Date: Tue, 18 Mar 2008 16:13:21 -0700 From: Norm Matloff To: Norm Matloff Subject: Computerworld Blogs, "Five reasons why the H-1B visa cap will increase" To: H-1B/L-1/offshoring e-newsletter Enclosed below is an excellent blog by Computerworld report Patrick Thibodeau, listing five reasons why Congress will raise the H-1B cap, and boy, did he nail it. He even correctly noted that the opponents of the H-1B program can't count on IEEE-USA, a putative H-1B-critic. However, I must add a few reasons to his list: Reason 6: Congress won't see through Bill Gates' misleading testimony. Gates has an aura, certainly not deserved in the view of many of us techies who eschew his software (I'm a longtime Linux user), but definitely effective on Capitol Hill, which is populated largely by gullible technophobes. Yet you don't have to know a byte from a bite to see that Microsoft has been outrageously untruthful. Consider for example the following: * Microsoft claims they need H-1B to keep jobs in the U.S., and only resort to offshoring if they can't find workers here. Yet in an internal presentation made to managers, Microsoft said, "Pick something to move offshore today." http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBelied.txt * Microsoft claims they can't hire developers, yet they asked their contractors to take a week's furlough to save money. http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBeliedMore.txt * Microsoft admitted that most of the developers it hires are young. As I've often mentioned, it is not generally understood, even by critics of the H-1B program, that H-1B is largely used as a way to avoid hiring the older (age 35 or 40) American workers. http://heather.cs.ucdavis.edu/Archive/MicrosoftLetsTruthSlipOut.txt * Microsoft salaries aren't keeping up with inflation. What kind of "labor shortage" produces declining wages, I ask you? http://heather.cs.ucdavis.edu/Archive/MicrosoftSalaries.txt It's not just Microsoft that is deceiving the public. The entire tech industry is just as culpable, continuing to insist that the U.S. educational system just isn't producing enough techies. The data show otherwise. The recent Urban Institute study demonstrated that we are producing more than enough STEM (science, technology, engineering and math) graduates for our economy (see my report at http://heather.cs.ucdavis.edu/Archive/UrbanInst2.txt). Starting salaries have been flat or falling. I've show such data before, and one of my readers points out the latest, noting that From the National Association of Colleges and Employers website -- The starting salaries for college grads in 2001: http://www.naceweb.org/press/display.asp?year=2007&prid=111 The starting salaries for college grads in 2007: http://www.naceweb.org/press/display.asp?year=2007&prid=264 The starting salary for computer science grads was $52,473 in 2001 and $53,051 in 2007. Inflation for this time period has been about 16% but yet the starting salary for computer science grads only increased by 1%. The educational system itself is happy to chime in to agree with the industry claims, as they want to get donations from industry too, and want to leverage the "labor shortage" into more funding for schools and universities. Last week the Dean of Engineering at CSUS told the student newspaper that employers are desperate to hire (http://media.www. statehornet.com/media/storage/paper1146/news/2008/03/12/News/Fair-To. Train.Engineers.Fill.State.Employment.Gap-3263699.shtml). The good dean is quoted as saying "When I meet with representatives of industry , they are not asking for engineers - they are yelling for them." Yet the listings at CSUS' Engineering/Computer Science placement office are meager, at least in the computer fields; other than a listing from Accenture, and a few civil service job openings (most of which will likely be canceled due to the California budget crisis), there's basically almost nothing there. Granted, there are other ways of getting jobs besides via campus recruiters, and most new CS graduates do find jobs of some kind in the end, it is definitely NOT a job seeker's market, as evidenced by the flat/falling wages. And the number of listings on CSUS' job board is WAY down from the past. Reason 7: Congress doesn't want to know these truths anyway, as they don't want to jeopardize the lavish campaign contributions Congress receives from the tech industry. Recall that the last time Congress raised the H-1B cap, there were explicit public statements by politicians stating the Congress enacted the increase solely to get campaign money. Sen. Robert Bennett (R-Utah) remarked, "Once it's clear (the visa bill) is going to get through, everybody signs up so nobody can be in the position of being accused of being against high tech. There were, in fact, a whole lot of folks against it, but because they are tapping the high-tech community for campaign contributions, they don't want to admit that in public." (Carolyn Lochhead, Bill to Boost Tech Visas Sails Through Congress: Clinton Expected to Sign Popular Measure, San Francisco Chronicle, October 4, 2000.) A major supporter of pending legislation which would increase the H-1B quota, Rep. Tom Davis (R-Va.), said, "This is not a popular bill with the public. It's popular with the CEOs...This is a very important issue for the high-tech executives who give the money." (Committee To Address Bill Eliminating H-1B Cap, National Journal Technology Daily, May 5, 2000 and Lars-Erik Nelson, Pols Are Going Overboard On Visa Program, New York Daily News, May 3, 2000.) Rep. Davis was chair of the Republican Congressional Campaign Committee. Reason 8: The Programmers Guild and many other critics of the H-1B program are diluting whatever influence they have (which Thibodeau correctly points out is limited compared to the huge clout wielded by the tech industry) by focusing on the second-sourcing issue (in which a firm hires H-1Bs and then rents them out to other firms). This is basically a nonissue. if those firms disappeared tomorrow, their clients such as Microsoft would take up the slack and hire more H-1Bs directly. Worse, PG and the others are thereby giving Congress an opening in which Congress could make some sort of restriction that appears to ban second-sourcing and thus claim to have made concessions to PG while actually not liberating any jobs for U.S. citizens and permanent residents at all, both because the restriction would be cosmetic and because, as I said, even with genuine restrictions the current clients of the body shops would simply hire more H-1Bs directly. Norm http://blogs.computerworld.com/five_reasons_why_the_h_1b_visa_cap_will_increase Patrick Thibodeau March 15, 2008 - 3:36 P.M. Five reasons why the H-1B visa cap will increase Two bills were introduced this week to raise the H-1B visa cap. They follow Microsoft Corp. Chairman Bill Gates' visit to Washington and his push for a H-1B cap increase. The opposition faces a daunting task in challenging the push to increase the H-1B visa. H-1B proponents in Congress acted quickly to take advantage Gates brought to the issue. U.S. Rep. Lamar Smith (R-Texas) introduced legislation Friday that would retroactively increase the 2008 visa cap to 195,000, as well as set that level for the fiscal year, 2009, that begins Oct. 1. Gabrielle Giffords (D-Arz.) introduced legislation the same week to increase the cap to 130,000 a year. The current cap is set at 65,000, with an additional 20,000 for holders of advance degrees. Here are five reason why opponents face a very difficult, if not impossible task, in stopping a visa cap hike: One: H-1B opponents have no clout If H-1B visas weren’t part of the larger immigration reform issue in Congress, the H-1B cap would have been increased long ago. The opponents have been piggybacking on the broader immigration debate and they know it. But the H-1B opposition is in decline even as the debate grows more intense. Five years ago, tech workers in Connecticut – many working or connected to the financial services industry (the first industry to really embrace offshoring) – organized a lobbying group, the Organization for the Rights of American Workers (TORAW). By 2003, Connecticut's congressional reps had introduced several bills – all affecting the H-1B issue. The legislation went nowhere, but Connecticut tech workers proved that an organized effort can have impact. It’s all part of history now. TORAW has disbanded, out of money and members. The broader base of opponents are alert, well connected and can fire off thoughtful, well researched emails to lawmakers at an instant, but TORAW is illustrative of the anemic state of the opposition. Opponents lack lobbying muscle in Washington. Two: The Gates effect Bill Gates is, obviously, a powerful proponent of the H-1B visa. But where is the opposition’s star power? Lou Dobbs isn’t it. The Programmers Guild has been effective in raising issues, but the real heavy weight organization, with true lobbying ability, is the IEEE-USA, and it has scaled back its opposition to H-1B visas. This group has staked out a position focused on visa reform and improving access to permanent residency, the Green Cards. The IEEE-USA was once more direct about the impact of the H-1B visa: In 2004, when the cap was scaled back to 65,000 the IEEE-USA pointed out: The number of unemployed U.S. high-tech professionals dropped sharply from the first quarter of 2004 to the third quarter. The decline mirrors the reinstatement of the H-1B visa cap to its historical level of 65,000 in Fiscal Year 2004 from 195,000 in FY 03. That was a strong message to send to Congress. But the IEEE-USA also represents many academic institutions that depend on the H-1B visas. Although universities are exempted from the cap, foreign enrollments may suffer if students feel they have little chance of remaining in the U.S. longterm. Universities also have strong ties to tech companies. It is probably safe to say that the IEEE-USA, as an organization, is getting pulled in different directions. Three: There is grass root support for the H-1B visa A major use of H-1B visas is to help facilitate offshore outsourcing and even in this downturn outsourcing will continue to grow. That’s the broad outlook by industry analysts. The pressure for visas remains, even in a downturn. But the H-1B visa has a very broad, grass root constituency that extends beyond the tech sector. In the 2007 fiscal year, nearly 20,000 companies, academic institutions, hospitals, public schools and others received only one H-1B visa. These organizations send emails as well. Four: The H-1B lottery is a big problem for tech firms The forecasted demand for H-1B visas is going to force the U.S. Citizenship and Immigration Service (USCIS) to hand out visas via a random lottery for the fiscal year 2009 that starts Oct 1. For the 2008 fiscal year, the USCIS received more than 123,000 visa petitions in two days for the 65,000 cap. Despite that number, the odds were still good that a petition would be approved in its lottery. The USCIS put all those visa petitions in a hat and selected about 100,000, rejecting the rest. The selection process works like college admission: The USCIS accepts more petitions then it has slots and expects a certain number of these applications to be withdrawn or disqualified. But this year there seems to be broad consensus that the number of visa petitions will exceed last year's total, and companies may face visa odds of two-to-one or higher. This makes the outlook for getting a visa very unpredictable and unacceptable to tech groups, which are now pushing for a cap increase with special urgency. But here is an important point to keep in mind: The people who receive visas under the 65,000 cap are more likely to only have a bachelor degree. They are the worker bees. The U.S. has a separate H-1B visa cap of 20,000 for foreign nationals who graduate with advance degrees from U.S. universities. But there was no lottery for these graduates because there was no sudden rush in demand. The USCIS filled those petitions on a first-come, first serve basis until April 30 that year. That may change this year. Five: Congressional support for visa Lawmakers have moved the cap up and down before and they will do it again. Congress will increase the cap this year or next and may make it retroactive as well. Had an immigration bill been approved last year the cap would have been 115,000. The open question is whether the H-1B visa will be reformed as part of a cap increase. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) last year pushed for a reform that set a limit on how the visa is used. One rule set a limit that no more than 50 percent of the U.S.-based employees at a company using H-1B workers can be visa holders. It was a measure aimed at making the India offshore firms a little less nimble and raising it as a trade issue for India.