To: H-1B/L-1/offshoring e-newsletter Mon Mar 18 10:48:32 PDT 2013 "It is difficult to get a man to understand something, when his salary depends on his not understanding it"--1900s novelist and social critic Upton Sinclair "Follow the money"--Watergate informant "Deep Throat," advising Washington Post reporters Woodward and Bernstein We are seeing various parties push harder and harder to portrary problems with H-1B as consisting mainly of abuse by the Indian bodyshops. As many of you will recall, I strongly disagree with that notion, and have shown statistically and otherwise that legal abuse of H-1B pervades the entire industry, including the mainstream, household-name firms. But let's take a look at WHY many in the H-1B debate are trying to shift the blame to the Indians. (I will be using the term "Indian" here to mean "Indian and Indian-American," and will sometimes use "American" to mean "non-Indian." I do so for the sake of simplicity, and I believe things will be clear from context.) The latest industry lobbyist tack is to claim that the nation is "unified" in its support of expanding foreign tech worker programs (in some form). But upon closer inspection, one quickly sees that the segments in that "unified" view all have major vested interests in the outcome. Here is a partial list, with their motivations: * the tech industry: desire for cheap, handcuffed labor * the American Immigration Lawyers Association: motivation obvious * universities: hire their own H-1Bs; benefit from industry largesse, e.g. Stanford's industry-donated buildings, such as Gates Hall, Hewlett Teaching Center, Packard Hall, Gordon and Betty Moore Bldg., etc.; large influx of foreign students keeps grad student stipends down (cf NSF internal document advocating this) * K-12 schools: the industry's claim of a STEM labor shortage, aimed at leveraging an H-1B expansion in Congress, means the schools can ask for more funding for STEM education * the Democratic Party: using tech visas as a wedge to obtain legalization of undocumented immigrants * unions: similar to entry "Democratic Party" above; in 2006, the AFL-CIO considered a deal with the industry in which the union would support H-1B expansion in return for the industry supporting legalization of undocumented immigrants; the DPE part of AFL-CIO has been excellent, but often swimming against the general AFL-CIO tide * IEEE-USA: supports green cards, as result of threat of dissolution by IEEE parent organization, dominated by industry and academia Now, how do the Indian bodyshops fit into all this? Again, it's a matter of vested interests, but this time more subtle ones, such as: * a desire to expose or partially fix the H-1B problem, while ALSO pleasing those one is beholden to: an ostensibly pro-labor Democratic politician might want to please his corporate benefactors, for instance * a desire to receive funding for research by an organization or government agency that has a pro-foreign-worker stance * a desire to avoid being considered anti-immigrant, xenophobic or protectionist On top of that, there is the emotional remnant of the outrage felt by many in the 1980s or so when manufacturing--TVs, toys, furniture, etc.--was moved offshore. So the mere mention of the fact that the Indian bodyshops often send work offshore makes it very hard for people to engage in the due diligence efforts mentioned above--even though, as I pointed out yesterday, whether a job is shipped abroad or filled in the U.S. with an H-1B, American workers lose the job EITHER WAY. So, rather than addressing the widespread, industrywide nature of legal H-1B/green card abuse, it's politically convenient to portray the problem is occurring mainly in the Indian bodyshop sector (and, in view of the Sinclair quote above, to come to believe it). And with enough people making the argument, the "everyone says it so it must be true" mentality kicks in, so that many people even without vested interests believe it. I mention the above so that when you read the increasing number of news items on H-1B vis a vis the Indian bodyshops, you'll understand what the source of such talk is. Indeed, a major portion of the current H-1B debate is, sadly, being devoted to this "blame the Indians" argument. Again, I say sadly, because the evidence doesn't support it, as the mainstream firms are just as culpable. A much ballyhooed recent event was a Computerworld report, at http://www.computerworld.com/s/article/9236732/The_data_shows_Top_H_1B_users_are_offshore_outsourcers The opening sentence says it all: "The largest single users of H-1B visas are offshore outsourcers, many of which are based in India, or, if U.S. based, have most employees located overseas, according to government data obtained and analyzed by Computerworld." The message being sent, here and in the other statements made by the "blame the Indians" crowd, strikes me as similar to saying something like, "Banking regulation XYZ is bad because many big drug dealers use it for money laundering." Somehow the reader is supposed to conclude that the Indian users of H-1Bs should be especially reviled. It's only one step beyond that to concluding that the Indian firms are the ONLY abusers of H-1B, or at least the main ones. Senator Schumer has publicly stated this position, as have other major participants in the H-1B debate. The two CEOs who "testified" at the briefing described below also took that position. I should note carefully that the Computerworld article does not come to any such conclusions, nor does the author of the article hold such a view, I believe. But again, it's expedient for many participants in the H-1B debate to take the view, "Intel si! Infosys no!" The salient issue is that it is expedience at work here in forming the "blame the Indians" argument, not hard data analysis, and certainly not a desire to avoid undercutting the wages and job opportunities of U.S. citizen and permanent resident workers. Clearly the latter is NOT the goal of those who hold such sentiments; whether a job is shipped overseas or filled in the U.S. by a foreign worker, EITHER WAY THAT JOB IS NOT AVAILABLE TO AMERICANS. So the "blame the Indians" view stems ultimately from personal vested interests. With that in mind, consider another Computerworld article, which appeared a few days ago (as always, I'm highly appreciative of CW's continuing efforts to cover the foreign-worker topic): http://www.computerworld.com/s/article/9237639/Lawmakers_hear_from_CEO_opponents_of_H_1Bs See also http://www.politico.com/story/2013/03/a-necessity-or-vehicle-for-cheap-labor-88832.html http://www.epi.org/blog/ceos-explain-1b-visa-hurts-competitiveness/ The theme here is that, lo and behold, H-1B is opposed by some American CEOs. Your first response to this might be amazement--until you find that the anti-H-1B CEOs are heads of of AMERICAN bodyshops. Their ability to compete for outsourcing business is undercut by the Indian bodyshops. I should note that contrary to a statement in the article that this is a new wrinkle in the H-1B debate, it in fact has been a factor all along. Back in the mid-90s there were American bodyshops making the same complaints. Significantly, the two CEOs described in the article precisely fit the "vested interest" models I described above. In CEO Keane's statement, http://www.epi.org/files/2013/Keane_H-1B_briefing_14_March_2013.pdf he complies with full fidelity to the mainstream U.S. firms' party line, i.e. that (a) we do have an IT labor shortage, (b) H-1B should be used to remedy it, and (c) the mainstream firms use the program responsibly while the Indian bodyshops abuse it. Keane simply takes these things as given, which any facts to back them up. (The few facts he does offer are incorrect, such as his claim on the percentage of foreign students among CS degree recipients.) Keane of course would not want to criticize the mainstream U.S. firms even if he thought they are culpable. Remember, they are his CLIENTS. Keane castigates the Indian firms for not hiring Americans, but look what type of Americans HE hires, according to the CW article: "Ameritas is hiring local college graduates..." Remember, a major component of H-1B is AGE. I've pointed often to mainstream American firms who say they are "desperate" to hire, but then happen to blurt out that they are only hiring YOUNG new graduates. (As I've shown, this is NOT a matter of up-to-date skill sets.) So Keane is just as much a part of the problem as anyone else, even if he doesn't hire H-1Bs. The other American CEO to speak, Neeraj Gupta, took basically the same line as Keane: "Intel si! Infosys no!" In fact, he is so positive that the "Intels" don't abuse the H-1B program that he would EXEMPT this group from his proposal that Congress set a $100,000 floor on foreign-worker wages. I wonder if any of the congressional staffers in attendance found that to be a glaring disconnect, which it is. I must say, though, that Gupta had one extraorinarily elegant statement: "We have created a self-fulfilling `skills scarcity' problem With an expectation that most of the potential technology jobs of the future will be offshore, we see young Americans steadily moving away from technical degrees, creating greater pressure on an already weak supply pool. We continue to push for more kids to take up careers in STEM, but without a career path for our graduating students, we have broken the chain of long-term human capital development. We cannot expect our workers to become technology leaders of tomorrow without having the opportunity for an apprentice role or an entry-level job. We need to create meaningful and stable jobs for our graduating students. Else, as our technology workforce depletes, we are creating a major risk to the long-term competitiveness of US enterprises." Unfortunately, in that statement, Gupta focused again on the offshoring issue, and sidestepped the age issue entirely, but otherwise it is one of the most eloquent statements I've seen over the years. Note carefully that both of the CEOs tried to justify their claim that the mainstream U.S. firms use H-1B responsibly by pointing to the fact that those firms do research and development in the U.S. But that argument is actually misleading, as my recent EPI paper showed. In CS and EE, the foreign workers hired by mainstream firms are actually LESS likely than comparable U.S. natives to be working in R&D. This is for former foreign students at U.S. universities--exactly the group that the industry lobbyists are pushing Congress to enact a special new visa type for. Lastly, consider the following novel approach to bashing the Indian firms: http://www.nytimes.com/2013/03/19/us/politics/gender-bias-seen-in-visas-for-skilled-workers.html http://judiciary.senate.gov/pdf/3-18-13PanettaTestimony.pdf The argument is that the H-1Bs hired by the Indian bodyshops are overwhelmingly male, at least 70% and possibly as much as 85%. The problem with that argument is that the OTHER H-1Bs are also overwhelmingly male. If you look at the currently-fashionable group in Congress now, the foreign students getting advanced degrees at U.S. universities, you see similar percentages. In 2010-2011 in CS, the fraction of men among new PhD grads was 81%. This is overall, not just for foreign students, but in my experience the percentages should be similar in the foreign and domestic cases, maybe even a bit higher in the foreign case. Norm Archived at http://heather.cs.ucdavis.edu/Archive/Scapegoating.txt