Globalization or Exploitation of "Cyber Coolies" in India's IT Sweatshops?

[Riaz Haq]

India's IT sector business is essentially driven by low-cost call centers, first-line tech support, simple repetitive code writing, and execution of pre-defined test suites. A typical Indian IT worker is increasingly being called a "cyber coolie" or sometimes a "code coolie", the former term having been coined by an astute Indian columnist Praful Bidwai back in 2003.

India has become the world’s top provider of business-process-outsourcing (BPO) call centers, with revenues nearing $50 billion a year by selling cheap back-office services. The call center revenue constitutes the bulk of India's IT exports.

Harish Trivedi of Delhi University has characterized India's call centers as "brutally exploitative" and its employees as "cyber coolies of our global age, working not on sugar plantations but on flickering screens, and lashed into submission through vigilant and punitive monitoring, each slip in accent or lapse in pretence meaning a cut in wages."

An Indian blogger Siddarth Singh says that "one cannot dispute the fact that our IT industry is at best a glorified labor provider, and our feted “IT Giants” have failed to provide even a single proprietary product which could create waves in the global IT industry (perhaps except Finacle, a banking and finance solution by Infosys, and which is used by a number of MNC banks around the globe).

Siddarth asks the question, "So, what does Indian industry actually excel at?" Then he offers the following answer: "Well, we are the leaders in the so called IT Enabled Services, or ITES. These are basically services such as BPOs, call centers, KPOs etc, which extensively use IT to provide backend and customer services to primarily overseas customers. That our ITES industry is hugely dependent on foreign clients is also not a secret anymore, with hardly any Indian company enlisting the services of such companies".

A recent letter from a Bangalore based Indian IT worker addressed to the editors "The Hindu" newspaper read as follows:

This is how people in the West have started referring to people in developing nations. In the old days, of course, we Indians were referred to as "coolies" because we provided cheap labour. Nowadays, we are being called "cyber coolies".

Why? Because most software companies find it cheaper to get their job done in countries like India and other developing nations. There are many people in the U. S. and Britain who raise a hue and cry when jobs get exported to countries like India — especially jobs related to call centres and the software industry.

The fact that they refer to us as coolies shows that they haven't lost their imperialist outlook....

People and the media are often misled by "R&D" in the name of some of the western companies' locations in Bangalore.

In reality, Bangalore appears to be the code coolie capital of the world...it's not about tech, it's about cheap labor performing low-level tasks at rock-bottom wages. It's just cost arbitrage in the service sector.

I have no doubt there are some smart techies in India doing leading edge high-technology work, but these are exceptions. The overwhelming majority of the so-called IT work in India is call centers or low-level routine software tech support, maintenance, testing, etc. which is widely described as code coolie work. It's mostly about cost arbitrage, not advanced tech.



The call center business in India is unregulated by government, exposing workers to working in small spaces for long hours, close monitoring, and harsh working conditions. This is of considerable concern to some of the call center workers in light of the Bhopal tragedy and its aftermath which are symptomatic of how little Indian democracy cares for its people...be they industrial workers or cyber coolies in bondage who are exploited, held back and their lives totally controlled by foreigners under the "high-tech" and "IT" labels.

Even the identities of call center workers are changed in the same way as were those of the African slaves in the West. They are forced to take on western names and put on fake accents to please their customers in the West for a few bucks. The sad part is that, after over 60 years of independence from the British, some of the Indians still crave western approval and boast about the polls showing high approval ratings of India in the US. It shows that Indians' mental slavery after "globalization" is much more powerful than the physical slavery they endured for over a thousand years.

There are reports that some of the cyber coolies of India are beginning to revolt, according to the Times of London. They are creating “e-unions” and are planning to target British and American clients in a campaign to improve their working conditions.

Some of them are now protesting over low pay and aggressive management that will not negotiate with traditional trade unions, according to the Times story.

Instead of appealing to the deaf ears of Indian government or unresponsive managements of Indian-owned BPO firms, their strategy is to approach their British and American clients for support. Those who refuse may face a sabotage campaign by the same workers who have helped cut their costs.

Here is a pre-view of the upcoming NBC serial "Outsourced" about call centers in India selling to Americans:


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[Riaz Haq]

Are robots competing with manufacturing workers at home and abroad? Here's CBS 60 Minutes on it:

-------

Andrew McAfee: Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back higher than it's ever been. What's not back is the jobs.

Steve Kroft: And you think technology and increased automation is a factor in that?

Erik Brynjolfsson: Absolutely.

The percentage of Americans with jobs is at a 20-year low. Just a few years ago if you traveled by air you would have interacted with a human ticket agent. Today, those jobs are being replaced by robotic kiosks. Bank tellers have given way to ATMs, sales clerks are surrendering to e-commerce and switchboard operators and secretaries to voice recognition technology.

Erik Brynjolfsson: There are lots of examples of routine, middle-skilled jobs that involve relatively structured tasks and those are the jobs that are being eliminated the fastest. Those kinds of jobs are easier for our friends in the artificial intelligence community to design robots to handle them. They could be software robots, they could be physical robots.

Steve Kroft: What is there out there that people would be surprised to learn about? In the robotics area, let's say.

Andrew McAfee: There are heavily automated warehouses where there are either very few or no people around. That absolutely took me by surprise.

It's on display at this huge distribution center in Devens, Mass., where roughly 100 employees work alongside 69 robots that do all the heavy lifting and navigate a warehouse maze the size of two football fields -- moving 10,000 pieces of merchandise a day from storage shelf to shipping point faster and more efficiently than human workers ever could.
..
---------
Erik Brynjolfsson: IBM's deep QA system that plays "Jeopardy," we had a contest here that played against our best MIT students, the best Harvard students we could put it up against. And not surprisingly, Watson won. And it's being used in real practical applications now on Wall Street and in call centers. Siri -- millions of people are using that every day.

Andrew McAfee: The fact that computers can now understand and respond to human speech, the fact that they can actually generate prose of decent quality, they can drive cars, they can win at Jeopardy. We're seeing technology demonstrate skills that it's never, ever done before.
------------
Rodney Brooks: If you're using robots to compete with a simple task that a low-paid worker does in a foreign country you can bring it back here and do that task here.

Steve Kroft: Baxter costs 22 grand?

Rodney Brooks: Yep.

Steve Kroft: How long does he last?

Rodney Brooks: It lasts three years.

Steve Kroft: Three years?

Rodney Brooks: So you can think that as 6,500 hours.

Steve Kroft: I think it works out to about $3.40 an hour?

Rodney Brooks: About that yeah.

Steve Kroft: $3.40, that's probably the wages of the Chinese worker, right?

Rodney Brooks: It's just about right there now....

http://www.cbsnews.com/8301-18560_162-57563618/are-robots-hurting-j...

[Riaz Haq]

Here's a Guardian story on US penalizing Infosys for violating visa restrictions:

Infosys Ltd said on Wednesday it has reached a $34m settlement with US authorities in a case involving the widespread practice by Indian firms of flying workers to client sites in the United States on temporary visas.

The fine, which the US Department of Justice said is the largest in a case of its kind, comes as US lawmakers consider legislation that would make it more difficult and costly for Indian IT firms to send workers to the United States on temporary, restricted visas.

"Infosys denies and disputes any claims of systemic visa fraud, misuse of visas for competitive advantage or immigration abuse. Those claims are untrue and are assertions that remain unproven," Infosys said in a statement.

"There were no criminal charges or court rulings against the company. Furthermore, there are no limitations on the company's eligibility for federal contracts or access to US visa programs as a result of the settlement," it said.

Infosys, India's second-largest IT services exporter, employs roughly 15,000 people in the United States. As of March 31, about 10,800 of those were on H-1B visas, which allow an employee to stay and work in the United States up to six years, and 1,600 were on temporary L-1 visas, a company filing said.

The US investigation focused on the use of B-1 business visas and I-9 forms, Infosys has said. I-9 forms verify the identity of employees and their authorisation to work in the United States. A person on a B-1 visa in the United States can participate in meetings but is not allowed to work.

"It is likely to add more fuel to the ongoing debate around visa reforms," Chirajeet Sengupta, practice director in Mumbai at Everest Group, which advises clients on technology vendors, said on Tuesday after reports that a settlement was imminent.

"These reforms, if executed, have the potential to impact Indian service providers' landed resource model that is largely driven by access to H-1B visas in large numbers," he said.

In its statement, Infosys said only 0.02% of the days that Infosys staff worked on US projects last year were performed by people on B-1 visas.

"The Company's use of B-1 visas was for legitimate business purposes and not in any way intended to circumvent the requirements of the H-1B program," the Bangalore-based company said.

Infosys has secured roughly one B-1 visa for every 10 H-1B visas, according to a person with direct knowledge of the matter who declined to be identified.

US authorities have been looking into Infosys' use of visas since 2011. Earlier this month, Infosys set aside a reserve of $35m, including legal fees, as it worked towards a resolution of the US investigation.

The case is "an important event in the annals of Indian IT industry," Sundararaman Viswanathan, a consultant in Bangalore with Zinnov, which advises US corporations on sending outsourcing work to India, said ahead of the settlement.

"This is a common issue amongst all the Indian service providers – just that Infosys had to deal with it," he said.

"Though the Indian service providers do not intend to flout the visa regulations, there was definitely a lack of regard for certain norms and procedures. This will be fixed. There will be an increase in onsite hiring," he said.

http://www.theguardian.com/world/2013/oct/30/infosys-34m-settlement...

[Riaz Haq]

There is an increasing evidence of India’s growing stature and presence in the high-end value chain, where cost advantages may not be the only drivers to future growth,” Mr. Kumar added. India, once dubbed the back office of the world because of its abundance of cheap labor and tech proficiency, has suffered in recent years as call centers have been relocated back to the company’s headquarters and cloud computing has reduced firms’ need for offshore tech support.

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Average annual salaries in India for those working at this level are $41,213 compared with $42,689 in China and $132,877 in the U.S. which was the fourth best-paying country for those in the IT field. The Philippines, Indonesia and Malaysia rank lower than India for pay and the lowest paying of the 9,413 companies surveyed were in Thailand, Vietnam and Bulgaria. The survey was conducted by asking human resources managers about salary scales at each company.

The figures don’t take into account purchasing power parity – the principle that the same number of dollars can buy different amounts in different countries – but the findings could still mean tech companies are tempted to move more jobs to India.

“Lower-level roles are being moved to regions where talent is cheaper; the jobs that remain in Western Europe and the United States may be fewer in number but are more demanding and complex,” Rajesh Kumar, the chief executive of MyHiringClub.com said in a statement.

http://blogs.wsj.com/indiarealtime/2015/09/21/what-it-professionals...

[Riaz Haq]

2 #Indian owned #SiliconValley body shops fined for underpaying H1B visa workers from #India http://www.theindianpanorama.news/potpourri/business/2-silicon-vall... … via @theindpanorama

Scopus Consulting Group and Orian Engineers, two companies based in Silicon Valley and owned by an Indian-American Kishore Kumar have been ordered to pay fines of $103,000 to the federal government. Along with this, the company is required to pay $84,000 in back wages to its employees who are carrying H-1B visas.

The two companies bring workers from India and other countries on H1B visas to employ them as software engineers for Silicon Valley firms such as eBay, Apple and Cisco Systems.

During investigations, US Department of Labor Wage and Hour investigators found that the two companies violated the H1B provisions of the Immigration and Nationality Act by misrepresenting the prevailing wage level on the Labor Condition Applications required by the act, an official release said yesterday.Federal Administrative Law Judge Stephen R Henley ordered the two businesses owned by Kishore Kumar to pay 21 workers $84,000 in back wages and $103,000 in fines to the federal government.

“Some of the country’s most cutting-edge, successful organisations benefit from underpaid H-1B workers,” director for the Wage and Hour Division in San Francisco, Susana Blanco said.

“H1B workers must be paid local prevailing wages. We will not allow companies to undercut local wages and hurt US workers and businesses who pay their workers fairly,” Blanco said.

[Riaz Haq]

#India Body Shops Abusing #America's H1B Visa System. #US #SiliconValley high-techs hire few #Tata #Infosys #Wipro http://nyti.ms/1Y1VpdL 

H-1B visas are designed to bring foreign professionals with college degrees and specialized skills to fill jobs when qualified Americans cannot be found. But in recent years, global
outsourcing companies have dominated the program, winning tens of thousands of visas
and squeezing out many American companies, including smaller start-ups. RELATED ARTICLE

13 outsourcing companies took nearly one-third of all H-1B visas in 2014.

The top 20 companies

granted visas:

7 outsourcing firms

based in India

2 outsourcing firms

based in other countries

4 outsourcing firms

based in the U.S.

7 other firms

based in the U.S.

16,573 visas

2,811

7,132

5,619

Amazon

877

IBM

1,462

Accenture

2,275

Tata

Consultancy

Services (TCS)

5,650 visas

Cognizant Tech

Solutions

4,293

Infosys

3,454

Capgemini

Financial

Services

536

Microsoft

850

Google

728

Intel

700

iGate

Tech

886

Syntel

Consulting

1,080

Wipro

3,048

Tech

Mahindra

Americas

1,781

Apple

443

Deloitte &

Touche

559

Computer

Sciences

873

Mindtree

487

Larsen &

Toubro

Infotech

1,298

HCL

America

855

85,000 total H-1B visas

Congress set a limit of 85,000 visas annually, and more than 10,000 companies applied in 2014. But just 20 companies received more than 32,000 visas, according to Ronil Hira, a professor at Howard University who studies visa programs and analyzed federal H-1B data. The top 20 included several large outsourcing firms that provided temporary workers for businesses like Disney and Toys “R” Us.United States Citizenship and Immigration Services approves the visas on a first-come-first-served basis, beginning each year on April 1. Federal officials allow only one application for each foreign worker, but companies can submit an unlimited number of applications for their employees, so global outsourcing giants can, and do, submit many requests.

The outsourcing companies dominate the visa program by flooding the system with applications.

H-1B visas are granted by a computer-run lottery if the number of applications exceeds the annual quota in the first week, which has happened in recent years.To prepare an H-1B visa application, employers must first submit a public document, known as a labor condition application, to the Department of Labor. Companies can apply for more than one employee based on one labor condition application, and many outsourcing firms use one application to apply for 10 or more workers. The more labor condition applications a company gets approved, the more H-1B applications it can submit.Because H-1B visa applications are not public record, the labor condition applications are an indicator of how many applications a company intends to file.

Potential workers listed

on labor condition

applications

200,000

TCS

Cognizant

Infosys

150,000

Syntel

100,000

Wipro

50,000

iGate

Accenture

Deloitte

’05

’10

’14

’05

’10

’14

’05

’10

’14

’05

’10

’14

Outsourcing firms

based in India

Outsourcing firms

based in other countries

Outsourcing firms

based in the U.S.

Other firms

based in the U.S.

With more applications, the number of visas given to outsourcing companies has risen sharply.

Since 2011, as the American economy returned to growth, there has been a spike in the number of H-1B visas granted to outsourcing companies. Some companies are receiving at least four times as many visas as they did just a few years ago.

H-1B visas approved

20,000

TCS

15,000

Infosys

10,000

IBM

Cognizant

Microsoft

5,000

Accenture

Deloitte

’05

’10

’14

’05

’10

’14

’05

’10

’14

’05

’10

’14

Outsourcing firms

based in India

Outsourcing firms

based in other countries

Outsourcing firms

based in the U.S.

Other firms

based in the U.S.

Many H-1B workers earn salaries below market rates.

Under federal rules, employers like TCS, Infosys and Wipro that have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. But the companies are exempt from that requirement if the H-1B workers are paid at least $60,000 a year. H-1B workers at outsourcing firms often receive wages at or slightly above $60,000, below what skilled American technology professionals tend to earn, so those firms can offer services to American companies at a lower cost, undercutting American workers.

Wage distribution for new H-1B workers in 2013

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Bottom 25%

Top 25%

Outsourcing firms

based in India

TCS

Infosys

Wipro

Tech Mahindra

Larsen & Toubro

HCL America

Mindtree

Accenture

In other countries

Capgemini

In the U.S.

Cognizant

Syntel

iGate

Computer Sciences

Other firms

based in the U.S.

IBM

Amazon

Microsoft

Google

Intel Corp.

Deloitte

Apple

The vast majority of H-1B workers are from India.

The top outsourcing firms primarily bring temporary workers from India. American companies like Microsoft, Google and Apple have drawn from a wider range of countries, including China and Canada, for their H-1B workers. But in 2014, 70 percent of the H-1B visas went to workers from India, according to the Department of Homeland Security.

[Riaz Haq]

Big #India Body Shops Game #America's H-1B Visa Program To Hurt #US Employees and Move #American Jobs Overseas http://nyti.ms/1MU1K9c

Théo Négri, a young software engineer from France, had come up with so many novel ideas at his job at an Internet start-up in San Francisco that the American entrepreneur who hired him wanted to keep him on.

So he helped Mr. Négri apply for a three-year work visa for foreign professionals with college degrees and specialized skills, mainly in technology and science. With his master’s degree from a French university and advanced computer abilities, Mr. Négri seemed to fill the bill.

But his application for the H-1B visa was denied, and he had to leave the United States. Back in France, Mr. Négri used his data skills to figure out why.

Continue reading the main story
RELATED COVERAGE

A Toys Toys ‘R’ Us Brings Temporary Foreign Workers to U.S. to Move Jobs OverseasSEPT. 29, 2015
Sadhak Sengupta, from India, researches immunological brain cancer treatments in Boston.Miscalculation on Visas Disrupts Lives of Highly Skilled ImmigrantsOCT. 1, 2015
The Team Disney building in Lake Buena Vista, Fla., which houses most of the company’s technology operations.Pink Slips at Disney. But First, Training Foreign Replacements.JUNE 3, 2015
The answer was simple: Many of the visas are given out through a lottery, and a small number of giant global outsourcing companies had flooded the system with applications, significantly increasing their chances of success. While he had one application in last year’s lottery and lost, one of the outsourcing companies applied for at least 14,000. The companies were squeezing out American employers like his boss.

“I had this great American dream that got broken,” Mr. Négri said, speaking by telephone from Lyon, France.

Congress set up the H-1B program to help American companies hire foreigners with exceptional skills, to fill open jobs and to help their businesses grow.

But the program has been failing many American employers who cannot get visas for foreigners with the special skills they need.

Instead, the outsourcing firms are increasingly dominating the program, federal records show. In recent years, they have obtained many thousands of the visas — which are limited to 85,000 a year — by learning to game the H-1B system without breaking the rules, researchers and lawyers said.

In some years, an American employer could snag one of these coveted visas almost anytime. But recently, with the economy picking up, the outsourcing companies have sent in tens of thousands of visa requests right after the application window opens on April 1. Employers who apply after a week are out of luck.

“The H-1B program is critical as a way for employers to fill skill gaps and for really talented people to come to the United States,” said Ronil Hira, a professor at Howard University who studies visa programs. “But the outsourcing companies are squeezing out legitimate users of the program,” he said. “The H-1Bs are actually pushing jobs offshore.”

Those firms have used the visas to bring their employees, mostly from India, for large contracts to take over work at American businesses. And as the share of H-1B visas obtained by outsourcing firms has grown, more Americans say they are being put out of work, or are seeing their jobs moved overseas.

Of the 20 companies that received the most H-1B visas in 2014, 13 were global outsourcing operations, according to an analysis of federal records by Professor Hira. The top 20 companies took about 40 percent of the visas available — about 32,000 — while more than 10,000 other employers received far fewer visas each. And about half of the applications in 2014 were rejected entirely because the quota had been met.

---

The top companies receiving H-1B visas in recent years, Professor Hira found, include Tata Consultancy Services, known as TCS, Infosys and Wipro, all outsourcing giants based in India; Cognizant, with headquarters in New Jersey; and Accenture, a global operation incorporated in Ireland.

[Riaz Haq]

How the Indian experience blunts the most brilliant of expat CEOs 

Read more at:
http://economictimes.indiatimes.com/articleshow/60440441.cms?utm_so...

Let’s call him Abhijit Sen. Based out of the West Coast, the 48-year-old engineer has lived in the US for 25 years. He has worked with the world’s leading consulting firms and risen the ladder. Deeply networked with C-suite executives in the US, crisscrossing the country with them often in their private jets, he counts many Fortune 500 companies among his clients. 

Over five years back, Sen got headhunted to lead the US business of an India-based IT services firm, founded by a set of .. 

The unprofessionalism showed up in many places. When the founders came visiting the US, the expectation was that Sen would take them to meet client CEOs. This wasn’t easy. Those CEOs would rarely have the time and the founders would end up meeting lower-rung executives — which was not too soothing to their egos. Every time business deals would get into a tough zone, the founders’ first reaction would be to lower rates. 

For an industry built on cost-arbitrage, the play on rates came instinctively. “But the clients weren’t looking for rate cuts. Often my advice to rejig their strategies would work. But the bosses would feel slighted,” he says. 

His India trips were more difficult. Conversations were expected to be monologues. His peers raced to agree with and kowtow to the founders. “I thought being a yes man was so totally demeaning. If I did become one, what value would I have been bringing?” Soon, .. 

Read more at:
http://economictimes.indiatimes.com/articleshow/60440441.cms?utm_so...

[Riaz Haq]

#Hindu nationalists turn their sights on #India’s corporate titans. #Tech giant #Infosys accused of being “anti-National” . Accusations of companies are undermining India are unlikely to help attract much-needed #investment. #Modi #BJP | Financial Times

https://www.ft.com/content/d5530ac7-52d6-42b6-a2d4-7b28e8e21059


Infosys, the IT services company, has long been venerated as a symbol of a rising India.

The pioneering tech outsourcer was the first Indian company to list on the Nasdaq and became emblematic of the entrepreneurial energies and tech prowess of an aspirational nation seeking global recognition. The original founders, now billionaires, are investing in India’s next generation of dynamic tech companies and mentoring young entrepreneurs aiming to follow their trailblazing path

Given the company’s stature, many took note this month when it was accused of being “anti-national” and deliberately undermining India by Panchajanya, the Hindi-language magazine of the Rashtriya Swayamsevak Sangh, the parent organisation of Prime Minister Narendra Modi’s ruling Bharatiya Janata party.

The four-page tirade was ostensibly triggered by Infosys’ upgrade of India’s income tax portal, a $573m overhaul that was supposed to make it easier for Indians to file their income tax returns. Instead it has been riddled with glitches, which Infosys has struggled to fix since its June launch.

Taxpayers, and the government, are rightly frustrated. Nirmala Sitharaman, finance minister, has twice summoned Infosys chief executive Salil Parekh to urge a rapid remediation. The tax department has had to extend this year’s deadline for filing tax returns from the usual July 31 to December 31.

But Panchajanya did not merely attack Infosys for doing a shoddy job. Instead, the magazine — seen as a mouthpiece for the Hindu nationalist movement — accused the tech firm of deliberate conspiracy to undermine the Modi government, and India itself.

“There are allegations that the Infosys management is trying to deliberately trying to destabilise the economy. Could it be that anti-India forces are trying to harm India’s economic interests through Infosys,” the article posited. “Given the history and circumstances of the company, there seems to be an element of truth in the allegations.”

As evidence of the company’s supposedly shady conduct, the magazine then made a not so oblique reference to several independent news and fact checking websites funded by the Independent and Public-Spirited Media Foundation, a Bangalore-based philanthropic fund set up in 2015 to support public interest journalism. Among donors are several prominent tech titans, including the family of Infosys founder Nandan Nilekani.

“Infosys has been accused of aiding Naxalites, leftists and the ‘tukde tukde’ gang, (that wants to divide the country)” the magazine said, echoing the insults hurled by the BJP’s most combative politicians against government critics.

“Should a company of such dubious character be allowed to participate in a government tendering process?” it asked.

----

The normally staid annual conference of the Confederation of Indian Industry was jolted last month when commerce minister Piyush Goyal launched a tirade against corporate India, repeatedly singling out the 153-year-old Tata Group.

Though the video was briefly available on the CII’s YouTube channel, it was later taken down under instructions from the government. Tata has made no public comments on the episode.

Over the past decade private investment in India has been muted, say economists, and the economy was slowing down sharply even before Covid-19 hit. New Delhi is now eager to accelerate growth and is trying hard to portray itself as an attractive place to do business.

Overt bullying and hurling insults of treachery has in recent years enabled the BJP to intimidate its opponents, stifle criticism and mute policy debate. But such tactics may not encourage industries to open their wallets and invest.