To: H-1B/L-1/offshoring e-newsletter Fri May 23 21:02:19 PDT 2014 A few years ago, Microsoft announced that it was opening a software development center in Vancouver, BC, to house non-U.S. workers for whom MS could not get H-1B visas. The firm presented it as a desperation move that it was forced to take due to the yearly H-1B cap being too low. Some cynics rejected the move as a publicity stunt. Was it so? A new article and one I've newly discovered shed interesting light on this. The May 22 edition of Bloomberg BusinessWeek has a piece titled, "Vancouver, the New Tech Hub" http://www.businessweek.com/articles/2014-05-22/vancouver-welcomes-tech-companies-hampered-by-u-dot-s-dot-work-visa-caps In addition to quoting MS as complaining that it only got half the H-1B visas this year that they had applied for, the article makes some surprising admissions. First, it notes that a major attraction to MS and other U.S. software firms setting up shop in Vancouver is that "...salaries for tech workers are about 10 percent to 15 percent lower than in the U.S...." The article adds, "Last year, as [U.S.] salaries and hiring rebounded from their post-recession lull, other companies began looking for talent north of the border." It quotes a San Francisco firm as saying, “We found a pretty awesome cluster of talent [in Vancouver] who are open to reasonable wages." Remarkable statements, given that MS and the other big H-1B employers always say their motive in hiring foreign workers is a shortage of talent, NOT a desire to save on wages. More subtle, but equally important, is what the article says MS will do in expanded MS operations in Vancouver: "This month [MS] announced plans to more than double its roughly 300-employee office in Vancouver, where video games have been the focus. There, Microsoft will hire and train 400 software developers from around the world to work on mobile and cloud projects." What? "Hire AND TRAIN"? Bear with me while I explain. The training issue--a phony one, for reasons I'll discuss shortly--has been central to the H-1B debate ever since the industry's first push to expand H-1B in 1998. The legislation that was enacted included an H-1B user fee, so that employers would fund training that would allow Americans to do these jobs in the future. I stated at the time that this would never work, because (a) good programmers can learn new skills on the job, very quickly, without formal training, and (b) employers wouldn't hire them even with their newly acquired skills, as the employers wanted cheap foreign workers. Most tellingly, the ITAA lobbying report, the main foundation for Congress' 1998 expansion of the H-1B program, showed the industry's real motives: "Training employees in IT would seem to be a win-win for both worker and employer. And often that is the case. However, extensive training creates other issues. `You take a $45,000 asset, spend some time and money training him, and suddenly he's turned into an $80,000 asset,' says Mary Kay Cosmetics CIO Trey Bradley. That can lead to another problem. New graduates trained in cutting edge technologies become highly marketable individuals and, therefore, are attractive to other employers." Again, it is clear that Bradley was not willing to pay the salaries paid by other firms. The main issue was money, not skills. Getting back to the BusinessWeek quote above, it is important to note that the industry lobbyists have over the years repeatedly insisted that they don't have time to train Americans for the jobs they hire H-1Bs into. "We need our programmers to hit the ground running" is the usual phrasing used. They have stated this in particular for the older American programmers, admitting that there are lots of them available but claiming that they lack some specific new skills, say knowledge of the Python programming language. Oh really? Then why is MS planning to "hire AND TRAIN 400 software developers FROM AROUND THE WORLD"? For those of us who watch closely, MS has accidentally made a number of damning public statements, but this one is one of the most flagrant. See some others at http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBelied.txt http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBeliedMore.txt http://heather.cs.ucdavis.edu/Archive/MicrosoftLetsTruthSlipOut.txt (Add to that the MS claim that they paid their H-1Bs over $100K, which was later shown to be false, as admitted by MS.) And just as bad is the revelation made in the article, "Microsoft's Parminder Singh: He Heads His Own United Nations," in 2009, http://www.sikhchic.com/article-detail.php?id=1013&cat=8 The article states, "Up to 300 employees, software programmers for the most part, will work at the development centre. They will start off with relatively low-grade testing work, but Parminder Singh says he has no doubt that his new hires will be working on major software projects before long... Tacked on the wall is a world map, with dozens of coloured stickers, each pointing to the home town of one of the newly hired software programmers. There are a smattering from South America and Africa, a generous dusting through Europe and clusters in the Middle East, the Indian subcontinent, Southeast Asia and China. There are none in Canada or the United States." That term "low-grade testing" is quite accurate. Software testing is the "assembly line work" of the software development world, mundane stuff that anyone with some programming background can do. The implication that MS couldn't find anyone in the U.S. or Canada to do that work is outrageously false. And note the second half of the statement, that those foreign hires "will be working on major software projects before long..." I wasn't sure what that meant when I first read it (which, coincidentally, was last week), but now the BusinessWeek article's "hire AND TRAIN" quote of MS explains it: The foreign workers are being hired to do the easy stuff, software testing, while they are being TRAINED as programmers. Again, I cringe whenever I hear the word "training" in the H-1B debate. Older programmers do keep up with modern skills, and if you need them to learn a new one, they can do it quickly on their own. (If they are not good enough to do that, they aren't good enough to do software work in the first place.) But unless both articles above have wildly misquoted MS, it is clear that MS has simply been untruthful in saying that it can't find Americans to fill its H-1B jobs. The BusinessWeek article also reports, "Facebook opened a temporary Vancouver office last May to train as many as 150 newly hired developers while they wait for U.S. visas." There it is again--Facebook is going to TRAIN these developers. But there is more to it than that, in the phrase "while they wait for U.S. visas." I recently learned of what appears to have become a common workaround by the U.S. tech firms to the full H-1B caps: A U.S. firm sends the foreign worker to a foreign branch of the company, has them work there 12 months, and then brings them to the U.S.--not on an H-1B visa but instead on an L-1 visa, the intracompany transfer visa. In effect, MS, FB etc. "park" the worker in Vancouver (or wherever) for six months, then tells USCIS "We have a Canadian employee whom we need to transfer to the U.S."--fully legal, of course, but not in the spirit of L-1. This is interesting, as it has been widely assumed that the Indian bodyshops were the only ones abusing that visa. As I mentioned in that briefing sponsored by Sen. Sessions a week or so ago, the tech industry has gotten a free pass by the press on the H-1B issue; the journalists just naively accept whatever PR the industry lobbyists have cooked up. It's time they looked a little more carefully at things. Norm Archived at http://heather.cs.ucdavis.edu/Archive/MSVancouver.txt