Date: Wed, 30 May 2007 20:13:29 -0700 From: Norm Matloff To: Norm Matloff Subject: 2 National Journal articles To: H-1B/L-1/offshoring e-newsletter Enclosed below are two interesting articles from the National Journal. The first reports on the latest H-1B study by Programmers Guild founder John Miano. The second is on a topic we haven't heard much on lately, the effects of H-1B and offshoring on computer science enrollment in U.S. universities. Before beginning, I'd like to point out that each of the two articles gives prominent coverage to "organizations" which, as far as I know, consist of one person each: Stuart Anderson's National Foundation for American Policy and Donna Conroy's Bright Future. It's remarkable to me that both of them get the news exposure (and in Anderson's case, an invitation to testify before Congress). Of course, Anderson is well-connected in DC, and it is widely believed that he is funded by the industry and the immigration lawyers, but can that buy access to the press? Now, to some specific points in the two articles. # "What we see with the data is that we need to change the H-1B program to # limit the visas to people who are highly skilled," said John Miano, # author of the report and founder of the Programmers Guild, a group # representing information technology workers. This refers to Miano's finding that most of the computer-related H-1Bs are working at or near entry-level jobs, contradicting what the industry lobbyists say. It's true and important. However, it's important to keep in mind that those at higher levels, say Master's (jobs needing a PhD are rare), are also underpaid. # He found that reported wages for 84 percent of H-1B workers were below # the median U.S. wage, with more than half in the bottom 25th # percentile. Companies by law must pay foreign and U.S. workers the same # salaries, also referred to as the "prevailing wage." Miano contends that # many employers use invalid wage sources in listing prevailing wages on # applications, which the Labor Department in turn routinely approves. There is some use of invalid sources, but the audit showed this to be rare. Instead, as I've said, the underpayment of H-1Bs comes from gaping loopholes in the definition of prevailing wage, as noted by another panelist: # Panelist Ron Hira, a public policy assistant professor at the Rochester # Institute of Technology, said, "The prevailing wage is not really the # market wage." The bill by Durbin and Grassley currently in the Senate would fix that problem. Unfortunately, only parts of that bill have been incorporated into the big Comprehensive Immigration Reform bill, and the reform of prevailing wage is not among them. I'm told that Durbin and Grassley are still trying to get that provision added to CIR, but the reality is, sadly, that even the parts of their bill which did make it into CIR are starting to get whittled away by amendments. # Also, some U.S. tech workers dislike the idea of expanding the H-1B visa # program. A labor group in Washington state raised more than $12,000 to # pay for a Roll Call advertisement that will rail against Bill Gates' # recent congressional testimony in favor of unlimited high-tech worker # visas. This is WashTech, whose newsletter has done excellent jobs of investigative journalism in exposing Microsoft's incorrect claims. For example, they are saying they can't find enough software developers, while at the same time ordering their contractors to take a week's furlough to save money. See http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBelied.txt and http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBeliedMore.txt # On Monday, meanwhile, the National Foundation for American Policy # released research that found no evidence of heightened H-1B abuse. Back # wages owed to H-1B employees as a result of Labor Department # enforcement actions actually declined from fiscal 2005 to fiscal 2006. Once again: The vast majority of underpayment of H-1Bs is done in full compliance with the law. The problem is loopholes, not violations of the law. # Nate Viall, president of Iowa-based IT recruiting firm Nate Viall # and Associates, said that he's had enough conversations with computer # science department heads over the last 10 years to see that students # feel computer science is not a stable career. "They are opting for other # majors," he said. The enrollments have been plummeting, down 50% from the peak. The Association for Computing Machinery, which is the main computer science professional organization, is basically dominated by academia, and has been panicking. The ACM announced to its members that it would conduct a study to see how much the U.S. job market has been affected by offshoring, with the goal of finding a negative result and using it to convince students to return to the field. Given the vested interest the ACM has, the fact that they knew what their "findings" would be beforehand, and the high stakes--numbers are power in academia, so plummeting enrollment is a very serious issue--it's not surprising that their "findings" were that the perceived problem with offshoring is a "myth," in the words of the AP official quoted here. I have a full critique of the ACM study and its biases at http://heather.cs.ucdavis.edu/Archive/ACMStudy.txt But even if the ACM's claim were correct that the job market is just as good today as at the height of the dot-com boom (again, a bogus claim), it doesn't really matter. As recruiter Viall states here, students understandably shun the extreme volatility that has characterized the computer job market over the years. # But, Jeff Lande, a senior vice president at the Information # Technology Association of America, argued, "The indirect impact of no # increases in the visa numbers would be to force firms to consider # sending more work offshore because of domestic talent shortages. This in # turn could further the false perception that tech is not a good field to # enter." Hey, if much more were IS sent offshore, why would that be a "false perception"? This guy is working at cross purposes with himself. At any rate, this has always been the industry lobbyists' theme: "If you don't allow us to bring H-1Bs here, we'll have to ship the work offshore." Well, Congress gave the industry more H-1Bs, but the industry never made good on its promise. I like how it was put in a Gannett News Service article in 2005: # But Eileen Appelbaum, an economist and member of a National Research # Council committee that studied the impact of H-1Bs on the U.S. economy, # does not accept the way the H-1B option is typically framed: One can # have an H-1B worker in an American job, or lose that job to exportation. # "Industry said in 2001, "Let us have the H-1B visas and we'll do the # work here, or you can say no and we'll just move the work offshore,' " # she said. "Well, they got all the H-1Bs they wanted, and they still # moved work offshore. In 2005, that's an argument industry can't make # with a straight face." Yet the industry lobbyists continue to make that argument in 2007. And they do so because they know it works. The topic of losing jobs to foreign countries brings such a visceral response that people lose their capacity for critical thinking, and believe anything they're told. Note too the research of Prof. Hira, the panelist cited earlier, which detailed the use of H-1Bs to FACILITATE offshoring, rather than to avoid it. He found that in the average offshoring project, for every two workers offshore, there is one H-1B working on the project onsite in the U.S., for liaison, training and so on. H-1B has become such a vital component of offshore that the Indian Minister of Commerce recently called it "the outsourcing visa." Norm 05-22-2007 Labor: Groups Examine Reported Abuse Of H-1B Visas Aliya Sternstein © National Journal Group, Inc. A dispute continued this week between people who argue that the immigration sys tem unfairly limits visas for skilled foreign workers and those who believe its policies are resulting in an influx of cheap, low-skilled labor for the techno logy sector. On Tuesday, the Center for Immigration Studies, which favors narrower constrain ts on immigration, held a panel discussion to talk about an April report that indicates technology companies are abusing the current skilled worker permits, known as H-1B visas, to import low-wage workers. "What we see with the data is that we need to change the H-1B program to limit the visas to people who are highly skilled," said John Miano, author of the report and founder of the Programmers Guild, a group representing information technology workers. He found that reported wages for 84 percent of H-1B workers were below the median U.S. wage, with more than half in the bottom 25th percentile. Companies by law must pay foreign and U.S. workers the same salaries, also referred to as the "prevailing wage." Miano contends that many employers use invalid wage sources in listing prevailing wages on applications, which the Labor Department in turn routinely approves. Panelist Ron Hira, a public policy assistant professor at the Rochester Institute of Technology, said, "The prevailing wage is not really the market wage." Another flaw in the law, according to Hira, is that many employers do not have to look for U.S. workers before filing visa petitions for foreign workers. Center Senior Policy Analyst Jessica Vaughan said that with technology companies obtaining large numbers of visas for low-skilled workers, many people with truly special skills cannot obtain permits. The people nabbing visas "are young workers" who are not at the peak of their professional careers, she said, "and they are not the best and the brightest." Also, some U.S. tech workers dislike the idea of expanding the H-1B visa program. A labor group in Washington state raised more than $12,000 to pay for a Roll Call advertisement that will rail against Bill Gates' recent congressional tes timony in favor of unlimited high-tech worker visas. The Washington Alliance of Technology Workers ad reads, "Thousands of highly educated and skilled U.S. high-tech professionals have lost jobs and are unable to find new work because companies like Microsoft want to hire cheaper foreign labor instead of qualified, hard-working Americans." The promotion, which features a worker holding packing boxes in front of an "Exit" sign, is expected to run soon, according to Todd Tollefson, the alliance's executive vice president. On Monday, meanwhile, the National Foundation for American Policy released research that found no evidence of heightened H-1B abuse. Back wages owed to H-1B employees as a result of Labor Department enforcement actions actually declined from fiscal 2005 to fiscal 2006. Most H-1B investigation cases are paperwork offenses or misread employer obligations, not "willful" violations, according to the report. Of the dozen or so willful violations each year, none have been committed by companies with household names, the report said. 5/29/07 Labor Concern Over Bill's Impact On U.S. Computer Scientists by Aliya Sternstein The new Senate immigration bill could have a devastating effect on U.S. computer science education, say some of those opposed to a proposal in the bill that would increase the number of skilled worker visas. The sense among such critics is that industry would hire foreign-educated workers, rather than U.S. graduates, for programming and information technology projects. Nate Viall, president of Iowa-based IT recruiting firm Nate Viall and Associates, said that he's had enough conversations with computer science department heads over the last 10 years to see that students feel computer science is not a stable career. "They are opting for other majors," he said. In his midwest market, Viall added, "companies lowered their standards" in recruiting the class of 2007 to fill tech-related jobs. Advanced Placement Program Executive Director Trevor Packer said in February that high schools have had little incentive to hire educators qualified to teach computer science, partly because of the myth that computer science knowledge can be outsourced to India. State school systems view computer science as an elective -- offering just 2,491 courses nationwide in 2006 -- not as a core math and science subject, like biology (8,111 courses offered), calculus AB (11,526), chemistry (6,493), physics (4,082) and statistics (4,464). The immigration reform bill, which would bring more skilled workers into the country, could tilt the fragile balance of supply and demand at the college level, Viall said. "It's going to actually crush the [computer science] college majors, if that goes through," he said. "Industry is going to extend offers to the foreign workers before they hire the new graduates." The immigration bill would raise the cap on visas for skilled foreign workers, known as H-1B visas. The provision would mean fewer job openings for Americans in the United States but also less money in the U.S. economy, said Donna Conroy, a former technology professional who now directs a grassroots campaign to counteract claims that Americans cannot do science and technology. Her organization, Brightfuturejobs.org, has long lobbied against expanding the H-1B visa program. Conroy said she went into engineering more than 20 years ago because the space program made the discipline look "terribly exciting" and the women's movement made the dream realistic. "I would never have majored in engineering, if I knew my chances were significantly lower," she said. But, Jeff Lande, a senior vice president at the Information Technology Association of America, argued, "The indirect impact of no increases in the visa numbers would be to force firms to consider sending more work offshore because of domestic talent shortages. This in turn could further the false perception that tech is not a good field to enter." Aliya Sternstein Senior Writer, National Journal's Technology Daily Office: 202.266.7461 Cell: 301.367.9944 E-mail: asternstein@nationaljournal.com