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\title{Impact of Employer-Sponsored Tech Immigrants on the U.S.}

\author{
Norm Matloff \\
Department of Computer Science \\
University of California at Davis \\
Davis, CA 95616 USA \\
matloff@cs.ucdavis.edu 
}

\date{The Changing Face of America:
Going Beyond the Rhetoric on Immigration
\\
November 15, 2010}
 
\begin{document} 

\begin{frame}
\titlepage

\end{frame}

\begin{frame}
\frametitle{The Issues}

\pause

\begin{itemize}

\item H-1B work visa, employer-sponsored green cards.
\pause
(I'll refer to all these workers as simply ``H-1Bs'' for brevity.)
\pause

\item Employers claim hire H-1Bs due to shortage, need for
``best and brightest.''
\pause

\item Critics (including me) say it's really about cheap labor.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{Main Points}

\begin{itemize}

\item We all support the immigration of outstanding talents.
\pause

\item But most of the H-1Bs are ordinary people, doing ordinary work.
\pause

\item Several academic studies and two congressionally commissioned
reports have confirmed H-1Bs are often paid less than Americans.
\pause
(Americans = U.S. citizens or LPRs.)
\pause

\item It's loopholes, not fraud.  Underpayment of H-1Bs is LEGAL.
\pause

\item No independent study has shown a tech labor shortage.
\pause

\item Don't demonize the Indian ``body shops.''  The big mainstream U.S.
firms are just as culpable, including in hiring foreign students from
U.S. campuses.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{H-1Bs As Cheap Labor}
\pause

\begin{itemize}

\item Type I:  Paying H-1Bs less than comparable Americans.
\pause

\item Type II:  Hiring younger (less expensive) H-1Bs instead of older
(more expensive) Americans.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{Cheap Labor, cont'd.}
\pause

Type I wage savings:
\pause

\begin{itemize}

\item Legal prevailing wage defined by the {\it job}, not the {\it
worker}.  E.g. can a Master's worker for a Bachelor's price.
\pause

\item DOL prevailing wages don't account for ``hot'' skill sets, which
add about 15\% to wages in the open labor market.
\pause

\item Type I underpayment has been found to range from 15-20\% (Matloff,
2003) to 33\% (Ong, 1997).
\pause

\item NRC, GAO surveys found that many employers admitted that they pay
H-1Bs less than Americans.
\pause
And GAO pointed out that they do this LEGALLY.
\pause

\item Huge statistical pitfalls lurk here.  Beware of badly flawed 
studies on BOTH sides of this issue, e.g.  Zavodny, Mithas/Lucas, Tambe/Hitt.
\pause

\item Lure of a green card is a nonmonetary form of compensation, just
like, say, a shorter commute for you and me.  Thus many will accept
lower pay.  

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{Age Issues}

\begin{itemize}

\item Type II even more important than Type I.
\pause

\item ``Old'' here means 35!
\pause

\item HR rejects American applicants as ``overqualified''---and then
tells hiring managers there are no applicants, so must hire H-1Bs.
\pause

\item Again, fully legal.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{The PhD Issue}
\pause

1989 NSF position paper:

\pause

\begin{itemize}

\item ``PhD salaries too high.''
\pause

\item ``We'll bring down salaries by flooding the market with foreign
workers.''
\pause

\item ``Yes, the stagnant salaries will drive away domestic students
from PhD programs, but well, OK.''
\pause

\item Result:  New lawyers today make 50\% more than new CS PhDs.
\pause

\end{itemize}

{\bf This has caused an internal brain drain.}

\end{frame}

\begin{frame}
\frametitle{The Issue of ``The Best and the Brightest''}
\pause

\begin{itemize}

\item Some H-1Bs really ARE outstanding talents.  We should facilitate
their immigration (and I have).
\pause

\item But most are NOT in the ``best and brightest'' league.
\pause

\item Foreign PhD students disproportionately concentrated in
lower-ranking programs.
\pause

\item H-1Bs have fewer patents {\it per capita} than Americans.
(Hunt, 2010) is the only one to measure per capita.
\pause

\item H-1Bs have disproportionately fewer dissertation awards 
than Americans.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{Adverse Impacts}
\pause

\begin{itemize}

\item Cheap labor, size of tech H-1B population, reduce wage growth.
\pause

\item Even more importantly, H-1B labor pool reduces job opportunities
for Americans, especially those over 35.
\pause

\item Tech, especially PhD, becomes less attractive to American
students.  The shortness of careers is especially unattractive.
\pause

\item Loss of U.S. capacity to innovate (next slide).

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{Advers Impact on U.S. Innovation}
\pause

\begin{itemize}

\item Many H-1Bs come from cultures with rote-memory education systems.
(All East Asian governments have tried to remedy this.)  
\pause

\item The one comparative advantage Americans have is creativity.
\pause

\item Thus the displacement of Americans by H-1Bs means a net loss in
U.S. innovation.

\end{itemize}

\end{frame}

\begin{frame}
\frametitle{What to Do}
\pause

\begin{itemize}

\item Must get a REALISTIC legal definition of prevailing wage.
\pause

\item Bipartisan Durbin/Grassley bill does this well.
\pause

\item MUST reduce the power of lobbyists.

\end{itemize}

\end{frame}

\end{document} 

