Date: Mon, 10 Nov 2008 21:51:38 -0800 From: Norm Matloff To: Norm Matloff Subject: CW's Thibodeau speculates on what Obama will do on H-1B, GCs To: H-1B/L-1/offshoring e-newsletter The late Herb Caen of the San Francisco Chronicle often gave "Unclear on Concept Awards" for ideas that clearly were not well thought out before implementation. For instance, he wondered about the wisdom of supporters of a SF city ballot proposition waving placards at commuters leaving the city in the afternoon rush hour--most of whom could not vote on the proposition, as they don't live in the city. I must say that the enclosed blog by Pat Thibodeau, an excellent writer for Computerworld, seems Unclear on Concept to me. Addressing proposals such as those by Rep. Zoe Lofgren, "Queen of H-1B," to give essentially automatic green cards to foreign students in STEM graduate programs at U.S. universities, Thibodeau asks rhetorically why Congress would enact such legislation in today's severe economic times. His answer is that Obama's campaign promise to increase research spending will require giving the foreign students these easy green cards. It's unclear whether this is merely speculation on Thibodeau's part or Obama's people have actually given him indications along these lines. He doesn't cite any Obama aides. In any case, the entire notion just doesn't make sense. First, the foreign grad students themselves don't have much of a green card problem in the first place. As I've noted before, people with grad degrees, especially PhDs, already have priority for green cards, with short waiting times. The much-lamented long waiting times for green cards are experienced mainly by those who just have a bachelor's degree (see the data at http://heather.cs.ucdavis.edu/Archive/WadhwaIII.txt). Second, as I've often noted, the reason there are so many foreign students in U.S. tech PhD programs is that doctoral study is simply financially unattractive to American students. Even the industry-oriented NRC study found that an American student incurs a lifetime loss in earnings by studying for a PhD. That in turn is due to the presence of the foreign students themselves, who act as cheap labor both in graduate school and later in the workforce--all planned by our government National Science Foundation. I've often cited that NSF position paper, but it's so important that I will excerpt it again here. (See Eric Weinstein, "How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High-Tech Workers," NBER, Harvard University, 1998, http://users.nber.org/~peat/PapersFolder/Papers/SG/NSF.html). Recall that the NSF specifically advocated bringing in a lot of foreign students in order to attain the NSF's goal of holding down PhD salaries. The paper commented on the consequences: # A growing influx of foreign PhDs into U.S. labor markets will hold down # the level of PhD salaries to the extent that foreign students are # attracted to U.S. doctoral programs as a way of immigrating to the # U.S. A related point is that for this group the PhD salary # premium is much higher [than it is for Americans], because it is based # on BS-level pay in students' home nations versus PhD-level pay in the # U.S... # [If] doctoral studies are failing to appeal to a large (or growing) # percentage of the best citizen baccalaureates, then a key issue is # pay...A number of [the Americans] will select alternative career # paths...For these baccalaureates, the effective premium for acquiring a # PhD may actually be negative. And again, note that it's not just the industry salaries for PhDs, but the large numbers of foreign students keeps stipends for grad students low too, around $15,000 for the 9-month academic year. Comparing this to the $60K or more that a new bachelor's holder starts with in industry, you can see now why the NRC found that doctoral study is a financial loser for domestic students, something the NSF recognized too in the last passage above. That's why there aren't so many domestic students in grad school. If Obama really does increase research funding (actually, I think he will simply reallocate other research funds to energy research etc.), we would not "need" the foreign students, as the blog claims. All that would need to be done is to raise the graduate stipends. I served as graduate admissions coordinator in my department for 13 years, and thus have seen this up close. Money does indeed motivate potential grad students. Give them a stipend even half of what industry is offering, and they will apply in droves. Every computer science graduate admissions officer knows this only too well. Even Hillary Clinton made this proposal during the primary campaign. It's even more true now that tech layoffs are beginning. The classical pattern is that in times of economic slowdown, grad school applications surge. And we're in much more than a mere slowdown now, with the implosion of the financial sector and its shock waves felt by most other sectors. I mentioned the other day, for example, that in recent years about 30% of Carnegie-Mellon University graduates in electrical engineering have been hired by the financial industry. Since that industry is laying off like crazy, and there isn't much hiring elsewhere, a lot of this year's CMU grads are going to find grad study to be a good option. If only we offer them a reasonable stipend, even more will apply. Regardless of those conditions, academia and industry are going to have to wean themselves from this dependence on foreign students anyway. As I have noted frequently, including the other day, interest among foreign students in U.S. study had been declining in the last few years anyway, well before Wall Street's implosion. For details on this, I again refer you to the materials in http://heather.cs.ucdavis.edu/Archive/WadhwaIII.txt where you can see quotes from immigrant executives in the U.S. explaining that the tech markets in India and China have grown to the point at which new grads find it more attractive to stay home than to come to the U.S. Here is a condensed version of the comments you can find at the above link: [Quoting Lin Lee, director of Sun Microsystems' government strategy in Asia:] ...said many [Chinese] entrepreneurs want to join startups in China — where even five years ago they would have tried to immigrate. ... [Quoting Rosen Sharma, a U.S. CEO who graduated from India's top top university,IIT:] Of the 40 people in Sharma's graduating class at IIT Delhi [in 1993], he says, all but three came to the U.S...Last year, only 10 of the 45 IIT graduates...decided to pursue jobs in the U.S. So even if our economy improves, expecting to rely on the foreign students in the coming years is utterly unrealistic. If Obama really wants people to staff his ambitious research projects, he should avoid the advice reported/speculated in the enclosed blog, and take up Sen. Clinton's suggestion on grad stipends. Norm http://www.computerworld.com/action/article.do?command=viewArticleBasic&taxonomyName=Government&articleId=9119398&taxonomyId=13&pageNumber=1 Computerworld FAQ: Why Obama may back an H-1B increase even in a recession If the president-elect moves quickly to boost basic research funding, the visa issue will be part of the debate By Patrick Thibodeau November 6, 2008 (Computerworld) President-Elect Barack Obama has supported the H-1B visa program and wants to make changes to green cards that would help tech firms. There wasn't much said about this issue during the presidential campaign, especially after Wall Street collapsed. It also never came up in the debates between Obama and Republican John McCain. Now we're in a recession and unemployment is rising. Can Obama push ahead on tech-related immigration issues at this time? He might, and in this FAQ, here's an explanation of how that might happen. Does Obama support the H-1B visa program? Obama supports the temporary visa program but also wants it reformed. It needs reform. A U.S. Citizenship and Immigration Services report released in October said as many as one in five visa applications are either fraudulent or flawed. Some of the problems were egregious, including H-1B visas approved to shell companies. If that weren't enough, the U.S. Department of Labor added to the evidence of abuse, including a settlement last month requiring a Virginia-based company that also operates an offshore center in India to pay $1.7 million to 343 employees. Obama says he wants to "hold accountable employers who abuse the system and their workers," (PDF Page 8 on Obama's tech platform under the section titled: Reform Immigration ). Will Obama increase the H-1B cap? Obama supports raising the H-1B cap and did so in the U.S. Senate immigration bill in 2007. It would have increased the current 85,000 cap, which includes 20,000 visas set aside for graduates with advanced degrees. The Senate effort, which died in the House, would have allowed increases of up to 180,000 H-1B visas, as well as additional visas for advanced-degree graduates. Obama also continues to support comprehensive immigration reform. Excuse me, but how can Obama support increasing H-1B visas during a recession? Good question. Tech companies are cutting employees and the recession isn't stopping offshore outsourcing. The largest users of the H-1B visa are India offshore companies. When a U.S. company hires an outsourcing vendor, U.S. workers may be required -- if they want their severance -- to train their H-1B holding replacements. Moreover, offshoring is increasingly being aimed at higher-level jobs. Obama has pledged "to stop giving tax breaks to companies that ship jobs overseas," but he hasn't linked the H-1B visa to this issue. Indian offshore firms are worried he may do so. Why not increase green cards instead? Last May, U.S. Rep. Zoe Lofgren (D-Calif.) tried to bypass the immigration deadlock by introducing several bills to clear a direct path to permanent residency -- green cards to foreign students who graduate from U.S. universities with advanced degrees. Congress isn't expected to act on those bills during the upcoming lame-duck session. The tech industry argues that restrictions on the green card are as much of a problem as the H-1B visa issue. Easing access to green cards is an issue Obama supports. "We should allow immigrants who earn their degrees in the U.S. to stay, work and become Americans over time. And we should examine our ability to increase the number of permanent visas we issue to foreign-skilled workers," he said in his platform. Isn't increasing H-1B visas and permanent residency green cards a nonstarter of an issue during a recession? No. In fact, the visa issue may reappear with a vengeance, and here's why. Obama wants to double basic research spending over 10 years, and a lot of that money will fund research at U.S. universities that enroll thousands of foreign students. In the fall of 2007, of the approximately 112,559 students enrolled in U.S. engineering graduate programs, IT related and otherwise, 50% were non-U.S. citizens, according to the Council of Graduate Schools, in a report released in September (Report PDF ). Visa proponents argue that it makes little sense to improve basic research at universities only to force graduate students back to their home countries. Basic research is a cornerstone of Obama's tech and energy policy, and the polar opposite of the Bush administration, which actually cut basic federal research funding. (See this chart by the National Science Foundation.) If Obama can find the money to increase basic research, then the issue of keeping foreign students in the U.S., especially those students who work on government-funded research projects, brings these two issues together. Some tech lobbyists believe that increases in H-1B visas and green cards won't happen as long as U.S. companies are cutting jobs. But that will mean the debate will shift as well. "What do we need to do to ensure that we can grow our way out of this [downturn], innovate our way out this? You can't have that discussion without talking about immigration," said Robert Hoffman, vice president of congressional and legislative affairs at Oracle Corp., and co-chairman of Compete America, a lobbying group that supports raising the H-1B visa cap. Isn't this just too hot of a political issue for Congress and Obama? Opponents argue that the visa policies are partly to blame for declining computer science enrollments by Americans. Because the H-1B program offers the prospect of employment after graduation, it encourages foreign students to enroll, and those large enrollments are discouraging U.S. students from entering IT-related fields. This argument may rise again during the next debate on the visa issue, but it's not new and it's not an argument that finds support in Obama's platform. The bottom line is this: Obama has said nothing during the campaign that rules out either H-1B or green card increases. If anything, his tech platform, especially his plan to boost research funding, offers an argument for encouraging foreign enrollments and increasing access to visas.