Date: Thu, 24 Jun 2004 14:44:45 -0700 From: Norm Matloff To: Norm Matloff Subject: more wishy-washiness by the Dept. of Commerce To: H-1B/L-1/offshoring e-newsletter In 1997, when the ITAA launched its first campaign to expand the H-1B program, it convinced then-Pres. Clinton to order the Dept. of Commerce to play ball with the ITAA on the latter's efforts claiming an IT labor shortage. Accordingly, the DOC released its own report in the fall of 1997, with the DOC report being virtually a carbon copy of the ITAA's, stating that there was an IT labor shortage. Armed with DOC's government imprimatur, and DOC's cosponsoring of the ITAA Convocation in early 1998, the ITAA then started lobbying Congress for the H-1B increase. Congress enacted the increase later that year. However, due to vigorous complaints by a Hill staffer, the DOC began in late 1997 to listen to IT/engineering groups, who countered ITAA's claim of a labor shortage. I became involved in that process, and in my view the DOC responded remarkably well. As mentioned above, the H-1B increase did indeed go through in the end--the Clinton administration had stated in January 1998 that it was not willing to expand H-1B, but I never believed it--but DOC did listen to our side of the story in earnest. It released an announcement "clarifying" the original DOC report, saying that it did not actually state there was a shortage, and then two years later, in 1997, released an extensive report in which it said that it could not tell whether there was a shortage or not. It made a similar statement in another report in 2000. Throughout that period, the DOC sought input from the programmer/engineer side of the story. In 2001 of course there was a change in administration, with the new president being nominally much more pro-business than the previous one. (I say "nominally," because Democratic administrations have been just as co-opted by business concerning H-1B as Republican administrations have.) I was heartened when in 2002 Phillip Bond, Undersecretary of Commerce for Technology, reaffirmed the DOC's 1999 and 2000 reports. Bond said, "...there was not [in 2000], nor is there now, any way to establish conclusively whether there is, or is not, an overall IT worker shortage." See http://heather.cs.ucdavis.edu/Archive/DOC.txt for some details. With this background, the article below is disheartening, to say the least. Here we see that same Phil Bond buying into the "shortage" claim after all. And of course it's even worse to say this now in 2004 then in 2002, as the IT job market has gotten far worse since then. And we see that the DOC is just as conjoined with the ITAA as ever. The article also refers to a recent, much-cited Dept. of Labor report which tried to downplay the impact of offshoring. Even though I myself regard the offshoring issue as exaggerated, the DOL data greatly underestimate the degree of the problem. (There are many factors underlying the smallness of the number claimed by the DOL. For example, they are not separating numbers into IT-specific ones, and they are apparently not counting it as a "loss" if a new job is sent directly offshore, as opposed to a layoff followed by a transfer of work overseas.) The fact is that the ITAA's own figure is that 104,000 IT jobs have been offshored, which is significant in that there are about 100,000 unemployed American IT workers. (See the ITAA material at http://heather.cs.ucdavis.edu/ITAAOffshore.txt) Finally, we see once again the claim that H-1Bs are needed for foreign students studying in U.S. universities. See my detailed rebuttal at http://heather.cs.ucdavis.edu/GradDegrees.txt The DOC's repeated flip-flopping on the issue is matched only by that of former Clinton Sec. of Labor Robert Reich. Reich was quite critical of H-1B in the early 1990s, but then in the late 90s said, "Everyone knows we have a desperate computer programmer shortage." A couple of years ago, he suddenly criticized H-1B again. Then later he flip-flopped once more. (He has even flip-flopped on meeting with me. He was a visiting professor at UC Berkeley this spring, and when I suggested that we meet, he said he'd be "delighted" to do so. But then later he backed out.) I am bringing this up in part because I continue to hear from people that the H-1B issue would be solved if only Bush could be replaced in November. These people are sadly naive; the government coziness with industry lobbyists has been thoroughly bipartisan. On the other side, I used to get mail from people who said that H-1B would be solved if only Arnold Schwarzeneggar could replace Gray Davis as governor of California. (Yes, there ARE things a state governor can do on this issue.) Well, Schwarzeneggar won, and of course he has done nothing on this issue. Norm http://www.foxnews.com/story/0,2933,123562,00.html Psyching Up Kids for Tech Could Help U.S. Jobs Thursday, June 24, 2004 By Liza Porteus NEW YORK -- Getting kids excited about science and technology will help keep jobs here at home and will reduce the need to import talent from other countries, government officials and company executives said Wednesday. "I think we have to find ways to excite kids [about those subjects] probably as early as elementary school," Phil Bond, under secretary of technology for the Commerce Department, said Wednesday, adding that girls, especially, should be encouraged to follow career paths in those fields. "We have to keep them going through the process -- we're losing half the talent pool," Bond said. Bond's comments were delivered during an offshoring conference sponsored by the Information Technology Association of America. Offshoring -- sending work of U.S. companies overseas -- has become a political lightning rod during this election year. ITAA President Harris Miller called the issue an "emotional one" that continues to be surrounded by rhetoric from labor unions, politicians and others who say offshoring means less work for people here at home. "If you believe some of the rhetoric, you'd think Silicon Valley was going to move to Bangalore [India] next year, and that's not the case," Miller said. Offshoring has affected blue-collar workers in America's factories for years. But the issue has exploded in a presidential election year with an exodus of white-collar service jobs, particularly in call centers and technical support. John Kerry has hammered away at President Bush on the outsourcing issue -- saying American workers are losing out to foreign workers on jobs that can be performed more cheaply overseas. Bush, on the other hand, has argued that the United States cannot take an isolationist or protectionist stance in a global marketplace. Many U.S. companies and trade groups are siding with Bush, saying that in order to remain competitive in a global marketplace, the United States has to have a presence in overseas local markets. "The great misconception is that U.S. companies go abroad for cheap labor," said Joseph Quinlan, chief marketing strategist for Banc of America Capital Management. But, he said, outsourcing has been going on for over 100 years. "You have to be in country to compete," he said. "That's just how the global marketplace is." Last Friday, the Labor Department issued a report that said in the first three months of this year, the jobs of 4,633 U.S. workers were sent to foreign workers -- indicating that few layoffs here at home can be blamed directly on working being sent abroad. Those displaced workers were about 2 percent of the 239,361 private-sector, non-farm workers who lost their jobs. Industry officials point out that work is also insourced as an increasing number of foreign companies open up shop in the United States and hire Americans to work there. For example, Quinlan said, 25 percent of the manufacturing workers in Kentucky work for foreign affiliates like those in Japan or China. To keep the United States on top of its game, not only does it have to export some work but it also has to have a higher skilled workforce to be able to do the work here, and to better compete with foreign workers. "We're turning out more students with English and history degrees," Miller said, while countries like China, India and Taiwan are raising the quality of their own higher education institutions. "We're not seeing the results we'd like" to encourage entrance into the high-tech sector, particularly after the dot-com bust, he said, although some efforts have been made in the Bush administration to focus on the need to strengthen these programs. High tech companies and other businesses also want student visa restrictions relaxed so foreign students can study at American schools and stay in the country to work after graduation. "We have a brains deficit," Quinlan added. "You can let the good students and good teachers into the United States ... or companies can go overseas to tap into it ... we want to continue to attract the best and brightest." And although most of the country's 15,000 school districts are now wired for the Internet, that doesn't mean technology is being utilized as well as it could be in the classroom, Bond said. There's a huge need for further teacher training on how to use technology in a way that gets kids interested, he said, but a positive step is that a new generation of teachers that has grown up with technology is coming down the pipeline. Nanotechnology -- the art of manipulating materials on an atomic or molecular scale to build microscopic devices, such as robots -- could be the next big thing that gets kids' attention, Bond later told FOXNews.com. "I'm hopeful that's going to fire up kids," he said.