Date: Tue, 1 Nov 2011 23:36:16 -0700 From: Norm Matloff To: Norm Matloff Subject: Hira vs. Wadhwa, Round 2 To: H-1B/L-1/offshoring e-newsletter Some of you will recall the infamous CNBC debate between Prof. Ron Hira of RIT and Vivek Wadha, a former tech CEO turned tech commentator and academic researcher, chronicled in my posting http://heather.cs.ucdavis.edu/Archive/BankOfAmWadhwaHira.txt Well, a few days ago the two went at it again, this time on CNN. You can view an edited version at http://yourmoney.blogs.cnn.com/ The word "xenophobia" came up several times, as it did in Round 1. More on this point later. Apparently a significant amount of the material at the above URL was deleted, but you can infer some of it by reading Don Tennant's column on the incident, at http://www.itbusinessedge.com/cm/blogs/tennant/irresponsible-claim-us-firms-have-policies-to-displace-american-workers/?cs=48964 I've praised Don here before, and I've continued to find him to be exceptionally astute. Though I think he would admit to being biased a bit in favor of the industry, he usually makes a genuine attempt to be openminded. In this instance, though, Don dropped the ball. Ron had stated during the interview that many major U.S. firms have a policy to hire foreign workers in lieu of Americans. Don considered this to be an "outrageous" claim, one that would greatly undermine Ron's message. In the Comments section of the above Web page, several readers objected, and in his replies Don worsened the situation by challenging the readers to file whistleblower complaints against the alleged offender employers. That remark really shocked me, as Don should know that hiring an H-1B instead of an American, or replacing an American worker by an H-1B, is perfectly legal. (There is a minuscule exception to the former.) Back to the displacement/replacement issue, Don wrote in response to one reader, # Of course American workers are being displaced, Roy. Of course they # are. But he claimed that this is not being done as a matter of deliberate policy. I'm curious as to how he thinks it might NOT be deliberate. How could this be the case? These firms have highly professional HR staffs. Let's focus this discussion with a specific example, the Bank of America, one of the firms Ron cited. Here's an excerpt of what I wrote after Round 1: % 1. In 1997, the following report came out (Michael Liedtke, BofA Tech % Workers Fear Jobs Heading Off to India), Contra Costa Times (East San % Francisco Bay Area newspaper), April 27, 1997): % % # Bank of America's technology center is in the early stages of an % # unsettling cost-cutting experiment. The San Francisco-based bank is % # asking its computer engineers in Concord to undermine their own job % # security by helping to train potential replacment workers imported % # from India before shipping an untold number of positions overseas... % % # The bank also maintains none of its Concord emloyees will be % # dropped from the payroll if the pilot program with the India % # workers proves to be a success. % % That latter statement by the bank proved to be false. After % completion of the outsourcing program, the bank did indeed lay off its % IT workers in Concord and elsewhere in 2002 (Jim Gardner, Bank job: % You're Fired, Now Go Train Your Replacement, San Francisco Business % Times, November 22, 2002): % # Spreading some pre-holiday cheer, Bank of America this week % # announced that it is cutting 900 tech positions---with the twist % # that some layoff victims have to help train replacements if they % # want to get severance pay... % # The job cuts, 232 of them in the Bay Area, come as BofA is # % # outsourcing an increasing amount of tech work abroad, particularly to % # India. That has earned the Charlotte, N.C.-based institution % # the nickname of Bank of India among disgruntled soon-to-be-ex-employees. % % # Sure enough, dozens of Indian tech workers have been visiting % # BofA's major tech centers in Concord, Jacksonville, Fla., and % # other cities around the country recently. They're getting training % # on work they'll do back at home for about half what departing % # employees are paid. The bank confirms that some laid-off workers are % # being required to help train new ones (and not speak to the media) as % # a condition of receiving severance. % ... % 2. The BofA did the same thing in Charlotte, converting jobs from BofA % to HCL (an outsourcing firm). The workers were still working AT the % BofA, but technically not FOR the BofA--and soon afterward, they weren't % working at all, because HCL replaced them with H-1Bs for literally half % their salaries. This is detailed in the excellent case study by the % Programmers Guild, titled, "How to Underpay an H-1B," at % http://www.programmersguild.org/archives/howtounderpay.htm Come on, Don, what do you see in the above that you think might not be deliberate? Granted, some of this is offshoring rather than H-1B per se, but the two are linked, as Ron's research has shown. Moreover, the mainstream U.S. firms underpay their H-1Bs and green card sponsorees (see below); how could this possibly be anything other than deliberate policy? Now concerning the xenophobia charges: I've been actively working against xenophobia/racism (they're treated synonymously these days) all my adult life (see my bio, http://heather.cs.ucdavis.edu/matloff.html). Accordingly, I'm quite sensitive to this issue, and contrary to claims that Don has made publicly and to me privately that there is a strong streak of unhealthy race attitudes pervading the H-1B reform movement, I simply have not seen it. Yes, once in a while, but nothing pervasive, and certainly nothing more than I hear on occasion in so-called genteel society: my faculty colleagues, my liberal friends and neighbors--and maybe among politicians. Concerning the latter, there has been an alarming trend the last few years to cast the H-1B/green card issue as what I call "Intels versus Infosyses," symbolizing the U.S. versus Indian firms. The Intels are portrayed as the Good Guys and the Infosyses as the Bad Guys (or as my academic colleague Lindsay Lowell recently put it, the Good Actors versus the Bad Actors). Rep. Lofgren's automatic green card bill makes this very explicit in all senses except using the word "Indian." Don Tennant himself strongly holds this notion; see http://www.itbusinessedge.com/cm/blogs/tennant/alternatives-to-stapling-a-green-card-to-foreigners-stem-diplomas/?cs=48785 Note carefully that I'm not saying that Don or Lindsay or Zoe Lofgren are anti-Indian, but if they're going to take this kind of stance in such a racially sensitive context, they had better make darn sure they are on firm ground, i.e. that the Intels really are angels while the Infosyses are devils in terms of H-1B/green card issues. The fact is that abuse of H-1B/green cards is commonplace among the American firms. That has been clear to those on the ground for years (see David Huber's sad encounter with Cisco, the Cohen & Grigsby law firm videos, Vivek frank admission that he himself underpaid H-1Bs when he was a CEO in North Carolina, etc.), and I showed it quantitatively in this past summer's Sloan conference; see my statistical analysis at http://heather.cs.ucdavis.edu/SloanDCPaper.pdf Yes, the Indian firms tend to hire workers at much lower salaries than the American firms do, but that's because the Indian hires tend to be of much lower quality, e.g. Bachelor's degrees instead of Master's. But BOTH the Indian firms AND the American firms are underpaying their foreign workers, the data show. Terms like "xenophobia" and "racism" are easy to toss around, but one should make accusations very carefully, and above all one should put one's own house in order first. Norm