work and build solid experience, and could be extended for an additional year to support apprenticeships and other on-the-job training. The jobs could be at a private business, a non-profit, or a government agency.

- With mandatory federal funding, the program can grow large unemployed and wants to participate. The plan is designed to address long-term unemployment under all economic conditions - the program will expand during periods of high unemployment.

The legislation provides supports to help people overcome the barriers keeping them out of the workforce such as transportation, childcare, job readiness training, substance abuse treatment, or assistance finding a permanent job - and training programs that build skills to sustain permanent employment.  Instead of the work requirements being pushed by Republicans which strip access to health care, food, and housing without creating a single job - this project would match the people who are looking for work with a job. 

The bill also provides competitive grants to local areas to support innovation and investment in areas hit hardest by high poverty and chronic joblessness, which would give additional flexibility and support in the places where it is needed most. These grants would support locally-driven development, worker-owned enterprises, and other strategies to ensure that area residents are part of the process and benefit from the results.

The Pay-For: Eliminating Tax Breaks for Shipping Jobs Overseas

The new Republican tax law creates incentives for corporations to locate production abroad and ship jobs overseas. By imposing a true minimum tax on foreign profits, we can keep jobs right here at home and fully fund this plan to tackle long-term unemployment.

Senator Van Hollen has joined with Senator Whitehouse to introduce the NO TAX BREAKS FOR OUTSOURCING ACT, and joined with Senators Klobuchar and Duckworth to introduce the REMOVING INCENTIVES FOR OUTSOURCING ACT. President Obama’s minimum tax proposal is a third option, and this policy would have raised roughly $300 billion over 10 years.

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Monday, June 10, 2019

Amazon

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Jeff Bezos’ Corporate Takeover of Our Lives
How Amazon’s relentless pursuit of profit is squeezing us all - and what we can do about it

By David Dayen
In These Times
June 10, 2019

Amazon is an online retailer. It also runs a marketplace for other online retailers. Its also a shipper for those sellers, and a lender to them, and a warehouse, an advertiser, a data manager and a search engine. It also runs BRICK AND MORTAR BOOKSTORES. And GROCERY STORES.

There are OVER 100 MILLION AMAZON PRIME SUBSCRIBERS in the United States - more than half of all U.S. households. Amazon makes 45 PERCENT of all e-commerce sales. Amazon is also a product manufacturer; its Alexa controls two-thirds of the digital assistant market, and the Kindle represents 84 percent of all e-readers. Amazon created its own holiday, Prime Day, and the surge in demand for Prime Day discounts, followed by a drop afterward, skewed the nations retail sales figures with a 1.8% bump in July 2017.

Oh, it’s also a major television and film studio. Its CEO owns a national newspaper. And it runs a streaming video game company called Twitch. And its cloud computing business, Amazon Web Services, runs an astonishing portion of the Internet and U.S. financial infrastructure. And it wants to be a logistics company. And a furniture seller. It’s angling to become one of the nation’s largest online fashion designers. It recently picked up an online pharmacy and partnered with JPMorgan Chase CEO Jamie Dimon and Warren Buffett to create a healthcare company. And at the same time, its competing with JPMorgan, pushing Amazon Pay as a digital-based alternative to credit cards and Amazon Lending as a source of capital for its small business marketplace partners.

To quote Liberty Media chair John Malone, himself a billionaire titan of industry, Amazon is a “Death Star” moving its super-laser “into striking range” of every industry on the planet. If you are engaging in any economic activity, Amazon wants in, and its position in the market can distort and shape you in vital ways.

Elizabeth Warren’s PROPOSAL to break up Amazon, along with the FTC’s NEW OVERSIGHT AND INVESTIGATION, has spurred a conversation on the Left about its overwhelming power. No entity has held the potential for this kind of dominance since the railroad tycoons of the first Gilded Age were brought to heel. Whether you share concerns about Amazon’s economic and political power, or you just like getting free shipping on cheap toilet paper, you should at least know the implications of living in Amazons world - so you can assess whether its the world you want, and how it could be different.

Booksellers were the first to find themselves at the tip of Amazon’s spear, at the company’s founding in 1994. Years of Amazon peddling books below cost SHUTTERED THOUSANDS OF BOOKSTORES. Today, Amazon sells 42 PERCENT of all books in America.

With such a large share of the market, Amazon determines what ideas reach readers. It ruthlessly squeezes publishers on wholesale costs; in 2014, it DELIBERATLY SLOWED DOWN deliveries of books published by Hachette during a pricing dispute. By stocking best-sellers over independents and backlist copies, and giving publishers less money to work with, Amazon homogenizes the market. Publishers can’t afford to take a chance on a book that Amazon won’t keep in its inventory. The core belief of bookselling is that we need to have the ideas out there so we can discuss them says Seattle independent bookseller Robert Sindelar. You don’t want one company deciding, only based on profitability, what choice we have.

These issues in just the book sector are a microcosm of Amazon’s effect on commerce.

The term RETAIL APOCALYPSE took hold in 2017 amid bankruptcies of established chains like The Limited, RadioShack, Payless ShoeSource and Toys R’Us. According to frequent Amazon critic Stacy Mitchell, more people lost jobs in general-merchandise stores than the total number of workers in the coal industry in 2017.

Amazon isn’t the only cause; private EQUITY LOOTING must share much of the BLAME, and a shift to e-commerce was always going to hurt brick-and-mortar stores. But Amazon transformed a diverse collection of website sales into one mammoth business with the logistical power to perform rapid delivery of millions of products and a strategy to underprice everyone. That transformation accelerated a decline going back to the Great Recession (and much earlier for booksellers). Analysts at Swiss bank UBS estimate that every percentage point e-commerce takes from brick-and-mortar translates into 8,000 store closures, and right now e-commerce only has a 16 percent market share.

Take Harry Copeland (or, as he calls himself, “Crazy Harry” ) of Harry’s Famous Flowers in Orlando, Fla., at one time a 40-employee retail/wholesale business. Revenue at his operation has shrunk by half since 2008, equal to millions of dollars in gross sales. “The internet killed us,” Harry says. “I was in a Kroger, this guy walks up and says, I want to apologize. It’s so easy to go on the internet.” I said, “I did your wedding, I did flowers for your babies, and you’re buying [flowers] on the internet?” Even Harry’s own employees receive Amazon packages at the shop every day. In January, tired of the fight, Harry sold his shop after 36 years in business.

“Amazon was particularly deadly to the original everything stores,” the department stores like Sears and J.C. Penney that anchor malls. When the anchor stores shut down, foot traffic slows and smaller shops struggle. Retailers are planning to close more than 4,000 stores in 2019; the 41,201 retail job losses in the first two months of this year were the highest since the Great Recession.

Dead malls trigger not only blight, but also property tax losses. The broader shift to online shopping also transfers economic activity from local businesses to corporate coffers, like Amazon’s headquarters in Seattle.

Some of these failed retail spaces have been scooped up, ironically, by Amazon’s suite of physical stores, such as Whole Foods. Amazon also skillfully pits cities against one another and wins tax breaks for its warehouse and data center facilities, starving local budgets even more.

Amazon, of course, argues it is the best friend small business ever had. Jeff Bezos 2019 annual letter indicated that 58% of all sales on the website are made by over 2 million independent third-party sellers, who are mostly small in size. In this rendering, Amazon is just a mall, opening its doors for the little guy to access billions of potential customers. “Third-party sellers are kicking our first-party butt,” Bezos exclaimed.

It was a line I repeated to several merchants, mostly to snickers. Take Crazy Harry. In late 2017, Amazon reached out with the opportunity for Harry’s Famous Flowers to sell through its website. Sales representatives promised instant success. “We went live in November,” he says. I made three transactions, [including] one on Valentine’s Day and one on Christmas. The closest delivery to his shop was 34 miles away. By the time Harry paid his $39.99 monthly subscription fee for selling on Amazon and a 15% cut of sales, his check came to $6.92. “The gas was $50,” he says.

It wasn;t hard to find the source of the trouble: “When Harry searched on Amazon under flowers in Orlando,” his shop didn’t come up. Without including his name in the search, there was no way for customers to find him. Before long, Harry closed his Amazon account.

Crazy Harry’s troubles could be a function of Amazon running a platform that’s too big to manage. Two million Americans, close to 1% of the U.S. population, sell goods on Amazon. “There’s so much at stake for these sellers,” says Chris McCabe, a former Amazon employee who now runs the consulting site eCommerceChris.com. They’ve left jobs [to sell on Amazon]. They are supporting themselves and their families.

THIRD PARTY RESELLERS have been a great deal for Amazon - unsurprisingly, since Amazon sets the terms. Sellers pay a flat subscription fee and a percentage of sales, and an extra fee for “Fulfillment by Amazon,” for which Amazon handles customer service, storage and shipping through its vast logistics network. Fee revenue grew to nearly $43 billion in 2018, equal to more than one out of every four dollars that third-party sellers earned.

In other words, Amazon is collecting rent on every sale on its website. This strategy increases selection and convenience for customers, but the sellers, who have nowhere else to go, can get squeezed in the process. Once on the website, sellers are at the mercy of Amazons algorithmic placement in search results. They must also navigate rivals’ dirty tricks (like fake one-star reviews that sink sellers in search results) and counterfeit products. And if you get past all that, you must fight the boss level: Amazon, which has 138 house brands. Armed with all the data on sellers businesses, Amazon can easily figure out what’s hot and what can be cheaply produced, and then out-compete its own sellers with lower prices and prioritized search results.

Any failure to follow Amazons always-changing rules of the road can get a seller suspended, and in that case, Amazon not only stops all future sales, but refuses to release funds from prior sales. And all sellers must sign mandatory arbitration agreements that prevent them from suing Amazon. Several consultants I interviewed talked of sellers crying on the phone, finding themselves trapped after upending their lives to sell on Amazon.

While retail workers lose jobs, Amazon picks up some of the unemployment slack, hiring personnel to assemble its packages, make its electronics, and deliver its goods, with a U.S. workforce of more than 200,000, and another 100,000 seasonal workers - though 2018 research from the Conference Board confirmed the jobs created by e-commerce companies like Amazon do not make up for the loss of millions of retail jobs.

Plus, the experience of being a cog in Amazons great machine is, shall we say, unhealthy. We know much about the HORRORS OR BEING AN AMAZON WAREHOUSE WORKER IN THE UNITED STATES. These workplaces are aggressively anti-union. Amazon sets quotas for how many orders are fulfilled, monitoring a worker’s every move. Poor performers may be fired, typically over email. The daily monotony and pressure to perform has pushed workers to suicidal despair. A Daily Beast investigation found 189 instances between October 2013 and October 2018 of 911 calls summoning assistance to deal with suicide attempts or other mental-health emergencies at Amazon warehouses. And even these grunt jobs are insecure; Amazon had to reassure people this year that it wouldn’t turn over all warehouse jobs to robots, even as it rolled out machines that box orders.

Amazon’s other jobs, while less scrutinized than the warehouse workers, can be just as brutal. Thousands of delivery drivers wear Amazon uniforms, use Amazon equipment and work out of Amazon facilities. But they are not technically Amazon employees; they work for outside contractors called delivery service partners. These workers do not qualify for the guaranteed $15 minimum wage Bezos announced to much fanfare last year.

Contracting work out lets Amazon dodge liability for poor labor practices, a trick used by many corporations. At one such contractor in the mid-Atlantic, TL Transportation, one former employee (who requested anonymity) described the work as running, running, running, rushing. “There was no break time.” According to pay stubs, TL built two hours of overtime into its base rate, which is illegal under U.S. labor law. Other workers reported they always worked longer than the time on their pay stubs. Driver Tyhee Hickman of Pennsylvania testified to having to urinate into bottles to maintain the schedule.

Amazon runs plenty of air freight these days as well, through an “Amazon Air” fleet of planes branded with the Amazon logo - but these are also CONTRACTED OUT. At Atlas Air, one of three cargo carriers with Amazon business, pilots have been working without a new union contract since 2011. Atlas pays pilots 30% to 60% below the industry standard, according to Captain Daniel Wells, an Atlas Air pilot and president of the Airline Professionals Association Teamsters Local 1224. Planes are understaffed. “We’ve been critically short of crews,” Wells says. “Everyone is scrambling to keep operations going.”

The go-go-go schedule leaves little time for mechanics; planes go out with stickers indicating deferred maintenance. One Atlas Air flight carrying Amazon packages crashed in Texas in February, killing three workers.

Maine’s largest shopping center, the Maine Mall in South Portland, has struggled to survive the loss of multiple anchor stores. Linens N Things went bankrupt in 2008 (only to reemerge the next year as an online-only retailer). (Photo by Doug Jones/Portland Press Herald via Getty Images)

Even while driving workers at a frenetic pace, Amazon doesn’t always deliver on its promise of convenience and efficiency. Many products no longer arrive in 48 hours under Prime’s guaranteed two-day shipping. Its so challenging to reach customer service that Amazon sells a book on its website about how to do that. Whole Foods shoppers who have groceries delivered get bizarre food substitutions without warning.

Even as two-day shipping is creaking, Amazon has announced a move to one-day shipping, which will strain its systems even further while forcing competitors to adjust. Amazon’s one-day shipping announcement alone caused retail stocks to plummet on April 26, before any changes were implemented.

This feedback effect reveals how Amazon is not merely riding the wave of online retails convenience; only a company with ambitions as vast as Amazo’s could influence Fortune 500 business models across America.

Some retailers have given in. Walmart quickly announced its own next-day shipping. Kohls sells Amazon Echo devices. Target has bought up competitors to compete with Amazon on a larger scale. Call it concentration creep; one giant business triggers the need for others to get big, too. Corporate America is at once terrified of Amazon and reshaping itself to imitate it.

Take Amazon’s ever more sophisticated ploys to modify consumer behavior. With “personalized pricing,” Amazon uses the data of what someone has paid in the past to test what that person is willing to pay. The price of an item featured “in the buy” box on Amazon’s website may change multiple times per day, and can be tailored to individual shoppers. Amazon has charged more for Kindles based on a buyer’s location, and has steered people to higher-priced products where it makes a greater profit, rather than cheaper versions from outside sellers.

“Now, even big-box stores have electronic price tags that retailers can surge price” when demand increases. Amazon’s Whole Foods stores have become a testing ground for advancing this technique. Prices shown on electronic tags are tested, combined with discounts for Prime members, and relentlessly tweaked.

The potential damage to society from personalized pricing is significant, notes Maurice Stucke, a professor at the University of Tennessee. “It’s not just price discrimination, but also behavioral discrimination,” he says. Getting people to buy things they might not have otherwise purchased, at the highest price they’re willing to pay.

Amazon has plenty of options for this behavioral nudging, from listing a fake higher price and crossing it out to make it look like the customer is getting a deal, to its work on a facial recognition system using phone or computer cameras to authenticate purchases. With this tool, Amazon could theoretically read faces and increase prices when someone shows excitement about a product. Amazon has already licensed facial recognition software to local police units for criminal investigations, to outcry from privacy groups.

Then there’s Alexa, Amazons digital assistant, a powerful tool for manipulation. Alexa was designed to “be like the Star Trek computer,” said Paul Cutsinger, Amazon’s head of voice design education, at a developer conference earlier this year. Users can ask Alexa to play music and podcasts, answer questions, run health and wellness programs, set appointments, make purchases, even raise the temperature in the shower.

Psychologist Robert Epstein, who has pioneered research into search engine manipulation, has done preliminary studies on Alexa. “It looks like you can very easily impact the thinking and decision-making and purchases of people who are undecided,” Epstein says. “That unfortunately gives a small number of companies tremendous power to influence people without them being aware.” For example, Alexa can suggest a wine to go with the pizza you just ordered. It can also encourage you to set up a recurring purchase, the price of which may then go up based on Amazon’s list price.

The influence only increases as Alexa takes in more data. We know that Alexa is constantly watching and listening to users, transcribing what it hears and even transmitting some of that data back to a team of human listeners at Amazon, who “refine the machine’s comprehension.” The surveillance doesnt only happen on Alexa, but in the smart home devices it integrates with, and on the website where Amazon tracks search and purchase activity. Amazon even has a Ring doorbell and in-home monitor, which sends information back to Amazon. There is no escape. “Devices all around us are watching everything we do, talking to each other, sharing data,” Epstein says. “We’re embedded in a surveillance network.”

Even as it’s influencing our behavior, Amazon is transforming our physical world. Jos Holgun-Veras, a logistics and urban freight expert at Rensselaer Polytechnic Institute, estimates that in 2009, there was one daily internet-derived delivery for every 25 people. By 2017, he calculates, this had tripled. “The number of deliveries to households is now larger than the number of deliveries to commercial establishments,” Holgu-Veras says. In skyscrapers in New York City where 5,000 people live, it’s 750 deliveries a day.

Think of the difference between one trip to the grocery store for the week, and five or ten trips from the warehouse to your house. Our streets are too narrow and our traffic too plentiful to handle that additional traffic without crippling congestion. Plus, every idling car, and every extra delivery truck on the road, spews more carbon into the atmosphere. Our cities are not designed for the level of freight that instant delivery demands.

More deliveries also means more people staying indoors. “One thing I think about is how much we overlook the community and democracy value of running errands,” says Stacy Mitchell of the Institute for Local Self-Reliance. “These exchanges - chatting with someone in line, bumping into a neighbor on the street, talking with the store owner-may not be all that significant personally. But this kind of interaction pays off for us collectively in ways we don’t think about or measure or account for in policy-making.”

In These Times asked Frank McAndrew of Knox College, who has researched social isolation, whether Amazons perfect efficiency could be alienating. He wasn’t ready to make a definitive statement but did see some red flags. I do think we’re sort of wired to interact with real people in face-to-face situations, McAndrew says. “When most of our interactions take place virtually, or with Alexa, its not going to be satisfying.”

For most of our history, Americans didn’t require a personal digital assistant to answer our every whim. Why are we now reordering our social and economic lives, so one man can accumulate more money than anyone in the history of the planet?

One answer is that Amazon has paid as much attention to capturing government as it has to captivating customers. Amazon’s lobbying spending is among the highest of any company in America. After winning a nationwide procurement contract, over 1,500 cities and states can buy office items through the Amazon Business portal; a federal procurement platform is on the way. Amazon Web Services has the inside track on a $10 billion CLOUD contract to manage sensitive data for the Pentagon, something it already does for the CIA. Thats part of the reason why Amazon moved its second headquarters (after an absurd, game show-style bidding war that gave the company access to valuable data on hundreds of cities planning decisions) to a suburb of Washington, D.C., the seat of national power.

Making the directors of the regulatory state dependent on your services is a genius move. What political figure would dare crack down on the behavior of a trusted partner like Amazon?

In fact, Amazon has relied on government largesse since day one. No sales taxes for online purchases gave it a pricing advantage over other sellers (while a 2018 Supreme Court ruling changed that, the damage had been done). No carbon taxes helped Amazon build energy-intensive businesses dependent on fossil fuels for transportation and server farms. A lack of antitrust enforcement created a path for Amazon to super-size into an e-commerce monopoly. Weak federal labor rules let Amazon stamp out collective bargaining and rely on independent contractors. Mandatory arbitration locked third-party sellers inside Amazons private appeals process. Favorable tax law allowed Amazon to apply annual losses in previous years to its past two tax returns, paying no federal taxes on billions in income.

Of course, these rules helped all corporate giants and made executives filthy rich, often at the expense of workers. But Amazon tests the laissez-faire system in unique ways. In a future where Amazon broadens its control over our lives such that citizens have nowhere else to shop, businesses have nowhere else to sell, workers have nowhere else to toil, and governments have no other way to function, then who actually holds the power in our society? Avoiding that dark future requires leaders with the political will to stop it.

Elizabeth Warren;s plan to break up Amazon would rein in what she sees as unfair competition by preventing Amazon from selling products while hosting a website platform for other sellers. Warren also suggests splitting off Whole Foods and the online retailer Zappos, which Amazon bought in 2017 and 2009, respectively.

Fostering competition is a good start, but regulation must also prevent Amazon from bullying suppliers and partners. Lawmakers must force Amazon to pay for the externalities associated with its carbon-intensive delivery network. The company must pay a living wage to its workers, including its so-called independent contractors. It must be accountable to the legal system rather than a corporate-friendly arbitration process. It must not profit from spying on its customers.

If Amazon has caused this much upheaval today, when online shopping is still only 16 percent of retail sales, the future is limitless and grim. We have time to reverse this transfer of power and make it our world instead of Amazon’s. It’s an opportunity we cannot afford to squander.

David Dayen is the executive editor of The American Prospect. He was a 2018-2019 Leonard C. Goodman Institute for Investigative Reporting Fellow.

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Posted by Elvis on 06/10/19 •
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Wednesday, May 29, 2019

Made In China

image: your job is next to go to china

No, Mr. President: China didn’t steal our jobs. Corporate America gave them away
Trump’s trade war points the finger in the wrong direction. China behaved normally; corporate CEOs betrayed us

By Cody Cain
Salon
May 19, 2019

China is not stealing American jobs.

President Trump loves to blame China for the job losses that have devastated American workers under globalization. But the truth is that Trump is blaming the wrong party. Trump’s reckless trade war against China is misguided and amounts to a colossal charade that will not solve the actual problem.

Yes, it is true that numerous American manufacturing jobs have been shipped overseas to China, thereby leaving American workers jobless and suffering. But China did not steal these jobs.

No. These jobs were given to China. It was all legal and legitimate. China merely accepted the gift.

What would anyone expect China to do? Accepting these jobs was a perfectly rational course of action.

China was an underdeveloped nation with a large population of poor people willing to work for a fraction of the hourly wages of American workers. And then corporations came along and presented China with an attractive offer: We would like to build manufacturing plants in China and hire droves of your unemployed people to work there. What was China supposed to do? Naturally, China said yes.

This is hardly stealing.

It is true that these new jobs in China were intended to displace American workers. But does that concern belong to China? Does China have the responsibility to care for the well-being of American workers? Is China supposed to prioritize American workers over its own workers?

Of course not.

China is supposed to look out for itself and for its own workers, not for American workers. Thus it was perfectly proper for China to allow the manufacturing plants to be built in China and employ Chinese workers. China did not steal these jobs.

So if China is not at fault, then who is to blame for the devastation caused to American workers?

The answer is plain to see, and it lies within our own shores. The fault belongs squarely with corporate America.

It was corporate America that made these decisions. Corporate America decided to close their American plants and open new plants in China. Corporate America decided to lay off multitudes of American workers and ruin entire American communities.

And who profited from the destruction to American workers? It was the wealthy executives and shareholders of American corporations. They earned millions of dollars for themselves by cutting the costs of their workforce.

This is part of the larger trend of economic inequality that is eroding the entire middle class in America. Wealth is being shifted away from the workers down below and transferred up into the hands of the wealthy executives and shareholders at the top.

Trump blaming China is nonsense. China is not at fault. To be sure, China is hardly an angel and indeed engages in improper trade practices. But even if China agreed to whatever bone-headed demands Trump is seeking, the problem still would not be solved. The truth is that America cannot possibly compete against China on labor costs. The standard of living is much lower in China and thus Chinese workers are willing to accept wages far below living wages in America. So corporate America will continue to transfer more and more jobs to China and elsewhere. If we do not address this fundamental economic reality, then we will never solve the problem.

Trump blaming China has an insidious aspect to it as well. Focusing all the ire upon China is a grand misdirection that conceals the true culprit, namely, the super-rich corporate executives and shareholders in America.

This is part of Trump’s standard playbook. Trump falsely proclaims to be fighting for blue-collar workers, when in truth, Trump acts entirely in favor of the rich at the top.

Surprisingly, this seems to work. Some of the hard-working Americans who are being crushed by Trumps idiotic trade war and who should be denouncing Trump, nonetheless praise him for standing up to China, believing that Trump is fighting for blue-collar jobs. It is painful to witness such good people falling victim to Trump’s despicable con job.

In order to actually save the middle class, we need to focus on the true cause of the problem. We must direct our great powers of reform where they belong upon the wealthy executives and shareholders of corporate America who caused this problem in the first place.

The nature of the problem is that corporate America has no incentive to protect American workers. In fact, corporate America has every incentive to harm American workers by shifting their jobs overseas.

So the financial incentives must be reconfigured. If corporate America is going to ship American jobs overseas, it must not be permitted to pocket all the profits themselves and leave their displaced workers with nothing. Instead, corporations that send jobs offshore must be required to sufficiently compensate their displaced American workers. Executives and shareholders must not be permitted to enrich themselves unless and until their workers are financially secure.

OUR SOCIETY MUST FAVOR PEOPLE OVER PROFITS, not profits over people.

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Posted by Elvis on 05/29/19 •
Section Dying America • Section Workplace
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Monday, May 06, 2019

We Want Foreign Workers

image foreqign h1-b worker

The OPTIONAL PRACTICAL TRAINING (OPT) program, in which the AMERICAN GOVERNMENT pays American employers to discriminate against American workers has grown rapidly in recent years, and during FY 2017 it used nearly $2 billion swiped from trust funds for the elderly to favor 240,000 alien college grads over an equal number of U.S.-resident grads.

It is hard to believe, but true; employers of FOREIGN STUDENTS who have a degree from a U.S. institution are given an 8.25 percent tax break if they hire an alien, rather than a U.S. college grad with the same skills, and paid at the same salary, as we described in some detail in a recent posting.
- Bifg Media Hides Truth On Immigration II

Do We Really Need So Many Foreign Tech Workers?

By Froma Harrop
Real Clear Politics
February 2019

Americans don’t usually think of technical professionals as “guest workers,” yet at any one time, there are more than a half-million foreigners holding tech jobs in the U.S. They are here thanks to the H-1B visa program. H-1B, so the official spiel goes, addresses an ALLEGED SHORTAGE of “highly skilled” Americans to fill jobs “requiring specialized knowledge.”

GROWING EVIDENCE, however, points to companies’ using the program to replace perfectly qualified American workers with cheaper ones from elsewhere. A new REPORT published by the ATLANTIC COUNCIL, DOCUMENTS the abuses. The authors are Ron Hira, a political scientist at Howard University, and Bharath Gopalaswamy, director of the Atlantic Council’s South Asia Center.

Among their criticisms:

--Virtually any white-collar job can be taken by an H-1B visa holder. About 70 percent of them are held not by what we consider tech workers but by teachers, accountants and salespeople, among others.

(Denver Public Schools employs teachers on H-1B visas. During a strike, the district actually threatened to report participating foreigners to immigration authorities. It later apologized.)

“By every objective measure,” Hira and Gopalaswamy write, “most H-1B workers have no more than ordinary skills, skills that are abundantly available in the U.S. labor market.”

U.S. colleges graduate 50 percent more students in engineering and in computer and information science than are hired in those fields every year, according to a study by the Economic Policy Institute.

--Employers don’t have to show they have a labor shortage to apply. They don’t even have to try recruiting an American to fill the job.

Cutting labor costs is clearly the paramount “need.” In Silicon Valley, computer systems analysts make on average just over $116,000 a year. But companies can hire H-1B workers at a lower skill level, paying them only about $77,000 a year to do the same work, the report says.

And it’s not unheard-of for companies to ask American workers to train the H-1B workers taking their jobs. “60 Minutes” featured Robert Harrison, a senior telecom engineer at the University of California, San Francisco Medical Center. Asked whether training his replacement felt like digging his own grave, Harrison responded:

“It feels worse than that. It feels like not only am I digging the grave but I’m getting ready to stab myself in the gut and fall into the grave.”

Why does this program continue without serious reform? Mainly because its big boosters include such marquee tech names as Bill Gates, Mark Zuckerberg, Michael Bloomberg and Eric Schmidt. Big Tech has showered think tanks with funding to brainwash Americans into believing that their country is starving for tech expertise.

Are there rare tech skills that justify companies’ looking abroad? There are, but that’s the purpose of the O-1 visa. About 10,000 are granted each year to individuals with “extraordinary ability or achievement.”

I asked Hira whether we need H-1B at all.

“I think there’s a place for the H-1B program,” he responded. “The O-1 is a cumbersome process that requires a lot of paperwork, both in preparation and review. But we need to raise the standards of the H-1B program so that the quality and skills of the workers are much higher.”

Also, we should substantially raise the wages paid to H-1B workers and make employers show that they tried to recruit Americans and offered them positions. Other guest-worker and green-card programs have that requirement.

Finally, put in force an effective means of enforcement. Right now, compliance is driven by whistleblowing. A random auditing system would far more efficiently find abuses.

Apparently, the argument that “tech jobs need filling” has, in many cases, oozed to “we want cheaper foreigners.” The H-1B program demands a major overhaul.

SOURCE

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H-1B Petition Denials Skyrocketing in First Quarter 2019

By Nick Kolakowski
Dice
April 22, 2019

The rate of denials for new H-1B petitions rose in the first quarter of fiscal year 2019, according to new data from the National Foundation for American Policy (NFAP).

Some 32 percent of petitions for initial employment were denied, based on NFAPs analysis of U.S. Citizenship and Immigration Services (USCIS) data. That’s a remarkable increase from 2018, when 24 percent were denied, and 2015, when only 6 percent were denied.

That accelerated rate also applies to petitions for continuing employment, some 18 percent of which were denied in the first quarter of fiscal year 2019. If the goal of the Trump administration is to make it much more difficult for well-educated foreign nationals to work in America in technical fields, then USCIS is accomplishing that goal,Ӕ the NFAP wrote in a statement accompanying the data (PDF). Whether the actions of USCIS are serving the best interests of the United States is a question that will remain open for debate.”

Moreover, these denials come despite no sweeping legal overhaul of the H-1B system. “The rise in the denial rate for continuing employment, where existing H-1B workers whose petitions have been approved before, show that adjudicators are applying a new standard to people whose petitions have already been approved before,” William Stock, a founding member of Klasko Immigration Law Partners, LLP, told NFAP.

The data from NFAP aligns with general trends reported directly by USCIS. For example, the agency’s recent data showed that approvals of completed H-1B applications hit with an RFE (Request for Evidence) declined noticeably year-over-year in the first quarter of 2019. Premium processing might have re-opened after a lengthy shutdown, in other words, but some companies are facing a heightened degree of additional scrutiny.

However, there’s a big change underway for the H-1B system, and it could radically affect the types of candidates who successfully land a visa. In the current system, applicants with advanced degrees enter a master’s cap pool of 20,000 visas; those who are rejected then enter the 65,000-visa “general pool,” which features applicants without advanced degrees. The revamped system will allow all applicants, including those with advanced degrees, to enter the “general pool,” and any who don’t land a visa during that first round can then end up in the master’s cap pool.

In theory, this gives applicants with advanced degrees two shots at landing a visa. But with USCIS clearly subjecting applications to far greater scrutiny, it’s an open question whether a revamped system will allow companies to secure all the visas they claim they need.

In the meantime, the cap for H-1B visas has been reached for fiscal year 2020. Even as USCIS tightens the system, thats clearly not dissuading companies from attempting to secure as many visas as possible. If that wasnҒt enough, these firms are providing H-1B candidates with all kinds of perks, including company-paid housing, funded relocation, travel expenses, and sponsorship for green cards.

Leading companies think about immigration strategically. For example - companies that offer foreign nationals benefits that allow them to remain in the U.S. longer are finding more success in retaining foreign talent, Richard Burke, CEO of Envoy Global, wrote in a recent statement. ԓWith heightened political scrutiny comes heightened anxiety among foreign nationals looking to work in the U.S. Companies that are able to provide their employees peace of mind by offering them a clear path to a permanent green card are getting ahead of the competition in retaining the best talent.

But that idea is enraging to critics of the H-1B system, who say that companies abuse the visas in order to secure cheaper labor from overseas. H-1B holders at consultancy firms (which aggressively petition for the visas) are often paid less than H-1B holders at tech firms such as Google and Apple. While some studies argue that H-1B use translates into a positive effect for company productivity, it’s certain the visas will remain controversial for some time to come, revamps or no.

SOURCE

Posted by Elvis on 05/06/19 •
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