Date: Fri, 7 Apr 2006 14:25:33 -0700 From: Norm Matloff To: Norm Matloff Subject: well-researched SJ Merc piece To: H-1B/L-1/offshoring e-newsletter I often hear claims from programmers and engineers that the press is biased toward industry on H-1B and related issues. My stock answer is that other than a couple of glaring exceptions, almost all newspapers and magazines have been pretty balanced in their coverage. My problem with them is that although they are balanced, they don't go into any depth. Their formula is to get quotes from both sides of the issue, without bothering to check their validity, and then dump the mess in the readers' laps. Note my phrase above, "other than a couple of glaring exceptions." One of those exceptions has been the San Jose Mercury News. It has sometimes been so bad that Mercury reporters have actually browbeat and argued with the H-1B critics as they interview them--a flagrant breach of journalistic ethics. And the editorials have been consistently pro-H-1B, without exception, including one about a week ago. Still, even the Merc has occasionally run fairly some good pieces on occasion. The one enclosed below is excellent, not just by Mercury standards but in general. I don't ask that articles take a stance against the H-1B program; I simply would like to see some depth, and the one here is one of the rare pieces in a major newspaper to really go into depth. The reporter here is to be commended for digging through the arcane government reports and the like. If her editor gave her free rein to do this, my hat is off to him/her too. However, at the same time I am very disappointed, because the article takes the "safe" approach of implicitly sending the message that the problems in the H-1B program are confined to some small shady firms, not the household-name companies. It has always been the contention of the big players in Silicon Valley that although there is some abuse of H-1B, it is only by the Indian "body shops." Even Rep. Zoe Lofgren, Silicon Valley Big Business' best friend on Capitol Hill, uses this line. Various editorials in the Mercury also carry this message, albeit not fully explicitly. When the Mercury contacted me for this story, I put strong emphasis on the fact that the big guys like Intel were just as culpable in their abuse of the program, and I referred them to my analysis of the Intel data from the Dept. of Labor Web page, which I have available at http://heather.cs.ucdavis.edu/Archive/IntelH1BWages.txt Unfortunately, the Mercury indicated that it was not interested. I really don't know why the Merc feels it has to follow the industry party line on this. Maybe it's because the paper's bigwigs are always rubbing shoulders with industry CEOs at social events. Maybe they are so enamored of the success of Silicon Valley that they just can't believe that companies like Intel would take advantage of the loopholes in H-1B law. Well, they do; see my point about the "5%" rule in my Web page above. All in all, though, it's an excellent article. By the way, the quote attributed to the "American Engineering Association" should read "American Electronics Association." The American Engineering Association is a longtime critic of the H-1B program. Norm http://www.mercurynews.com/mld/mercurynews/business/14286391.htm H-1B visa law criticized ANALYSIS: PROGRAM GIVES AMERICANS NO PROTECTION, `NEEDS TO BE FIXED' By K. Oanh Ha Mercury News When a Sunnyvale tech company laid off the manager and most of his colleagues in its reliability testing group a year and a half ago, the manager said a few employees were spared -- younger, foreign workers on H-1B visas. The laid-off manager was infuriated that as an American citizen, he wasn't given priority over the H-1B employees. The H-1B visa program allows employers to hire skilled foreign workers when there's a shortage of available American workers. ``The law does not protect American workers at all,'' said Frank, a 45-year-old Chinese-American who was out of work for five months, and who insisted his last name and the name of his former company not be published because he fears repercussions from potential employers. ``It only helps American businesses and technology companies keep their costs low while sacrificing American workforce. That's not right.'' As Congress debates nearly doubling the number of highly skilled guest worker visas next year to 115,000, calls are mounting for an overhaul of Department of Labor's Foreign Labor Certification program. Critics have long charged that the foreign-worker program doesn't fulfill its primary mission: protecting American workers. They want stronger laws to preserve American jobs and argue the current system is prone to abuse and fraud. Increasingly, the federal government's reviews and audits of its own foreign-worker programs are highlighting the same shortcomings. While tech companies and lobbyists credit the H-1B visas with filling a crucial shortage of skilled tech labor, workers and their advocates counter the visas are being used to push Americans out of jobs and depress wages. A Mercury News examination of little-known government reports and analysis of H-1B applications supports critics' charges that the program gives U.S. citizens virtually no protection from being replaced by a foreign worker. California employers who filed applications seeking to hire H-1B workers were virtually guaranteed approval. Of nearly 54,000 applications to hire foreign workers filed by California employers in 2005, only 114 were denied by the Foreign Labor Certification program. Not all approved applications resulted in the hiring of a foreign worker or a visa being issued. Employers are not required to prove that American workers were not available for those jobs. The Labor Condition Application requires information about the H-1B position and the wage an employer intends to pay, which must be at least the prevailing market wage. The law also doesn't require the labor department to verify that employers actually pay the wages they stipulate unless there is a complaint. Of the 3,628 H-1B applications for foreign-worker visas filed last year by companies in San Jose, only two were denied. In Santa Clara, 3,677 applications brought only three denials. The Department of Labor ``rubber-stamps the forms that companies send them,'' said Marcus Courtney, president of WashTech, which represents tech workers across the country. ``Their hands are tied. They follow the law, which isn't adequate.'' Officials from the Department of Labor acknowledge that current statute allows them to reject applications only if there are obvious errors or omissions. Feinstein's position A few legislators acknowledge the issue: ``The problem has been that the Department of Labor does not really check to see if the company has made the effort to recruit in the United States,'' wrote Sen. Dianne Feinstein, D-Calif., in an e-mail. Still, Feinstein supports doubling the number of visas from the current 65,000. With various exemptions for certain types of jobs, the actual number of visas would effectively reach nearly 300,000. ``The program needs to be fixed,'' said Ron Hira, a vice president with the Institute of Electrical and Electronics Engineers-USA in Washington, D.C. ``We don't think raising the cap should be on the table before that happens.'' Tech-industry lobbyists counter that current rules sufficiently protect American workers. More H-1Bs are needed to fill the shortage of professionals with advanced degrees, they argue. Petitions for the entire 2006 allotment of H-1Bs reached the cap last August. In 2003, nearly 40 percent of the 217,000 H-1B petitions approved that year were for computer-related jobs. ``I have many executives saying they would love to hire for those positions from here,'' said Chris Merida, manager of public policy for the American Engineering Association. ``But . . . the talent is not here.'' In the last decade, numerous government reports have cited problems, but they have received scant media attention. A 1996 Department of Labor report was headlined: ``The Department of Labor's Foreign Labor Certification Programs: The System is Broken and Needs to Be Fixed.'' In its 2005 annual report, the Department of Labor concluded that ``reducing the susceptibility of DOL Foreign Labor Certification programs to abuse remains a challenge.'' Recent investigations by the department's Office of the Inspector General ``revealed corrupt employers, labor brokers and lawyers who file fraudulent applications. The prevalence of these cases consistently demonstrates the susceptibility of the program to fraud.'' In 2004, a report by the White House's Office of Management and Budget said the H-1B program is ``vulnerable to fraud or abuse.'' It recommends adding anti-fraud and audit functions and ``legislative changes . . . to require employers to test the labor market'' to recruit American workers before turning to foreign laborers. Instances of fraud It also cited problems with the permanent labor program, which allows employers to hire foreign workers permanently. Investigators found instances where applications for permanent workers were filed on behalf of fictitious employees, and where approval paperwork needed to hire foreign workers was illegally sold. The priority, the report said, was on processing applications, not rooting out fraud. Employers admitted to General Accounting Office investigators in 2003 that they ``hired H-1B workers in part because these workers would often accept lower salaries than similarly qualified U.S. workers'' -- but they did not violate the law because they were paying workers at least the ``prevailing wage'' approved by the Department of Labor. ``The system is broken, worthless,'' said Norm Matloff, a professor at University of California-Davis and outspoken opponent of the foreign worker program who has reviewed many of the reports. ``Companies don't need to violate the laws because of the loopholes,'' he said. ``They can easily violate the spirit of the law. That's fraud to me.'' Frank, the laid-off test manager, found work at a tech start-up but is concerned where the industry is heading. When he became a naturalized citizen in 1998, ``I thought it would give me more rights,'' he said. ``The reality is that the opportunities are for the foreigners.'' Mercury News database editor Griff Palmer contributed to this report. Contact K. Oanh Ha at kha@mercurynews.com or (408) 278-3457.