Tuesday, October 30, 2007

Reinventing Lawyers

I've noticed that as one grays around the temples, some sort of phenomenon gives others the impression that you know more than you knew before.  Suddenly, people who might never have listened to a word you had to say consider you a "resource" or, even worse, a "mentor".

In the case of my two sons --16 and 19 -- the phenomenon has eluded them; polite and wonderful as they are, it is clear from the rolling eyes that I've not much new to say.  Perhaps their epiphany of my wisdom will be manifested by some other physical change, perhaps false teeth, the continuing gravitational pull on my chin, or perhaps a prop (cane, walker, etc.).

In any event, the children of OTHER people seem to think I have something to say...and they are not shy about asking.  I probably have two or three conversations a month with someone considering law school.  I read them the Riot Act, explain market supply and demand, why associate attorneys are, in the vast majority of cases, today's version of galley slaves, killing themselves to enrich the fat coffers of their fat bosses, etc.  I tell them of the rewards of law, of the extraordinary buzz I get out of seeing the face of someone whose potential disaster I averted through my legal training and skills.  We discuss areas of practice (they ALL want to be international or immigration lawyers, poor souls) and they are always excited about our banter.

There is one subject, however, that takes them ALL by surprise:  it is when I tell them that while the tradition for lawyers is to graduate, get hired, and move up the food chain, the world of legal practice is changing dramatically and their reality will most likely be considerably different.  They must, I tell them, forget about that tradition and instead look ahead toward the practice of law as a tool with which they can find a meaningful, satisfying,  and financially rewarding career in the global economy.  I usually get the same response.

A blank stare.

The mythology of entitlement and order is being dashed to the ground by the global economy, and it stuns me that no one is really talking about its impact on the legal profession.  Law schools -- indeed ALL forms of higher education -- are one of the largest business sectors in the U.S.  Big money is spent on tuitions, on designer label visiting professors, and on the buildings which they call home.  So we look at little Joey, all grown up, talking about going to law school, isn't that wonderful...but we do not analyze the statistics which suggest that Joey might be better off starting his own web publishing business or taking that little eBay site he's done so well with up to the next level.  There is a considerable vested interest in our society in keeping those law schools full, and so Joey goes to law school.

In contrast, MBAs graduate with no uniform expectation of career path; the degree is viewed as a useful business tool preparing them for an infinite number of commercial possibilities, defined by their abilities, passions, and creativity.  A business partner of mine got his MBA and has spent his entire life in the non-profit sector.  Not so with a law degree, at least for the majority who seek it. I knew from day one of law school that I was not of the personality type which considers litigation "fun";  I knew I would not follow the "normal" career path most of my colleagues expected.  But today's prospective lawyers, despite the way the global economy is unfolding, remain oblivious to this new reality.  Instead of understanding the need to match their personal abilities and interests to what the economy demands, furious young law graduates ranting about their $150,000 in student loans and $8/hour clerkship are front page news in the Wall Street Journal.

Whoosh, just goes right over their brilliant little heads.

While we make a fine distinction -- sometimes passionately -- between "professions" and other industries, the truth is that, advanced degrees notwithstanding, doctors need patients every bit as much as plumbers need clogged pipes.  (Oh, the self discipline I am invoking to not inject a barrage of plumber/doctor wordplay at this point.)

The predictable career path of attorney lore is no more, but there is nothing to grieve about...change for improvement is always good.

Consider my very good friend, Casey.  Our family doctor for many years, he had a wonderful family practice.  We could drop by on a moment's notice if a kid got sick.  As is the case with so many physicians, after many years he came to the conclusion that there had to be a better way to practice.  He was tired of spending half his time running the business of being a physician, which only took away time from his passion...taking care of patients.

I would not describe Casey as anything other than smart and steady, but when the opportunity to join a large practice group materialized, he made the changes; going from a lovingly built private medical practice to a great big corporation was no minor event in his life.  Today, his time is spent on patients and he doesn't spend weekends paying bills and figuring out payroll.  Okay, so I don't know the receptionist anymore and I can't swing by to shoot the breeze because he is working very hard all day, but he is taking care of more people, has a great support system, owns his time and is very happy with the transition.

Change for improvement is ALWAYS good. 

Just as Casey found a new way of looking at his long-established medical practice, prospective and practicing lawyers would do well to similarly analyze the incredible inefficiencies which continue to characterize the U.S. legal system, depriving clients of the attention and service they deserve, and further eroding the reputation of our noble profession which is, after all, about helping other people.

Friday, October 26, 2007

Unions in Check: NLRB Permits Faster Challenges by Members

As the National Labor Relations Board hustles to clear its docket, corporations are being pleasantly surprised...while unions cry "foul".

Dozens of recent case decisions show a definitive intent by the Board to further limit organized labor. The Bush administration has long been the target of union criticism; after years of pro-union decisions during the Clinton years, the about-face created tremendous issues for unions. Setting aside their own well-document issues -- for example, the ongoing corruption probes, their pragmatic, practically-overnight embracing of migrant workers into union membership after years of ruthlessly demonizing them, etc. -- organized labor has decided that the current Board simply isn't playing fair. But are they correct?

It depends how you view it. The five appointed members of the NLRB inlcude three Republicans and two Democrats. Two of the Republicans' and one of the Democrats' terms are due to expire soon. A 3/2 split is hardly outrageous for political appointees and the NLRB Chairman, Republican Robert Battista, says the claims of the unions are horse-hooey: they are clearing the docket because the docket needs to be cleared and there is nothing partisan whatsoever going on. But the nature of the beast itself IS political, as can be documented by the consistently pro-union votes of the Democrats and the consistently anti-union votes of the Republicans.

But one decision in particular is relevant to large employers: limitations in "card checks". Basically, when a union attempts to organize within an employer, the employer may agree to recognize the union as a majority if the majority of workers in the company have signed cards showing their support for unionization. Obviously, unions love this because it is easy to get a signature for a generic endorsement...and much harder to wage war via a voting campaign.

Because unions are in the business of generating revenues for unions, the more members, the better. Duh. But in doing so, many make a lot of promises which soon vaporize, leaving the new members with only union dues as a reminder of their union membership. Accordingly, many who sign a card check soon change their minds. Under federal labor laws, once a union is recognized via card check, disgruntled members can't force an actual vote for 3 years or the length of the initial contract, whichever is less.

Accordingly, the you-know-what hit the fan when the Board recently decided that a minority of workers can seek an election within 45 days of a card-check driven formation.

This means two things:

-false promises are no longer a viable means of inducing card check support and

-employees affected by unionization will be for the first time ever empowered to challenge deceptive union formation practices.

As we learned through the elections we forced upon Iraq, democracy may not make everyone happy, but that's precisely what democracy is..

Thursday, October 25, 2007

Metagaming, Economics, and Global HR Compliance

Today I am going to talk about the LEAST talked about 2007 Nobel Prize, the one in Economics, awarded to three U.S.-based economists - game theory pioneer Leo Hurwicz, Eric Maskin and Roger Myerson. After half a century of work in a little-known but massively cool area of game theory, it’s about time.

Before I get into explaining their area – known as mechanism design theory (MDT) – I must explain that as a person who barely squeaked by with a “B” in Dave Denslow’s Economics class some 30 years ago at the University of Florida, I am hardly in a position to analyze, much less pontificate, over a heady topic such as this. Still, it is the Blessing of the Blog that its author can spout forth in both wisdom and ignorance, and the reader can read or roll his/her eyes and move on. Motivated by the early watchers of the night sky who were able to connect the dots and assign meaning and function to what appeared to be chaos, suffer my ramblings as I cobble together my theory on how MDT can transform your business. Perhaps I can shed a ray of light or two on the gloomy night sky of global workforce compliance in the process.

A recent economist described MDT as exploring “the gap in knowledge between buyers and sellers, and the costs and consequences for the efficient operation of a market.” Wikipedia describes it this way:

“Mechanism design is the art and science of designing rules of a game to achieve a specific outcome”

It is a form of “Metagaming”, which Wikipedia describes as:

“...a broad term usually used to define any strategy, action or method used in a game which transcends a prescribed ruleset, uses external factors to affect the game, or goes beyond the supposed limits or environment set by the game.”

Getting creative within a hornet’s nest of federal and state HR bureaucracy presents a number of challenges; this is precisely the story behind the success of I-9 Advantage and our evolving suite of workforce compliance services and products..

Here’s a beautiful example of metagaming at its core, also from Wikipedia:

“There is a special set of moves in chess which allows a player to win in four moves. Competitor A has been watching Competitor B play chess, and the past five games in a row Competitor B has attempted to use this four-move win. When Competitor A sits down to play against Competitor B, Competitor A will be metagaming if he/she plays in a way that will easily thwart the four-move checkmate before Competitor B makes it obvious that this is what he/she is doing.”

That, dear reader, is why I get so stoked about what we are doing. In a world where government regulations continue to hammer industrial clients with potentially collossal fines and sanctions, I-9 Advantage is thinking several moves ahead and guiding our clients through these murky times.  I-9 Advantage has quietly become the leading provider of I-9 and workforce compliance solutions because we have, quite simply, shattered the box.

Rooted in Total Quality Management, infused with Design for Six Sigma, and encrusted with the desire to shake up the legal status quo and give U.S. and global employers a smarter solution, the attorneys and experts at I-9 Advantage are all driven by a common vision of excellence.  It is our curiousity, our willingness to take things apart, analyze them, and reinvent them, that has led to the industry revolution we have triggered.  As we disrupt, those disrupted are grumbling, but that’s part of the process. 

Just like the guy whose four-move checkmate no longer works.   Talk to me if you need to no more about what we can do for your corporate peace of mind.

Wednesday, October 24, 2007

As if Compliance isn't a Big Enough Headache...

The EEOC is reporting that HR departments are being targeted for bogus emails containing a Trojan Horse virus.  According to the department, the email's subject matter features precisely the kind of wording that makes the heart of an HR Director or GC leap:

"Harassment Complaint Update For"

Pass this information on to your recruitment, HR, and legal folks.  Although most of us have virus detection software protecting us, a lot of folks don't run such protection at home, on mobile devices, etc.  Let them know NOT to open any attachments or click on any links if they receive what appears to be an EEOC email.

Trust me, if there's been a complaint, the EEOC won't by shy about relaying the info to you via a legitimate email without infected attachments.

Monday, October 22, 2007

2007 in Enforcement: Business in the Bullseye

Back on August 9th, ICE -- U.S. Customs and Immigration and Customs Enforcement -- released a five page memo euphamistacally entitled "Protecting National Security and Upholding Public Safety".  The memo, signed off by Asst. Secretary of Homeland Security Julie L. Myers, attempts to stamp the administration's current employer-sanctions initiative with the seal of "national security" and "Public safety".  Consider the proud list of raids detailed within and see how much safer you feel from Al Qaeda:

-Fresh Del Monte Produce 160 farmer workers rounded up with fake social security and other documents; each faces, according to the memo, up to 15 years imprisonment and a $500,000 fine...roughly one fruit picker's earnings over 112 years the GNP of his village in Sonora (when combined with the next 15 villages in the vicinity.)

-George's Processing Plant- 136 southwest Mississippi chicken-pluckers/gutters/cleaners/packagers.  Of those, one was charged with "being an illegal alien in possession of a firearm".   Sounds like Al Qaeda to me.

I could go on and enumerate the other 10 raids proudly hailed as "protecting our national security" , but it doesn't seem worth the tedious effort:  the dining room wait staff, landscapers, pork processors, sweatshop seamstresses, cleaning crews, hotel maids, etc. which make up the balance of those arrested and placed in criminal proceedings didn't really sound like, uh, terrorists.

Should U.S. immigration laws be enforced?  Absolutely!  Should employers who willfully violate such laws be sanctioned?  By all means.

Should the administration take a deep breath, regroup, and rethink its policy of linking chicken pluckers with national security in its wholly incredulous attempt to justify its heavy-handed intrusion on private sector employers while offering them no viable means of legalizing their workforces, made up of mostly decent foreigners willing to do the work you and I prefer not to do?

I think so.  The whole WMD fiction that got us into Iraq is now hitting even closer to home, and no lawn, hotel room, or unpicked tomato in America will be safe until someone slaps this sadly chaotic administration upside the head with a wake up call for sane solution which doesn't villanize employers of low-skill laborers and the workforces upon which the depend.

Wednesday, October 17, 2007

The Fear Factor Hits HR

Why, oh why, am I always right?

Like some latter day Nosferatu infused with the wisdom of the immigration elders, I've been calling this whole "Attack on U.S. Employers" deal for about four years...and once again my voice calling in the regulatory wilderness proves prophetic.

The call came yesterday: an old friend/client whom I'd transitioned to U.S. permanent residency several years back was in a panic.  It seems an audit letter requesting an I-9 review of his employer, a substantial South Florida enterprise with several hundred workers, had landed on the boss's desk a few weeks ago and the boss bellowed for the usual suspect: the Director of Human resources...my friend's new position.

"What do we do, Jose?  I've looked through the files and it's a mess!   It was all before I was in the job and most of the I-9s are incomplete or don't have copies of the proof of work.  I already have called in about 50 Latin employees to update their files and bring in their proof of permission to work. You have to help me!"

Here we go again, I thought to myself.  After explaining the concept of "Privacy Act" and advising him to revisit his approach as far as correcting the problematic I-9s, I gave him a few suggestions as to how to assemble the documentation for the site visit...which is tomorrow.  I could hear the gnashing of his teeth as I said goodbye.

They're in big trouble.

Experiencing a bit of a deja vu, I dug deep into my archives and tracked down an email I'd sent my friend's boss about two years ago, advising them that given their industry sector (can't say) and profile, it was essential to conduct an internal I-9 audit to remedy any issues since the company was a prime target for workforce audit.  I read the email history and saw it was my second such email to the company's owner, and that he had responded to neither.

No prophet is welcome in his hometown.  Perhaps those of you reading will heed the Book of Workforce Compliance Revelations and get thee to I-9 Advantage before the fire and brimstone hits your HR team.

Tuesday, October 16, 2007

Simplifying Workforce Compliance for Inside Counsel

Political tides shift, and the historical benevolence extended to corporate America by Republican administrations has given way to an enforcement-driven policy designed to salvage conservative voter discontent.  The losers, of course, are not just the corporations suddenly facing a barrage of potential fines and sanctions.  Both undocumented AND lawful workers are being caught in the fine bureaucratic net intended to enforce existing -- and often conflicting -- Social Security, labor, and immigration laws.   And while they will not receive much sympathy from either the U.S. government or the public, corporate legal departments are in the front line of the current battle.

The October 2007 issue of Inside Counsel magazine features an excellent discussion of this phenomenon by Charles James, Chevron's General Counsel and Vice President.  Mr. James astutely points out that the days of "innocent until proven guilty" are long past for U.S. companies, and GCs must carefully determine how best to deal with this reality:

"In today’s world, law enforcement personnel expect that a mere government letter questioning company behavior will prompt the company to launch a comprehensive investigation and deliver the results to government enforcers. The government also expects that a company of any significant size will maintain its own internal police force—not just a passive organization that comes when called, but rather one that aggressively patrols, monitors, detects and investigates all aspects of legal compliance."

The question suggests, he says, is clear: "Should corporate legal departments also act as the corporate police or, more politely, the corporate compliance group?"

Mr. James argues that the GC is ill-equipped to serve as that "internal police force", and here's why:

"First and foremost, there’s the question of resources. A corporate compliance scheme that meets current government expectations must involve ongoing monitoring, testing and auditing programs. These activities, which must be integrated into daily business operations, are more in line with what auditors and accountants typically do. If the corporation is going to task its legal department with performing such duties, it must be prepared to provide the expertise and resources necessary and to deploy those resources in a manner that provides a clear line of sight to potential problem areas."

You can read Mr. James' article in its entirety here.  He goes on to explain that in Chevron, they keep compliance distinct from the law function, but acknowledges that there are a number of ways to "skin the cat".

Staying on top of workforce regulatory issues which can damage a company is what I-9 Advantage group does 24/7.  Email me at j.latour@i9advantage.com to see if our version of cat-skinning is what the doctor ordered for your enterprise.

Thursday, October 11, 2007

SS Enforcement/I-9 Battle Win for Employers...as War Looms

A collective sigh of relief could be heard across the U.S. this morning as General Counsels, immigration attorneys, and labor organizations heard the good news:  the U.S. District Court for the Northern District of California granted a temporary injunction keeping the federal government from initiating its aggressive new enforcement of so-called “no match” Social Security letters.  Under long-existing regulations, the Social Security Administration issues notifications to employers when an employee’s SSN information does not match government record. 

The new policy, abruptly announced this summer and immediately stayed temporarily until this federal court could review it, manifested the administration’s jaw-dropping about-face in its approach to the problem of illegal workers: after the President’s plan to legalize the U.S.’ 12 million+ undocumented aliens collapsed, the White House immediately announced aggressive new enforcement rules aimed at prosecuting those very undocumented workers, while simultaneously threatening to cripple those industries which rely upon migrants to fill jobs American’s don’t want to fill.

What does this temporary injunction mean?  Well, for starters, it means you have a little longer to get your leaky roof fixed before Mr. Chertoff and crew shut down the roofing industry, where the overwhelming majority of workers are not lawful U.S. workers.  The parties were ordered  by the court to “meet and confer on the form of the injunction, and submit a proposed order by October 12, 2007.”

Here’s how the court summarized its decision:

On August 15, 2007, the Department of Homeland Security (DHS) promulgated a final rule entitled “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter.” See 72 Fed. Reg. 45611 (Aug. 15, 2007). Plaintiffs, a consortium of unions and business groups, filed a motion for preliminary injunction, arguing that injunctive relief is appropriatebecause they have demonstrated a high probability of success on four theories: that the rule…

(1) contravenes the governing statute;

(2) is arbitrary and capricious under the AdministrativeProcedure Act;

(3) is an exercise of ultra vires authority by DHS and the Social Security
Administration (SSA); and

(4) was promulgated in violation of the Regulatory Flexibility Act.

The balance of hardships tips sharply in plaintiffs’ favor and plaintiffs have raised
serious questions going to the merits. Accordingly, the motion for a preliminary injunction is GRANTED.

Now, nice as that sounds, here’s the problem:  looking back at the last few years, it’s pretty clear that when courts have tried to limit the power of the executive branch, things haven’t always turned out the way the court intended them to turn out.  Consider Guantanamo.  Or maybe the whole wire/phone tapping stuff.  And then there was Valerie Plame incident.
It’s pretty clear that the relationship between this administration and the courts attempting to enforce our Constitution is not exactly cordial.  This most recent temporary victory – and I stress the former…temporary  -- does not mean employers are by ANY means out of the woods.  In fact, if history is to be considered, it is almost certain that the federal government will continue to pursue whatever enforcement is possible so long as it does not fall specifically with in the letter of the law, i.e., the ultimate language of the injunction.  If history is to be considered, forget about the “spirit of the law”…if the injunction doesn’t spell it out, it will be fair game for Mr. Chertoff.

Therein lies the bedeviling problem:  since the Homeland Security Adminstration was created in response to the horrible events of September 11th, the already convoluted and overlapping laws and regulations addressing illegal employment have become a kaleidoscope of bureaucratic chaos.  At the helm of all of this is an agency which, despite its noble purpose, is tasked with the enforcement of an encyclopedic collection of complex and contradictory statutes and policies which it fails to fully comprehend.  This is nothing new: the fact is that the Privacy Act clearly prohibits a number of requirements imposed in long-existing employer enforcement provisions, and the fact is that probably 100% of U.S. employers are in one or another form of non-compliance with one law or another.

Worst of all, beleaguered GC’s and Directors of HR have not been able to count on outside counsel for a solution.  Sure, there’s software to input I-9s, but who’s keeping a current, real-time audit of workers’ employment status?  And how many of those hiring managers, recruiters, and HR teams have been trained – as they are required by law – to properly collect, monitor, and archive I-9 information?

To hear more about our lean, mean, bullet-proof I-9 solution and the protection it offers against federal fines and share-busting headlines, email me at J.Latour@I9advantage.com .   When I explain what we can do to manage your company’s I-9 compliance, you’ll breathe your own sigh of relief.

Wednesday, October 10, 2007

CAFTA Update- Costa Rica (Probably) Comes Aboard

Well, I've been checking online to confirm the facts but I still can't find definitive confirmation on Sunday's CAFTA vote in Costa Rica.  It APPEARS that voters approved it by a narrow (52%) margin.

Good for them if they did.  The call centers will remain open.  The export opportunities to the U.S. will expand for Costa Rican businesses.  The business centers and corporate affiliates will arrive in greater numbers, creating more jobs and stimulating the economy of this stunningly magnificent yet bureaucracy-ridden paradise.

Maybe my friend will get even get the dial up Internet access for which he's waited six months.

The lesson in Costa Rica is not so much about what Costa Rica WILL accomplish by becoming a participant in the Central American Free Trade Agreement.  The lesson, I believe, is about what they ALMOST didn't approve, and the economic decimation which faces economies which reject globalism for illusions of a world economy long dead and buried.

In today's economy, to the victor comes the spoils.  And so India booms and China explodes, and Brazil trots along, all via their homegrown workforces meeting global market demands.  Meanwhile. the U.S. endlessly debates whether our economy needs to increase the woefully inadequate 65,000 annual visa limit for H-1Bs and -- forgive me for repeating this yet AGAIN -- Bill Gates has no choice but to take his business -- and the thousands of jobs it creates --to Canada.  Unlike the legion of quality schools in India and China cranking out IT, technology, medical, and other professionals in high demand, the U.S. continues to graduate art history majors (no disrespect, I love art...but we just don't need that many, okay?)

Here are the facts about the H-1B workforce in the U.S.:

  • H-1B visa holders represented only 1.2 percent of professionals employed in colleges and universities in 2001 and 1.4 percent in 2002.

  • Even in the field of computer systems design, long stereotyped as the domain of foreign professionals, the share of H-1B visa holders dropped from 10.9 percent in 2001 to 4.4 percent in 2002.

Costa Ricans are divided as well, but the majority are smart enough to understand the consequences of burying their heads in the economic sand.  What about us?

Monday, October 8, 2007

CAFTA and Costa Rica: A Diorama of Globalism vs. Nationalism

Yesterday's referendum in Costa Rica on the proposed free trade on a free trade pact appears to be headed toward approval.  My Tico friends -- Costa Ricans refer to themselves as "Ticos" -- are pretty solidly divided on the issue: half believe that approval of the treaty is an indispensible part of Costa Rica's future, citing the fact that Costa Rica is the only remaining holdback (the Dominican Republic, Guatemala, Honduras, Nicaragua and El Salvador have already approved their participation.)  But a growing number of Ticos -- now about half -- are skeptical of the benefits of free trade, arguing that it could adversely affect Costa Rica's farmers and traditionally "sovereign" sectors such as telecommunications.

While I can't speak on the impact on farming, I can think of nothing better for Costa Rica and its people than to have direct competition leveled against its woefully inept telecommunications system.  The entry of U.S. providers would mean the end of the ICE (national phone company) monopoly, and that would be a good thing.

Jealously guarding a national industrial sector is anathema to a free market, and BOY does Costa Rica serve as living proof.  Recently , faced with dramatic losses from international long distance revenues, ICE demanded that VOIP - voice over internet -- be deemed an illegal infringement on the soveriegn control of telephony.  The lines of patient Ticos filling ICE offices speaks volumes about the reality of the situation:  getting a home internet line can take months, getting a cell phone can take even longer.

It's easier to get a cell phone in Equatorial Guinea, West Africa, an isolated island ruled by an authoritarian leader, than it is to get one in Costa Rica, where Oscar Arias is again at the helm. The same Oscar Arias who won the Nobel peace prize is now being called a "traitor" on his way into the CAFTA voting booth for supporting the free trade agreement.

Whether or not CAFTA passes in Costa Rica -- and it looks like it will -- the lessons from all the bruhaha leading up to the election are very telling for those of us involved in global business.  In the past, this kind of debate about entrenched national "rights" was limited to the Castros, Kims, and the uber-hystrionic Chavez...dictator/demagogues disguised as nationalists.  True leadership seeks market efficiencies; even the Chinese leadership, as control-driven as ever, has implemented broad reforms designed to improve the lives of the population.  So you would think that in a service and tourism driven economy such as Costa Rica, the current national division on free trade is a true aberration.

It isn't.  What it IS is a reflection of the nationlistic reflex we will increasingly see in a global economy, both in developed nations and in those less developed.  The reason is simple: human beings don't like change.  They are threatened by it. It is the tragic reason why so many choose to remain in an abusive relationship because they fear living alone.  It is why the majority of Americans, regardless of their political persuasion, are unable to deviate from the dogma of their respective political party and concede points to the opposing party.

Consider the BPO's (business process outsourcers) which have permeated Costa Rica's economy for the past decade.  Long hailed as a favorite call center location for both its political stability and educated workforce, thousands of Ticos work for leading U.S. and international companies, servicing calls throughout the English and Spanish speaking world.  The failure of Costa Ricans to approve CAFTA will surely mean the end of this industry and the loss of thousands of jobs, much as U.S. legislation against online gambling forced thousands of Ticos out of their online casino jobs.

Just as Bill Gates moved a major operation north to Canada the day after U.S. immigration reform fell apart earlier this year, the many Fortune 500 companies with call centers in Costa Rica will find more favorable conditions elsewhere...and more Tico jobs will disappear.

From my perspective, this phenomenon is like the diorama of a great war within each nation, where those seeking entitlement via national ownership of industries are up against the pragmatists who believe that the only possible way forward is through increased utilization of technologies and relationships which improve efficiencies and costs across the board.  Here in the U.S., when the bipartisan immigration reform bill was slayed, the "nationalists" won.  And the next day Microsoft had no choice but to head to Canada.

If you root out the emotional stuff -- that indignant demand that, darn it, this is OURS and we MUST own it -- invariably nationalism as applied to economic considerations is a folly, leading to some pretty dumb stuff.  I think Costa Rica has better things to do than arrest folks for using Skype.

The truth about this whole "Globalism vs. Nationalism" debate boils down to intelligent analysis.  To paraphrase Jeff Goldblum's character in Jurassic Park,  explaining how it was possible to have dinosaur eggs hatching when all the genetically-engineered dinosaurs were of one gender: Business will find a way. 

VIsionary leaders will understand that fact and steer their economies with that in mind, expending energy to define the highest value in workforce ability instead of digging in their heals to keep foreigners out.  Keeping a watchful eye on how this unfolds is critical for companies with global workforces.  Today's dream offshore location might be tomorrow's hyper-regulated backwater, and tomorrow we might be staffing places we can't even pronounce today.

Monday, October 1, 2007

Faulty Logic

Today a U.S. District Court in San Francisco begins examining the legality of a planned U.S. government crackdown which, if implemented, will, among other things:

  1. make the cost of your produce skyrocket

  2. paralyze the few remaining active sectors of the U.S. construction industry

  3. shut down restaurants and make the cost of your next roof repair triple

At issue is the recently announced plan to step up enforcement by the Social Security Administration of so-called "no match" letters, the process by which the SSA notifies an employer when the Social Security information submitted by an employee does not match federal records.   Essentially, employers have now been placed in the position of "immigration police", and the crackdown will devastate sectors of the economy historically dependent upon foreign labor.   This morning's Wall Street Journal succintly reveals the administration's oxymoronic policy shift:

"The Bush administration prepared the crackdown after Congress failed to pass an immigration bill that would have legalized the nation's 12 million illegal immigrants."

Whatever side of the immigration debate you fall into -- and after 20+ years of living and breathing immigration I myself am still somewhat undecided on the best solution -- one must admit that the 180 degree turn from supporting a resolution intended legalize migrants to target enforcement directed at U.S. enterprises reliant upon them is a bit perplexing.

Theories abound: some believe that in the wake of his failure to pass immigration reform, Mr. Bush sees his legacy inextricably linked to the neoconservative crowd.  If you can't legalize 'em, shut 'em down...even if "'em" means lawful U.S. enterprises and even if the U.S. consumer feels the brunt of the enforcement in his/her bank account.  Others believe that the pragmatic-sounding-but-economically-unfeasible approach -- "let's just enforce the laws we already have on the books" -- is a politically more neutral manner of showing that, well, the government is at least doing something...

Whatever the reasons behind the crackdown, a number U.S. industries are in a near-panic, and the legal review which begins today will determine the fate of many U.S. businesses.  Initiated by the AFL-CIO (another oxymoronic reality for an old-timer who remembers when unions were vehemently anti-immigrant) and later joined by the U.S. Chamber of Commerce, the United Fresh Produce Association, the National Roofing Contractors Association and the Association of Nursery and Landscapers, the legal challenge is based upon the argument that the enforcement could lead to discrimination against of firing of U.S. born workers or legal immigrants.  The argument convinced a federal judge in August, and the enforcement effort was stayed pending the result of the proceedings which begin today.

If the challenge proves unsuccessful and the administration initiates the strict enforcement policy , employers of some 7.3 million workers in the food service, construction, housekeeping, agricultural and numerous other sectors will face fines in excess of the current $2200 per-worker limit.  The roofers told the WSJ that their 4300 members have "no way to run [their] business if this goes forward." In U.S. agriculture, an estimated 70% of workers are illegal immigrants.

You can see where this is going.

This is not a political question because everyone on ALL sides of the fence agrees that the U.S. must both control its borders AND remain economically strong.  And we all agree that, well, picking tomotoes is just not something we really have time to do.  It is, instead, a complex question which integrates our nation's economic need to fill jobs Americans will simply not take,  our commitment to an already-battered  U.S. consumer economy, and our belief in our nation's history of wisdom, generosity, and decency  in dealing with uninvited migrants over the centuries.

Left to the reasoning in Washington, the Melting Pot will soon contain nothing but hot water.