Date: Mon, 23 Apr 2007 00:10:17 -0700 From: Norm Matloff To: Norm Matloff Subject: two sympathetic but somewhat inaccurate editorials on H-1B To: H-1B/L-1/offshoring e-newsletter Enclosed below are two opinion pieces on the H-1B issue. Though they express views which are critical of the H-1B program, which I am as well, there are some serious inaccuracies. The editorial in the Atlanta Journal and Constitution is well-meaning, but unfortunately the author accepts the industry lobbyists' claim that we have a shortage of programmers and engineers. This is absolutely false, and can be seen in a number of ways. I've mentioned, for example, the BusinessWeek article that showed that starting salaries for new graduates in computer science and electrical engineering have been flat since 1997 (adjusted for inflation). If we had a shortage, those wages would have risen sharply. Note also the detailed Duke University survey of employers, which also concluded there is no tech labor shortage. The AJC's McNaughton makes a second major error in stating that the problem with the prevailing wage law is that it's not enforced. (It also says that only some H-1B employers are subject to that law anyway, which is not true.) Actually, the problem is loopholes, not lack of enforcement. The legal definition of prevailing wage allows employers to pay H-1Bs well below the market wage, and yet be IN FULL COMPLIANCE WITH THE LAW. The Carlini piece says that Americans are not allowed to apply for H-1B positions, and that the Durbin/Grassley bill would change that. In other words, Carlini seems to think that present law bars Americans from applying for these jobs. This is nonsense. Anyone can apply. The problem is that the law doesn't require most H-1Bs employers to give Americans hiring priority. It is this aspect that is addressed by Durbin/Grassley. Carlini also misunderstands the prevailing wage issue. He says that the presence of so many H-1Bs in the market brings down average wage levels. That's true, of course, but again the major issue is the loopholes. By far the most important value of the Durbin/Grassley bill is that it plugs those loopholes in the legal definition of prevailing wage. It has some other good provisions too, such as the aforementioned imposition of a requirement that employers give Americans hiring priority, and a provision requiring employers to advertise jobs on a Dept. of Labor Web-based database before offering those positions to H-1Bs. But again, the real value of D/G is that it fixes the core problem, which is the loopholes in prevailing wage law and regulations. Unfortunately, it's easy to miss that, since the majority of the bill (and even its title) deals with enforcement issues. No wonder McNaughton and Carlini misunderstood. The bill confused them (as did, no doubt, some anti-H-1B activists who haven't done their homework). As I said, those portions of the bill that address enforcement are not very valuable, because enforcement is not the problem in the first place. It's the loopholes which are the problem, and D/G does a good job of addressing that problem. Bottom line, though, my hat is off to McNaughton and Carlini for having the courage to speak out against this sham known as H-1B. I'm sure they will now come under heavy pressure from the industry lobbyists to recant their positions. Norm http://www.ajc.com/opinion/content/opinion/stories/2007/04/21/0422edvisa.html Atlanta Journal and Constitution How America can win job race Tighten reins on hollow visa program that takes advantage of U.S. education failures Published on: 04/22/07 The trouble with the United States is that it produces too many journalists and too few engineers and computer science majors. The result is a shortage of college graduates with the technological skills most in demand. OK. The relationship is not quite that simple. But it's close enough to provide all the ammunition that American employers need to lobby for permission to hire more foreign workers in fields that attract too few U.S. citizens. The high-tech industry wants to increase the number as part of immigration reform. Currently, no more than 65,000 new H-1B visas can be granted each year for foreigners holding bachelor's degrees. Those visas are renewable and permit a temporary immigrant to work in the United States for up to six years. Another 20,000 H-1B visas are reserved for temporary immigrants with graduate degrees. No less a technology icon than Bill Gates of Microsoft told Congress in March that the visa cap "is arbitrarily set and bears no relation to U.S. industry's demand for skilled professionals." The apparent proof of that came less than a month later. The U.S. Citizenship and Immigrations Services announced in early April that it received 150,000 requests for next year's H-1B visas on the first day that applications were accepted. Unless many more young citizens can be encouraged to major in science, technology, engineering or math, an expanded H-1B program will be trotted out regularly as the right solution to keep the United States economically competitive. In fact it may be. But Congress needs to fix the flaws in the system before thinking about opening the door to more temporary workers from abroad. Consider these issues that should be addressed: • Four of the five biggest recipients of H-1B visas are Indian companies that specialize in outsourcing jobs — often for American corporations. The fifth company is headquartered in the United States but a majority of its workers are in India. • India's minister of commerce recently referred to the H-1B as "the outsourcing visa." That's because it's used by foreign companies to gain experience and contacts in the United States useful in winning job outsourcing contracts. • Safeguards against abuse of H-1B visas are weak. Some employers are required to promise two things: They'll pay skilled immigrant employees prevailing wages and try to fill openings with U.S. citizens before turning to guest workers. Other employers are not subject to those requirements; the test is how dependent a business is on foreign workers. But even for employers subject to the restrictions, there doesn't appear to be much danger that the rules will be enforced. Wage standard checks apparently are triggered only if a complaint is filed with the U.S. Labor Department. That's not likely to happen, because it would cost a foreign worker his or her job if the visa were lifted as a result of the complaint. As for the requirement that employers try to fill jobs first with citizens, there's even less of a chance that cheating will be detected. The government does not verify the supposed absence of qualified citizens for jobs that go to foreigners. • Under visa regulations, some companies can legally replace qualified employees who are American citizens, with foreign workers. There are enough problems with the H-1B visa system that Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) introduced legislation early this month to curb abuses. They said changes are needed to protect American workers from being bypassed for jobs. The long-term solution, however, is to lure more young Americans into technical studies. The number of degrees awarded in those fields has been increasing, but it hasn't kept up with demand. Perhaps it's because other areas of study are more appealing or less challenging. Whatever the case, until recently more degrees in journalism/communications were awarded in the United States than degrees in the computer sciences. Data compiled by the National Center for Education Statistics also show that at least twice in this decade, fewer bachelor's degrees were awarded in engineering than in journalism/communications. Obviously, not all the scientific degrees are won by U.S. citizens. Some are earned by foreign students. And with the limit on H-1B visas, it means when those students graduate, they may not be able to stay in the United States. "Unfortunately," Gates said during his March testimony before a House committee, "America's immigration policies are driving away the world's best and brightest precisely when we need them most." He's probably right. But that wouldn't be an issue if sufficient numbers of young citizens were attracted to engineering and math and computer sciences. The conventional wisdom — and Gates' hunch as well — is that the secret to higher enrollment in technical studies lies in raising educational standards and results in primary and secondary schools. That means raising the skill level of teachers and challenging young students to excel rather than get by. "Every student in America should graduate from high school ready for college, career and life," Gates insisted. "Every child. No exceptions." Not everyone will agree with Gates that companies such as Microsoft should have unfettered access to talented foreign workers. But no one can disagree with his goal for America's children. — David McNaughton, for the editorial board http://www.midwestbusiness.com/news/viewnews.asp?newsletterID=16969 H-1B Jobs: Where's the Real Shortage of Skilled Workers? Published on 4/11/2007 Carlini's Comments, MidwestBusiness.com's oldest column, runs every Wednesday. Its mission is to offer the common man's view on business and technology issues while questioning the leadership and visions of "pseudo" experts. CHICAGO - While H-1B job quotas are being talked about again, do we really need to look outside our borders for workers? Are H-1B workers better educated and better workers or are they just cheaper to pay? "133,000 H-1B Visa Applications Submitted in Two Days" was the cover story of this week's Information Week. It's interesting how so many people lost jobs in the last couple years and could never get anything close to what they were earning while many companies claimed they couldn't find anyone. Many people in the Midwest were cut from good jobs and never had a chance to return This is from an AP article last week: ^ To the dismay of technology companies that rely on the visas to hire ^ skilled foreign workers, U.S. Citizenship & Immigration Services says it ^ reached its limit for 2008 H-1B visa petitions in a single day and will not ^ accept any more. ^ The agency began accepting petitions [on April 2] for the fiscal year ^ starting Oct. 1 and said it received about 150,000 applications by ^ mid-afternoon. There is finally a Senate bill that says an American worker can apply for these jobs. The bill is co-sponsored by Sen. Grassley in Iowa and Sen. Durbin in Illinois. While this will hopefully be a starting point for IT job reform, I think it's too late. While there were people in the job market for several years, many companies didn't want to pay their market rate. Instead, they artificially created a new fractional rate by introducing many H-1B jobs. Salaries for database administrators in some cases went from $80,000 to $90,000 a year to $40,000 by the introduction of H-1B workers eager to work in the U.S. Where was the mainstream media spotlight on this issue? I wrote columns about this dating back to 2002. Wake Up, Chicago Executive Says Discussing this with others in the Chicago area, here is what the president of a Chicago company said who disagrees with the perspective of Oracle's Hoffman. ^ The real problem in the U.S. is our lack of focus and attention on our ^ grade school and high school children in terms of their lack of discipline ^ in math and the sciences. The U.S. will continue to get its head handed to ^ it due to our laziness in the education systems. Our main support structure ^ -- the parents of these children -- need to start demanding excellence from ^ their kids. ^ How competitive the U.S. is in the future is not a function of the ^ threshold of H-1B visas. This is an absolute scapegoat of an excuse. ^ Certainly increasing this threshold further exacerbates our laziness. We ^ need to wake up. ^ I couldn't disagree more with Oracle's Hoffman stating: "Our broken ^ visa policies for highly educated foreign professionals are not only ^ counterproductive [but] they are anti-competitive and detrimental to ^ America's long-term economic competitiveness." This is utter lunacy and ^ is somewhat the root cause of our problem. ^ ^ We have captains of industry running high-tech companies like Oracle who ^ are hinging our competitiveness on the number of H-1B visas we allow in the ^ U.S. These companies should be fueling our educational systems with the ^ right support structure in math and the sciences and offering programs, ^ scholarships and seminars within our schools. ^ Our high-tech companies are looking to the H-1B programs as a quick fix to ^ solve today's problems. Similar to the desperation tactics of a junkie, ^ they're just grabbing H-1B employees when needing their next fix. This is ^ not a Band-Aid covering a superficial wound. This is more like taking two ^ aspirin for someone with blunt head trauma. Again, we need to wake up. ^ Our ability to compete in the future is a function of many things (how ^ visionary we are, how innovative and entrepreneurial we are, etc.). If we ^ don't set our children in the right direction today in terms of needing ^ sound math and science skills, we are in for a rude awakening. ^ I am coaching my grade school and high school kids to have a firm grip in ^ these areas. As a safety net, I also want them to learn Mandarin just in ^ case. The education programs in this country are way off kilter. This topic could fill a whole book. When you have administrators focused on political correctness instead of global competitiveness, it's time to make radical changes. H-1B Process is Easy, But Not For U.S. Workers Everything in finding and streamlining the H-1B job process is out there (from general questions to streamlining the process). If only there was something this good for U.S. citizens who have been spinning around in menial jobs for the last six years maybe more people would have found better jobs. Don't kid yourself. The overall economy has suffered because of this. The media and all the economic pundits don't seem to see the correlation that many white-collar and technical jobs have evaporated. With that, the buying power from those jobs has also evaporated. If you don't think so, ask yourself this question: How many H-1Bs are buying new Fords, GMs and Chryslers? How many are buying houses? They send their money home, stimulate the economy back there and don't buy into what used to be the American dream of buying a house and a new car. Check out this graph along with this graph (both courtesy of Gene Nelson) showing more than 25 million jobs transferred to non-U.S. citizens. That's a huge amount of purchasing power. It doesn't take someone with a doctorate to see the effects on our economy. Many IT people who used to buy new cars have changed their consumer habits drastically. A friend laid off from a $90,000 project manager job at Motorola in 2001 is looking at trying to keep his 2000 Japanese luxury car working as he tries to juggle a mortgage and other expenses in a job that pays significantly less. If he ever buys anything else, it will be a used Japanese car and he swears he will never buy a Motorola product again. Is he and thousands of other people still bitter about Motorola's job-slashing strategy? It's funny how the backlash of not buying a former employer's products or services after a bitter layoff is never factored in when looking at slumping sales. How many former Motorola employees go out of their way to buy Samsung, LG and Nokia cell phones today? More important, how many of their friends are also influenced by them? That would be an interesting study and also something for HR experts to look at when they caution individuals about "not burning their bridges" and giving two week's notice when leaving a company. The same goes for a friend formerly with United Airlines who recently bought a used Lexus and has no intention of ever buying an American car again. If money isn't coming in as it used to, the common concern I have heard from many people seems to be that they can't take a chance on buying an inferior product that won't last as long. The longer the mainstream media don't put an objective spotlight on these issues and the real impact on the American economy, the more people will turn to other media outlets to get their news. They don't trust someone saying the economy is great while they are trying to figure out how they don't lose their home. Carlinism: When you replace people, you also replace or reduce their buying power.