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How European Startups Are Battling Labor Laws For Developers and Programmers
Nerval's Lobster writes "The United States with its H-1B controversy isn't the only country going through that sort of immigration upheaval. As the cult of entrepreneurship spirals upward in Europe, the intricate vagaries of immigration policy on the continent are being newly scrutinized by our company-building classes. Freshly venture-backed European Internet companies want talent, and they are going to remarkable lengths to get it — but not always legally. Milo Yiannopoulos talked to whole bunch of entrepreneurs and investors in Europe about the fudges, shortcuts, workarounds and, in some cases, 'strategic decision-making' are — just about — getting their companies the talent they need. For example, one well-known Parisian venture capitalist told Milo that he knows of 'at least nine' startups in France employing developers illegally, keeping them off the books not only to avoid France's notoriously onerous labor laws but also because it would have been impossible, or simply too expensive, to import them officially."
Typical employer whining about not being willing to pay prevailing wages. From the article:
As usual, it's employers whining that they can't find wage slaves.
You might be a greedy scumbag, regardless of the amount of money you have already accrued. Check for the following symptoms: not wanting to pay taxes on money your employees earned for you, feeling it is totally acceptable to dumb toxic waste from your country off the coast of Somalia, or stealing from babies.
But seriously, this isn't "battling labor laws," this is breaking the law for a higher profit margin.
Yeah, right.
It's more like: "We don't want to pay proper wages for good techies, so we are breaking/bending every rules to exploit cheap illegal labor and keeping more of the venture capitalist money for ourselves".
Seriously, I have seen this in many a start-up, in France and elsewhere: pay people low - even though their knowledge is what makes your bloody start-up possible - and fire them as soon as they start demanding correct wages and reasonable working hours. Meanwhile, the CEO is looking for the nearest Porsche dealership. It's simply disgusting, and it has nothing to do with France laws and regulations (which can be a pain in the neck, I admit).
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
The problem is that the EU allows most people from any EU nation to move to other EU nations. As the locals get fed up with millions of people arriving in their country with whom they have nothing in common, who often can't speak the same language, and who take many of the low-paid jobs that locals used to do, they demand that their politicians do something about immigration. The politicians can't do anything about EU immigration because it's controlled by the EU, so they impose tougher and tougher rules on non-EU immigration, which are counterproductive and fail to solve the problem, but win votes.
1. Because it is a race to the bottom: if you're getting companies in there because of your 'near zero' corporate tax, don't be surprised if they move to another country with 'nearer zero' corporate tax, and lower payroll tax as well, and maybe poorer working conditions.
2. Because if a company isn't paying corporate tax, then it is much harder for it to be worth having them in the country (the cost of servicing their existence may exceed their return to society/government)
That sounds more like a management issue than it does an H1-B problem.
If someone is churning out substandard code and causing schedules to slip... be they an American or H1-B holder... replace them... it's that simple.
Help Brendan pay off his student loans
I think a lot of the better educated in the US are starting to look with interest at Europe's social protections. My sister and her family moved to the land of opportunity a month ago, and are already working out exit options since there's no way in hell they can afford university or health fees for the kids. Yes it's not perfect but you'd be surprised how financially advantageous paying your taxes into social systems can be.
Those social protections are part of the problem, or rather, the way some countries implement them. In some EU countries, government has pushed the cost and risk of social measus to employers. An employee falls ill or is injured? Company is obliged to pay for their wages, sometimes for over a year. Need to fire someone? You can't, or you spend a goodly sum getting rid of him/her. Or you have someone off on maternity leave, with the obligation to keep paying her wages, just a few weeks after she joined the company. Yes, it happens, and by law you cannot refuse someone on that ground or even ask about it in a job interview.
That's all fine and dandy for the worker, and for corporations who can easily absorb the average costs incurred in a large group of employees. But in small startups, having to pay a worker who is unproductive one way or another for a long period of time can kill the company. You can insure against that, but the premiums are unbelievable.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Speaking as someone who hires and fires people, firing people and hiring new ones is far easier said than done, even if you propose to pay them well.
Even with a labor market full of candidates with the skills you need, you're still looking at a few weeks to get them in the door. In the meantime, your project is disrupted. Sure, you can try and train up someone on your team and make them work harder for a month or so, but they don't just learn stuff overnight, and your good team member is going to be overworked because those people still have to get their own code/project out the door on time as well.
I don't know where you have worked, but it's about ten times more likely to see people laid off than it is for them to be fired for performance, and there is a reason for that. I'm not afraid to fire someone who is not performing, but that's usually after at least working with them for some period of time to try and rectify the issues. The last thing I want to have to do is fire anyone unless they are richly deserving and that usually is demonstrated by a history of failure over time. So, if I have a "problem", he's going to be my problem for awhile. Thankfully, if you do find the right candidates, the failures are few and far between.
I work in a "right to work" state in the US. So, I don't even have to worry about half the stuff a European employer will have to when it comes to letting people go. There is nothing simple about it.
And there's the fact that you're going to fire someone. Unless the guy is an asshole, even doing what you must for good reason is not a pleasant task. In no way do I want to work for people who think I am going to fire people at the drop of a hat.
If someone is churning out substandard code and causing schedules to slip... be they an American or H1-B holder... replace them... it's that simple.
You haven't worked with people who ask you to... do the needful... have you? The substandard code is a byproduct of a combination of culture, language barrier, and a lack of experience. Note that I said experience, not education. American labor often stresses that people take their own initiative in solving a problem. You're expected to come up with a solution on your own, with little oversight or guidance, and you're given some leeway in making that happen. Yes, some companies are worse about this than others -- I am speaking in generalities here. YMMV. The culture of many of our immigrants is to not take that initiative -- but to only do things under the express guidance of their leaders. They see a problem and unless it's in the three ring binder that says "Things Management Says You Should Do When You Spot Problem X", it doesn't exist. They don't even see it. If you ask them about it, they'll say they don't know.
I'd snark you back and say "it's that simple," but nothing about conflicting cultural ideas and attitudes is. Nothing. You can't just replace people who have good attitudes but limited experience or have been trained to not take the initiative... you're just passing the buck on to the next person then. And it won't save your project. Software development isn't like factory work -- you can't mongolian hoarde the problem and solve it faster. In truth, a lot of times adding new people or more people makes the project take longer. This is a "people" problem, but it's commonly seen in all engineering disciplines. It's just the nature of the work.
The H1-B problem is not about putting down immigrants. We want them. Hell, we need them for some industries. The problem is that you can't destabilize an industry by radically changing either supply, or demand, and not have it hurt everyone. The H1-B program radically increased supply, and as a result, the cost of technical labor dropped -- a lot. It dropped so much that a lot of people who had invested in an education in it were left high and dry, and many people who had solid experience suddenly found themselves knocked several notches down on their career path and had to scramble to find a way to support their current lifestyle at a much lower income, with often tragic results. So a lot of experienced people left the industry to move into fields that were more stable, and the overall quality of the labor dropped.
This, in turn, fueled more cries for H1-Bs because high level positions were now going unfulfilled -- there was a glut of low-level workers, and very few experienced people because they didn't want to move 'down' in their career and simply moved out. That gap simply couldn't be filled no matter how many workers you threw at the problem. So the entire problem became cyclical... more H1-Bs mean more experienced workers leave, which mean lower overall quality of work, and now businesses are scrambling to find anyone who's qualified amongst a veritable sea of resumes... none which have the amount of experience needed.
And that, right there, is how our industry collapsed. It was because of short-term thinking -- they wanted to tap into the global labor market, so they poked a hole in the dam of regulations holding them back, thinking they could suckle off the new supply of cheap labor. But they were trying to drink out of a firehose, and then the dam exploded and washed out the entire industry.
There is no new tech now in this country. It's all gone to shit. It died because of short-term thinking, and now our high tech industry is just an empty shell, unable to produce any better than the third world, because that's the only labor source we have left.
#fuckbeta #iamslashdot #dicemustdie
not only to avoid France's notoriously onerous labor laws but also because it would have been impossible, or simply too expensive, to import them officially.
I took the same approach when I opened a bar that offered drinks for half the price of the competition. I couldn't afford to buy my booze officially, so instead I was knocking over liquor stores. It's the only way I could make my business model work, which completely justifies it.
Stop-Prism.org: Opt Out of Surveillance
That whole article sums up what is wrong with these venture capitalist funded start-ups; they want to compete on a different playing field than established companies. They want to be able to import cheap labour from other countries as they aren't willing to pay the going rate for local engineers. They don't want to register their employees properly as they will be liable for more taxes and to give their employees the rights they are entitled to.
As a European, I'm glad these guys are finding it difficult to ride roughshod over the laws has to protect workers. If you can't afford to do things the proper way then your business is not viable. Complaining that you can't find exploitative loopholes that depress wages for the rest of us is laughable.
So, riddle me this: how do you pay your workers a lot of money, but offer a cheap product?
Henry Ford figured it out. Anyone who can't doesn't deserve to stay in business.
Not "worker" but "society". These safety nets are created to ensure the future continuity of society through making everyone's future safer. A good example you list is maternity leave. Most of the developed countries already have bare minimum birth rates to hold their populations steady, and many would be in decline if not for immigration. This is a massive time bomb because our retirement systems are designed so that we have enough people providing for those who no longer provide for themselves. As this pool is depleted, societal order built on wealth will collapse. Japan has this problems in a very severe form due to their extreme xenophobia preventing immigration from plugging the short term loss accrued and as a result they're already struggling even though enough time hasn't lapsed for the problem to become even remotely bad. This is the issue of next twenty to thirty years and it's going to keep getting worse during this period.
So we have a choice: deprive the owner class of some income and give all mothers in the country a significant incentive to get children desperately needed to maintain the society, or award owner class with a bit more money, and make sure that it will be next to impossible to get children unless you're very safe financially and have society hang on the verge of a cliff in twenty years or so due to collapsing birth rate.
It's called "short term gain versus long term gain". You are advocating the short term gains and fully willing to throw the future under the bus for them. This is a very common way of thinking among those of the current owner class, as they believe that they and their capital will be allowed to leave the society when it starts to collapse and go to another healthy society to parasite off until its eventual collapse. And the circle will continue.
They are likely wrong, and forgetting the lessons of French Revolution and what happens to owner class alongside everyone else when society really does collapse in a large Western contry. While many of the owner class in the developing countries successfully dodged this bullet and just left for European countries and US after parasiting their own countries to the point of societal collapse, it's highly unlikely that US and European countries will allow for the same thing to happen to them. A far more likely outcome is the way of the guillotine and mob justice on those who remain alongside massive confiscation of property and a complete collapse of society to the point where there are no "healthy economies" to run to due to global impact of a collapse of a large Western country.
The company wants to "avoid France's notoriously onerous labor laws", but it still operates in France, rather than India or China. There must be some reason for that choice. Perhaps some reason paid by taxes, or even guaranteed by labor laws...
That's what economic theory teaches. Reality is more complicated.
Here's reality: Suppose I'm a contractor with a bunch of construction workers digging trenches. Now trench collapses are a major cause of workplace deaths. You prevent trench collapses by shoring up the sides of the trenches if they get too deep or the soil is too damp. It takes longer to shore up the sides, so it takes longer and costs more to do the job safely. If the trench collapses, and kills a few workers, it doesn't cost the contractor anything, because it's a worker's compensation case, which means the state pays (and doesn't pay much), and these businesses are run as corporations, so the contractor simply goes bankrupt and starts a new corporation.
Most contractors don't shore up the sides of the trenches. They can bid low for these jobs. If a contractor were to shore up the sides of the trenches, it would cost him more, he'd have to bid more, and he wouldn't get the job.
So the result of competition in the free market is for contractors to run their businesses in a way that kills their employees. Because unemployment is so high, they can always get more employees, who are desperate for work and willing to face the risk of death.
And that's the race to the bottom.
(OSHA can't stop it because they they don't have enough inspectors. They'd need a thousand times as many inspectors to visit all these small sites.)
This is the classical mistake where people like you assume that labor is a resource like steel, or oil. Humans are not a resource, for they are unpredictable, and stochastic. Meaning if I drop steel I have certain physical properties. Where as if I drop a person I will have a multitude of reactions.
"For example, in the classic case of the original Luddites, when it became cheaper to make clothing due to technological advance, people had more money to spend elsewhere, and that elsewhere is where the new jobs go, and you invariably see more jobs created than had existed before that "job costing" technology was invented. It happens every single time, without fail"
Silicon Valley; In fact jobs have left and have not been created. Sure there are success stories, but the influence of Silicon Valley as a job creator has waned. Take for example Apple, or Oracle, who have jobs there, but have created a huge number of jobs outside of that region. Facebook is a bit of the old culture of creating jobs in silicon valley. New jobs have not replaced the old jobs. I can bring in many other examples of where more jobs are not created.
"As for minimum wage...If your wage was below what you're willing to work for, then you'd simply not take the job. This is a fact. Most people do in fact work at above minimum wage. Minimum wage has the following effect: For the low end workers who really aren't worth a shit (there are many out there - this nobody can deny) they simply have no job at all. Whereas they could have at least had SOMETHING, they now have nothing. This has two effects: Increased unemployment, and higher prices. Because prices now go up to match that minimum wage increase, your purchasing power hasn't really gone anywhere. Most people tend to equate money with wealth, and that relationship isn't one to one."
Wrong, another example, Germany. Germany has no minimum wage and in fact there is this concept of hunger wages. This means a person is working full time, and does not even come close to making enough money to support their family. I am talking wages of about 1 euro per hour. The government kicks in social help to make ends meet. Germany has shown that to survive you will take work below your pay because you need to do something.
"A classic example I look at is this: Back in 2001, I paid $3800 for a 50" tv. The thing was pretty massive not just in diagonal length, but it was pretty fat too - it was rear projection. A really big and obnoxious TV by today's standard. Last year I "upgraded" my whole living room: Bought a new leather couch, ($1,200) built a 5.1 surround system from the ground up (none of the HTIB crap, a truly good sound system, $1,000ish with 8 channel lossless audio) and a new samsung 50" tv that has a MUCH better picture quality than the one from 11 years ago, consumes a lot less power and is light enough for one person to carry. Total spent was $3,200. Basically by spending less I have more "wealth" than I did 10 years ago - and that's even ignoring inflation."
Oh yes just because I can pay for cheaper consumer crap things are ok. I am going to ask how old are you? For life also includes health care, education, etc. These costs have become prohibitive for the poor. Sure they are given loans and then get jobs where they can barely pay back these things. But hey as long as I can get get cheap consumer crap all is ok, right?
"When somebody tells you that the poor are poorer and the wealthy are wealthier because - adjusted for inflation - the poor are making fewer dollars today than they were in the 90's, they have no idea what they are talking about. "
Again you don't know what you are talking about. Cheaper consumer crap yes. Cheaper food? NO, but I guess you don't buy food do you? Again the question of age. The poor are poorer than the average poor of say 40 years ago. When economists measure poverty and such they don't measure it in absolute values like how much currency you have. The measure it in terms of what you can afford for the monies you make. Again, g
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Look, I get it, you're unemployed, you're bitter, and you're looking for blame, but you've been going on like this for weeks now and it's tiresome.
I'll admit I'm not American, and I don't know the vagaries of the H1-B system, maybe that means I don't know what I'm on about, but maybe alternatively it allows me to be objective.
You see here's the thing, I hear a lot whining about how H1-B has decimated the US technical industry, and the people I hear it from all seem to have one thing in common - they're unemployed or they seem to believe they're underpaid, and it's all the fault of immigrants. So I decided I'd look at the fact.
I figured I'd see exactly what these low paid immigrant workers are getting paid and so forth, and I found this site which seems to have a pretty good database:
http://www.h1bwage.com/
For 2012 a search of programmer came up with 10k records, developer another 10k, whether any of these crossover I'm not sure, but hey let's call it 20k anyway. Estimates are shaky but currently the amount of developers in the US seems to be anything from about 1 million to 4 million depending on who you ask, but again let's given the benefit of the doubt and pretend there are only 1 million, so H1-B visas account for 2% of developer jobs each year based on these figures, that's a small amount but it's certainly not negligible so it's a fair criticism that H1-B immigrants are taking at least a non-negligible amount of jobs each year. Note that the number of developers has grown each year, and so has the visa cap, roughly linearly so the figure will be reasonable for past years also.
But I also found figures for average salaries for developers, they seem to have remained fairly stagnant for a few years (if the economy isn't growing much, neither will wages grow much) at roughly $73k per year as the average and the top 10% earning an average of $110k. So the next issue is that immigrants are being employed because they accept less money and are bringing salaries down, again though looking at http://www.h1bwage.com/ I can't really see how that's true - the majority are getting paid more than the average so if anything H1-B immigrants must be raising the average.
In fact, many of the companies that I see chided here for wanting to increase the H1-B quota "to bring down developer wages" are doing quite the opposite. Facebook in 2012 was paying an average of $115k per developer, Google $125k, Microsoft $104k, Apple $119k. Given this, all these major companies are paying well above the average developer salary to immigrants, and all except Microsoft are paying above the average paid to the top 10% of developer salaries in the US.
So here's what frankly I think the facts say the reality of the situation is, that in practice, across the globe it's not ever going to be the case that every American programmer is better than every other programmer in the world, in fact, there will be a sizeable segment where the opposite is true, that is for example, that perhaps the bottom 50% of American programmers are statistically going to be nowhere near as talented as the top 10% of developers in almost every other country in the world. That's bound to be a lot of developers, and awful lot. What this means is that technology companies who want to populate their company with the best talent available no matter where in the world that comes from are going to have to use the H1-B visa program.
I'm not saying there aren't companies taking the piss, one company at least stood out on my peruse through and that was Wipro, they clearly seem to pay a little below average on average, and lot in some cases whilst also taking up more than their fair share of the quota, but by and large the H1-B visa program seems to be being used for what it's intended to be used for, on average does not appear to decrease average developer salaries but in fact increases them and that companies such as Facebook, Microsoft etc. want to