Wednesday, November 12, 2003

Diverging into politics

I had an interesting, if brief, discussion with one of my friends after last night's BNUG meeting. He's very much against the H1-B visa program and feels that it's a significant cause of the workforce contraction that's happened in the IT profession over the past few years.

I disagree.

Why, you may ask? Here's why. Under the H1-B program, workers from foreign countries come here to work. They have to be paid a competitive wage for practical reasons (they need to live here and deal with the US cost of living while they're here), and some of them wind up becoming permanent residents or even citizens eventually. America was built on immigration, and just because some abuses have certainly occurred is no reason to end a program that has been a channel for people to come to the greatest nation on Earth.

There is, however, a problem with the workforce. It's the offshoring movement. Companies are losing sight of the long-term problems that can emerge when you take your intellectual capital and ship it overseas in order to meet better quarterly numbers today.

This has already decimated American manufacturing, and now it's spread to the IT sector as well. Tomorrow it'll be the accountants and clerical workers who get farmed out. What jobs will be left here? There's only so many jobs open at Starbucks, McDonald's, or your local Gap to be had. People have to earn enough money to patronize those businesses, and to boost short-term shareholder value companies are putting their customers out of work. It only goes so far, folks.

American business have three constituencies they need to satisfy: customers, employees, and shareholders. To focus on one of them to the exclusion of the other two is a recipe for long-term disaster - Wall Street may be happy when you show numbers worthy of a "growth company", but how do you sustain that bump in the long term? What do you cut when there's nothing left to cut?

The focus of business should be on maximizing their potential sales, keeping the cost of sales at a reasonable level, building quality products, and having a happy, motivated workforce to help you do it as well as possible. If you make a good product and sell it at a fair price, people buy it. If your employees are happy and well-compensated, they will be motivated to build the best possible products. And if the customers are buying and you're making a profit, then to hell with Wall Street if they're not happy. You and I are the shareholders - and I don't know about you but I just want to be vested in solid, well-run businesses that make things people buy. I wasn't spoiled when mutual funds were returning 50% per year in the dot-com boom, and I wasn't devastated when the crash came. I expect solid, long-term growth and I could give a fig about this quarter. Show me the long view.

So if you want to keep this country what it is, don't cut off the foreign workers to spite yourself. Keep the jobs here, regardless of who does them, and build your companies the old-fashioned way.

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