NewsNotables – Issue 77

Immigration Audits Drive Illegal Workers Underground

The Wall Street Journal August 15, 2011

In 2009, Alba and Eugenio were making almost twice the federal minimum wage, plus benefits, cleaning a skyscraper for a national janitorial company. With two toddlers, the Mexican couple enjoyed relative prosperity in a one bedroom duplex in a working class neighborhood. In 2010, federal agents audited employee records of ABM Industries, Ink., forcing it to shed all the illegal workers on its payrolls in the Twin Cities. Among the undocumented immigrants who were let go was this couple who had worked at ABM for more than a decade.

Shortly afterwards, the couple landed at a small janitorial company, scrubbing car dealerships for about half the pay, without benefits. In early 2011, that employer was also hit by an immigration audit. In late February, the couple was let go again. Today, the couple is struggling to make ends meet, working part time and often relying on handouts from food banks to feed their family.

The journey from prosperity to the economic margins is an increasingly common path for thousands of undocumented workers pushed out of their jobs by the federal government’s audits of U.S. businesses, according to immigrations experts, business owners and unions. The audits started in 2009, put the onus on business to police workers, requiring companies to turn over employee records to federal agents. If the papers aren’t in order, the workers are quietly let go without penalty while the companies are punished.

The audits are conducted by Immigration and Customs Enforcement, or ICE, a unit of the Department of Homeland Security. The audits were initially hailed by some immigrant advocates as more humane because they eliminate deportation raids. But it has become increasingly clear that the policy is pushing undocumented workers deeper underground, delivering them to the hands of unscrupulous employers, depressing wages and depriving federal, state and local coffers of taxes, according to unions, companies and immigrant advocates.

Comment: Illegal workers in the U.S. is a very controversial subject. Our congress has been debating for years what our policy should be, with no result in sight. So I won’t attempt to cover the subject here in a few sentences. The prior article concerning Costco and other companies voluntarily having ICE audit their employment practices is commendable. This article does show some of the unintended consequences. The world financial crisis and run away debt has taken the spotlight off illegal immigration but would hope our congress will soon address the many issues involved.

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Costco Joins Program to Ensure Legal Hires

The Seattle Times, July 28, 2011

Costco has entered into a partnership with U.S. Immigration and Customs Enforcement to ensure its current and future employees, who are immigrants, are legally allowed to work in the U.S. Costco, one of the nation’s largest retailers, joined 12 other Washington employers in participating in the free and voluntary program, called ICE Mutual Agreement between Government and Employers (IMAGE).

ICE trains program participants on proper hiring including how to spot potentially fraudulent employment documents and it conducts audits of their employment records to ensure current employees are legally allowed to work. IMAGE participants use a social security number verification service, as well as the Department of Homeland Security’s E-Verify to screen documents of new hires against Social Security Administration and Homeland Security records.

Joel Benoliel, senior vice president and chief legal officer for Costco said by participating with the government “we set high standards for other U.S. based companies.” Costco was asked to participate because of its employment records show the company is in strong compliance with employment laws. ICE officials hope Costco’s participation will encourage other employers to join. IMAGE was formed five years ago and now has 100 employer members nationwide including Tyson Foods. Seattle’s Swedish Medical Center signed an agreement in early July. Tacoma based TrueBlue, formerly Labor Ready, is also a participant.

Leigh Winchell, ICE’s special agent in charge of Seattle employers said, “This action sends a strong message to the millions of Americans who do business with Costco that the company places a priority on hiring and employing a legal work force.”

Comment: Costco has a record of strong hiring policies and generous employee benefits. Costco now employs more than 140,000 people, including seasonal workers, so joining ICE (voluntarily) is no small task and shows their continuing effort to be a leader in employee matters. I agree with Mr. Winchell that this does send a strong message to the millions of Americans who do business with Costco. I also believe it sends a strong message to other U.S. based companies.

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Are Smartphones Creating Tech Addicts?

The Seattle Times, June 26, 2011

A 22-year-old Hayward, CA., resident, Floilan Vincent, walks through Southland Mall in Hayward, his eyes trained sharply on the 3.5 inch diagonal iPhone 4 display screen he’s carrying in his hand. Floilan is oblivious to much around him as he taps on what he calls his “mobile laptop” to check sports scores, send texts, look up movie listings, watch trailers, figure out where to eat and how to get there. “It’s really useful, “ Floilan explains. “It’s not just for talking to friends.”

He was asked, on a scale of 1 to 10, if he thinks he’s addicted to his phone. His response was that he puts himself on the top of the list, a full 10. He knows this because when he once lost his phone for a week, he suffered from what felt like withdrawal symptoms for three days, including irritability, worry and panic.

Floilan is not alone. As most of us have witnessed at dinner with friends, in business meetings, even just walking down the street or in a mall, those tiny screens have an enormous power. Our dependence on smartphones is not just a distraction but an addiction to many of the 72.5 million Americans who own smartphones. “It’s crazy in our mind that we could become addicted to a device. But that’s what is happening,” says David Greenfield, a psychologist and author of Virtual Addiction: Help for Netheads, Cyberfreaks and Those Who Love Them. “We think we are free and easy and able to make our own decisions, but we are addicted.” Several examples mentioned in the article are:

  • Rachel Pisarevich, 19, of Martinez, Calif., sleeps next to her phone.
  • Terence Johnson, 22, of Rodeo, Calif., is “always connected,” checking Twitter and Facebook for friend’s updates.
  • Emmanuel Rivera, 23, of Concord, Calif., has walked into strangers while checking his phone.
  • Kristy Trinh, 18, of Alameda, Calif., walked into a dumpster while checking her phone.
  • Jim Thorne, 50, calls his dependence on his iPhone an 11. He uses if for everything — to pay bills play games and find people to date. “It stays on my night stand,” he says. “If I wake up in the middle of the night, I check it.”

Greenfield says, “The way the addiction to phones and Internet works is determined by what is called a variable ratio reinforcement schedule. It’s like a slot machine. You check the phone for Internet, and, in an unpredictable fashion, you might see a new photo of a friend’s baby or get a text message. Although it is unpredictable, when you do see something new, it stimulates pleasure centers in the brain.”

Comment: This addiction can also be dangerous. A University of Texas Health Science Center report says texting while driving claimed more than 16,000 lives from 2001 to 2007. As texting has become much more popular in recent years, I imagine that statistic is increasing. The article made me think where I am on the 1 to 10 scale of addiction. It’s higher than I would like to admit. How about you?

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Executive Learns From Hack

CEO Now Treats IT Department as Critical to Hyundai Capital’s Operation

The Wall Street Journal, June 21, 2011

Ted Chung, the CEO of South Korea’s largest consumer finance company, Hyundai Capital Services Inc. , was on a business trip in Denmark in April when he got a call that changed the way he does his job. He received a call saying its computer system had been hacked. The caller threatened to release stolen confidential information if the company didn’t pay him. Over the next two weeks, the company worked with police to track down what turned out to be two groups of hackers, one group from South Korea and one from the Philippines.

The lessons Mr. Chung and his colleagues learned from the experience have led to fundamental changes in the structure of the company, as well as his own thinking about how he leads it. His biggest mistake was that he used to treat the IT department as simply one of many units that helped the company get its main job done. Today he treats it as central to everything the company does. Mr. Chung has spent weeks learning the ins and outs of network architecture, security infrastructure and tradeoffs between data protection and customer satisfaction.

The IT department, which has added a security unit, now reports directly to the CEO. The company has slowed the introduction of several new products to ensure they don’t create new holes in security. The next day, Chung held a news conference to tell customers and investors what happened and what the company knew. That openness put the company under the spotlight of the media and government regulators. Hyundai Capital is still awaiting regulator’s decision on whether to penalize it for having a system susceptible to hacking.

Here are the five lessons from Mr. Chung’s experience:

  • Trust the authorities.
  • Stay open and transparent.
  • Learn IT and know where vulnerabilities are.
  • Create a philosophy that drives IT decisions.
  • Reassess plans for products and services.

Comment: I applaud Mr. Chung and Hyundai Capital for their transparency and informing authorities and customers immediately. Technology, both good and bad (hackers), has changed the way we do business and will continue to evolve. It seems that almost every business technology advancement opens the door for those who want to harm the business or profit by finding a way to hack and steal confidential information. Hyundai Capital has learned its lesson well and is on the right path as it provides new products and services.

By Roger Eigsti
Board President,
Institute for Business, Technology, and Ethics