Importing Cheap Labor Eliminates American IT Jobs

Immigration policy played an important part in the debate before and after the 2016 election.

The debate was focused on whether or not to protect undocumented aliens in the United States because they do “jobs Americans won’t do” – for example agriculture, food processing, and unskilled construction.

But no attention has been paid to protecting jobs Americans are doing from documented alien labor.

Despite the loss of +/- 200,000 US technology jobs, the United States Citizenship and Immigration Services (USCIS) proceeded to awarded 85,000 “temporary high skilled knowledge worker” non-immigrant visas (H1-B) to foreign contract worker firms and American technology firms — 85,000 direct competitors for the limited number of IT jobs available in 2016 and 2017.

Why are we not Employing American Workers?

The phenomenon is not new. Computer World estimates that at least 776,000 tech workers have entered the United States to directly compete with American workers between 2007 and 2017.

For the last few years, the majority of these visas (65,000 annually) went to India-based contract labor (outsourcing) firms. The firms, in turn, hire BA graduates from Indian colleges and universities to fill the visas.

The advanced degree quota for H1-B visas (20,000 annually) go to high technology companies — Facebook, Apple, Google, Microsoft and Intel, to name just a few.

In addition, H1-B visas are issued to American college and universities above the annual quota stipulated by Congress.

While, at the same time, the National Institutes of Health spends $11 million a year to help US citizen Ph.D. graduates in STEM to find alternative careers. There are not enough jobs for all the Ph.D. graduates USA universities produce.

Solution: Hire a Made-in-America Worker

The H1-B visa program poses a direct threat to US technology workers – both present and future – as the numbers of these workers have continued to grow despite a general weakening of demand for IT workers in the United States.

In recent years more and more high profile American companies have fired entire departments of American workers and hired H1-B replacements.

  • Southern California Edison
  • Northeast Utilities
  • Toys R Us
  • Disney Company
  • University of California San Francisco Medical Center
  • Too many more to name

In all of these situations, the American workers were required to train their replacements as a condition of receiving their severance pay!

Many of the displaced workers had 10, 15 or 20 years of service to the firms that dismissed them in the name of profits.

Turn-off the Spigot

Despite extensive investigation and numerous hearings before Congressional Committees no action has been taken to correct the abuses of the H1-B program.

Currently there are three bills pending. One in the Senate and two in the House, including one authored by Silicon Valley representative Zoe Lofgren which would require H1-B employers to pay 150 to 200 percent of the current prevailing wage for that job classification – a move that would bring the program back to its original intent. Once, again, the H1-B visa would be reserved for the rare, unusual and uniquely skilled job creator.

In addition, the Trump Administration has issued an Executive Order to “study” the problem but did so without turning off the spigot.

Exactly the opposite should be done.

There is a practice from an earlier time in information technology that applies to the current H1-B situation.

Before every executive had a laptop with a company performance dashboard in the middle of his/her desk, IT departments used to produce volumes of paper reports. Periodically, the queue of reports had to be “cleared” to reduce wasted paper and reduce labor costs.

The IT Department would simply stop printing all the reports one Friday evening and wait to hear on Monday who called and asked for their report. If no one asked for a specific report by the following Friday, it was discontinued.

Instead of waiting for Congress – which has shown no appetite to touch anything related to immigration this year – let’s just turn-off the spigot by Executive Order.

Don’t hold a lottery to award the 85,000 2017 H1-B visas and see if any labor shortage occurs – if any company mounts a court challenge in the name of shareholder profits.

It is more likely that the result would more be more jobs and better wages for American technology workers.

Banking for 21st Century American Infrastructure

Banking for 21st Century American Infrastructure

I do Pilates every day and go to a Pilate’s class 3 times a week not because I like it – but because I know it’s essential to maintaining strong bones and muscles (the human infrastructure) over a life time.

I choke down two HUGE calcium pills each morning for the same reason.

Not bragging – but comparatively – my infrastructure’s in a lot better shape than America’s.

Just as the human body hangs on a strong skeletal muscular core – the USA’s economy hangs on a strong infrastructure.

That’s a problem.

Infrastructure Drives Productivity

Every hour each individual worker wastes commuting on overcrowded highways reduce our economic productivity decreases and pollution increases in our atmosphere.

An antiquated passenger and freight railway system delivers products to market too slowly at too high a price and serves too few passengers in a small number of commuter corridors.

Our international airports are the first impression we make on foreign tourists and foreign business people – seeking to do business in the United States. Too often – even in Washington, New York and Los Angeles – our airports look less like the gateway to the world’s largest economy and more like the bus station in the 1969 movie Midnight Cowboy.

When portions of our electric grid fail, commerce stops. The national economy shrinks.

Drought and floods both result in costly economic dislocation.

Infrastructure is a Big Capital Expense

We know that our electrical grid, water storage and transport systems are at risk of attack from saboteurs and/or hackers.

There is no effective urban evacuation plan in earthquake prone California. Our road system is inadequate, at risk of failing in a major earthquake and not a reliable corridor of escape.

Baton Rouge flooded for lack of a by-pass canal.

But no one is doing anything to solve the problem

Why? It costs money.

America Needs an Infrastructure Bank

It is time to charter a USA Infrastructure Bank with sufficient capital to meet the estimated demand.

The bank would use its capital to make loans to Federal Highway System, states, localities, airports, Amtrak, and publicly owned utility providers to fund infrastructure refurbishment and upgrades.

The loans would be repaid from taxes, bonds issued by government entities and service fees paid by users.

Hillary Clinton has proposed such a bank as part of her Presidential campaign. Three bills were introduced in Congress in 2015 but never made it out of committee.

These proposals would charter the bank as a WHOLLY OWNED GOVERNMENT CORPORATION.

The problem is we already have one and know the consequences.

The US Post Office is a wholly owned government corporation!

An Economic Shot-in-the-Arm

Rebuilding, modernizing and securing our infrastructure would give the US economy a huge boost.

The American Association of Civil Engineers estimates that needed infrastructure upgrades could add up to $3 trillion by 2020:

  • Create millions of new “skilled jobs” with good wages.
  • Boost productivity by speeding people and goods to market at a lower costs
  • Encourage innovation, creativity and entrepreneurship – leading to new industries and new global opportunities
  • Increase our national security and protect the homeland.

Who is going to pay for it without adding to the National Debt?

Let’s Make a Deal with Big Business

The Treasury estimates that US multi-national corporations are holding approximately $2.3 trillion in profits off-shore to avoid the world’s highest business tax rate.

Repatriating these profits could generate as much as $8 trillion in U.S. domestic economic activity.

This economic elixir is going to remain off-shore as long as the US Treasury demands 35 percent tax-off-the-top.

Why not offer these tax payers a deal they can’t refuse — one-time tax of 15 percent on only half of their off-shore profits in return for lending the other half to the newly chartered USA Infrastructure Bank for a fixed period of time?

To protect their “investments” the corporations (for example Apple, Google, Facebook, Merck, etc.) would be granted the majority of seats on the new bank’s Board of Directors — in ratio to their contribution.

  • The corporations would receive interest on their “investment” in the bank.
  • The corporations could use the money exactly as they do today – collateral for bank borrowing to finance operations.
  • “Investment” would be returned to the corporations after a specified period of time.

Don’t Upgrade — Innovate

Instead of replacing 20th century structures and systems with more “modern” facilities, a Board dominated by the most innovative business leaders in the world would move to capitalize opportunities currently in the design and development stage: Innovative thinkers will anticipate the future — asking questions that lead to a merger of 21st and 22nd century infrastructure.

  • How will driverless cars change the way we drive and build roads?
  • Should we invest in building high speed railways or jump to Hyperloop connections between major cities?
  • Can we turn oceans into environmental friendly sources of water and electricity versus building more reservoirs?

This kind of thinking increases the chances of making major technological breakthroughs exponentially. Innovation can create new global commercial opportunities for American entrepreneurs!

A partnership between business and government can demonstrate to politicians and bureaucrats the value of thinking strategically rather than tactically — the first step toward the 21st century American citizens want and deserve.

What does the USA have to lose?


We Can Fix the Mess NAFTA Created for US/Mexico Trade

The Canada and USA Bi-lateral Free Trade Agreement was implemented in 1990.

At that time I was the Program Manager for a global logistics re-engineering effort at Unisys. This was a first-of-its kind Logistics System (people, process and enabling technology) seamlessly integrating manufacturing plants and distribution centers located in five countries – including the United States and Canada – on three continents.

The system tied every component (by “country of origin”) plus all labor added at every level of the manufacturing process directly to the unique (serial numbered) computer peripheral finished product.

The granular ability to track parts and tie them, across the global supply chain, to the individual worker who had handled them led to an agreement with the US Customs Service to provide entry documents electronically to the US Customs Service for pre- approval.

The team quickly created electronic entry documents to satisfy the new Canadian customs requirements – making Unisys an early beneficiary of the agreement.

After some initial hesitance by the Canadian people – who feared becoming a defacto 51st state – free trade between the USA and Canada has worked very well — accelerating negotiations for a tri-lateral North American Free Trade Agreement (NAFTA) — signed into law by Bill Clinton in 1993.

Why the Assumptions of NAFTA Failed at our Southern Border

NAFTA has not worked as well with Mexico. During negotiations, many acknowledged the challenges of integrating two “developed” economies with a third that was still “developing”. But negotiators underestimated those challenges.

The US government expected that free trade would expand economic opportunity in Mexico. Expanded opportunity, they argued, would reduce the flow of illegal immigrants seeking employment in the United States.

The hopes for a broader improvement in the economic lives of “average” Mexicans have not been realized.

NAFTA and US Jobs

Trade between the United States and Mexico grew exponentially under NAFTA. But as more raw materials moved south to be returned as manufactured goods — the historic USA trade surplus became a persistent 25% trade deficit.

The deficit will continue to grow as Mexico aggressively imports American manufacturing jobs.

But not all job-shifting by US manufacturers to Mexico is negative for American workers.

The “cross border supply chain” has the potential to strengthen employment across North America.

The Ford Solution

Made-in-America is central to Ford Motor’s brand strategy.

When they announced the development of a 2018 manufacturing line in Mexico to build low margin Ford Focus hybrids – they simultaneously announced the existing Michigan plant will be upgraded to produce high priced SUVs and trucks.

The $8/hr jobs go to Mexico to preserve and increase $60/hr jobs in Michigan.

Bombardier – the Canadian airplane manufacturer makes a similar argument — its Mexican fuselage plant results in increased employment in the United States and Canada.

US/Canadian Free Trade Suggests a Template

Auto manufacturing on both sides of our northern border increased as a result of liberalized Direct Foreign Investment (FDI) regulations in Canada.

It created a flourishing cross border consumer economy with Canadian “day trippers” flocking to US shopping centers to buy attractively priced merchandise.

The US market for Canadian energy products and precious metals increased as a result of lower costs and ease of transport.

Hollywood studios have taken advantage of the lower production costs in Canada to develop significant satellite operations without fear of intellectual piracy.

USA/Canadian imports and exports tend to balance each other out – resulting in real GDP growth in both countries.

Canada is, also, our most reliable ally.

Building a Beneficial US/Mexico Relationship

A mutually beneficial trade relationship with Mexico is entirely possible – a relationship that looks more like our Canadian trading relationship.

More manufacturing jobs are an opportunity to expand the Mexican middle class but not all of those jobs have to come at the expense of American workers.

Rising factory wages in China create an opportunity for Mexico to compete globally to manufacture products destined for North American consumers.

To capitalize on this opportunity, Mexico must rapidly improve public education. The US can help through the Peace Corps, Teach America and other non-governmental organizations.

Build a more Efficient Cross Border Supply Chain

Further, strengthening the North American supply chain so that raw materials, sub-assemblies, and finished goods can move smoothly, safely, rapidly and legally across our southern border will require better highway and rail transport from the Mexican interior.

Joint investment in developing infrastructure – through the Inter-American Development Bank and cross border investment ( — will create skilled and unskilled labor jobs in Mexico – drawing more economic migrants back to Mexico from the US while growing GDP on both sides of the border.

Renegotiate NAFTA

Growing trilateral GDP was the impetus behind NAFTA. It remains the objective, but the agreement has to be renegotiated with assumptions based on reality.

What is important is to grow the middle class throughout North America. This is not a zero sum game!

The United States and Canada can help accelerate Mexico’s economic development but Mexico must take the first step by cleansing itself of rampant internal corruption.

In addition to demands for better schools, the emerging middle Mexican middle class will demand effective public safety and better social services. NAFTA negotiators must support these demands.

Further, they must link renegotiation to forceful actions by the Mexican government to deal with international drug smuggling and human trafficking.

Nothing undermines NAFTA more than the volatile southern border that has existed since General Pershing chased Poncho Villa back across Rio Grande in 1916!

Made In China

China versus USA: Piracy on the High Seas of International Trade

While Thomas Jefferson was negotiating with France over the Louisiana Purchase, pirates operating out of Tripoli (now Libya) were menacing American mercantile ships in the Mediterranean – imprisoning and ransoming crews — and impeding the expansion of American trading relationships with Southern Europe.

Expanding global trade was imperative to the survival of the Republic.

In their book Thomas Jefferson and The Tripoli Pirates, authors Brian Kilmeade and Don Yaeger offer an engaging account of America’s first response to piracy on the high seas.

President Jefferson sent the US Navy and Marines.

Supported by Congress, Jefferson took major risks — ranging from the bombardment of Tripoli to the Trade Embargo of 1807 — to establish the RIGHT of American merchants to trade anywhere at any time without fear of assault by pirates or the British Navy.

USA Founded on Principle of Trading Freely

Profitable trade has driven American economic development since the first European settlements.

For the next +/- 150 years, the colonies traded abundant natural resources (animal furs, lumber and fish) and commercial agricultural products (cotton, tobacco, molasses, sugar) for manufactured products and luxury goods (silk, tea).

More than 20 percent of North American trade was carried by ships built and owned by colonial merchants by 1773 — when the Boston Tea Party previewed the coming rebellion.

The British government should have taken note.

The seeds of the American Revolution were spread in reaction to British trading policies these merchants considered oppressive and confiscatory.

The British East India Company imported tea from China and sold it in the colonies — forbidding colonial merchants to engage in direct trade with China.

Not long after the Revolution the Stars and Stripes flew over the Canton, China harbor.

Our early trade with China was lopsided, corrupt, and tightly constrained by the Chinese Emperor — not very different from our trade with China today.

How China Plays by Different Rules

Since World War II, American trade policy’s been built on the assumption that strong trading relationships lead to strong friendships, a “level playing field” for expanding trade, and a strengthening global middle class.

A middle class opposed to war and eager to buy American manufactured and agricultural products.

China and the United States resumed trading after a thawing of relations during the 1970s.

Rather than level the playing field – American concessions as acts of “friendship” — tariff reductions — cost jobs.

But there’s no reciprocity from China. America imports 91 percent more from China than it exports to China.

China’s emerging middle class has shown a willingness to pay for quality American made goods but their government continues to protect Chinese businesses from foreign competition.

China’s global power house factory system was built on what the World Trade Organization often finds to be unfair trading practices: erecting barriers to some products  and “dumping” others.

Apple Inc. Suffers Chinese Trade Piracy

For example, CEO Tim Cook argues Apple cannot manufacture iPhones in the United States because wages for Tool and Die Makers would add 40% to the cost of iPhone.

The facts are different. The manufacturing cost difference would be about $2.50 for every $700 retail phone

The real reason – China requires products sold in China to be made in China.

China is Apple’s largest iPhone market.

But acquiescence has not protected Apple from Chinese trade piracy.

Just last week, Chinese Courts ruled that a Chinese (defendant) firm can manufacture and sell worldwide goods stamped with the iPHONE logo and the internationally recognized registered trademark symbol (“R”) without a license from (compensating) Apple.

Counterfeiting goods is big business in China.

It is government sanctioned 21st century piracy!!

The Real Reason Behind our Murky Relations

With such an abysmal record on trade, why is China is still a “most favored nation”?

Why are China’s military provocations in South China Sea, cyber assaults on our government agencies and overt military spying met with pronouncements of concern rather than actions of real consequence?

Easy: China holds nearly $2 Trillion – 1/3 of the total US Debt in foreign hands.

We Must Retool Our Assumptions about China

President Obama and his successor – whoever she or he may be – must make clear to China bilateral trading relationships and genuine friendships are not necessarily the same thing.

We trade with nations we do not consider friends – for example Vietnam or Russia.

BUT – we do favors – eliminate tariff barriers – only for our friends.

The United States economy – troubled as it is – is still the largest economy in the world. (

If China doesn’t sell their goods to the United States who will buy them?

If China does not buy US Treasuries where will they safely invest their dollars?

We have economic leverage. Chinese outrages have stirred the administration but quick, bold trade renegotiation is required.

China should have no doubt we remain committed to eliminating any and all piracy.


Saving US Economy Starts Now: Keep Oreo Cookies in Chicago

The first item I selected at the grocery store last night was a bunch of fresh tulips with a banner “Grown in California”.

As I was preparing dinner, I turned on the ABC Nightly News. David Muir reported from the newly renovated Renaissance Hotel at Times Square that Marriott Hotel brands were all switching their guest room towels from imports to “MADE IN AMERICA” – without adding a penny of cost to Marriott hotel operations.

Consumers Drive Job Creation

My tulip purchase helped to make and maintain a job for a Californian.

Marriott Hotels’ towel decision has created 150 manufacturing jobs in Georgia.

Those manufacturing jobs will create additional opportunities from cotton farmers to the local diner.

Marriott Hotels’ action is not just good for American workers – it’s classic American marketing. They’ve created a differentiator.

A differentiator is anything that will separate Marriott from the competition– i.e. will cause the consumer to pause — give their offering a second look.

Guests will tell their friends how good they felt wrapping themselves in Made-in-America towels at a Marriott property.

That good feeling — backed up with an effective advertising and free media campaign will garner Marriott brands additional customers this vacation season.

The more effective the strategy is for Marriott, the more quickly their competitors will “catch the wave” of Made in America towels.

Every Presidential Candidate Promises Jobs

According to recent polls, the number one issue in the 2016 Presidential Election is THE ECONOMY.

Every candidate is promising to produce jobs – lots of jobs.

But none of them have explained how they are going to do it.

Maybe we should elect David Muir? Unlike all the leading Presidential candidates, he understands that a dynamic economy is a balance of consumption and production!

The American economy grows, generates real new Gross Domestic Product (GDP) when it creates a demand for American made goods instead of imports. pace at which the economy grows is determined by how fast those dollar bills change hands between producers and consumers within the circle of the US economy.

When consumer goods are imported into the United States rather than manufactured in America, the American economy shrinks because dollars exchange hands between consumers in the United States and producers in other countries.

In Short: Importing consumer goods exports American jobs, wages and consumer dollars.

The Result is a Slowing US Economy

Demand makes economies grow.

In the years after the Second World War Mississippi enjoyed a flourishing textile industry. They grew cotton and turned it into textiles and clothing that we all bought.

In the 1980s and 1990s textile manufacturing jobs in Mississippi began a steady migration to China and other “developing” countries – where wages were lower.

The Congressional Research Service estimates that by 2005 three quarters of the nation’s textile and clothing jobs had been off-shored.

In Mississippi, riverboat gambling became the replacement industry. “Service sector” jobs – waiters, maids, and croupiers – command much lower wages than more highly skilled manufacturing jobs.

Less clothing manufacturing meant less demand for Mississippi cotton. Cotton farmers earn less and employ fewer workers to grow, harvest and gin the cotton.

The result: Fewer jobs, lower paying jobs and reduced profits — a reduction in national consumer demand for “Made-in- Mississippi” — weakened the Mississippi economy.

Mississippi has the highest poverty rate in the United States – with more than 20 percent of their population living below the poverty line.

In 2016 – Plug the Job Leak

Stop the bleeding!

Between 1998 and 2013 fully one third of the manufacturing jobs in the United States disappeared. This extraordinary job loss is magnified by the fact that the US population grew by twelve percent in the same period – widening the gap between good paying jobs and available workers.

Some of the job losses are due to innovation and obsolesce but most can be traced directly to the export of American jobs.

The pattern is continuing in 2015.

Nabisco announced that it is sending 600 unionized jobs from Chicago to Mexico to save $46 million dollars in “costs”.

Bring Oreo Cookies Back to Chicago

The sisterhood of American moms and grandmothers can stop this outrage by refusing to buy the product.

The most powerful weapon Americans possess against job loss is purchasing power.

Just like the union workers who are being shelved by Nabisco – all of us can “go on strike” – boycott Oreos made in Mexico!

I want my grandkid’s Oreos baked by a profit-sharing baker in Chicago.

I’ll pay a little more for bedding manufactured by a profit-sharing seamstress in Vicksburg, Mississippi.

It is a mystery to me that Presidential candidates don’t point to the relationship between “buy American” and “growing” American jobs?

Someone get Hillary and Donald a plate of Chicago baked Oreos!


Every American Worker Needs a Better 4th Grade Education

It’s hard to impress my 12 year old granddaughter, Alyssa.

We were Easter basket shopping and while we were standing in the checkout line, I was pulling out the cash to pay for our purchase – down to penny.

“Wow, how did you do that?” Alyssa asked, surprised that I could do the math in my head.

I explained I had added the price of the two items she and her sister had picked out and then multiplied the total by 9.25 percent (our sales tax rate) and rounded to the next highest penny.

“In your head?”

“There were no hand held calculators when I went to school.” I replied. “You couldn’t pass 4th grade if you didn’t know your times tables – backwards and forwards”.

It’s Not 1970!

In 1970 a high school diploma implied that the graduate had mastered basic arithmetic, could read and write a coherent paragraph demonstrating comprehension of what they’d read and possessed some knowledge of basic science.

Maybe not enough to be admitted to Harvard or UC Berkeley but certainly enough to begin to build a middle class life – an auto mechanic, building trades apprentice, chef, miner, farmer, police officer, fireman, US military member or factory worker.

Fast forward to 2016 and you’ll find fewer manufacturing jobs available to new high school graduates, but there are still hundreds of careers that can be built on a 1970s high school education including new careers like network administrator or computer programmer — jobs that pay +/- $70K or more a year – after only about a year of technical training.

The problem is that a high school diploma in 2016 does not require the same mastery of basic math, English, science and civics as it did in 1970.

Over the past half century a high school diploma has morphed from a measure of accomplishment to an entitlement earned by not disrupting the classroom.

The ACT College Testing Service statistics on college readiness are staggering. Just 25% of entering freshmen are ready to do college level mathematics and 50 percent are ready to do college level English.

When I was a freshman at UC Berkeley, the very few freshmen who failed their English, math or foreign language placement exams snuck out of the dorms at 7:30 AM to take their “walk of shame” to 8 AM remedial classes! Today there’s no sneaking around – it’s half the entering class!

Internationally American 15 year olds ranked 27th in math and 20th in science in 2012 — 50 points less than their peers in Hong Kong in both these vital areas.

The Best Education is Cumulative

A child who enters kindergarten not speaking English is immediately at risk of not succeeding in school, not graduating from high school and never achieving a middle class standard of living.

In California, for example, 42 percent kindergartners come from homes were no English is spoken.  Governor Brown estimates 38 percent of Californians work at low or minimum wage jobs. There’s a relationship!

Raising the minimum wage is not the solution.

We’ve got to fix our K to 12 education system.

True the percentage of high school graduates going directly to college has increased from 50 percent in 1970 to 69 percent in 2014.

But that statistical improvement results from a growing number of students – more boys than girls — dropping out of high school before graduation. Their teachers have taught since kindergarten that high school graduation is nothing more than a ticket to college. Once a student concludes college is out of reach – it is easy to decide to drop out and get a (minimum wage) job now.

A College Degree Isn’t Everything

The education establishment — and the politicians they support with their union dues — must abandon the subtle bigotry that assumes people who don’t have a college degree are “uneducated”.

If these people are “uneducated” – the education establishment should ask themselves — whose fault is it?

In the 21st century, technology will shrink the number of lawyers, for example, the economy needs far more drastically than it will shrink the demand for plumbers and mechanics.

A plumber still needs a good apprenticeship not a college degree.

During the next half century, technology will create tens of thousands of jobs we haven’t thought of yet.

The challenge for educators from the kindergarten classroom to Washington is to graduate every single high school student with a “1970s high school diploma”.

Basic math, English, science and civics skills are analogous to the foundation of a house. Just as different house styles can be built (and later remodeled) on a strong foundation the 21st century worker can train and retrain for several careers over their work life based on a solid high school academic foundation.

Technology can enhance these basic skills but can’t replace learning how to “do the work” to get the answer.

Teachers, themselves, need to embrace the 21st century reality – learning and adapting are the life blood of an economy of opportunity.

Learning needs to last a lifetime but K to 12 is still the indispensible foundation.

Photo Credit: Shutterstock


There’s No Such Thing as a Free College Education

While I was serving as the Strategic Staffing Manager at Intel Corporation, I had a mentor who was the Human Resource Manager for another large company.

Every time I stepped into his office I was confronted by a cardboard cutout of a kitten.

The kitten was crouched over a bowl of milk. The caption read “there is no such thing as a free lunch”.

When any Presidential candidate promises you something “free” in exchange for your vote, you need to ask yourself: “how much am I willing to pay for it in perpetuity – both in taxes and in diminished opportunity?”

Free Tuition Just Shifts the Burden

“A free college education for every student at every public college or university in America” is as likely as being swept up in a tornado, landing on your head still holding your dog, and living to tell about it – i.e. assuming the Wizard of OZ is a true story!

It is campaign fairy dust. Even Hillary Clinton agreed during the Wisconsin Democratic Debate Hillary Clinton.

The National Center for Public Policy and Higher Education recently published an e-book, American Higher Education: Journalistic and Policy, that documents how our states are already struggling to maintain their quality higher education programs.

Our top ranked universities are already under continuing stress: Universities of California, Oregon, Washington, Pennsylvania, and New York train a significant number of our doctors, lawyers, scientists and entrepreneurs.

What happens to these economically essential programs when funds are diverted to an open-ended commitment to undergraduate tuition?

State budgets are funded by taxes – principally income taxes, small business taxes, and real estate taxes.

As state tax revenues tumbled following the 2008 recession and states scrambled to balance their budgets, their public college budgets contracted proportionately.

The recovery, beginning in 2010, has not produced enough revenue to restore most of the drastic cuts.

The University of California, as an example, gets about 40% of its funding from state general tax revenues – the rest from federal government and private research grants, endowments, and student tuition and fees.

Undergraduate, in-state tuition has risen from around $7500 in 2005 to more than $12,000 for the current academic year.

Increased tuition has resulted in an explosion of student loan debt – easy to incur and very hard to repay.

The promise of “free tuition” has obvious appeal for both students and their parents, but is it sound policy?

“Free Tuition” Puts the Tax Burden on College Graduates

Bernie Sander’s free tuition plan is estimated to Sanders Plan cost $100 Billion in the first year of full implementation.

The plan would be funded by a $75 Billion a year tax on Wall Street. To pay the tax, Wall Street would increase fees on the investment tools used by large and small investors alike.

Taxing investment instruments reduces the amount of investment capital available for business formation and expansion around the country. The result would be a contraction of the economy and the creation of fewer new jobs.

Most small investors are parents or grandparents of college kids – or someday will be. The new fees will be added to the income and capital gains taxes these investors already pay. That will reduce the after tax income of retirees, for example.

Mr. Sanders would fund the balance of his plan through increased state taxes – raising taxes on small investors still further.

Students will begin to “pay forward” their “free tuition” in the form of higher taxes from their very first pay check until they die.

Public Colleges Need Incentives to Modernize

The objective of “free tuition” is laudable. A more realistic approach is to make college more affordable by driving down costs and embracing innovation.

Colleges and universities need to join the new America. They’ve got to learn to do more with less!

What if public colleges switched from negotiating reductions in faculty compensation and retirement benefits, and put more emphasis on faculty teaching hours.

If each professor taught 10 hours a week rather than 6 – a third more students could be accommodated at nearly the same cost.

Some studies estimate that as many as 70 percent of entering freshmen are not “college ready”.

What if colleges required freshmen to take and pass remedial courses over the Internet before arriving on campus?

Students – on average – would save a year of tuition and campus living expenses. Colleges would save staff and classroom space.

Millions upon millions of dollars are spent on college athletics.

What if the professional sports leagues that depend on college athletic departments as their “farm team” – paid for the management and maintenance of these athletic programs?

Student athletes would still get funding they need to underwrite their education.

Students and alumni would still participate in the rituals of college athletics.

They’d cheer proceeds from ticket sales, gear, and television rights going to reduce the cost of every student’s education.

And isn’t that the objective after all?

The tuition burden on students will start to decrease as soon as colleges and universities step up to the plate and focus on reducing their internal operating costs.

PHOTO CREDIT: Berkeley Lab


Being MADE IN THE USA Doesn’t Mean Your Parents Get to Live Here

Around mid-September 2015, I am expecting a national baby boomlet — focused in California, Texas, Nevada and Arizona – states where the illegal immigrant population is more than 7% of the state’s total.

The baby boom will be a direct result of President Obama’s December, 2014, Executive Memorandum which defers deportation action against any illegal immigrant continuously resident in the US more than 5 years, and – here’s the catch — who is the parent of a baby born in the United States.

President Obama’s executive action will provide an estimated 5 million illegal immigrants with work permits and protection from deportation – the equivalent of permanent residence — simply because they’ve birthed a baby on US soil. These children “anchor” their parents in the United States whether or not the parent would ever have been eligible to immigrate legally.

“Anchor Babies”

But there’s more to the “anchor” than just acting as an argument against deportation. There are significant financial incentives. The little bundle of joy is eligible at birth for US welfare benefits, health care and a free public education.

Tax payers provide food stamps, rental assistance, health care, day care, free school, free school lunches and more. Los Angeles County estimates it spends about $1.6B a year on such benefits to illegal immigrants.  These benefits are paid from local tax receipts that might otherwise be spent on modernizing schools, improving senior centers, housing homeless veterans, additional low cost health care – even street repairs.

Birthright Citizenship is a Permanent “Fast Pass” / an “E Ticket” to the USA

When the birthright citizen child reaches the age of 21, they can “sponsor” their parents’ application for permanent US residency. In other words, the “anchor baby” citizen sponsor jumps his/her parent to the head of the line.

Every year the US authorizes 1,000,000 legal immigrants. 488,000 of the total are classified as family unification immigrants – spouse following husband, for example.

Every illegal immigrant in the US whose status is changed is counted against the 488,000 total allowed.

National Debate to Define Birthright Citizenship Is Long Overdue

The last serious national debate over birthright citizenship took place in 1868 when the Citizenship Clause in the 14th Amendment to the Constitution was passed. The clause was required to remove the barrier to Negro citizenship that had been written into the original Constitution.

Congress did not intend a broad application of this principle. If they had, they would not have specifically excluded Native Americans from the benefits of birthright citizenship!

Thirty years later (1898), the Supreme Court ruled that the Citizenship Clause of the 14th Amendment conferred birthright citizenship to all children born to a lawful permanent resident of the United States. There’s never been a challenge brought to confirm that the same applies to the child of a nonresident alien.

In the century since, at least 80 percent of the legislation and legal opinion has narrowed the grounds for legal immigration to the United States.

During this whole period, bureaucrats have blithely conveyed US citizenship to any child born on US soil regardless of the status of the parents – citizen, legal or illegal immigrant, temporary worker or tourist who just drops in while pregnant.

Several Congressional acts specifically declared large numbers of immigrants to be ineligible for citizenship — but failed to address the issue of birthright citizenship for their children. In almost every case, children born in the US have “anchored” their parents.

Border Security Requires 21st Century Birthright Definition

Since 1910 Congress has tried repeatedly to secure the US Border by paramilitary force and it hasn’t worked.

It is farcical to believe that it is possible to secure any of the nation’s borders as long as the rewards of illegal entry – the “anchor baby” at the end of the rainbow — outweigh the risks posed by the US Border Patrol, TSA, or Customs and Enforcement.

Legislation has been proposed in each of the last six (6) Congresses to limit future birthright citizenship only to children born to one permanent resident or citizen parent.

It’s an approach that is transparent, fair, and equal – the original purpose of the 14th Amendment.

Can such legislation pass Congress as a step toward “comprehensive immigration reform”?

It is certainly past time to have the debate and let citizens decide.

Photo Credit: Google Images

Fair Pay Act

What You Need To Know about the Fair Pay Act

Just last Saturday, we had dinner at a BJ Brewery location. It’s a family-style restaurant where I usually tip 15 percent. I had had a bad day and was less gracious than I should have been over a couple of mistakes the waitress made. She, on the other hand, was more than gracious in response. I left a 20% tip – she had earned it.

Imagine that on the way out of the restaurant the waiter who had served us two weeks ago confronted me. “You gave her a 20 percent tip but only gave me a 15 percent tip two weeks ago. You owe me an additional 5 percent tip“.

I would be outraged by his brazenness leaving me no alternative. Never tip.

Pay Check Privacy under Attack

If the Fair Pay Act before the US Senate Commerce Committee were to become law, confrontations just like my imaginary tale could become a daily staple of the American work place. The Senate bill would make it illegal for an employee to refuse to disclose their salary/hourly wage to any other employee who asks for the information.

Further, there’s no specific language to insure the employee who is asking has a reasonable basis to believe that they are being treated unfairly. Failure to comply could lead to legal consequences for both the confronted employee and the employer.

The confronter can sue if the confronted claims privacy. The confronter can sue if the confronted acknowledges that he/she earns more money.

Sounds like a full employment act for under-employed lawyers.

It Is Fair to Pay For Performance

In business the issue of fair pay, within the context of equal pay, is a constant challenge. It’s a balancing act – between rewarding key performers and still motivating the larger work force.

We call it pay for performance and no matter how many objective criteria are established, it’s a gut call. Making a gut call depends on the reviewer’s skill plus the assurance of privacy needed to be open, honest and constructive with the employee.

Last Saturday, I just calculated the waitress’s tip and left it. It’s much harder to sit across the desk from someone you work with regularly and explain they are not going to get the raise they expected or they are going to get a promotion they didn’t expect but deserve more than a colleague – and why that is so.

Imagine Public Performance Reviews

Can you imagine conducting that review in an auditorium full of the employee’s peers? Neither can I – but that is the net effect the Fair Pay Act would have.

Performance reviews would take on the characteristics of a trial. The reviewer would become the defendant, the employee the prosecutor, the co-workers the jury judging the fairness of the argument and outcome.

The appeals process would be endless. The money in the merit pay pool would be diverted to pay for an army of lawyers.

Employers Left With Bad Choices

Employers would be left with two bad alternatives – eliminate all incentive pay and performance reward systems or relocate jobs outside the United States.

Eliminating incentive pay and performance rewards creates disincentives for employees. There is peer pressure to resist innovation, creativity, increased productivity and demonstrated ingenuity. That was the pay philosophy at General Motors – prior to the 2009 bankruptcy.

The easiest jobs to relocate are the best jobs – for example, technology, banking, pharmaceutical research, and advanced manufacturing. The jobs we need to build a sustainable 21st American Century.

What If Congress Gave the Economy a Kick in the Pants, Instead?

The best way to insure fair pay is to expand the economy.

The government has a legitimate leadership interest in building and maintaining the national physical infrastructure. These activities – properly funded – will generate engineering, construction jobs and support jobs to boost the economy this year and into the future.

We know exactly where these jobs are. Our national transportation system isn’t globally competitive. Our national utility grid is unacceptably fragile. Our major seaports must be modernized to compete globally to dock 21st century super-cargo and super-tanker ships.

But where will the money come from?

WHAT IF the Senate chartered an independent, private sector US Infrastructure Bank to fund modernization of our public infrastructure?

When the economy generates more jobs than qualified applicants to fill them, pay for performance is not just fair but required to compete for workers! Isn’t that the real objective after all?

Photo Credit: Howie Levine/RAC

  • It is up to YOU

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    In the coming weeks, will do what our Presidential Candidates and other politicians are not - throw out some positive and plausible ideas to "right the ship of state".

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