High-Tech Cheap Labor
By Norman Matloff
Tuesday, September 12, 2000; Page A35
Computer industry CEOs, claiming a desperate labor shortage, are pressuring Congress to raise the quota for the H-1B work visa, under which tens of thousands of foreign-national computer professionals are brought to work in the United States each year. While the industry denies its motivation is the hiring of cheap foreign labor, the facts say otherwise.
Last October Susan deFife, CEO of womenConnect.com, testified to the Senate in support of raising the H-1B quota. She claimed that a desperate shortage of American applicants had forced her to hire a newly graduated H-1B. Yet a Freedom of Information Act (FOIA) inquiry later showed that deFife was paying this person only $35,000 per year--when the national average for new computer science graduates was $45,000.
Ecutel CEO John Harrison testified on the House side last year, claiming a lack of applicants for computer programmer jobs. Yet a FOIA inquiry later showed that he too was paying many of his H-1Bs only $35,000.
Several university studies have shown that the H-1Bs tend to earn less than their U.S. citizen/permanent resident counterparts, with the gap being 20 percent or worse. The law requiring that H-1Bs be paid "prevailing wage" is riddled with loopholes.
As immigration attorney Joel Stewart notes, "Employers who favor aliens have an arsenal of legal means to reject all U.S. workers who apply." And though some employers do not cheat their H-1Bs relative to American programmers of the same age and background, they still save on salaries by hiring H-1Bs, whose median age is 28, instead of hiring more expensive Americans over age 40.
Thomas J. Engibous and Edward B. Rust Jr. stated in a Sept. 7 op-ed piece in The Post that the H-1Bs are needed to compensate for declining university enrollments in electrical engineering. This was an obfuscation, since the overwhelming majority of high-tech H-1Bs are computer programmers, not electrical engineers. (H-1B computer science graduates outnumber those in electrical engineering by 15 to 1.) Yet in spite of the fact that university computer science enrollment has doubled in the past few years, fewer than half of the computer science graduates are being offered programming positions. Employers are importing H-1Bs at low salaries to do the programming, while shunting many Americans into lesser jobs such as customer support.
And it is worse for the older programmers. Surveys of high-tech hiring managers have revealed that only 2 percent of them seek workers having more than 10 years of experience, and only 13 percent of managers under 30 had hired anyone over age 40 in the past year. Most of the older ones leave the field when they cannot find programming jobs. Industry lobbyists cite low unemployment rates for programmers, but these ex-programmers do not show up in those statistics.
Contrary to the industry claims of a programmer shortage, employers freely admit that they are inundated with resumes. These supposedly "desperate" employers reject the vast majority of their applicants without even interviewing them. Cisco receives 20,000 applications per month but hires only 5 percent of the applicants. Inktomi hires only one percent, Microsoft 2 percent, Qualcomm 5 percent, Red Hat Linux one percent.
Other than studies funded by the industry and its allies, no study has confirmed the industry's claim of a labor shortage. The Department of Commerce, which the industry had railroaded into supporting its claim of a shortage in 1997, now has recanted, stating there are not sufficient data to assess the situation.
The Immigrants Support Network, a militant organization of H-1Bs from India, notes that the most appealing feature of the H-1B program to employers is that the visa holders are de facto indentured servants. If an H-1B worker is being sponsored for a green card by the employer, the worker is trapped during the five years or more that it now takes to process the green card. Employers can underpay and overwork H-1Bs at will, without fear of the workers' moving to another firm.
Politicians on Capitol Hill do not want to know any of this, as they are anxious to curry favor with the industry. A major supporter of pending legislation that would increase the H-1B quota, Rep. Tom Davis (R-Va.), has openly said, "This is not a popular bill with the public. It's popular with the CEOs. . . . This is a very important issue for the high-tech executives who give the money."
These firms of the New Economy seem to be awfully fond of the Old Economy--of 200 years ago, when indentured servitude was in vogue.
The writer is a professor of computer science at the University of California, Davis.