View From Lodi, CA: Microsoft And Intel—Profit Without Honor

Last week, in my column titled "Bill Gates—Big, Rich Phony", I chided Americans for failing to engage in the political process.

More pro-active involvement, I speculated, might result in greater opportunities—especially jobs—for our children and grandchildren.

I was specifically critical of the amount of time parents spend with their children at soccer, tennis and swimming lessons.

While they're at play, Washington, D.C. is either giving high-income jobs to foreign workers via the H-1B or L-1 visa or off-shoring those jobs.

For a country that talks incessantly about kids and their future, few Americans seem willing to fight for them.

In conclusion, I noted that if concerned citizens don't mount a vigorous defense against American job loss, influential globalists like Bill Gates, who favors no caps on H-1B visas, are certain to get their way.

No sooner had I filed my column when I read that Craig Barrett, chief executive officer of California-based semiconductor giant Intel told New York Times columnist (and a fellow proponent of unlimited visas for foreign workers) Thomas Friedman that his company can be totally successful without ever employing another American.

Barrett added that he could hire the best brain talent "wherever it resides."

What Barrett didn't say is that his "brain talent" comes to the US on H-1B or L1 visas.

The L1 visa allows a company to transfer one of its international employees to the US, and permits him to work for seven years before returning home.

The hook: an L1 visa holder is paid a wage closer to his salary in his native country than the going rate in the US. And, unlike the H-1B visa, the L-1 has no cap.

Intel, Friedman pointed out, is making its engineering investments in China, India, Russia, and Poland and, to a lesser extent, Malaysia and Israel. That's a lot of job creation…all overseas.

Like Gates, Barrett lays much of the blame for having to go offshore for professionals on the poor K-12 public school system.

Barrett bemoans the lack of meaningful science instruction at most typical high schools. And he points to Intel's multimillion-dollar investment in trying to improve the way high school science is taught.

But Intel's high school programs are just window dressing and tax write-offs.

University of California Davis Professor University of California Davis Professor Norm Matloff told me to "take every remark made by Intel as insincere and self-serving." 

Barrett revealed his true agenda in a meeting last week with journalists at Reuters News Service. [Intel's CEO on taxes and green cards May 8, 2005]

Pushing as always for more free trade, unlimited visas and lower corporate taxes, Barrett said that Intel could save as much as $1 billion in taxes over 10 years by building its next factory in a country Malaysia.

Barrett is also looking favorably at India, which he called "more competitive," to set up an assembly and testing facility.

Building overseas, instead of upgrading an existing U.S. facility, would be worth as much as $5 billion to the host nation, said Barrett.

"There are many locales that you can go to that have much lower corporate tax rates, even tax holidays for a period of time, and capital incentives or training incentives at a national level," he said.

As for visas, Barrett claims that denying educated people who want to come to the U.S. "has to be the dumbest thing in the world."

But this statement is still more Barrett smoke as there is a glut of educated, talented but unemployed American engineers.

Noted Matloff, "The U.S. produces more engineers per capita than any country in the world except Israel. The problem is that Intel and Microsoft won't hire them."

What put me back on my soapbox this week is that with high school and college commencement ceremonies at hand, graduates will hear thousands of empty words about "their future."

But the future that awaits them is more likely to be the one outlined by Barrett than the flowery one that will be predicted on graduation day.

I grudgingly admit that Barrett can manage his company in whatever way he sees fit. That is the mandate given to him by his directors and his investors.

But I also know that the path chosen by Intel, Microsoft and others who have opted for cheaper overseas labor does not work for the common American good.

Greedy corporate maneuvering translates into bleak consequences for the country.

Barrett is, of course, protected. With a $2.4 million salary and exercised options of $10.7 million in 2004, he's set.

And who knows how much greener things will get for Barrett? Intel is off to a red-hot start in 2005 as revenues and net income rose 17 and 25 percent to $9.5 and $2.2 billion respectively. [Congratulate Intel]

But I view the course that Barrett, Gates and others of the same mind set have chosen as profit without honor.

Joe Guzzardi [email him], an instructor in English at the Lodi Adult School, has been writing a weekly column since 1988. It currently appears in the Lodi News-Sentinel.