Date: Thu, 28 Jun 2007 15:55:54 -0700 From: Norm Matloff To: Norm Matloff Subject: Dean Takahashi expanded column on H-1B To: H-1B/L-1/offshoring e-newsletter As San Jose Mercury News columnist Dean Takahashi says below, a few weeks ago he ran a very pro-H-1B column, which I then posted to this e-newsletter. Some of my readers then sent him angry messages in protest. Some of those messages were cc-ed to me, so Dean called me and we chatted for a half hour or so. H-1B, like lots of issues, is a topic on which people of good intentions may disagree with each other after carefully investigating the facts. But I do think Dean's readers should expect him to be consistent, which he is not. Here is what he says: # A video that surfaced on YouTube on Tuesday showed that some over-eager # immigration lawyers have been encouraging companies to exploit the H-1B # loopholes in order to hire low-cost immigrant labor. # ... [intervening paragraphs deleted] # I'm in favor of improving enforcement so that the H-1B program isn't # simply an instrument for those seeking low-cost labor. The YouTube vidoes showed how employers LEGALLY circumvent the law requiring employers to recruit Americans (for green cards) and LEGALLY circumvent the law requiring employers to pay prevailing wage (for H-1B visas and green cards). Dean himself phrases it above as "exploit the loopholes," i.e. FULLY LEGAL. So it is NOT an enforcment issue. Now, why would Dean not realize that he so badly contradicted himself? Sorry for playing amateur psychologist :-) but in my long experience I believe the answer lies in something else he said: # Convinced that immigrants have been key to Silicon Valley's success, I # suggested we expand the program. This is a mantra for these people, especially at the Mercury News. It's not conscious, but rather just taken for granted, and is powerful enough to suppress any power of critical thinking. Here's an example: # I did get a couple of responses that favored the program. Vinod Dham # said he came to the U.S. on a student visa in 1975 with $20 in his # pocket. He later led the development of Intel's Pentium microprocessor Indian-American engineers proudly call Dham "the father of the Pentium." Well, guess what! The Israelis think that THEY developed the Pentium. :-) (See http://www.factsandlogic.org/outstanding_accomp.html) Good for Dham and good for the Israelis. But the fact is that the Pentium was a project involving hundreds of engineers. NO ONE was indispensable. The Pentium would have been built even if Dham had never been born, and even if Intel had never established a branch in Israel. As I explained to Dean, I have actively supported rolling out the red carpet immigrationwise for "the best and the brightest." My own department has two faculty members, one from India and another from China, who would not be with us had I not stridently pushed my colleagues to agree to hire them. But such outstanding people comprise only a tiny percentage of foreign workers. Meanwhile the H-1B program is causing an internal brain drain, in which the older (age 40 or even 35) workers are forced out. I've mentioned, for instance, my former student, who was so talented and innovative that he was written up in the Wall Street Journal, yet last year had to leave the field at age 37. We are LOSING a lot more good people than we're gaining. So for Dean to conclude that without immigrants the Valley would not be as strong or as innovative etc. is just plain wrong. Back to YouTube: Dean dismisses those lawyers as "over-eager," implying that their practices are not the norm. He offers no evidence for that--he could have called two or three immigration lawyers and asked if they themselves ever make use of loopholes--and he should know better. I sent him the Joel Stewart statement, "Employers who favor aliens have an arsenal of legal means to reject all U.S. workers who apply," published in a prominent newsletter for immigration lawyers. (By the way, Stewart's bio, at http://fowler-white.com/profile.asp?wld_id=2966823 describes him as "a nationally recognized authority on employment-based immigration matters as well as a popular speaker at immigration seminars for national and local bar associations throughout the United States. Mr. Stewart is the editor of The PERM Book, the definitive authority on the subject of PERM processing of labor certifications, and the editor/author of The Perm Quarterly, a professional journal that compiles and develops updated information on PERM for attorneys and employers. Mr. Stewart has been writing the BALCA Case Summaries for AILA and Immigration Law Today since 1987...") I sent Dean the information that the law firm in the video is one of the largest in the U.S., that one of the lawyers in the video is a former chair of the Immigration Committee of the ITAA, the might industry lobbying group, etc. I sent Dean a partial list of the firm's clients, including major companies like Marconi Communications. I cited the GAO study in which the GAO had surveyed employers, and that many employers had told the GAO "that they hired H-1B workers in part because these workers would often accept lower salaries than similarly qualified U.S. workers; however, these employers said they never paid H-1B workers less than the required wage"--directly illustrating the role of loopholes, right from the horse's mouth. I don't think Dean intentionally ignored any of this when he dismissed the firm in the video as "over-eager,", but the "immigrants made Silicon Valley" mantra is so powerful that he just didn't see it. Once again, the problem is the inability to notice that the emperor has no clothes. There is nowhere in which this illness is more acute than at Dean's employer, the San Jose Mercury News. At least Dean is a nice guy who is trying to be fair, unlike some who've been at the Merc. I'll leave names out here, but one Merc reporter used to browbeat and argue with some of the H-1B critics she interviewed (and for news pieces, not opinion columns), a breach of journalistic ethics. A Merc columnist repeatedly used industry talking points without attribution, and eventually admitted that her "family connections" to the industry were influencing her writings. The one reporter who wrote a number of good pieces on H-1B left the paper, insisting that it was for personal reasons, but one must wonder. Dean is also a former writer for the Red Herring. That publication made its views crystal clear in their editorial in July 1998: $ Companies have a fiduciary responsibility to keep labor costs low... $ And if companies say they want to hire more skilled foreign workers $ because those workers are cheaper, we should believe them --- and $ increase the number of visas issued. Dean says: # In addition, Matloff says, "If there really is a shortage of tech # workers, why have wages in computer science and electrical engineering # been flat since 1999." # Robert Hoffman, vice president of government and public affairs at # Oracle, says wages in the electrical engineering category rose 34 # percent from 1997 to 2005. And he says Department of Labor data shows # that the unemployment rate for software engineers is 1.7 percent, which I gave Dean a citation for my claim, a BusinessWeek study. I also emphasized that in that study the salaries were adjusted for inflation. I'm willing to bet Dean a dozen doughnuts that Hoffman's data did not adjust for inflation. [Added later: Hoffman did indeed not adjust for inflation, and his data actually CONFIRM that we don't have a tech labor shortage. See http://heather.cs.ucdavis.edu/Archive/DeanTakahashi2.txt] As to the unemployment data, I reminded Dean that people do have to pay the mortgage or rent. When engineers can't find engineering work, most leave the field and count as EMPLOYED people in some other line of work. Thus the unemployment data are meaningless for this discussion. As to the Meebo issue, I've gone over that thoroughly before (see http://heather.cs.ucdavis.edu/Archive/MeeboEtc.txt) but I do want to address this: # Sternberg insists that he pays his two H-1B workers exactly the same as # his other workers. If so, then he's underpaying them, because Sternberg claimed that these two are "absolutely exceptional." In the free market, you pay more for geniuses. Lose the mantra, Dean. http://www.mercextra.com/blogs/takahashi/2007/06/28/more-views-on-h-1b-column-a-longer-version-than-ran-in-the-paper/ Norm Tech Talk with Dean Takahashi More Views On H-1B Column: A longer version than ran in the paper By Dean Takahashi Thursday, June 28th, 2007 at 12:01 am in General. My May 24 column favoring an expansion of the H-1B skilled worker visa program struck some readers as too one-sided. In the column, I sympathized with the woes of Seth Sternberg, CEO of Web instant messenger company Meebo in Mountain View, about how tough a time he had finding qualified tech workers for his business. He had turned to the H-1B skilled worker program to hire two employees and groaned about the red tape in the system. Convinced that immigrants have been key to Silicon Valley’s success, I suggested we expand the program. A couple of dozen heated responses from folks around the country reconfirmed to me that immigration is a hot button issue as lawmakers continue to debate legislation. Steve Landess, a 55-year-old tech worker in Austin, Texas, wrote that he hoped that I will be replaced soon by an H-1B journalist. Now that the compromise immigration deal has fallen apart in Congress and a new vote isn't imminent, there is more time to discuss this issue. Landess and other H-1B opponents say there are loopholes in the program and enforcement failures that allow companies to use the program’s low-paid immigrants to take jobs that could otherwise go to Americans. A video that surfaced on YouTube on Tuesday showed that some over-eager immigration lawyers have been encouraging companies to exploit the H-1B loopholes in order to hire low-cost immigrant labor. They pointed to the fact that older Americans have such a hard time finding jobs, even amid the current job boom in Silicon Valley, where tech companies are complaining of extreme shortages of engineers. And they note that wages have been fairly stagnant in some tech professions, even as employers decry shortages. I do in fact have an older friend in his 50s who had to look for a couple of years here to find a job and then lost it via a merger in January and is now looking again. That’s a sad commentary on the lack of opportunities for older tech workers in the current tech boom. I still believe that bureaucratic immigration policies will hurt the competitiveness of American companies in an era of globalization. With the "flattening of the world" described in Thomas Friedman'' “The World is Flat,'’ everyone here should realize that they have to choose their specialties wisely to avoid being replaced by low-cost workers elsewhere. And immigrants in general have been a godsend to the American technology industry. One of Sternberg’s points is that foreign nationals bring diverse perspectives to companies that are trying to become global. A Google executive recently said that 8 percent of the company’s employees have H-1B visas, and two of them came up with key inventions that have made Google more competitive. I’m in favor of improving enforcement so that the H-1B program isn’t simply an instrument for those seeking low-cost labor. Some readers doubted that Sternberg had tried very hard to find talent for his Web instant messenger company in the U.S. before he turned to foreign talent that needed H-1B visas to work in the U.S. Norm Matloff, a professor of computer science at the University of California at Davis, looked up Meebo’s paperwork and found that Meebo declared that the prevailing wage for its H-1B hires was $69,700, which Matloff said was half the rate that the top people get in the valley. Matloff says several studies have shown that H-1B visa holders are paid low wages, a fact that belies the notion that in a true shortage these H-1Bs would logically be paid higher. Matloff believes that people abusing the program are using it as a vehicle for age discrimination. His point isn’t that Meebo should pay these two guys more. He says the law simply doesn’t penalize companies for paying H-1Bs less than they would Americans. In addition, Matloff says, “If there really is a shortage of tech workers, why have wages in computer science and electrical engineering been flat since 1999.'’ Robert Hoffman, vice president of government and public affairs at Oracle, says wages in the electrical engineering category rose 34 percent from 1997 to 2005. And he says Department of Labor data shows that the unemployment rate for software engineers is 1.7 percent, which is below full employment. Again, the opponents say the job picture is not rosy and that the statistics just paint a murky picture. Sternberg insists that he pays his two H-1B workers exactly the same as his other workers. On the same form that Matloff examined, Sternberg said Meebo expected to pay the H-1B workers $75,000 to $125,000. And Sternberg, 28, said he does have at least one older employee in his ranks. That person does meet Sternberg’s requirement of hiring “energetic'’ people, he said. Matloff, meanwhile, notes that the problem with the program is that companies are allowed to pay lower wages to H-1B workers; he favors a system that would require employers to pay H-1B workers a median wage in a given job category. My previous column noted that the number of H-1Bs admitted each year are only 0.07 percent of the American work force. But Ron Hira, author of “Outsourcing America'’ and assistant professor of public policy at the Rochester Institute of Technology, wrote that it would be more accurate to compare the 65,000 H-1B visas granted each year to the population of information technology workers and the growth of jobs in that sector. In that context, the number of H-1B workers looks like a big portion of actual job growth. By Hira’s calculation, H-1Bs currently in the U.S. add up to perhaps 8 percent to 10 percent of the IT worker population. Those numbers held up high even in 2002 and 2003, which were years of steep layoffs in the tech industry. Hira also points out that most of the top 20 H-1B employers are offshore outsourcing firms, which are companies that presumably aren’t hiring the best and brightest talent but rather the cheapest. Hira believes that the U.S. can benefit from more skilled workers, but it could be done with less exploitation through the green card system for permanent residency. Ultimately, statistics can be selectively chosen to make either side’s case look better. Both sides acknowledge that. It may be the only they agree on. Others disputed my use of Andy Grove as an example of a valuable immigrant. They noted that Andy Grove did not come on an H-1B visa, but as a refugee. I asked whether we would turn him away today. I’d agree that the logic here can applied both ways, as someone like Grove could have easily as popped up from the suburbs of Chicago. I did get a couple of responses that favored the program. Vinod Dham said he came to the U.S. on a student visa in 1975 with $20 in his pocket. He later led the development of Intel’s Pentium microprocessor and is now a venture capitalist. At New Path Ventures, he’s funding companies that outsource a lot of work to India, but he’s still creating a small number of jobs in the U.S. “I’m all for creating a fair process, one that allows bright people to come here and bring their families as well,'’ Dham said. He says the issue of family separation is one of the toughest problems for visa holders and bureaucratically it is one of the most frustrating. And Christian Plante, a senior marketing manager for Altera who came from Canada, said he endured an ordeal of six years as he and his wife awaited their green cards. “I’ve seen people leave the US and take with them the knowledge and expertise they built here in Silicon Valley to their home country,'’ Plante said. “This can’t be good for the competitive position of this nation. I believe we should do make sure these people are allowed and enticed to stay and build their future here.'’