Date: Thu, 7 Apr 2005 17:10:28 -0700 From: Norm Matloff To: Norm Matloff Subject: PR work on foreign students getting into full swing To: H-1B/L-1/offshoring e-newsletter As I mentioned a couple of days ago, the flurry of articles in the press on foreign students during the last year is a sure sign that the lobbyists (universities, industry, immigration lawyers) have begun a PR campaign to get legislation passed favorable to the their selfish interests--and, from my point of view, counter to the interest of American (i.e. U.S. citizen/permanent resident) tech workers. Sure enough, a bill has recently been introduced, and lobbying instructions are starting to be disseminated to the "troops." See the posting I made the other day, at http://heather.cs.ucdavis.edu/Archive/ActionAct1.txt (Much of the present posting will overlap with the one above, but I have some new material too.) The article enclosed below shows that things are beginning to pick up speed in that direction, with a full-scale assault by the lobbyists. Here are the major points I wish to make about the bill: 1. Why the bill would be bad for American tech workers: The tech industry hires the foreign-student graduates of U.S. universities under the H-1B visa program as a source of cheap labor, thus greatly reducing job opportunities for Americans. For example, consider Intel. Intel claims its H-1Bs almost all have a Master's or PhD. Yet its median wage for H-1Bs, about $65K, is way lower than what people with Master's and PhDs in engineering make. The NSF data, for instance, show a national median of $100,000 for PhDs in engineering; only 5% of Intel's H-1B prevailing wage figures were even above $90K, let alone $100K. In fact, the 75th percentile for the Intel H-1B application forms was $73K; in the other words, the top 25% of Intel H-1Bs only make as much as the top 50% of Americans nationwide in this field. Though this analysis makes the point, for full details on how underpayment of H-1Bs works, see my law journal article ("On the Need for Reform of the H-1B Nonimmigrant Work Visa in Computer-Related Occupations", University of Michigan Journal of Law Reform, Fall 2003, Section V). 2. Why the bill's premise, that we "need" the foreign students, is incorrect: We are (and have been) overproducing PhDs (whether foreign and domestic) in engineering and science. This has been well documented. We are overproducing Master's degrees too; for example, in engineering our ratio of yearly production of Master's to Bachelor's degrees is about 2:1, whereas in China--shrilly claimed by these same lobbyists to be on the verge of overtaking the U.S. technologically--it is about 10:1. Note that the numbers of students accepted to American PhD programs are calculated on the basis of the amount of research money available, not on economic/societal needs See William F. Massy and Charles A. Goldman, The Production and Utilization of Science and Engineering Doctorates in the United States}, Stanford Institute for Higher Education Research, Stanford University, July 1995; William F. Massy and Charles A. Goldman, The PhD Factory, Anker Press, 2001 and Anthony Ralston, "The Demographics of Candidates for Faculty Positions in Computer Science"; Digest of Educational Statistics, 2003, http://nces.ed.gov/programs/digest/d03/ch_3.asp; and China Statistical Yearbook (Zhongguo Tong Ji Nian Jian), 2004. We have tons of engineers and scientists today are who unemployed, or more typically, underemployed. The latter term means they are working in jobs outside of engineering/science, such as driving a school bus or working as a security guard. For the industry to claim a "shortage" of engineers/scientists is outrageous. 3. What is the hidden agenda here? At the outset of this posting, I identified three groups with extremely strong vested interests here: universities, industry and immigration lobbyists. I've already explained the interest of industry, and the same explanation holds for immigration lawyers. What about the universities? A university's prestige in engineering and science is mainly due to its research reputation, especially the amount of research funding it acquires from the federal government. The funding is used largely to pay graduate students to do the research work. If universities can't get the students, they can't get the money. Moreover, many faculty don't like teaching undergraduate courses, and without a large population of Master's and PhD students, the faculty would not be able to teach many graduate courses, forcing them to teach more undergraduate courses. As the lobbyists point out, applications from foreign students for U.S. graduate programs in engineering and science are way down. In other words, the entire research/monetary empires in many universities is in danger of being scaled way, way back. "Follow the money." Disclaimer: I'm not saying that it's bad that professors do research. On the contrary, to me, it's one of the real attractions of the job. But it has become a money-making racket, rather than serious thinking by scholars. 4. So why can't the universities fill their graduate programs with American students? Even the very best American students in engineering and science tend to shun graduate work. It's a problem of economics. The stipend paid to the students, around $16,000 per year or so, is not enough to attract very many American students. Studying fo a PhD produces a net loss of earnings lifetime for American students, due to having to go five years or more on this low stipend and forego industry-level salary during that time. The National Science Foundation, a federal government agency, actually promoted the use of foreign students for this explicit purpose, as well as for the explicit purpose of holding down PhD salaries in industry. The NSF also explicitly pointed out that this policy would result in much reduced interest in PhD programs by American students, while the foreign students would still come here, since $16,000 still is a lot by their standards, and most importantly, the future prospect of a U.S. greencard comprises a huge form of nonmonetary compensation. As Stephen Seideman, Dean of the College of Computing Science at the New Jersey Institute of Technology put it, the foreign students "will do everything they can to stay here." (Patrick Thibodeau, The H-1B Equation, Computerworld, February 28, 2005.) Needless to say, it's the same situation when they are later hired by industry. Thus the universities "need" foreign students, to supply the "money-making graduate/research machine." In other words, just as in the case in industry, the foreign students are "needed" as cheap labor. See the congressionally-commissioned study, Building a Workforce for the Information Economy, National Academies Press, 2001; and Eric Weinstein, How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High-Tech Workers National Bureau of Economic Research, Harvard University, 1998. 5. Is it true applications from foreign students to U.S. graduate programs are down sharply? If so, why? The percentage drops in foreign student enrollment quoted here, 4% and 2.4% are small, so why is the tone from the universities so alarmist? First of all, those are static numbers, for overall current enrollments, as opposed to applications from NEW students. In other words, much of the current trend is masked. Second, those figures don't separate out undergraduate and graduate numbers. This point is extremely important, because as I said above, it is the graduate enrollment which really counts. A number of figures have been published which confirm that the trend here is indeed sharply downward. Applications from China, for instance, are supposedly down 50%, and my Chinese sources indicate that that figure makes sense. So, why aren't the students as interested in coming here as in the past? It is NOT primarily an issue of visa problems. The undergraduate foreign students need visas too, and yet interest from them doesn't seem to be down so much. But undergraduates have typically come to study at U.S. schools for the reasons the general public thinks of--having a chance to experience a different culture. By contrast, foreign students have come to U.S. graduate programs as a steppingstone to a U.S. greencard, with the goal of economic betterment. But the U.S. tech job market is awful now, and the foreign students are savvy enough to see that this poor job market here will be permanent, due to offshoring and the H-1B program. The latter sounds ironic, but they see that once they get their greencards, they would no longer be exploitable, and they too would be displaced by H-1Bs. Meanwhile, the tech job markets in their home countries are booming. See See NAFSA Update No.347, "Action Alert: Stop S.1394!," National Association of Foreign Student Advisers Government Relations Department; Jen Lin-Liu, "A Chinese University, Elite Once More," The Chronicle of Higher Education, July 9, 2004; and Liz Reisberg, "Where Did All the International Students Go?", International Higher Education (pub. by Boston College), Fall 2004. 6. So, what do these lobbyists want? It's humorous to see the quote in the article enclosed below, "The reason for the continued decline in the number of foreign student enrollments is unclear." It's only unclear to the administrators, who've never bothered to actually ask the foreign students. But in reality, I think many of them do know what the reasons are, and what they really know is that, in order to be able to continue to "live the good life" they've had, they need to make extraordinary efforts. The visa issue is minor; it wasn't a major issue in the first place, and recent actions in the executive branch have pretty much addressed it. Instead, they're talking (semi-privately for now, more openly in the future) about having the U.S. government pay foreign students to come here, giving the foreign students more generous immigration opportunities, etc. Meanwhile, to my knowledge, none of the technical professional organizations, nor the immigration reform organizations, setting up to deal with this legislation. As I said, I believe that this legislation will be broadened quite a lot by the time it really is considered, and is likely to be enacted, to the detriment of American engineers and scientists, including those who immigrated earlier. Norm http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/04/05/MNGP0C36E71.DTL San Francisco Chronicle Tuesday, April 5, 2005 Drop in U.S. student visas by foreigners Decline after 9/11 curbs called threat to education, economy and security Carolyn Lochhead, Chronicle Washington Bureau Washington -- Declining enrollments of foreign students at U.S. universities, caused in part by tighter security restrictions imposed after the Sept. 11, 2001, terrorist attacks, threaten the nation's higher education system, economy and even security, a top Senate Republican said Monday. Sen. Richard Lugar, R-Ind., chairman of the Senate Foreign Relations Committee, said many foreign students still view the United States as an inhospitable place to study, despite recent improvements in granting student visas. Some of the terrorists who carried out the Sept. 11 attacks entered the country on student visas. The subsequent tightening in the name of national security discouraged thousands of legitimate foreign science and engineering students and research scholars who fill top U.S. universities and often remain in the country to work, university and government officials said. California, the leading host state for international students, saw a 4 percent drop in the 2003-04 academic year to 77,186, the Institute of International Education reported. Nationwide, the number of international students at U.S. educational institutions fell 2.4 percent to 572,509 during the same period. A recent survey by the Council of Graduate Schools reported continuing declines in U.S. university enrollments of foreign students, although the drop is not nearly as sharp as in previous years. University education is a significant U.S. export, earning about $13 billion a year, about the same as medical equipment and supplies. U.S. businesses, particularly Silicon Valley technology companies, also rely heavily on foreign students educated at U.S. universities in math, science and engineering, disciplines that haven't attracted enough U.S. students to meet industry demand. Lugar held a hearing on the issue six months ago, leading the State Department and Department of Homeland Security to slash visa waiting times. "My impression is the visa issue has improved considerably over last six months," said Ivor Emmanuel, UC Berkeley's director of services for international students and scholars. Nonetheless, he said, three years of delays and uncertainty "created a perception that the U.S. is unwelcoming." The problem now, university officials contend, is that other countries began recruiting foreign students or improving their own education systems, particularly in China and India, major sources of engineers and scientists. "A lot of students from China, for example, are choosing to remain in China," Emmanuel said. "There's also competition from other countries, notably Australia and Canada, which are more aggressive in recruiting foreign students, and those countries have more user friendly visa processes." Rapid tuition increases at U.S. universities are also contributing to the decline, Emmanuel said. John Pearson, director of Stanford University's Bechtel International Center, agreed that delays have improved markedly. The reason for the continued decline in the number of foreign student enrollments is unclear, he said, adding that universities in England, which have also seen big tuition increases, face a similar problem. "Our country is now running a grave risk that students from abroad are finding other countries more hospitable; they're finding other universities seemingly just as adequate as our own," Lugar said before a closed-door briefing in the Capitol with administration and university officials. Lugar said the vacancies in U.S. universities "are going to be vacancies in our industries, in our technical capacity." That is a big security problem, he said. "We're talking today not about how to accommodate students from abroad who somehow might injure our security, we're talking about our security." Sen. Lamar Alexander, R-Tenn., said foreign students are doing for the U. S. economy today what German scientists who left the Nazi regime in the 1930s did for the economy then. If outsourcing jobs is a problem, he said, one answer is to "in-source brain power." E-mail Carolyn Lochhead at clochhead@sfchronicle.com. Page A - 3