Date: Fri, 4 Nov 2005 22:45:42 -0800 From: Norm Matloff To: Norm Matloff Subject: [matloff@cs.ucdavis.edu: ITAA :: Business Development :: Workforce & Education] To: H-1B/L-1/offshoring e-newsletter Issues I'll discuss here: * A sellout by the Senate, including by putative "pro-labor" Democrats, most of them prominent ones. * An outrageous statement by Alan Merten, chair of a congressally commissioned study on H-1Bs, "IT labor shortages," etc. * One aspect of the bill is not 100% bad. The Senate just approved a substantial increase in the H-1B visa cap, and an increase in employer-sponsored green cards. (Since the latter are technically called "visas," I'll simply use that term below.) As has become typical, the measure was buried inside a huge, complex appropriations bill. It now awaits reconciliation with the House bill. Senator Byrd proposed an amendment to remove the visa increases from the bill. Only 14 senators voted yes. I'm enclosing a list of all the senators' votes on the Byrd amendment below, which I obtained from the NumbersUSA Web site; remember that a Yes vote means opposition to the visa increases. There are a few votes worth mentioning: * Sen. Feinstein (D-CA) voted No, even though she publicly questioned the wisdom of the visa increase. Granted, Feinstein did get the committee to cut the H-1B increase in half, but that is not worth much; once the industry reaches the cap, they'll just ask for more, and Feinstein will, I'm sure, agree again. * My other senator, Barbara Boxer (D-CA), voted No, and will ALWAYS support the industry on any immigration issue, according to what a top aide of hers told me. * Sen. Dodd (D-CT) voted Yes. He has been critical of H-1B/L-1 in the past. See http://heather.cs.ucdavis.edu/Archive/Chambliss2.txt * Sen. Clinton (D-NY) voted No. She will basically support the industry on every H-1B/L-1/offshoring issue, and is a public ally of Tata Consultancy Services, one of the biggest H-1B/L-1/offshoring firms. See any of the files whose names begin with "Hillary" at http://heather.cs.ucdavis.edu/Archive. * Sen. Stabenow (D-MI) voted Yes. She got into the Senate by defeating Sen. Abraham, a Republican who had been the chief architect of the 1998 and 2000 H-1B increase. She had criticized Abraham for that, and it's good to see that she followed through here. * Sen. Cantwell (D-WA) voted No. She is a former tech industry executive. * Sen. Lautenberg (D-NJ) voted No. He is (or at least was) a part owner of Wilco, a tech firm that is being sued for allegedly abusing the H-1B program. * Sen. Kennedy (D-MA) voted No. Though he too has publicly criticized the H-1B program in the past, he has generally been a friend of industry on this issue. According to the IEEE-USA, Kennedy was one of the prime movers in the current visa increase legislation. And the American Electronics Association, one of the key industry lobbying groups, said "Senator Kennedy has been a significant advocate on immigration issues related to high- skilled workers." * Sen. Kerry (D-MA) voted No. During the 2004 presidential election I pointed out that in spite of his "Benedict Arnold" rhetoric, he actually does support offshoring. See any of the files whose names begin with "Kerry" at http://heather.cs.ucdavis.edu/Archive. * Sen. Lieberman (D-CT) voted No. He has praised the H-1B program in a letter to the U.S. India Political Action Committee, etc. See http://heather.cs.ucdavis.edu/Archive/Lieberman.txt * Sen. Harkin (D-IA) voted No. He was extremely outspoken against H-1B in 2000, but has been absolutely silent on the issue since then. The obvious explanation is that he was threatened with punishment by the Democratic Party or the industry or both. All of these happen to be Democrats. With two exceptions, they voted with the industry on the Byrd amendment. This is no accident; in spite of the pro-labor tradition/image of the Democratic Party, the fact is that they have been very strongly in support of the industry on H-1B/L-1 and offshoring issues. See http://heather.cs.ucdavis.edu/DemocraticParty.txt I myself am a registered Democrat, and my remarks during the election angered some people who mistakenly believed that Kerry would fix the H-1B and offshoring problems if he were elected, but the fact is that the Democrats are totally corrupt on this issue. I'm enclosing an article about the visa increase bill below from the Washington Times. (There was also a brief mention inside a broader article in the Washington Post.) There is the usual industry propaganda there, which I've refuted so many times before. For example, the industry lobbyists here once again point to the large numbers of foreign graduate students in the U.S. as supposedly showing a "need" for H-1Bs. See for example http://heather.cs.ucdavis.edu/Archive/ProposedMSPhDExemption.txt for the refutation, or the files whose names begin with "ForeignGradStudents" in http://heather.cs.ucdavis.edu/Archive. But I wanted to call attention to one part of the article in particular: * Alan Merten, president of George Mason University and former * chairman of the National Academy of Sciences' 2001 study "Building * a Workforce for the Information Economy"... said the influx of * workers would hold down wages to some degree. * "Anytime you increase supply, you hold down wages," he said. "But we * did not find five years ago that it had a significant impact on wages * at all." That's flat-out false. The NRC report stated that the impact of H-1Bs was ALREADY holding down wages (page 187). Merten never should have been appointed to chair that NRC commission, as he has very strong ties to industry. For example, he sits on the boards of several high-tech firms, one of which hired an H-1B engineer at a salary of only $30K. See Section IV.A of my university law journal article, at http://heather.cs.ucdavis.edu/MichJLawReform.pdf Finally, a comment on the green card increase: This is not 100% bad. The abuse of the H-1B program stems largely from the fact that, if an H-1B is being sponsored by his employer for a green card, he is a de facto indentured servant for the years it takes to get a green card. Since he can't (actually, he can, but he dare not) move to another employer during this time, he is open to exploitation. This is an absolutely central point in the H-1B issue. If the yearly cap on employment-based green cards is increased, the period of indentured services is reduced, and thus H-1Bs are less attractive to employers. This was the motivation for the "instant green card" proposal made by IEEE-USA in 2000. In my opinion, that proposal was ill-conceived, but the idea itself--of removing the key feature which makes the H-1Bs exploitable--was correct, and my own H-1B reform proposal later included one feature which was somewhat similar to this. (Section VII.B of my law journal article.) The industry itself has always been interested in increasing the H-1B caps, not the green card caps, precisely for this reason. They like the fact that the green card process enables the employer to have a stranglehold over the H-1B, thus allowing the employer to pay low wages. They also like the "loyalty" (i.e. immobility) of the H-1Bs. An employer of an H-1B doesn't have to worry about the worker suddenly leaving the employer in the lurch by going to another company. FACEIntel, a group of dissident Intel employees, stated in the 1990s that an Intel HR person, Donna Hasbrouck told the the Microprocessor Technology group "after hiring the foreign student, delay the immigration paper work process, because when they get their green card we lose them to companies like Sun Microsystems and Silicon Graphics, they pay them about 30% more." You can see this in the major industry lobbying organizations' public statements, enclosed below. The press release of the ITAA on the Senate action is titled "ITAA Cheers Senate Vote on H-1B Visa Recapture," not mentioning the green cards. The American Electronics Association's statement of August 12 of this year, aimed at pressuring Congress to take action, mentioned only H-1B (ditto for the SJ Mercury News op-ed by its president). The Compete America press release is an exception, but even Compete America has focused on H-1Bs much more than green cards. Norm http://www.washtimes.com/metro/20051103-103013-2489r.htm Immigration bill gets support By Keyonna Summers THE WASHINGTON TIMES November 4, 2005 Local universities and technology alliances have thrown their support behind federal legislation that would make it easier to bring in highly skilled teachers and workers from India and China. A Senate budget bill on the floor Monday included provisions that would exempt spouses and children of highly skilled immigrant workers from counting toward the annual 140,000 cap on green cards, allowing the government to issue employment-based visas to 90,000 more workers than in the past. The measure would help fill the demand for technology workers and reduce the backlog of applications from India and China, where those now being accepted applied at least four years ago. "Companies [and] universities are very concerned about our ability to compete globally," said Sandy Boyd, vice president of the District-based National Association of Manufacturers and chairwoman of Compete America, a pro-legal, employment-based immigration coalition. "Our ability to innovate and create jobs is really dependent on ... developing good American talent, and it also means having access to the world's talent." Many technology companies in the region find it difficult to recruit Americans from local universities because there are 20 percent fewer engineering majors in the United States than 20 years ago, according to Compete America. At U.S. engineering colleges, foreign nationals earn more than half of the master's degrees in science, engineering and technology and about two-thirds of the doctorates, the coalition said. China graduates nearly four times as many engineers as the United States. "So [American employers are] either leaving the positions unfilled or they're not taking the best talent they can find," said Jeff Lande, senior vice president of the Arlington-based Information Technology Association of America. Part of the Senate Judiciary Committee's budget reconciliation package, the provisions also seek to increase the fee on employment-based visas by $500 each, raising $300 million in federal revenue, and to increase the H-1B temporary visa cap from 65,000 to 95,000. The legislation would "recapture" unused green cards and temporary visas previously approved by Congress. The Senate yesterday voted down a move by Sen. Robert C. Byrd, West Virginia Democrat, to strip from the budget bill the increased visas caps and to raise by $1,500 the fee of L-1 visas, which allow U.S. and foreign companies to swap management staff between branch offices. Among the companies that support Compete America's push for access to foreign nationals -- many of whom already reside in the United States -- are Microsoft Corp, Intel Corp. and Texas Instruments Inc. George Washington University is one of several local universities that said they welcome the opportunity to readily hire foreign professors and researchers. "Our business is to provide a world-class education to our students, and in order to be successful in that mission, we need to be able to attract and retain highly skilled persons, some of whom come from outside the U.S.," said Marie Rudolph, the university's director of government, international and corporate affairs. Deborah Meyers, senior policy analyst at the Migration Policy Institute, said the influx of foreign workers would not pose competition for most American workers or day laborers in the region who migrate to the U.S. in search of construction jobs. "These are positions that require extensive education [and] persons with extraordinary ability, persons with advanced degrees," Ms. Meyers said. "The employers have to make an attestation with the [U.S.] Labor Department that they have tried to recruit domestically for these positions. ... So there are some measures in place to protect domestic workers already, and those would remain." Alan Merten, president of George Mason University and former chairman of the National Academy of Sciences' 2001 study "Building a Workforce for the Information Economy," said these foreign workers likely would improve the economy by starting companies and creating jobs for American technology workers. However, Mr. Merten warned that the workers eventually might take their skills back to their native countries. He said America should focus on cultivating its own talent or find ways to retain foreign workers. Mr. Merten also said the influx of workers would hold down wages to some degree. "Anytime you increase supply, you hold down wages," he said. "But we did not find five years ago that it had a significant impact on wages at all." http://www.itaa.org/newsroom/release.cfm?ID=2209 ITAA Press Release ITAA Cheers Senate Vote on H-1B Visa Recapture 04-Nov-05 For More Information Contact: Bob Cohen (703) 284-5301 bcohen@itaa.org Charlie Greenwald (703) 284-5305 cgreenwald@itaa.org Arlington, VA - The Information Technology Association of America (ITAA) today applauded lawmakers for including provisions in a Senate Judiciary Budget Reconciliation bill passed last night, 52-47, that would allow business immigration visas available but not issued in previous years to be applied in the current year. "The Senate has grabbed the opportunity to make a real difference for America's high tech future," said ITAA President Harris N. Miller. "Recapturing these visas will give an immediate boost to U.S. competitiveness in overseas markets." ... FOR IMMEDIATE RELEASE October 20, 2005 Compete America Supports Senate Judiciary Committee Move to Provide Relief for Visa Shortage Budget Measure Would Provide Interim Solution to H-1B and Green Card Crisis Washington, D.C. - Compete America endorsed the Senate Judiciary Committee's approval today of a budget reconciliation measure that would provide interim relief from the current crisis-level shortage of H-1B and employment-based visas (green cards). Compete America believes the package will give American employers temporary, but critical access to the talent needed for continued innovation, job creation and economic expansion in the worldwide economy, even thought the proposal was amended to halve the number of "recaptured" H-1B visas allowed per year. In addition, the measure would more than meet the full Judiciary Committee budget reconciliation obligation of $300 million over five years through increased license and applications fees. "The relief provided by the Senate bill is a stop-gap measure necessary to ensure that the United States has the ability to attract and retain critical talent." said Sandra Boyd, Vice President, National Association of Manufacturers and Compete America Chair. "We are grateful to Chairman Specter and Ranking Member Leahy for their leadership in moving the Senate in the right direction on this issue. We look forward to working with the House towards adoption of a similar measure." Among the specifics of the measure approved today, the following are critical to easing visa shortage, while raising significant Federal revenue: o The measure would "recapture" employment-based (green card) immigrant visa numbers that were available by statute but unused in previous years due to processing backlogs, and make them available again at a rate of up to 90,000 per year; o The measure would provide that only employment-based immigrants, and not their spouses and children, would count toward the annual limit on employment-based immigration; and o It would "recapture" H-1B visa numbers that were available by statute but unused in previous years, and make them available again at a rate of up to 30,000 per year. "At no time in our nation's history has the door been as closed to talent as it is today," said Lynn Shotwell, Executive Director of the American Council on International Personnel. "The H-1B visa quota for fiscal year 2006 was exhausted well before the new fiscal year even began, and there are years-long backlogs for green cards." To illustrate the growing problem, Shotwell pointed to the fact that from 2001 to 2004, 141,365 employment-based third (EB-3) preference category visas were left unused - despite significant demand - due to processing delays at the U.S. Citizenship and Immigration Services. "Relief is needed, and it's needed now," Shotwell concluded. Compete America (www.competeamerica.org) is a coalition of more than 200 corporations, universities, research institutions and trade associations concerned about legal, employment-based immigration and committed to ensuring that the United States has the highly educated workforce necessary to ensure continued innovation, job creation and leadership in a worldwide economy. http://www.aeanet.org/PressRoom/aeamonthlynews1105.asp#federal from NumbersUSA: Akaka (D-HI), Yea Alexander (R-TN), Nay Allard (R-CO), Nay Allen (R-VA), Nay Baucus (D-MT), Nay Bayh (D-IN), Nay Bennett (R-UT), Nay Biden (D-DE), Nay Bingaman (D-NM), Nay Bond (R-MO), Nay Boxer (D-CA), Nay Brownback (R-KS), Nay Bunning (R-KY), Nay Burns (R-MT), Nay Burr (R-NC), Nay Byrd (D-WV), Yea Cantwell (D-WA), Nay Carper (D-DE), Nay Chafee (R-RI), Nay Chambliss (R-GA), Nay Clinton (D-NY), Nay Coburn (R-OK), Nay Cochran (R-MS), Nay Coleman (R-MN), Nay Collins (R-ME), Nay Conrad (D-ND), Nay Cornyn (R-TX), Nay Corzine (D-NJ), Not Voting Craig (R-ID), Nay Crapo (R-ID), Nay Dayton (D-MN), Yea DeMint (R-SC), Nay DeWine (R-OH), Nay Dodd (D-CT), Yea Dole (R-NC), Nay Domenici (R-NM), Nay Dorgan (D-ND), Yea Durbin (D-IL), Yea Ensign (R-NV), Nay Enzi (R-WY), Nay Feingold (D-WI), Yea Feinstein (D-CA), Nay Frist (R-TN), Nay Graham (R-SC), Nay Grassley (R-IA), Nay Gregg (R-NH), Nay Hagel (R-NE), Nay Harkin (D-IA), Nay Hatch (R-UT), Nay Hutchison (R-TX), Nay Inhofe (R-OK), Yea Inouye (D-HI), Nay Isakson (R-GA), Nay Jeffords (I-VT), Yea Johnson (D-SD), Nay Kennedy (D-MA), Nay Kerry (D-MA), Nay Kohl (D-WI), Nay Kyl (R-AZ), Nay Landrieu (D-LA), Yea Lautenberg (D-NJ), Nay Leahy (D-VT), Nay Levin (D-MI), Nay Lieberman (D-CT), Nay Lincoln (D-AR), Nay Lott (R-MS), Nay Lugar (R-IN), Nay Martinez (R-FL), Nay McCain (R-AZ), Nay McConnell (R-KY), Nay Mikulski (D-MD), Nay Murkowski (R-AK), Nay Murray (D-WA), Nay Nelson (D-FL), Nay Nelson (D-NE), Nay Obama (D-IL), Nay Pryor (D-AR), Nay Reed (D-RI), Nay Reid (D-NV), Nay Roberts (R-KS), Nay Rockefeller (D-WV), Yea Salazar (D-CO), Nay Santorum (R-PA), Nay Sarbanes (D-MD), Nay Schumer (D-NY), Nay Sessions (R-AL), Yea Shelby (R-AL), Nay Smith (R-OR), Nay Snowe (R-ME), Nay Specter (R-PA), Nay Stabenow (D-MI), Yea Stevens (R-AK), Nay Sununu (R-NH), Nay Talent (R-MO), Nay Thomas (R-WY), Nay Thune (R-SD), Nay Vitter (R-LA), Yea Voinovich (R-OH), Nay Warner (R-VA), Nay Wyden (D-OR), Nay FEDERAL ISSUES AFFECTING YOUR BOTTOM LINE Looking Ahead at Congress - Immigration Reform, H-1B Visas, and AHP Immigration Reform and H-1B Visas: On August 12, 2005, the U.S. Citizenship and Immigration Services announced that the congressionally mandated cap for H-1B visa applications had already been reached for fiscal year 2006. This means that no new visas will be made available until October 2006. As many of AeAs companies know, H-1B visa holders are a small, but critical part of a high-tech companys workforce, as this visa allows access to the best and brightest individuals from throughout the world. AeA has been meeting with key members of the Administration, House, and Senate to encourage a re-evaluation of the current system and help shape some type of solution to help fix the problems associated with the H-1B visa process. On August 17, 2005, an opinion editorial by William T. Archey, AeA President & CEO, on immigration reform ran in the San Jose Mercury News and was carried in 15 other newspapers around the country. To view the article, go to www.aeanet.org/mercoped.