Date: Wed, 24 Sep 2003 23:36:36 -0700 From: Norm Matloff To: Norm Matloff Subject: comments on CNN/Lou Dobbs show on H-1B/L-1 To: age discrimination/H-1B/L-1 e-newsletter As many of you readers know, this week Lou Dobbs has been running a series titled "Exporting America." Tonight the topic was the H-1B and L-1 visa programs. I'm enclosing the transcript below, along with my comments. First, though, I wanted to make a disclaimer regarding something Dobbs said: By the way, the numbers that we have, just to put it forward, let me give the source, University of California Davis. The estimated holders of H1-B Visa in this country right now is 856,000, L-1 Visa holders, 325,000. I wish to point out that I am NOT the source for those numbers. Neither of them appears in my H-1B/L-1 summary paper, http://heather.cs.ucdavis.edu/Summary.pdf As to the numbers themselves, the first is, I believe, the official INS figure for last year, and is probably correct. The second number is apparently from Rep. Mica's comments earlier this year, which were later stated by the State Dept. as being incorrect. Now, here are my comments: PILGRIM: [H-1B] workers are supposed to be paid at the same rate as Americans and the company must say that no American was available for the job, conditions experts say are not consistently enforced. I wonder which experts Pilgrim is referring to. Certainly I didn't make such statements ("no American available" and "not consistently enforced") during her interview of me, and I doubt that Michael Teitelbaum would make such statements either. The statements are not correct. The H-1B program does NOT require employers to say no American was available for a job taken by an H-1B. (There is a special category of employers who are subject to such a restriction, but this category is tiny.) The underpayment of the H-1Bs is NOT an enforcement issue. The problem is the huge loopholes in the law. Because of those loopholes, employers underpay H-1Bs while still being in full compliance with the law. I can't really plame Pilgrim here. She was pressed for time, and only asked me a couple of questions, as she needed to move on to her next interview. (Meanwhile, there was a rush at the CNN office to finish my taping, as California Lt. Gov. Cruz Bustamante was to be taped next.) Clearly Pilgrim has a lot of stories to cover, and not much time for each one. And the two mistakes she made above are, alas, very common in the press. But they involve very important points. The high point of the show was the debate between industry lobbyist Harris Miller and Rep. Tom Tancredo. I've debated Harris myself a number of times. I didn't see the show (it was pre-empted here on the West Coast, for the debate between Bustamante and the other candidates), but I'm told that Harris looked pretty nervous. If so, that would be a departure from his usual smooth manner. (Though he has in the past occasionally lapsed into ad hominem attacks, which he did here.) MILLER: The other thing that's important to realize, Lou, the H1-B Visa program is an interesting program. When Congressman Tancredo's colleagues crafted the program, then made it a program in a fish bowl. This is a program everybody, you, the Congressman, workers on the street, can find out exactly what H1-B workers are being paid. If somebody doesn't like that, they can file a complaint with the Department of Labor, which is required to enforce the law and take action against the employer community. This is Harris' favorite argument. It's a fallacious argument, and it's too bad that Rep. Tancredo didn't call him on it. As I said above, it is NOT a problem of enforcement. The employers are underpaying the H-1Bs in full compliance with the law, which is riddled with loopholes. So there is nothing the Department of Labor can do, and DOL has basically said don't bother complaining. There are also serious problems with Harris' "fish bowl" metaphor. The glass in that bowl is for the most part opaque. The law requires much less than Harris is implying here, and employers certainly won't volunteer to give you any more. Try walking into any company and demanding to see what they are paying their H-1Bs, what qualifications those H-1Bs have, etc. You will be flatly refused, as a few enterprising reporters (and laid-off Sun engineer Guy Santiglia) found out. The employers are not legally bound to provide that information, and they won't do so. MILLER: So the program is working as intended. When unemployment is going up, the number of visas is going down. If the congressman's objection were correct, that this is a cheap labor program, then again I ask why wouldn't employers use the maximum number the law allows? They would use all 195,000... Another favorite argument of Harris'. I wish the congressman had called him on this one too. You can't hire H-1Bs if you don't have job openings. So of course the number of H-1Bs will go down when the number of job openings goes down. For Harris to claim this means the employers are acting responsibly is absurd. As I've said before, if we had a gas shortage and people drove less, resulting in fewer accidents, Harris would claim that General Motors must be making safer cars. Norm (Original transcript at: http://www.cnn.com/TRANSCRIPTS/0309/24/ldt.00.html The enclosed is a later transcript, though I can see that there are still some typos.) Copyright 2003 Cable News Network All Rights Reserved CNNFN Lou Dobbs Tonight September 24, 2003 Wednesday ... Coming up here: a U.S. government policy that paves the way for foreign workers to take American jobs. Kitty Pilgrim reports. We'll have two leading experts face off on the controversial H1-B and L-1 visa programs. And telemarketers are given free rein to call your home. But how do they find out your personal information to begin with? Peter Viles reports. And Congressman Billy Tauzin, the chairman of the Energy and Commerce Committee, joins us. He says today's ruling will not stand. He joins us next. Please stay with us. ... DOBBS: We've been reporting for weeks on this show about the massive loss of American jobs to foreign countries in our series of special reports, "Exporting America." What is less well known is how tens of thousands of foreigners take jobs in this country every year, under special visa programs. Incredibly, some American workers are training those foreigners to take their own jobs. Kitty Pilgrim reports. (BEGIN VIDEOTAPE) KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): Mike Emmons was living a comfortable life in a suburb of Orlando until the company where he worked decided to bring in overseas workers on special visas to replace some of their workers. The worst part, -- the Americans were asked to train replacements before they were let go. MIKE EMMONS: They held out a carrot for the Americans, a severance. Stay on and train your replacement workers, then you'll get this severance when you leave. I stayed on until November until I landed another job. But what I learned about these H1-B and L-1 visas is very discouraging for American workers. PILGRIM: Mike's wife went to work. One of their big concerns -- uninterrupted health care coverage for their daughter, born with spinal bifida (sic). Mike found another job at considerably less pay. Lisa says it changed their outlook and their lifestyle. LISA EMMONS: It's changed my views completely. Everything is different now than it used to be. We didn't have a financial worry really, ever. I can drive through my neighborhood today and there are more "for sale" signs than I have ever seen right now. PILGRIM: After lobbying by the high-tech industry, Congress expanded the H1-B visa program to bring overseas skilled workers into the country. Workers are supposed to be paid at the same rate as Americans and the company must say that no American was available for the job, conditions experts say are not consistently enforced. The quota of visas, normally set at 65,000 a year was raised by Congress during the high-tech boom to 115,000 in 1998, then 195,000 in 2000. Because of the high-tech bust, the numbers of visa applications have been dropping, and the quota is expected to drop back to 65,000 this year. But experts say, in this economy that is still too high. PROF. NORM *MATLOFF,* UNIVERSITY OF CALIFORNIA - DAVIS: We've got hundreds of thousands of people in this field, American workers are out of work. We have no business allowing 65,000 people to come in from abroad and take their place. PILGRIM: Another visa, the L-1, used within a company to transfer overseas managers to this country for temporary assignment, has also generated an influx of workers. Those who studied the issue carefully, like Michael Teitelbaum, say although visas have legitimate uses, loopholes are widely exploited. MICHAEL TEITELBAUM, SLOAN FOUNDATION: There are some employers who use them responsibly and very parsimoniously and make a serious effort to hire domestic workers before they go abroad to hire. But those employers do not account for a very large fraction of 195,000 visas per year. (END VIDEOTAPE) PILGRIM: Now the first solution is to enforce the rules of equal pay. And the second, and Congress is in the process of doing this, is to decide just how many so-called specialists are required from overseas. Perhaps it's not as many as the companies say they need -- *Lou. DOBBS: Kitty, thank you very much. Kitty Pilgrim. In tonight's "Face Off": "Should foreign workers be allow allowed into the United States on those special visas?" Republican Congressman Tom Tancredo of Colorado says the visas destroy American jobs, and should be abolished. Harris Miller is the President of the Information Technology Association of America and says U.S. companies need those foreign workers to remain competitive. To you both, welcome. We appreciate you being here. TOM TANCREDO (R), COLORADO: Thanks, Lou. DOBBS: Congressman, if I may begin with you. TANCREDO: Sure. DOBBS: These visas, apparently, for years, were not given much notice. Congress approved the approach. How -- what are we -- what we to do here? TANCREDO: Well, what happened -- you're absolutely right. We have had the H1-B visa program for many years. It just wasn't really used very much until -- until a couple of things happened. Of course, there was a high-tech boom, and at that time, employers started to figure out that they could actually displace American workers, higher- paid workers, by bringing cheaper labor into this country. And they saw a way to do it. It was called the H1-B visa. Someone on your program a minute ago, one of the experts, said that not all companies do it. That is true. Some are very judicious about it. But many, many -- in fact, I would say the majority abuse this dramatically and have actually brought in now about 800,000 people right here, right now, on H1-B visas. DOBBS: And another 400,000 on the L-1 visa for... TANCREDO: Which is growing dramatically. DOBBS: And let me turn to you, Harris. Can this really be allowed to stand when we're sitting here with 6 percent unemployment; we have technology workers without jobs and we're importing people to take their jobs? HARRIS MILLER, PRES., INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA: Well, let me try to introduce some facts into discussion. It might be more useful for viewers. Number one, the number of... DOBBS: Whoa! Whoa! Whoa! Harris... MILLER: Unfortunately, Kitty's report didn't report -- conclude the fact. The number of H1-B visas users that came into the country in computer in 2002, according to the Department of Homeland Security, dropped 25,000, the lowest number in seven years. So the program is working as intended. Where there is a shortage of I.T. workers, the numbers go up. When there's not a shortage, the numbers go down. The cap that Congress imposed said that's the maximum number. That's not the actual number. And if Congressman Tancredo was correct, and the program were being used to bring in cheap labor, then why wouldn't the employers bring in every single one of the 195,000? DOBBS: Well, Harris, I'm sorry to get involved, but Harris has been a little direct. One, Miss Pilgrim did not report that those were I.T. workers but total visas extend. MILLER: But the total number of visas was also down, Lou, with all due respect. DOBBS: She reported they were down to 65,000 MILLER: No, that isn't what she reported. She reported the numbers inaccurately. DOBBS: OK. Congressman, you have a run. TANCREDO: OK. Somebody is certainly inaccurate about the numbers. One I'm looking at right here, the most recent numbers, given to me show the visas issued in 2002, 79,100, 2002. Now they are down this year to about -- well, there's 59,000 have been issued so far this year, another 15,000 in the pipeline. That's so far this year. Now -- but the point is this, Lou. Yes, the visas numbers are down, and here's why. It's not because all of these corporations are doing it just by the book. It's because there are fewer jobs, number one. And number two, because they found another loophole, another visa category that they are using and the numbers are rising in. It's called L-1, where they can, by intracompany transfers, bring in the same people and oust American workers. That's what's happening. That's why the numbers in H1-B are going down. MILLER: Again, with all due respect, Congressman, I think the numbers from the Department of Homeland Security show the L-1 visas dropped again from 2001, to 2002 projected to drop again in 2003. The other thing... (CROSSTALK) MILLER: So the program is working as intended. When unemployment is going up, the number of visas is going down. If the congressman's objection were correct, that this is a cheap labor program, then again I ask why wouldn't employers use the maximum number the law allows? They would use all 195,000. The 79,000 the congressman referred to -- again, those include health care workers, those include fashion models, those include short order chefs. Of those 79,000, 25,000, according to the Department of Homeland Security are in I.T., which is down dramatically. It's the lowest number since the mid '90s. TANCREDO: And what is happened to the L-1 category? It is up dramatically. The highest numbers that we have ever had. Why? Because they are -- that's the alternative loophole. You're right. Congress has put pressure on them. It's absolutely true. There's a lot of heat that's been -- that's been applied here and so companies are saying, you know what? We better look at this a little more carefully, figure out a different way to do it. They have done that. It's called L-1s. And, of course, it's also true that there are have fewer jobs available. That's actually another reason why it's going down. But that isn't because everybody in the corporate -- everyone in corporate America is just saying, let's live by and play by the rules. That's simply not the case. DOBBS: Let me ask you this, *Harris,* following up on the congressman's point. How many people are in the United States on L-1 and H1-B visas right now? MILLER: The best we can determine, about 200,000 on H1. It's hard to tell because, unfortunately, the immigration department doesn't do a very good job of tracking people (UNINTELLIGIBLE). But about 200,000 on H-1s. L-1s, it looks like it's about 100,000 to 125,000, the best we can tell. TANCREDO: There have been over 800,000 H1-B visas, and reapplications. We have no idea -- are you telling me you believe that 600,000 have gone home over the course of the last six or eight years? I mean, that's simply impossible. You know as well as I do, that the numbers are much closer to 800,000 here than 200,000. MILLER: Congressman, the numbers are impossible. The maximum number that came in in any one year under the H1-Bs, as you said yourself, was a little over 150,000. According to the Department of Homeland Security, over half the H1-Bs stay here less than three years. TANCREDO: No, they don't. They stay here longer than three years. They just keep applying or some of them, of course, don't go home at all. And there's absolutely not one single thing that we have ever done to try to enforce the law. That's another problem. Not one person who has been -- has been, to my knowledge, not one single person has been expelled from this country because they overstayed their H1-B visa. DOBBS: Has anyone been expelled, *Harris,* in your knowledge? MILLER: As far as I know, yes, according to the Department of Homeland Security. (CROSSTALK) TANCREDO: How many? How many? MILLER: Congressman has the power... (CROSSSTALK) MILLER: I can't yell against the congressman. TANCREDO: You're absolutely wrong on that and you know it. No one has been deported because they've extended their H1-B visas. MILLER: The other thing that's important to realize, Lou, the H1-B Visa program is an interesting program. When Congressman Tancredo's colleagues crafted the program, then made it a program in a fish bowl. This is a program everybody, you, the Congressman, workers on the street, can find out exactly what H1-B workers are being paid. If somebody doesn't like that, they can file a complaint with the Department of Labor, which is required to enforce the law and take action against the employer community. DOBBS: I have to share with you the e-mails we receive from our viewers laying out H1-B programs the stories that we have received from people and I mean lots of them. Talk about training people for jobs that they're supposedly bringing in because the skills weren't available to be replaced. By the way, the numbers that we have, just to put it forward, let me give the source, University of California Davis. The estimated holders of H1-B visa in this country right now is 856,000, L-1 visa holders, 325,000. MILLER: (UNINTELLIGIBLE) that's Norman Mattloff (ph) who has had a personal problem with immigration for a long time. I suggest that congressman believes those numbers. (CROSSTALK) TANCREDO: There's -- how many reports do you want? MILLER: He has the authority to ask the General Accounting Office, as a member of Congress. I'd be glad to work with him on that request. DOBBS: If I man say something here, congressmen, as we wrap up, one of the things that is maddeningly frustrating to us, in the special series in "Exporting America," is the federal government, the Commerce Department, the Labor Department, the Department of Homeland Security, none of them have figures that tell us who is crossing our borders, under what circumstances, who remains, who goes, who's deported. It is a remarkable situation. Whether one is to look at it from the issue of employment security, economic security, or national security itself. It is a remarkable. (CROSSTALK) TANCREDO: That is certainly true, Lou. If I went tomorrow to either the president of the United States, I'm afraid, or the leadership in the Congress, with the full proof plan to actually control our own borders and stop all illegal immigration into this country and significantly even reduce legal immigration so we can begin to get a handle on this problem that you've described, I'd be thrown out by the ear. The reason, Lou, is because we have a cheap labor policy. We do not want to reduce it. We do not want to stop either illegal immigration or reduce even the legal ways in which people come in here and actually throw American workers out of work because it's less expensive to do so. It's a horrible thing to say. I wish I didn't have to, but it's the way it is. DOBBS: I ask here on our own network if we had H1-B Visa holders and the answer is, yes. It's a remarkable situation in every respect. Harris, you get the final word. MILLER: One point, I hope your series would raise the United States runs a trade surplus with the rest of the world in two areas, airplane manufacturing, that's because we've got only one of two companies in the world that makes them, and I.T. We run $7.9 billion surplus with the rest of the world. As you know, as you report every night, we run a trade deficit in everything else you can think of, automobiles, textiles, oil, et cetera. The reason we want to surplus the rest of the world is we have the best I.T. industry in the world and it's important that your viewers understand that. DOBBS: I don't think anyone here -- any of our viewers of this broadcast will be surprised that this country is preeminent in technology. I think it's one of the reasons they're stunned to find we don't have the adequate skills in the opinions of some corporations to put Americans into jobs rather than H1-B and L-1 Visa holders. Harris, thank you much. Congressman we thank you very much for being with us. Tomorrow here in "Exporting America," we will find out why thousands of jobs and new semiconductor plants were shipped overseas and what it will take to bring those jobs back to the United States.