California Senators Feinstein and Boxer Sell Out the Working Class

An increase in H1-B visas appeared in the November 3, 2005 federal S. 1932 Omnibus Reconciliation Act of 2005, commonly referred to as the Budget Reconciliation Bill. The Bill included Section 8001, from Senator Feinstein’s judiciary committee, which increases the number of H1-B visas by 30,000 and increases the cost to employers or the recapture fee by $500. With the Bill’s passage, the amount of H1-B visas issued rises to 95,000 from 65,000 in 2006 and the cost to employers per H1-B rises to $3,685.00 from $3,185.00.

The inclusion of increasing H1-B visas is particularly stunning, when considering our current jobless recovery, where the administration has consistently over estimated job creation and Silicon Valley has created no net new jobs. Over the past three years, looking back from July 2005, the seven largest Silicon Valley companies have increased market value by more than 500%, yet Silicon Valley employment declined by 19,600. The Bill is particularly irresponsible when comparing today’s job creation with previous economic recoveries. During the previous recovery from 1995 to 1997 Silicon Valley added 82,000 jobs. We just had a jobless recovery. Selling California’s skilled workers out for $3,685.00 per job is nothing less than shocking.

Our Senators have no clue what it’s like to send out resume after resume, with many times no response and only a dearth of interviews. They don’t understand the economic impact on the family of taking a job at half your previous salary and less benefits. They don’t know what it’s like to waste your time in a part-time job to pay the rent or put food on the table. But they do know supporting foreign workers will make their Chief Executive Officers (CEO) friends and rich contributors happy.

These same contributors that gave tremendous sums of money to Arnold Schwarzenegger’s California Recovery Team – Yahoo’s Chairman/CEO Terry Semel and founder Jerry Yang contributed $100,000 each, Cisco Systems Inc. CEO John Chambers contributed $100,000, and Venture Capital firm Kleiner Perkin’s Vinod Khosla handed over a check for $250,000 – thumb their noses at the Democrats by supporting Republican initiatives and candidates. CEO Scott McNealy from Sun Microsystems and the gang at Yahoo helped Governor Schwarzenegger create false, contrived “town halls,” to promote his anti-worker agenda, yet our Senators sacrifice our jobs to a constituency that works against the Democratic Party’s interests.

Both California Senators had an opportunity to remove the H1-B language, on the same day, through Senator Robert Byrd’s SA 2367, an amendment to S. 1932, but both California Senators decided to vote SA 2367 down. Of the fourteen SA 2367 “YEAS,” three Republicans supported Senator Byrd’s initiative to remove the H1-B visa language.

Similar to H1-Bs, both Senators fervently supported accounting fraud perpetrated by the lack of expensing of stock options reform; again, the Senators campaigned on the side of decimating the middle class. The bulk of stock options, roughly 80% go to the top mangers – the highest paid 50 to 100 -- in an organization, 30% to 40% go to the top-5, and on average only 6.4% go to employees paid under $75,000 annually. Keeping the accounting fraud going since 1994 has helped facilitate the two Americas, one of haves and the other of have nots.

Cisco Systems recent first quarter results, announced November 9, 2005, exemplify the impact of stock options. The company had to cut $0.05 from earnings or $228MM to pay for stock options, which amounted to 20% of the full quarter’s $0.25 in earnings per share, without expensing stock options. The day before S. 1932 was introduced; Mercury Interactive Corp., another Silicon Valley high flying tech firm, announced the resignations of its CEO and Chief Financial Officer, Amnon Landan and Douglas Smith, respectively, over the manipulation of stock option grant dates and pricing. Both of these companies were and are egregious abusers of stock option executive compensation.




Andrew H. Dral, “The Rabble”