This process of maintaining a standing army of unpaid graduates has become characteristic of the IT industry over the last three years
There is an excellent book, really a long essay, by Harvard economist John Kenneth Galbraith called ‘The Economics of Innocent Fraud’. He points out how we, as a society, have come to substitute the term ‘market economy’ in place of the term ‘capitalism’.
In this case, ‘market economy’s a more favourable and gentler term. It comes with an implication that economic power lies with consumers rather than the owners of capital or with the managerial class, who have taken over the work of the owners. It is this substitution that Galbraith points to as an example of innocent fraud.
The trouble with innocent fraud is that it always comes with a foundation of truth. It is essentially more of a white lie than a black one.
What we tell ourselves about the Indian IT industry — that it has created wealth in a completely transparent fashion in contrast to the rest of India Inc., that its genie-in-the-bottle was a Bollywood-like Silicon Valley tale, and that for India to grow, its IT industry must grow — is an innocent fraud.
It was Amartya Sen, in a JFK-esque speech at Nasscom’s annual conference in 2007, who first knocked on the doors of this innocent fraud. “Given what the country has done for Indian IT,” he said, “is it (not) silly to ask what specially can the IT industry do for India (other than what happens automatically without any deliberate pursuit of non-business ends)?” Dr. Sen, however, did not take his train of thought much further than gently chiding the industry, and pointing out that it could contribute outside just the IT sector. In the six years since Dr. Sen’s speech, it has become much easier to see through the innocent fraud surrounding the IT industry; in fact you have to make an effort to not see through it.
On March 4, 2013, fresh engineering graduates hired by IT firm HCL Technologies staged what was perhaps the largest protest in the history of India’s IT industry. Their demands were simple: they wanted the company convert the letter of offers that had been handed out into actual jobs. The students had been issued the letters of intent nearly two years before the protest, in September 2011. Not only were they not being paid, many of them were also pressured and forced to turn down other job offers as HCL dangled the hook of promising them a join date.
As of October 1, 2013, a number of students were still reportedly waiting to be scooped up; others have been turned away after two years, with the company now saying they aren’t technically qualified to become HCL employees.
This process of maintaining a standing army of unpaid graduates has become characteristic of the IT industry over the last three years. It offers IT companies a set of talking points when they pitch to clients; the bigger pool of waiting engineers one has, the quicker you can scale up and down.
On April 11, 2013, CBC News published an expose, detailing how IT firm iGATE tightly controlled the lives of Indian employees that had been sent overseas to work on onsite projects.
“They [iGATE] have a rotation policy, and they make sure you don’t get settled here,” said one of the ex-iGATE employees. “You are always threatened that any time you will be sent back to India.” One of the workers also said, at one point, that he and his family was forced to get on a plane to India with little notice, right after his wife had given birth.
A dense network of immigration rules, work visas and intra-company transfers (which are doled out as ‘favours’ as going abroad are often seen as perks) ensure that Indian IT companies can quell Western protectionism fears while still maintaining profit margins. Employees are sent to Western countries, but still held tightly on a leash, and can be summoned back at any moment. Much to the contrary of Indian apologists, those sent to the U.S cannot switch jobs and are subjected to lesser pay (the infamous Brookings Institution study that claims otherwise has a number of flaws).
Infosys shelled out $34 million earlier this year in a settlement with the U.S Government, which alleged that it brought Indian programmers illegally into the U.S on visitor visas. Where, then, is the outrage over an industry, that has come to define India, shipping its employees into the U.S to work for sub-standard pay and on fudged visa documents?
In October this year, Karnataka started the process of yet again exempting the IT industry from the Industrial Employment (Standing Orders Act)—a set of labour laws that would require each company to define conditions of employment and details such as working hours, wages, grounds of termination and so on.
IT industry captains have, on cue, dismissed any push towards regulation as “retrograde” and an “archaic step”. The common consensus amongst business leaders is that regulation is best left to governing the manufacturing sector.
Labour laws, however, are the exact prescription the IT industry needs. Especially at a time when employees at mid-sized IT firms are often forced to work 14-hour days, when women BPO employees are paid less than their male counterparts, and when employees are terminated under less-than-clear grounds.
It is clear that the IT Industry has become more rigidly exploitative — as a natural consequence of lower wages, economic slowdown, a lack of jobs in the country, the outsourcing engine, not to mention human nature.
The roaring 1990s and the wealth it brought to India’s middle class went hand-in-hand with the growth of the IT industry, bringing about a sense of gratitude towards the sector that mostly continues to today. It is this attitude of gratitude that keeps us from seeing the real picture in the IT industry.
The technology entrepreneurship scene, which is still in its infancy, has started the shift towards a business model not based on a ‘race to the lowest wage’ premise. But why not aspire for more i.e for a better and more transparent IT industry?