Date: Tue, 26 Oct 2004 23:58:54 -0700 From: Norm Matloff To: Norm Matloff Subject: Kerry releases position paper on offshoring/H-1B/L-1 To: H-1B/L-1/offshoring e-newsletter According to my sources, some unions and programmer groups have been pressing the Kerry campaign for months to take a pro-programmer/engineer stance, regarding offshoring and H-1B/L-1. The campaign has now released an eight-page position paper on this issue. I had already made a detailed analysis of Kerry's positions on these issues; see http://heather.cs.ucdavis.edu/Archive/Kerry.txt I think the evidence I presented there makes it quite clear that (a) Kerry's proposals on these issues amount to nothing more than tweaking around the edges, and (b) Kerry is beholden to numerous powerful campaign contributors who would not permit him to make any real change regarding H-1B/L-1/offshoring. The new position paper released today merely provide more evidence that Kerry would not be of any real help to programmers and engineers. Again, see the above Web link for the reasons that Kerry's remedies for the offshoring problem amount to very little. See also http://heather.cs.ucdavis.edu/Archive/KerryLAT.txt Note too that retraining for displaced techies, offered by both Kerry and Bush, would merely find jobs (if they're lucky) in lower-level, lower-paid positions, so it does not count as a "remedy." The only thing new in the position paper is Kerry's proposal for H-1B/L-1: Stop the abuse of H-1B and L-1 visas by capping these programs and ensuring that Americans with the necessary skills get the opportunity to fill available white-collar service jobs in our own economy before an H-1B visa applicant. If no such American worker is available, the foreign worker should be paid at the prevailing rate. Kerry wants a cap on L-1, which doesn't exist now. That's good, though Kerry seems to wrongly think that H-1B doesn't have a cap either, which once again indicates, as we've seen in the past, that Kerry's people simply don't consider these issues important enough to look at in any detail. Kerry SEEMS to be endorsing requiring that employers give hiring priority to American, something that neither H-1B nor L-1 have now. Or is he? What is that word "ensuring" doing in there? In a previous statement to the press, the Kerry campaign incorrectly stated that H-1B already requires hiring priority for Americans. Coupling that with the odd usage of the word "ensuring" above, I think that Kerry is merely reiterating his old position, that better enforcement of H-1B law is needed. As I've said many times, it is NOT an enforcement problem; the law itself is riddled with loopholes, so there is nothing to enforce. Note also the "necessary skills" phrase above, another out for the employers. Recall, for instance, that some of the Indian H-1B/offshoring firms have their own internal software, apparently for project management rather than for use in the actual applications, which guarantees that no American will have the "necessary skills." Kerry also seems to be endorsing adding a prevailing wage requirement to L-1. But he is missing a key ingredient: The prevailing wage requirement for H-1B is useless, riddled with gaping loopholes, and thus it would be useless for L-1 too if it were the same, as is likely. The unions had proposed setting a fixed salary floor for H-1Bs, set at the median for the profession, no loopholes. That provision is conspicuously absent. So, the only thing new is the L-1 cap. Too little, too late. I'm disappointed to see the union endorsement of Kerry on these issues at the end of the enclosed article. Norm (lifelong Democrat) http://news.com.com/2102-1014_3-5427751.html?tag=st.util.print CNET News.com http://www.news.com/ Kerry report: Economy 'threatened' by offshoring By Ed Frauenheim http://news.com.com/Kerry+report+Economy+threatened+by+offshoring/2100 -1014_3-5427751.html Story last modified October 26, 2004, 3:54 PM PDT Software programmers and other professionals hurt by outsourcing should get federal assistance, Democratic presidential candidate John Kerry said Tuesday in a new position paper. Kerry's paper also repeats a number of his ideas for keeping high-paying jobs in America in the face of the offshore-outsourcing trend, in which skilled work is sent to lower-wage countries such as India. The paper, published one week before the presidential election, is the latest move by Kerry to attack President Bush on economic matters. Bush has been quiet on the specific topic of shipping work abroad, but his advisors have defended so-called "offshoring" as healthy for the economy. Kerry's new paper argues that the Trade Adjustment Assistance (TAA) program should be expanded to cover white-collar workers displaced by outsourcing. The program, which gives workers up to two years of income support and training services if they lose their jobs to foreign competition, currently does not cover all technology professionals. "America confronts a new competitive challenge. The very sectors that drove the American boom of the 1990s are now being threatened by offshore outsourcing," the Kerry report states. "Today, America's innovation workers--software programmers and other professionals--are seeing their jobs outsourced to lower-wage countries around the world." The offshoring phenomenon owes to factors including better global communications and much lower wages for programmers in developing countries. But the exact scale of the trend has remained murky. There are conflicting signs about whether the job market is improving for U.S. technology professionals. But they are likely to face growing competition from other countries: Research firm IDC recently predicted that the worldwide market for offshore information technology services will more than double between 2003 and 2008 to $17 billion. To help U.S. workers find better, higher-paying jobs, President Bush has proposed to double the number of people served by a job-training program and increase funding for community colleges. Earlier this month, he signed a bill that extends the federal research tax credit by 18 months. And on Oct. 22, he signed a bill that, among other things, is designed to encourage companies to reinvest foreign earnings in the United States by temporarily taxing repatriated income at a lower rate. Kerry himself proposed such a temporary tax holiday. But his campaign criticized the new law for failing to stop an incentive for companies to send jobs offshore, because they can still defer taxes on overseas income. Kerry plans to end tax breaks for companies that ship jobs overseas and continues to call for federal contract work to be performed by American workers "where possible." In his new paper, Kerry claims that the Bush administration "refuses to acknowledge the extent of the challenge facing America's innovation-intensive services--a key engine of our 21st century economy." Kerry's plan calls for making America the "location of choice for high-value services" through steps such as reining in the spiraling costs of health care and education. The White House on Tuesday did not immediately respond to a request to discuss the offshoring issue. The paper reiterates Kerry's stand that call center employees must disclose their location and says he will require companies to give at least three months of advance notice before laying off employees and shipping their jobs overseas. Regarding TAA, Kerry also said he supports expanding the health care tax credit associated with the program to 95 percent of premium costs from the current level of 65 percent. In addition, Kerry calls for reforming the controversial H-1B and L-1 visa programs, which have been accused of fueling the offshore trend. For instance, he wants to ensure "that American workers with the necessary skills get the opportunity to fill available white-collar service jobs in our own economy before an H-1B visa applicant" does. Currently, employers do not have to attest that they sought U.S. workers to fill the job before applying for an H-1B visa. Marcus Courtney, president of technology worker labor group WashTech, praised Kerry's paper. "Today, the Kerry campaign has announced a real plan to ensure that America's best-paying, best-skilled jobs are kept in the U.S.," Courtney said in a statement. "A Kerry administration, unlike the current one, understands that America's white-collar workers are facing losing their jobs in today's global economy and is putting his words into action to increase the job security, wages and benefits for white-collar workers." Copyright ©1995-2004 CNET Networks, Inc. All rights reserved.