Date: Wed, 18 Jul 2012 23:38:59 -0700 From: Norm Matloff To: Norm Matloff Subject: one step backward To: H-1B/L-1/offshoring e-newsletter As some of you have heard, Senator Grassley has now lifted the hold he had placed on H.R. 3012, a bill to eliminate the per-country caps on EB-series (i.e. employer-sponsored) green cards. While I have been neutral on that bill, I view this latest development as a step backward in terms of addressing the main abuses in H-1B and EB. Grassley's statement, read into the Congressional Record, may be viewed at http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=41746 In short, here is what happened: When H.R. 3012 reached the Senate, Grassley put a hold on the legislation, a Senate parliamentary procedure that froze the bill. He subsequently offered an amendment, which in essence consisted of the provisions in the H-1B reform bill he has introduced several times with Senator Durbin. Grassley said he'd release his hold if the amendment were approved, which it was not. Last week Grassley offered a different amendment, consisting of some tougher H-1B enforcement provisions. This one was accepted, and he released his hold. (There are apparently other holds still pending.) I've always strongly supported the Durbin/Grassley bill, and greatly appreciate their efforts. (Though Grassley appears to be the much more interested of the two.) However, from the beginning, e.g. http://heather.cs.ucdavis.edu/Archive/DurbinBill.txt I've also stated that what I like about Durbin/Grassley is two specific provisions, which would (a) fix the gaping loopholes in the definition of prevailing wage, and (b) apply the laws currently imposed on "H-1B dependent" employers to all employers of H-1Bs. I've said that I do not regard the enforcement provisions of the bill to be of any major value, since noncompliance with the law is not the primary problem with H-1B. Indeed, I have viewed the enforcement provisions as dangerous, worse than doing nothing. Here's what I said at the time (see above URL): ...if Congress says, "Well, let's fold those anti-fraud measures in this bill in with our H-1B expansion bill. After all, Durbin's bill was mainly about fraud, so we would be using the essence of his bill," a terrible hoax will have been played on the American people. H-1B is NOT about fraud, for the most part; it's about employers, large and small, taking advantage of huge loopholes, that they wrote, in order to hire cheap foreign labor. Durbin's bill, by having so many anti-fraud measures, and by having its very title focus on fraud, invites a scenario in which its valuable portions are jettisoned. The reason this is dangerous is that it would give Congress an excuse to wash their hands of the H-1B issue. They could declare "mission accomplished," claiming H-1B has been fixed. Sadly, that's exactly what seems to have occurred with H.R. 3012. In fact, the first "mission accomplished" statement has already appeared in print. Neil Ruiz of the Brooking Institution (yes, the one in the pro-H-1B conference yesterday) wrote in an op-ed in the National Journal also published yesterday, Grassley just announced last week his removal of his hold on the Fairness of High-Skilled Immigrants Act that would remove per-country visa quotas for green cards, in exchange for reforming the H-1B visa program. Maybe Grassley, together with other Washington leaders, can now apply a more nuanced understanding of demand for high-skilled labor in their own regional economies so that the program can be reformed to work for their own regions and the entire nation in the long run. Grassley, in his statement, specifically stated that his new amendment does NOT fix the general H-1B problem. But that comment will be lost among all the Ruizes who spin Grassley's hold release as meaning that Grassley is now OK with H-1B. As such, I must view the recent action as a step backward, sadly. The primary problem with H-1B is not enforcement of the law; instead, the trouble is with the law itself, riddled with loopholes. The most harmful loopholes are those dealing with the definition of prevailing wage, allowing the legally required wage to be well below the market wage. And as I've shown statistically with the green card data, most tech employers of foreign workers pay ONLY the legally required wage, so most are paying below-market wages. Yes, yes, there are some well-publicized cases of violation of the law, but the law was written so liberally that it's not necessary to cheat; employers can make out like bandits while still complying with the law. I must emphasize yet again that the problem is across the board, including with mainstream U.S. firms. It is NOT limited to the Indian bodyshops, which essentially were excluded from my green card analyses. (As shown by Prof. Ron Hira, the bodyshops seldom sponsor their foreign workers for green cards.) If H.R. 3012 does pass, it will be interesting to watch the consequences. Though it will speed up green card processing for those born in India or China, those from most other countries will find their waits substantially lengthened. They won't be happy, and they may force the green card issue back in Congress. Unfortunately, that will renew pressure for a "staple a green card to their diplomas" bill. As to the Brookings conference, whose videos you can view at http://www.brookings.edu/events/2012/07/18-h1b-workers I'll review it when I get a chance. Norm