Inside Google's shadow workforce of contract laborers

I don't get the point of this article - why single out Google specifically, when a lot of tech companies (as the article notes) hire contractors? Furthermore, TVCs at Google can use many on-site perks, and I know a few who transitioned into Googlers. I strongly suspect this isn't common at most companies.

One thing that annoys me is what effectivly amounts to a visa fraud. Consulting companies consume most H1 quota even though the peple they hire effectively work in a different location. They bring L visa people to work in an unrelated company (L1 requires immigrant to have been an employee before coming to US). And then we hear about H1 shortages...

Consulting companies charge fereign workers for visa processing (they disguise the charges as training and such) - which is illegal, keep people on L1 visas without applying for Green Cards (so the employee cannot find a US job without the contractor). And Google et al seem to be perfectly fine with that.

Green badge is an intern.

This article muddled a few different issues together in a way that made its point less clear.

The core questions are essentially:

* Does sourcing certain categories of positions from an independent contracting company circumvent benefits non-discrimination laws?

* Does that relationship also depress wages for those positions?

Non-cash benefits occupy this weird legal position in American employment as an artifact of WWII. During the war there was a labor shortage, so wages began to rise as companies competed for the remaining talent. The government was afraid of hyperinflation and since it was paying a lot of the companies that were still producing goods, it introduced wage controls. Companies got creative and started to compete on non-cash benefits (health insurance largely). Controls were proposed, but with the help of the threat of strikes by labor, these benefits got exempted from the wage controls. By the time the war was over, this had created an industry that survives and confuses us to this day. These benefits are very valuable.

There are many folks who think that income inequality is bad and that the government should do something about it. One class of legislation in this area is non-discrimination policies for benefits. Starting with retirement benefits (and most recently the ACA for health benefits), employers became required to construct benefits policies that would help all of their employees and not selectively offer benefits to the most valuable folks. This makes being an employee of a company with good benefits very valuable.

Almost twenty years ago, Microsoft was hiring lots of independent contractors for software development. Microsoft was paying higher cash rates that it paid in salaries to full time employees, but did not extend the benefits programs to independent contractors. These contractors argued that their job responsibilities did not satisfy the "independent" part (there are clearer tests I'm abridging here) and that they should be reclassified as employees with benefits. They were successful and got a multi-million cash payout.

In response, tech companies started to hire flexible and temp labor through brokers and contracting companies who then employed the actual laborers. These companies have worse benefits programs than the tech companies who hire them. If Alphabet had a subsidiary just for janitors, this type of disparity would likely be illegal. However, since the janitors are employed by a legitimately different company, things are probably OK legally.

So, in this context, is Google unfairly cutting benefits to classes of workers by hiring them through an independent broker? Personally, I would argue yes, especially if those same workers are routinely getting fired and then rehired after a delay. Anecdotally, this seems to happen a bunch. I also agree that Google is not the only one doing this, and that makes it worse, not better because more people are getting loopholed out of benefits. I suspect they singled out Google to try to tell a clearer narrative.

Finally, the article didn't do much research on this, but if these companies really only exist to cut costs due to benefits, we should see the janitorial company charge rates that track benefit spending increases. If that is happening while also holding employee rates constant, I think there's a stronger case for trying to patch the hole.

I mean, they did remove "don't be evil" from their company principles, so at least they're not hypocrites.

Still, it sounds like google is walking a line with contractors; some roles/work make sense to have contracted out - but ones where they're working FT along regular hires, or managing a team? That's alarming.

I think more light can be shed on contractors in the major tech shops. Obviously google isn't alone in this practice.

1. The economy is at 4% employment, it has never been more competitive to hire and retain someone. If these contractors are really very unhappy (versus sometimes mildly put-out or slightly disgruntled as the case seems), they can nearly instantly leave.

2. H1B Visas are falling, this makes it even more competitive for Google to retain talent. Citizen talent can immediately leave whenever they want if they don’t like the benefits, Pay, treatment they are receiving versus indentured foreign talent.

3. Why would the contract labor force ever expect to receive the same information clearances and treatment as full time employees? Did they read the contracts they signed and make rational decisions about what to say yes to?

4. I am deeply suspicious of anyone who claims to speak for a group of victims. In this case, the “victims” are generally in the upper 1% of humanity. College educated tech workers working for Google in the United States (did I mention we are at full employment and they can leave instantly?).

These people aren’t victims, they are the champions of the entire world. They are the winners of the game of life, they don’t really need more effort put into making them slightly more happy.

Why not focus our helpful energy on...oh, I Don’t know, the armies of people living like animals, defecating in the street and wandering downtown San Francisco naked with severe mental wellness issues?