Needed Reform for the H-1B Work Visa: Major Points

Norman Matloff1

University of California, Davis

May 7, 2003

1  The Program

H-1B is a temporary work visa program established in 1990.2 Employers are not required to recruit Americans before resorting to hiring H-1Bs.3 Over the years, most computer-related employers of H-1Bs have also sponsored them for green cards, thus attaining an exploitative hold over the workers.
In 1998 and then again in 2000, computer-related employers demanded that Congress increase the yearly cap on H-1Bs, from its original level of 65,000 to 115,000 in 1998 and 195,000 (plus new cap-exempt categories) in 2000. The employers claimed to need these workers to remedy a software labor shorage, citing industry-sponsored studies. However, none of the numerous independent studies ever confirmed a shortage.4 Prominent members of Congress publicly admitted that they were forced to approve the H-1B expansions because of industry campaign contributions.5

2  Direct Adverse Impacts of the H-1B Program on U.S. Workers

3  Use of H-1Bs As Cheap, Compliant Labor

4  Prevailing-Wage Laws Are Virtually Meaningless

5  H-1B Dependency Restrictions Must Be Made Universal

6  "The Best and the Brightest"

7  Doctorates

The industry statement that 40-50% of U.S. doctorates in computer science are awarded to foreign students is accurate but misleading.

8  My Proposal for Reform

Note: Meaningful, useful reform of the H-1B and other guest-worker programs will presumably occur as a synthesis of a number of diverse ideas. The reforms outlined here represent my own views, and are not intended to negate proposals made the Programmers Guild and other labor advocacy groups.

8.1  Goals/Requirements

Reform must address the following points:

8.2  A Comprehensive Reform Proposal

This program would replace H-1B, L-1 and other guest-worker programs used to import technical workers.37 However, for brevity I will simply use the term H-1B here.
Here is an outline of my proposal:

8.3  Justification

Note what is missing from this proposal-bureaucracy and delay. The adjudication of the work visa and green card would be almost completely automated, and should work in "real time." The system would eliminate the need of large firms to maintain special Immigration Departments, and small firms would find that their expenses for legal fees would be reduced to a small fraction of their current level.
The safeguards in my proposal against Type I and Type II wage abuse by employers take on different forms. I guard against Type I savings by eliminating the indentured servitude problem which currently is the major enabler of those savings. To guard against Type II savings, I have the provision that the guest worker be paid at least the median for the given profession, a requirement that the data show would be effective in eliminating much of this kind of abuse of the H-1B program. In addition, the system has recruitment and anti-layoff provisions, makes the entire process transparent to American workers in a timely manner, and establishes the Commission on Technical Guest Workers, which would give them a clear, easy avenue through which they could file complaints.
The various safeguards-working in concert, which is key-would not be foolproof but should provide reasonable worker protection while giving access to foreign labor to sincere employers.

Footnotes:

1Dr. Matloff is a professor of computer science and a former software developer in industry. His bio is available at http://heather.cs.ucdavis.edu/matloff.html.
2H-1B replaced a similar program, H-1.
3Employers who are legally designated as "H-1B-dependent" actually are subject to such a restriction, but as explained later, only 0.1% of H-1B employers fall into this category.
4See Section 4 of my updated congressional testimony, http://heather.cs.ucdavis.edu/itaa.html.
5See Sec. 2.3 of my updated congressional testimony.
6The term programmers includes software engineers, system analysts and so on. The vast majority of high-tech H-1Bs are programmers, as opposed, for example, to electrical engineers and the like.
7N. Matloff, forthcoming academic paper.
8 Santiglia v. Sun Microsystems, U.S. Dept. of Labor, Office of Administrative Law Judges, Case No.: No. 2003-LCA-2.
9Ken Alvares, Vice President, Human Resources, Sun Microsystems, Testimony Before the Committee on the Judiciary U.S. Senate Hearing on The High Tech Worker Shortage and Immigration Policy, February 25, 1998
10Lisa Vaas, L1s Slip Past H-1B Curbs, eWeek, January 6, 2003
11Jennifer Bjorhus, U.S. Workers Taking H-1B Issues to Court, San Jose Mercury News, September 26, 2002.
12See first Sarah Lunday and Rick Rothacker, BofA to Send Tech Jobs Overseas, Charlotte NC Observer, March 6, 2002. Then view important further details at the Programmers Guild Web site, http://www.programmersguild.org/Guild/h1b/howtounderpay.htm, which shows that many of the newly-hired workers were H-1Bs, rather than workers in India as reported by the Observer.
13National Research Council, Building a Workforce for the Information Economy, National Academies Press, 2001.
14See the NRC report, and my updated congressional testimony, for extensive analyses of the fact that older workers in this field face major difficulties. Without access to the H-1B labor pool, the employers would be forced to consider the older workers.
15Contrary to the claims by industry lobbyists that evidence of abuse is merely "anecdotal"
16Paul Ong and Evelyn Blumenthal, Scientists and Engineers, in Darrell Hamamoto and Rodolfo Torres (ed.), New American Destinies: A Reader in Contemporary Asian and Latino Immigration.
17Demetrios Papademetriou and Stephen Yale-Loehr, Balancing Interests: Rethinking U.S. Selection of Skilled Immigrants, Carnegie Endowment for International Peace, 1996.
18N. Matloff, updated congressional testimony.
19National Research Council, Building a Workforce for the Information Economy, National Academies Press, 2001.
20 Straight Talk (weekly television program produced by Santa Clara County Democratic Club), June 10, 2000.
21It is thus useless to complain to the Dept. of Labor, as DOL itself has pointed out. Thus the industry lobbyists are incorrect in claiming that lack of complaints must mean that abuse of H-1B is rare.
22http://www.programmersguild.org/Guild/h1b/howtounderpay.htm
23Joel Stewart, Legal Rejection of U.S. Workers, Immigration Daily, April 24, 2000.
24See immigration attorney Jose' Latour's electronic newsletter,http://www.usvisanews.com/memo1192.html, January 6, 2001.
25 Santiglia v. Sun Microsystems, U.S. Dept. of Labor, Office of Administrative Law Judges, Case No.: No. 2003-LCA-2. Several other suits like this are now pending against Sun as well.
26Bureau of Labor Statistics, 2001 National Occupational Employment and Wage Estimates, and statistical analysis of INS data in my forthcoming academic paper.
27 See N. Matloff, forthcoming academic paper. The ACM (the Association for Computing Machinery) is the main computer science professional body.
28The former foreign doctoral students comprise only a small fraction of all H-1Bs anyway; see below.
29 See David S. North, Soothing the Establishment: The Impact of Foreign-Born Scientists and Engineers on America, University Press of America, 1995. North found that the lower-ranked U.S. engineering doctoral programs consisted 50.6% of foreign students, while the higher-ranked U.S. programs had only a 37.2% foreign enrollment.
The PR hype on the quality of the H-1Bs was epitomized by a 60 Minutes television broadcast on January 12, 2003, amidst a PR campaign by Indians and Indian-Americans called "Brand IIT." (See Big Guns Come Together to Promote Brand IIT, Harihar Narayanswamy, Times of India, December 26, 2002.) The goal was to publicize the Indian Institute of Technology university system. The 60 Minutes piece called IIT the best engineering school in the world, and portrayed all the IIT graduates as geniuses. All of this was puff-piece journalism, not a serious look at what actually is a genuine success story.
India should indeed take pride in IIT, and there have indeed been many top IIT students who come to U.S. graduate schools (some later becoming top university faculty). But it is certainly not the case that most, or even many, IIT students are geniuses. And the institution itself is merely good, not world-class. Its faculty have not produced the seminal research papers, the patents, the standard-setting textbooks and so on which are needed for world-class status. It suffices to point out that it is the IIT graduates who come to the U.S. for advanced study, rather than American students going to IIT.
30N. Matloff, forthcoming academic paper.
31AnnaLee Saxenian, Silicon Valley's New Immigrant Entrepreneurs, Public Policy Institute of California. PPIC is in funded by an industry-related source, William R. Hewlett, co-founder of Hewlett-Packard.
32Nor have native-founded companies generally done so. Progress in the computer field is highly incremental, and virtually no one individual or individual firm has been indispensable.
33Source: Private INS data. See http://heather.cs.ucdavis.edu/itaa.html.
34See N. Matloff, forthcoming academic paper, for a detailed analysis. Note by the way that many of the big names of the field, e.g. Microsoft founder Bill Gates, Oracle founder Larry Ellison, Apple/Pixar founder Steve Jobs, do not even have a Bachelor's degree, let alone a PhD.
35National Research Council, Building a Workforce for the Information Economy, National Academies Press, 2001.
36The NSF has explicitly called for the importation of foreign scientists and engineers in order to suppress Ph.D. salaries. See Eric Weinstein, How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High-Tech Workers, NBER, Harvard University, 1998.
The universities have enormous incentives to toe the industry party line concerning H-1B and industry claims of a software labor shortage. They count on industry for large donations of equipment, research funds and even the construction of entire buildings, and they are major users of the H-1B program themselves. See an extensive analysis in my updated congressional testimony.
37I am often asked about the related issue of offshoring, i.e. shipping software development work abroad. In spite of all the recent press coverage, offshoring only comprises about 1% of U.S. software development work (other offshoring work, such as call centers, is beyond the scope of my expertise and interest), and I do not believe it will ever become more than, say, 5% or so. It is simply too difficult to do software development by remote control, no matter how good one's communications technology is. This, for example, is why U.S. employers bring the H-1Bs here, rather than simply offshoring the work. Note, by the way, that offshored projects typically include an H-1B/L-1 component as well. See my forthcoming paper for details.
38The employer would inform DOL as to the salary paid, but need not put it in the database.


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On 7 May 2003, 14:04.