To: H-1B/L-1/offshoring e-newsletter Sat Jun 29 08:54:32 PDT 2013 Readers of this e-newsletter often send me items from the press, prefacing their remarks with "You've probably seen this, but in case not..." In most cases, the material is indeed new to me. So please, everyone, continue to bring these things to my attention. My posting here will discuss several recent articles or bloggings that readers have pointed me to. 1. NYT, "A Bill Allowing More Foreign Workers Stirs a Tech Debate," June 27, http://www.nytimes.com/2013/06/28/technology/a-bill-allowing-more-foreign-workers-stirs-a-tech-debate.html?_r=0 This article pits older American workers against immigrants, especially those who would come here if the current Senate bill were to be enacted. Unfortunately, it misses the point when it says, "Silicon Valley companies, warning of an acute labor shortage, say it is too costly to retrain older workers like Mr. Doernberg, and that the country is not producing enough younger Americans with the precise skills the industry needs." It's wrong first because in the old, pre-H-1B days, programmers and engineers routinely learned new skills on the job, no formal training needed; as I've said, if someone is not good enough to learn on their own, then he/she is not good enough for you to hire in the first place. Second, typically the young workers don't have the skills either! But they are cheaper, so employers are willing to have them learn on the job. In many cases, those young workers are H-1Bs. This may make perfect sense economically, but it does put the lie to the industry's stated purpose for hiring H-1Bs, i.e. that there is a labor shortage. What caught my eye in this article, though, was this statement: "If anything, one recent study suggests, the growth of immigrant workers in American companies helps younger American technical workers — more of them are hired and at higher-paying jobs — but has no noticeable consequences, good or bad, on older workers. 'In the short run, we don’t find really any adverse or superpositive effect on the employment of Americans,' said William R. Kerr, a Harvard business professor who conducted the study on the work force of 300 American companies. 'People take an extremely one-sided view of this stuff and dismiss any evidence to the contrary.'" Some of you may recall that I mentioned a couple of months ago that I would review Bill's paper here, and that I would first run a draft of my posting by Bill for his comments. I kept putting it off, both due to lack of time and due to the paper's use of a rather controversial statistical technique that I did not relish explaining. But now with the above passage, I'd better get my analysis out soon. :-) 2. Dice, "H-1B Reform Might Bring Unintended Consequences, June 21 http://news.dice.com/2013/06/21/h-1b-reform-might-bring-unintended-consequences/?CMPID=EM_SV_UP_JS_AD_LC_AD_&utm_source=Cheetahmail&utm_medium=Email&utm_content=&utm_campaign=Advisory_Lifecycle&om_rid=AAGso-&om_mid=_BQI8$-B8tYqRPk&dadv&om_rid=AAgAcR&om_mid=_BRzFN0B8zjz8NP&dice I've long held that the organizations and activists aimed at reducing the scope of foreign tech worker programs are shooting themselves in the foot by focusing on the Indian bodyshops, basically asserting that abuse of H-1B occurs mainly in those firms, not in the mainstream companies such as Intel and Microsoft. You can tell right away that something is seriously wrong with this strategy, as it jibes completely with what the industry lobbyists say. My point is that (a) abuse of H-1B pervades the entire industry, (b) by agreeing with the industry lobbyists, the anti-H-1B people are in essence giving Congress "permission" to expand H-1B subject to some restrictions on the Indian firms, and (c) in the end, Congress is not going to clamp down even on the Indian firms. See http://heather.cs.ucdavis.edu/Archive/DiggingTheirOwnGraves.txt for details. The importance of this Dice article is that it shows that the lobbyists for the Indian firms are confident that (c) will occur. 3. T.A. Frank, The New Republic, "Why Liberals Should Oppose the Immigration Bill," June 27 http://www.newrepublic.com/article/113651/liberal-opposes-immigration-reform# On the one hand--keep in mind that there is a "HOWEVER" coming later--I basically agree with Frank, and have been making such comments for many years, including in my 1996 Senate testimony. My dad was an immigrant and my wife is an immigrant. I've been living in immigrant households (foreign languages spoken, nonmainstream foods, nonmainstream holidays, nonmainstream sensibilities) my entire life, and am staunchly pro-immigrant. But at the same time, there is no doubt that low-skilled immigration harms some of the most vulnerable members of our society, including earlier immigrants. As a political liberal myself, I am irritated by the liberals who view amnesty for unauthorized immigrants as helping "the little guy," when in fact the little guys are not only beneficiaries but also tragic victims. I am very sympathetic to the notion of amnesty as a humanitarian act, but there also would be a lot of "collateral damage." Note by the way that the Senate bill not only grants amnesty but also enables the future import of low-skilled labor in other ways, greatly exacerbating the problem. And by the way, I am irritated by the obviously flawed claims of the CBO that amnesty would produce a net fiscal benefit. So, I am pleased to see T.A. Frank bring up the subject for discussion. HOWEVER, I have to counter by saying that Frank is the author of one of the most biased articles on H-1B I've ever seen, one in which he seriously stretched ethical boundaries, in my opinion: http://heather.cs.ucdavis.edu/Archive/WashMonthlyInfomercial.txt 4. Vivek Wadhwa, "Big Laobr's Anti-Immigration Rumor Machine," June 28 http://techcrunch.com/2013/06/28/840005/ I consider Vivek to be a friend, and tend to be tolerant of his occasional tirades; see http://heather.cs.ucdavis.edu/Archive/ChangingFaceOfAm.txt As such, I wouldn't even mention this latest tirade, if not for the fact that it brings up an important point concerning the rigor of research on H-1B and related issues. In the current episode, Vivek takes aim the Economic Policy Institute, calling EPI "anti-immigration." Unfortunately, Vivek hasn't done his homework here; EPI has released a number of pro-immigration reports, notably by Heidi Shierholz (whose work is similar to that of my colleague Giovanni Peri, who is arguably the most stridently pro-immigration economist in the nation), a book-length report by Ray Marshall, and a pro-amnesty statement by EPI president Larry Mishel. It is true that EPI has done considerable work criticizing one narrow aspect of immigration--foreign tech workers, especially by Ron Hira, an academic who over the years Vivek has taken special aim at. (Again, see my link above.) This spring, EPI published at least three major research papers on the subject, including my own, along with a number of smaller reports. This has really helped bring the problems of H-1B to the attention of people in the press, who had previously been brainwashed by the industry lobbyists. That seems to be the root of Vivek's sudden outburst against the EPI, in which he says, "[EPI] continues to grab national headlines for research that claims that there is no tech-talent shortage. As stupid as this may seem to people in the tech industry, EPI keeps repeating this — despite the fact that its evidence falls apart once respected economists review its non-peer-reviewed papers. Facts don’t usually get in the way of politics, however. It started with policy papers by Ron Hira, an associate professor at the Rochester Institute of Technology." As far as I know, no "respected economists" have criticized any of the EPI papers. Other than a catty blog by industry lobbyists Robert Hoffman regarding the EPI paper by Salzman, Kuehn and Lowell, I have't see any criticism at all. My colleague Peri, for instance, has been in the press a lot lately and has published a few op-eds in support of the Senate bill, yet he has never criticized the EPI papers, nor has he even made claims contrary to them. Indeed, he has for example publicly stated that low wages in STEM, kept low by immigration, give Americans incentives to not pursue STEM careers. Though Vivek is definitely off-base in his remarks above, he does indirectly bring up the vital question of the quality of research in H-1B, which I will now discuss. Specifically, Vivek derides the EPI papers as not being peer-reviewed. In fact, most technical research papers on H-1B, including all of Vivek's, are non-peer-reviewed. I agree that this is an important point--and in my recent Barrons op-ed I made sure to tell the reader that my recent paper in Migration Letters was peer-reviewed (http://heather.cs.ucdavis.edu/Barrons.txt)--there is nevertheless a lot of non-peer-reviweed research out there that is quite good. I've cited some of Vivek's own research as being excellent. And Vivek is quite wrong about EPI in that regard. I don't know how EPI's review process works in general, but I can say that the scrutiny to which EPI put my own paper was the most rigorous I'd ever experienced in my more than three decades publishing research in math, statistics, computer science, electrical engineering and yes, immigration. There were several internal EPI reviewers on my paper, and I believe there was an external one as well. Having peer review is better than not having it, but peer review is no guarantee of fairness or quality. Economists tend to be highly polarized on many issues, immigration being a prime example, and if one of the "peers" reviewing a paper subscribes to an ideology opposite that of the author, the paper may be rejected--or emasculated. Conversely, sympathetic reviewers may endorse a poor-quality paper. I've often cited the peer-reviewed paper by Mithas and Lucas as being of especially poor quality and lacking in impartiality. See http://heather.cs.ucdavis.edu/Archive/MithasLucas.txt http://heather.cs.ucdavis.edu/Archive/MithasLucasPublished.txt Again, the immigration issue is polarized. But one must insist on fairness. And one quick test I apply on the fairness criterion is to first check a paper's bibliography. If you look at my EPI paper, for instance, you will see citations to research that is to various degrees seemingly at odds with mine, such as Carnevale, Hunt, Kerr, Lofstrom, Mithas, Saxenian and Wadhwa. By contrast, in Giovanni's STEM paper that is getting a lot of press, he has NO citations whatsoever of research that is negative about H-1B. You as the consumer may feel lost in the technical details of a paper, but you can very quickly apply this simple fairness test. Norm Archived at http://heather.cs.ucdavis.edu/Archive/RecentPressItems.txt