Outsourcing Jobs, and the Steve Daines Payday

A well-placed industry source reached out to me today with some very interesting data, timely information given that Steve Daines is talking about a possible run for U.S. Senate.

When Steve Daines was running for Congress in 2012, the Democratic Party accused him and the company he helped run, RightNow Technologies in Bozeman, of outsourcing jobs overseas. Daines had been a senior vice president there, and had also been stationed in Asia.

For this assertion, the Democratic Party was sued by the CEO of RightNow, Greg Gianforte, for defamation to his company. They settled the case recently, for an apology; the Chair of the Party, Jim Elliot, wrote a public letter apologizing to Gianforte for having claimed without proof that RightNow outsourced jobs.

At any rate, the company was recently bought by Oracle, the silicon valley giant. But the campus in Bozeman, which employees over 1,000 people, is still in operation. The sale of the company was for a reported $1.5 billion dollars, and is believed to have made Daines a very rich man, for he was a big stockholder.

What we learn today is this: Oracle has applied for a total of 605 special visas, for the purpose of importing foreign workers to Bozeman to work at the former RightNow campus.   You can see the data here, which is downloaded from the US Government’s visa website.  I reached out to the Oracle media department to seek more information about these applications, but have received no reply.

The type of visas that Oracle applied for are known as an H-1B visa.  H-1Bs are highly controversial and mightily opposed by workers-rights advocates in America, including organized labor and many members of Congress.   Companies use these visas to import foreign temporary workers without any chance of a path to citizenship and often for the purpose of simply saving money, since the worker can usually be paid less than an equivalent American worker.

Here’s what the Boston Globe wrote this month about a company that used H-1B applications to alter its workforce:

ON JAN. 14, 2010, senior executives at Molina Healthcare in Long Beach, Calif., called their staff together for a somber meeting. The company had done poorly the previous quarter, they announced. Dozens of people in the IT department would have to be let go. What the fired employees didn’t know was that the previous day, the US Department of Labor had approved applications for 40 temporary workers from India to be placed at Molina, through a company called Cognizant.

The fired employees — all US citizens or green card holders — were earning an average of $75,000 a year, plus benefits; the new workers, brought on H-1B visas, earned $50,000, with no benefits, according to a lawsuit filed by the ex-employees. The lawsuit alleges that Molina was flush with cash at the time, and that the real reason employees were fired was their nationality.

Here is a spreadsheet that shows every H-1B approval received by RightNow (2011 and 2010) and Oracle in Bozeman (2012). It appears that in 2010 and 2011, RightNow received permission to hire several foreign workers in Bozeman each year.  One of the spots in 2011, for example, was for a market researcher.  Then, in 2012, Oracle received permission to hire 605 engineers for the same location.

Now look at the salaries (column F).  In 2011, RightNow said the prevailing wage for “Computer Software Engineers: Applications” in Bozeman was $71,000.  The next year Oracle said the prevailing wage for “Software Developers, Application” was $52,739.”  That’s a 25% discount.

So you can see how Oracle might be planning to abuse the H-1B system.  By defining down the job, they can pay 25% less.  Keep in mind that the wage is attached to the job, not the person.  Oracle can hire the most qualified Computer Software Engineer on the planet for their Software Engineer position, and still legally pay the Software Developer price.  This Indian press release shows that the average H-1B worker makes 25% less than equivalent American workers – a bit less than the discount Oracle is going to get by taking these jobs from people in Bozeman.

Whether this information creates a reason to reevaluate Gianforte’s lawsuit against the Democratic Party, and the apology that settled it, is something that we will let Chairman Elliot deal with. The lawsuit did include other allegations of defamation beyond the statements about outsourcing.

What does appear certain is that the sale of RightNow Technologies to the Oracle Corporation (a sale that made Congressman Daines some big bucks) has led to, or is quickly leading to, the outsourcing of Bozeman jobs to foreign workers. If you sift through some of the data on these websites, you will also see that significant savings from the hiring of H-1B workers will accrue to the applicant company Oracle.

Because when you import foreign temporary workers and thereby save money, you are outsourcing. Even if Oracle claims to be simply finding workers with specialized skills that are not otherwise findable in the domestic workforce, it is an economic fact, a law of economics, that at some price, whatever that price may be, Oracle could get similarly qualified Americans to answer the want ad. It’s just that it’s cheaper to import foreign labor, cheaper precisely because the option exists legally.

Just like it’s cheaper to import fruit pickers from Mexico. You hear people say that “Americans don’t want to do the work” that migrant foreign laborers are hired to do. In fact, Americans will absolutely do the work, just not at the meager wages that companies offer. And the wages remain meager because foreign laborers can invariably be recruited, whether legally or illegally, to do the work for dirt cheap. It is a story that has played out over most of American history–when wages get too high, bring in foreigners who will work for less, or can be paid less because of loopholes in the law.

Predictably, Congress is helping Oracle with all of this. Last week, the Senate quietly amended the H-1B law, to make it easier to import workers, to help multinational companies import many more of them, and to lower the burden of proof (regarding shortages in the domestic workforce) that companies must meet to be granted the right to import a foreign worker.  The amendments were inserted into the comprehensive immigration reform bill. S. 744. Dick Durbin, D-Illinois, railed against the entire H-1B scheme as nothing more than a scheme which allows the largest companies in America to circumvent the normal immigration rules–and the U.S. market wages. Orrin Hatch, who is famous for screwing middle class Americans for the benefit of large Fortune 500 corporations, led the charge, and Oracle’s lobbying team was right there with him, prodding him.

When it gets to the House, perhaps we’ll see what Daines has to say about the Bozeman H-1B situation.

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32 Comments on "Outsourcing Jobs, and the Steve Daines Payday"

  1. That’s because Dick Durbin is a straight up badass who doesn’t stand for screwing americans and taking good high-paying jobs from american workers! Durbin led the charge against Wisconsin teabagger Governor Scott Walker’s work to strip 170,000 Wisconsin public employees of their collective bargaining rights too and is pro-union all the way. Where were Max and Jon on the vote to add this bullshit to an otherwise good bill? I don’t want to find out Max voted for this but he has been really close with Orrin Hatch lately and so that’s why I’m worried.

  2. You can be sure Daine’s and his company benefited from ‘gummint’ contracts you bet, oh boy!! He’s been around ‘hawking’ chamber of commerce agendas and consoling ‘baggers’ about the mean ‘ol IRS that did stray but has NOT
    prosecuted the baggers for ILLEGAL 501c4 political activities.
    Meanwhile Daines offer NO practical solutions for healthcare other than cast yet another vote against the ACA – the GOP’s – or rather baggers – 37th attempt or more, I’ve lost track.

  3. Sounds like Daines is doing a great job if the anonymous site of the mt. cowgirl is attempting to smear him! So, it is okay to legalize millions of low skilled people who will vote democrat, but not the highly skilled workers who create and innovate within the USA?! Liberals and progressives are so devoid of principles.

    Bring on that hydro power, Daines. Stop those welfare payments to those useless wind farms…

    • Larry Kralj, Environmental Rangers. | May 30, 2013 11:40 PM at 11:40 PM |

      HEY, monte, if dipshit daines is so good, tell the little fella to cowboy UP and run against Schweitzer for the senate! What? What was that sound?! Was that the sound of little dipshit’s ASSHOLE puckering shut?? I think so! The little man ain’t quite up to a real political fight now is he?!

      You see, monte, dipshit daines is a pretender, a corporate toady who’d sell his GRANDMOTHER to please his Kockh brother masters!. Everyone knows that. Schweitzer would pull that STICK outta his ass and beat him with it!

      What say you, monte? Is dipshit up for a real fight?

  4. I’m telling you Oracle did this same thing in Pleasanton California in 2004-5 they took over a company called Peoplesoft, then kicked out the American workers for H1b employees as well. Thousands lost their jobs. Good luck Bozeman… you’re gonna need it

  5. Jennifer Davies | May 31, 2013 5:29 AM at 5:29 AM |

    Greg Gianforte is Montana’s leading opponent of public school classrooms in Montana. As you can see from this article in the Bozeman Chronicle, he created a board of people to send RightNow money to private schools–Judy Martz is on it–and he gave them millions. http://www.bozemandailychronicle.com/news/education/article_65e078d4-8432-11e1-84cb-0019bb2963f4.html

    He is also the major donor of the Montana Family Foundation, funding a lot of their anti-public school lobbying efforts.

    http://helenair.com/news/legislature/who-s-behind-montana-s-school-choice-movement/article_0b204b88-8f8d-11e2-b63a-0019bb2963f4.html

    He’s also the major donor of the creationist museum in eastern Montana! http://billingsgazette.com/news/features/magazine/dinosaur-museum-presents-biblical-view-of-origins/article_1c9ac218-bab0-11de-84f1-001cc4c002e0.html

  6. Richard Miller | May 31, 2013 7:58 AM at 7:58 AM |

    You had best go back to school (if you can afford it) and learn Chinese or how to speak like someone from a call center in India. With the rest of the rich asses in this country, the 99% will be serving them their dinner asnd licking the scum off of their boots. Daines is extremely bad news for Montana and its citizens. Another fake rich politician looking to feather his own nest. I have two friends that work for the new company, formerly known as R.N.T., both graduates from MSU with computer engineering degrees. You mean to tell me Mr. Daines, that the thousands of dollars and hours spent getting these degrees were a wast of time? You fit the term of head ASSHOLE.

  7. Thank you, so much, Cowgirl, for this information. Keep it coming.

  8. janis aimee, Olympia WA | May 31, 2013 2:15 PM at 2:15 PM |

    I am constantly amazed that ‘we’ are told there are not enough people living in the U.S. qualified to high-tech jobs! I say every time: How can this be true?! (It makes me even more upset to hear the President essentially say the same thing.) The rub (thus the ‘cover’) of questioning this assertion is for ‘the powers that be’ to say: “Oh, what have you got against people from other countries?” So now ‘we’ are virtually accused of being either racist or xenophobic. There is nothing further from the truth – especially knowing there are Americans of every ancestry, and every skin-tone that have advanced degrees that are being told “No, you can’t have this job, it’s going to someone who will work cheaper.” This is not an issue of color, it’s an issue of profit – just as most divisive issues are. As usual, your articles are among the most informative – maybe we could get you a job at MSNBC!

  9. As as IT worker and a long time follower of the IT industry, I can say that Oracle and Larry Ellison are well known in the tech industry for being, how does one politely say, bastards. More on point, there is no shortage of tech workers. There are only shortages of companies that are willing to pay market prices for labor and companies that are unwilling to train workers. I am continually amazed by pro-capitalism business people who don’t like being on the receiving end of market forces.

  10. We already know what Daines is going to say about the H1-b visa issue- he’s gonna say f*^# you Montanans I have corporate cash to raise for me reelection or run for US Senate– just like he effectively says with every vote he makes. You think the Lee Newspapers is going to look into this?! Yeah right- and the Bozeman chronicles editors are already afraid of Daines so they won’t do a damn thing. Meanwhile 600 people making 50, 000 a year in Bozeman are going to lose their jobs and be replaced by imported guest workers from other countries. Why would Daines even bother- he’s got his money.

  11. Larry Kralj, Environmental Rangers. | May 31, 2013 11:01 PM at 11:01 PM |

    Well yes, they are. I’ve been saying this for some time now. Dipshit daines and his Teatard Kockhlickers are traitors!

    http://smirkingchimp.com/thread/ted-rall/49817/immigration-reform-is-treason-unemployment-is-high-why-are-we-importing-foreign-workers

    • Daines won’t run. The guys and gals who will run against Schweitzer are the one’s who are new to the game, upstarts, and are too naive to understand that if they win the GOP primary, they’ll get humiliated just like Roy Brown (think vegetarian). In other words, the politicians who will try to challenge Schweitzer are those who don’t understand that at the conclusion of the race, their statewide aspirations will be permanently sunk, because they will become a joke within their own party.

      • Larry Kralj, Environmental Rangers. | June 1, 2013 6:11 AM at 6:11 AM |

        Yeah, just like Cornhole Burns against Melcher! How’d THAT work out for the ReePubes?

        You may be right, but it’s hard to say. The ReePubes just might see an opportunity here to go for broke. Montana is basically a wild card. And let’s face it. There ARE a whole lotta dumbasses in this state! And let’s face it, the have more money than brains. Turns out they don’t NEED brains with citizens united! They may view it as winnable with Dipshit Daines as their candidate, and hence, open up the fly and let the Big Kock money out!
        WHO LET THE BIG KOCKS OUT?!
        They might figure that with the Big Kocks, anything’s possible. And they might be right! But like you, I seriously doubt it. Scwhetizer would wipe the floor with Dipshit Daines.

  12. Larry Kralj, Environmental Rangers. | June 1, 2013 6:22 AM at 6:22 AM |

    SEND IN DIPSHIT DAINES! Yes, folks, there’s a problem here with the Teatard Reetard Dipshit Daines approach to economic development! Dipshit is the head toady for the Kock bros., or more specifically, a kockhead! And when the shit hits the fan, or in this case, the Kalamazoo River, it’s time to send in the best. It’s time to send in the kockhead, little dipshit daines!

    So, beFORE we listen to dipshit explain his plans for economic development, maybe we could see the little fella in action! How ’bout it, dipshit??? You ready to go into battle, little dude?

    http://thepoliticalcarnival.net/2013/05/30/video-keystone-xl-tar-sands-isnt-oil-this-is-a-pipe-eating-planet-cooking-water-fouling-goo-you-cant-clean-up-tar/

  13. Interesting comments above. But “Cowgirl,” we get it. You and Pogie and others are going to be feasting on Daines for the next couple years, as you are paid to do. (Pogie does it pro bono, I’m sure.)

    The question is, when it comes time to challenge his seat, will you give us something better than the standard-fare Democratic limp noodle? It’s not about Republicans. We know them well, wild and arrogant. It’s Democrats sucking up the legitimate bandwidth, taking all of the good energy that public angst produces, and giving us shills like Baucus, Tester, and Gillan. Give us a fighter for once, or stop whining.

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