I mean, incompetent management may have allowed the situation to persist. But your wife "working" 2.5 jobs for (presumably) the expected hours of just one of those jobs can't be blamed on management. She chose to accept all 3 of those positions with the knowledge that she wouldn't meet the conditions of employ.
I'm not a "send 'em to jail!" type, and I have little sympathy for large corporations, but let's not pretend it's anything less than time theft.
US employers have worked very hard to make many of their workers "exempt" [1] such that they don't have to pay for overtime and can make people work egregious hours without getting in legal trouble.
If that's not "time theft", then I don't see why an exempt worker who can do the work of two people shouldn't get paid for doing the work of two people. It would be different if they were hourly workers and they were double-billing for the same hour, of course. But I don't think that's what's happening here.
[1] https://www.investopedia.com/terms/e/exempt-employee.asp
Most employment contracts I've seen stipulate an expected work week of 40 hours. If I sign 3 contracts like that, now I would need to work 120 hours to fulfill the obligation. And as long as someone collects the paychecks from all 3 jobs without fulfilling the contractual requirements of those jobs, well, that is sort of the definition of theft. Money gained without performing the work necessary to earn it.
Sure, there are lots of jobs where "time theft" is a useful concept, but there are a lot of others where it isn't. I'd go so far as saying that thinking in those terms can be another sign of incompetent management.
Of course not, which is why overemployed people hide this information from their employers.
The two full-time companies objected strenuously to her leaving and made various offers to keep her around. Would they have suddenly decided that they were deluded and that she was actually a horrible employee if they knew the truth? Possibly, but that doesn't mean they're in the right.
The real problem here is that a large portion of managers actually have no idea what constitutes a good employee or good job done. So they try to figure it out through second order observations like how many hours are worked, how convincingly the employee acts like they're good at doing their job, or how they report on their progress in meetings; and they get upset when they find out information that makes it seem like the employee should be doing a worse job.
I'm being a bit harsh, since I'm not immune to the same thoughts and uncertainties; I have an employee of my own who has two other part-time jobs and at times I've questioned whether that's OK. When I really examine the work he's doing, though, the answer is always the same: he's doing a good job, and the rest of his time is none of my damn business.
The reason employers would not approve isn't because the employee's attention is split, but because the employee would not be meeting the conditions of employment!
40 hours is the commonly accepted definition of "full time" in the US, and this is often written into employment contracts as well. Additionally, employers generally have expected working hours where the employee is available for meetings, mentoring, pair programming, etc.
So, how can you fulfill the expectations of multiple "full time" jobs while only putting in the time for one?
Realistically, it's a technical field and there are a lot of very, very poor candidates out there who will fill the seat for 40 hours but completely fail on performance. And I think that's why nobody was judging performance based on hours of butt in seat.
But her time is not their property, and so there is nothing illegal about her doing with it as she pleases. You can’t steal something that is already yours.
What kind of consultant is paid less?
I could definitely imagine scenarios where a meeting-heavy middle/upper management job pays quite a bit more than consulting.
We (Westerners in general) would indeed be screwed if you could just replace people with cheaper workers from other countries. It's not that simple, though. Language and cultural differences are a massive barrier. I say that as someone who has worked with a lot of East and Southeast Asians who are brilliant, hardworking people -- but it still takes a lot of effort to figure out how to work together, and that's at a startup scale where you can really pay attention to each person. Larger companies tend to have a lot of outsourcing horror stories.
I have no regrets and still employ the same people today, but it just wasn't so straightforward as you're making it out to be. I think it's actually easier for a startup to have, let's say, an entirely Indonesian team including the founders, targeting an American market, versus a startup having an American founding team then start hiring in Indonesia. (For big companies I don't know, but I'd imagine it all gets even more complicated.)
I had no luck with it at all myself. I'd get completely useless low-quality crap work out of these guys when I got anything out of them at all.
I think you'd have to hire some local managers and maybe send over some experienced devs from the USA to train up the locals, at which point it'd only be a matter of time until they realize their new worth and jump ship for FAANG or whatever.
One of the companies asked her to stay on as a consultant. They ended up hiring someone full time... who spent all their time in meetings, while my wife did the actual work. For significantly less pay, of course.
So yes, overemployed remote workers really exist, but at least in her case it was largely due to incompetent management.