Infosys \'chop shop\' comparison

[sftrade]

Most people should have heard Senator Schummers statement where he likened Infosys to a chop-shop. Media outlets in India are now beating this story to death and trying to find out the literal meaning of chop shop (A place where stolen cars are disassembled for parts). I for one didn't know what a chop shop literally meant inspite of living in the US for over 10 years.

I think the Senator is saying that the Infosys is operating 'illegally' in the US since it doesn't want to hire US citizens and the chop-shop is just a colloquially way of put it. I for one am with Schummer on this and Infy and other companies operating on foreign soil will see public perception turn more negative if they don't fix their hiring processes.

Mohandas Pai made a stupid statement that Infosys creates jobs in the US specially when you compare that they hired 500 US citizens and outsourced 100k jobs to India.

The Economist puts it more eloquently

http://www.economist.com/blogs/freeexchange/2010/08/trade_1

What do you guys think ?

[rajradio]

I for one am with Schummer on this and Infy and other companies operating on foreign soil will see public perception turn more negative if they don't fix their hiring processes.

Why should they? isnt west all about who does the job cheaply and in best possible fashion? Dont they call it free trade? And is public equal to red necks like schummer? I dont think infosys is a chop shop. It is a well thought company that pays US back in the currency that it needs, cheap, efficient and sometimes ruthless.

RK

[ahirman]

Though I understand the timing of comments (rheotric for Nov elections) the fact that he is the chairman of the United States Senate Judiciary Subcommittee on Immigration, Refugees and Border Security makes them very significant. Its sad that the chairman carries such personal views. Since IT outsourcing is tightly coupled with immigration its not hard to determine here that his personal views will cloud his judgement and affect his role as a chairman of the subcommittee.

I hope his comments draw wide response and condemenation from the broader set of people including media representatives and industry bodies. His comparison and analogies provide biased one sided personal opinion which is not supported by facts.

[ahirman]

Sid, though Mohandas Pai should not have responded that way (it was precisely the debate chuck schummer want) and it was not required at all but how Infosys and other similar companies contribute to US economy cannot be ascertained in terms of no of hires. These companies operate dev centers in US, pay taxes and all the employees on short term visas pay income tax and social security. All this contributes to local economy. They reduce the cost of services and bring efficieny in the market. There is nothing illegal about this.

We should focus on the illegal part of this debate and push senator schummer to justify the comments. The fact that US is fine with millions of illegals but the senate committe chairman is just focusing on tiny percentage of law abiding, tax paying immigrants is nothing but distortion of truth and a lame attempt to restrict larger debate to a community which because of small size doesnt count as a vote bank in the upcoming elections.

[returning_indian]

This is nothing but tactics to collect funds from unusual sources to pay for border protection and then pass illegal immigration reform. Riding on backs of high skilled immigration to pass illegal immigration reform. This bill of collecting extra fees is doing exactly the same. Schummer wants to convince few republicans to join CIR, republicans are wanting this drama of border control (and then say no to CIR), Schummer wants money in this deficit controlling environment and wants a way to pay for it, calls Infosys chop shop and blame for America's misfortunes, and charge them extra money.

[Serenity now]

Bigger question is, why Infy is hiring Indians to be employed in US on H-1B? Is it cheaper to hire Indians in US on H-1B? I thought its illegal to pay someone on H-1B below certain (market?) rate?

[oasis138]

I don't understand how can someone question Infy on why they hire Indians and not Americans for the majority of the jobs in the US. I dont think Infy is being a nationalist here. They are hiring what they deem as the best fit in terms of skills set, pay, flexibility, mobility, etc etc. Also the Labor laws are very clear. Infy cannot pay someone below the pay scale set for a particular role. However its quite likely that if the pay scale for a role as per Labor dept is say 60k Infy would hire an a h1-b who's willing to work for 61k versus a USC who would want 70k. This is as long as Infy believe that the savings of 9k dont exceed the productivity of a USC versus an H1-b.

[returning_indian]

Bigger question is, why Infy is hiring Indians to be employed in US on H-1B? Is it cheaper to hire Indians in US on H-1B? I thought its illegal to pay someone on H-1B below certain (market?) rate?

Proposition is not just for h1b but for L1 as well. Moreover making candidates work 80hrs is not specified in LCA.

[ahirman]

Bigger question is, why Infy is hiring Indians to be employed in US on H-1B? Is it cheaper to hire Indians in US on H-1B? I thought its illegal to pay someone on H-1B below certain (market?) rate?

Why Infy is hiring Indians to be employed in US on H-1B? - OP has mentioned US citizens and permanent residents (MDP has also mentioned US citizens and perm residents)
Is it cheaper to hire Indians in US on H-1B? - No
I thought its illegal to pay someone on H-1B below certain (market?) rate? - You are right.

You are already connecting the dots between Infosys, H-1B, Illegal below market pay......without even being asked for. You just scored a self goal a minute into the game or may be you are in chuck schummers team in which case I can already sense the next set of bigger questions...

Why not call Mr schummer a liar for calling Global delivery illegal instead of going to debate about ethics of all outsourcing companies....

[sk2011]

Not much to think about why Infy hires Indians or others... Think about 2 things.

1. Would the skills of an average Indian techie earning $X/hr equate to an average American techie at the same $X/hr ?
2. Typically, many employees with services companies are here as a rotation resource who goes back to India saving $$ to services companies (thereby such companies charge less to US business), could the same be done with American employee ?

-SK