President Obama spent $831 billion of taxpayer money on a stimulus plan for the economy. He gave nearly $50 billion in aid to GM to keep it afloat. He lost $500 million on energy company Solyndra. All in the name of saving jobs.
Yet when it comes to his own signature initiative, the president doesn’t care about American workers. He’s outsourced ObamaCare.
After the disastrous rollout of HealthCare.gov, the administration hired Accenture as the new lead contractor. The deal is estimated to be worth $90 million and is now in the hands of the poster boy for global labor arbitrage and offshore tax havens.
Accenture has 80,000 Indian workers, 35,000 in the Philippines and only 40,000 in the United States. Over 40 percent of their worth comes from outsourcing. In all probability, the tech jobs awarded under this contract and paid for with US tax dollars are going abroad.
But even if the work is done locally, chances are the employees are foreigners brought in for lower wages using the controversial H-1B visa program — where companies are allowed to hire guest workers from abroad.
In 2012, Accenture ranked fifth among American companies in using H-1B visas. That year alone, Accenture brought into the United States 4,037 foreign workers on H-1B visas.
Tech companies argue they need H-1B visas because there aren’t enough qualified American engineers, yet the facts do not bear this out. In truth there is no tech worker shortage or lack of skills and talent in America. The real motivation of offshore outsourcing companies like Accenture is cost. They use H-1B and other guest-worker visas to pay less wages than they would have to pay an equivalent American worker.
Accenture saves money by underpaying foreign guest workers they import — typically 25 percent less for their imported employees than the prevailing wage for a similar US citizen worker.
Ron Hira, an associate professor of public policy at the Rochester Institute of Technology, analyzed Accenture’s use of the H-1B program. In 2005, the company had 12,684 H-1B foreign guest workers earning an average of $53,042 per year. That’s far less than the median $80,000 salary the same job responsibilities and skills required would fetch for an American worker. Accenture is so bad, they paid a foreign guest worker $25,113 per year — for the title of “chief programmer.” Typically chief programmers make six figures in the United States.
It appears undercutting wages with H-1B visas is part of Accenture’s business model. Hira found that, in 2012, the median salary paid for Accenture’s new H-1B workers was $64,700, while Amazon paid their equivalent H-1B workers a median salary of $95,000. Google, who also uses comparable technical skills sets to Accenture and Amazon, paid a median salary of $110,000 to their new H-1B visa hires.
Accenture also avoids American taxes. The company is headquartered in Chicago, but it’s incorporated in noted tax haven Ireland.
It’s unclear how much money Accenture has avoided paying to the US. But the company caused a scandal in the UK last year when it was revealed it paid only 3.5% in corporate income taxes, when the going rate is 25%.
If you’ve never heard of Accenture, the largest consulting company in the world, that’s by design. Accenture used to be called Arthur Anderson, until it was found to be complicit in the Enron scandal.
But hey, new name, new advertising campaign — who remembers?
And chances are Accenture has kept its nose clean since . . . Except no.
In 2011, Accenture agreed to pay the government nearly $64 million after being accused by the Justice Department of making false claims for payment with agencies for information-technology services. That’s right, they falsely billed the government for IT work. And now they’re running the government’s health-care website.
Accenture also allegedly “falsely inflated prices and rigged bids in connection with federal information technology contracts.” This year, the USPS inspector general also called for suspension of Accenture postal-service contracts due to an increased risk of fraud. Oh, well, sure they can be trusted this time.
So how did Accenture land such a plum contract? The $5.5 million they spent in lobbying in 2012, in addition to the $1.2 million in campaign donations, likely has something to do with it.
America needs jobs. The labor participation rate in the US has dropped to 62.8%, the lowest level since 1978. That’s a record 91 million adult Americans, many who have simply dropped out of the labor force due to a lack of work.
It has been proved repeatedly there is no shortage of Americans with technical skills and talent. In a recent study, Hal Salzman, Daniel Kuehn and B. Lindsay Lowell found there were 50% more college graduates with technical majors than were hired in related technical positions. Every year only one in two science and technology college graduates obtains employment in their major.
Employment in the fields of science and technology are at 2001 levels, and these figures count foreign guest-worker visa holders!
The president says the biggest problem with the economy is that we’re not spending enough money. Yet Obama doesn’t care that the money he does spend is going to Mumbai, Shanghai and Dublin, along with American jobs. It’s no surprise America’s middle class is becoming extinct.
Robert Oak is the nom de plume of the editor of the website The Economic Populist.
January 18, 2014
photo credit: Steve Rhodes via photopin cc