There is no free market

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at:, or follow me on Twitter.

I think it is funny when people say stuff like “the free market will decide which company is best” or “the free market will determine what a worker’s salary should be”. But there is no free market. Plato said that humans are fundamentally political, and politics plays a large role in shaping every market:

This manager was forcing Americans to get in line for jobs behind “landed resources” from IBM India. In case you are wondering — yes, this is illegal. See 8 USC § 1324B.

So how can IBM so flagrantly violate the law?

The reason IBM can get away with this disgraceful behavior is that discrimination enforcement requires a complaint. An employee considering a complaint has to weigh the probability of the government prosecuting the case and winning adequate compensation against the risk of retaliation and damage to his or her career. Many companies make severance packages contingent upon employees signing away rights to file such a complaint.

At this point, I am sure the IBM public relations folks reading this posting to formulate their response are thinking to themselves “Rogue hiring manager. IBM does not have a policy of discrimination.” Read on.

The American IBM employee forwarded the e-mails to IBM HR and attached the following complaint:

You included these two positions – below – again into today’s email to “Available”. Per below, they are NOT looking at Americans. Pretty clear.

You would think that IBM HR, upon learning of unlawful discrimination, would disavow the actions of its hiring manager and take decisive corrective action.

Instead, IBM HR actually responded by explaining to the American employee why IBM violates the law:

There are often US Reg [U.S. Regular] seats that also have landed GR [Global Resource] seats open – sometimes the customer will take either as long as they are working onsite – – and the cost difference is too great for the business not to look for landed GRs or to use them if they are a skills match.

There you have it, straight from the IBM HR department. Foreign workers, global resources supplied by IBM India, are so cheap compared to Americans that it is worth violating the law.

IBM HR added this coda to its message to the American employee:

IBM India may not have visa-ready resources with the specific skills so many times US resources do fill the seats though

Doesn’t hurt to get your resume in cosideration if that turns out to be the case. (sic)

IBM’s HR statements demonstrate a number of points about the H-1B program:

Companies are willing to ignore available Americans even when they say they “urgently” need workers.

H-1B workers are cheaper than Americans — “and the cost difference is too great” for IBM not to look for foreign workers first. The H-1B statutes are designed to allow employers to legally pay H-1B workers less than Americans and IBM (and a lot of others) is taking full advantage.

The H-1B visa quotas are important — IBM would only hire Americans when “visa-ready resources” were not available. The quotas put in place a stopping point where employers can no longer ignore American applicants.

It is not just the Indian bodyshops who are H-1B abusers — Alcatel-Lucent is an H-1B abuser, telling IBM they prefer foreign workers. IBM is an abuser by giving preference to foreign workers.

Big companies try to hide their H-1B abuse through indirection — Alcatel-Lucent is getting its H-1B workers from IBM. IBM is getting them from IBM India. The chain goes even farther. I previously posted a blog describing recruiting agencies claiming to work for IBM India who were posting advertisements for jobs in America where only Indian H-1B holders would be considered.
Obviously, the government is not going to correct abuse at big-money companies like IBM. In the 22 years since creating the H-1B program Congress has done nothing to fix the well-known problems. The most likely corrective action will come through the legal system. This e-mail illustrates the kind of evidence that is waiting to be found in discovery at many large companies.