Date: Tue, 14 Jul 2009 11:38:58 -0700 From: Norm Matloff To: Norm Matloff Subject: Schumer announces move regarding foreign workers To: H-1B/L-1/offshoring e-newsletter Though the title of the first enclosed article below includes the word "H-1Bs," I have not included the word in my Subject line above. The reason for my exclusion of the word is that Senator Schumer has not said anything about increasing the H-1B cap, so far as I can tell. There have been news articles on this in the last few weeks, and to my knowledge Schumer has made no public statements in this regard. The language in his statements suggests he plans an expansion of the employment-based green card program. This would be just as pernicious has an H-1B expansion, but it is for that very reason that I wish to call attention to the distinction between the two; I don't want readers here to get the impression that I support a fast-track green card program or the like. The quote included in the Computerworld article below, # "We must encourage the world's best and brightest individuals to come # to the United States and create new technologies and business that will # employ countless American workers, but must discourage businesses from # using our immigration laws as a means to obtain temporary and # less-expensive foreign labor to replace capable American workers," said would appear to be similar to statements made during the last year by a number of Democrats, including Obama, supporting liberalization of the employment-based green card program. As I've written here many times, I am just as strongly opposed to expansion of the green card program as I am to expansion of H-1B, as both have the effects of reducing job opportunities for U.S. citizens and permanent residents. Moreover, though I definitely support bringing "the world's best and brightest individuals" here, very few of the foreign workers are of that caliber. Of course, the second half of Schumer's comments above is designed to give them impression that he wishes to take strong action to stop abuse of the H-1B program. My guess is that that is not the case at all. Instead, I believe his legislation will simply include provisions to stop fraud rather than abuse, via stepped-up enforcement measures. As I've stated so often, the main problem is loopholes in the law, not fraud, so anti-fraud measures would be of little value. For example, it is a safe bet that Schumer will not propose that all employers be subject to the restrictions currently imposed on H-1B-dependent employers, such as a requirement that the employer attempt to fill the position with an American before hiring an H-1B. After those were temporarily extended to TARP recipients, i.e. the financial industry, earlier this year, Schumer vowed to overturn that legislation. It is interesting that Schumer on the one hand claims to be opposed to using foreign workers as cheap labor, while on the other using Greenspan as his star witness, who has stated repeatedly (see the second enclosed article below) that the goal of importing the foreign workers is to keep salaries down. Definitely an "emperor has no clothes" moment. Greenspan has made such statements many times in the last year or so, and one has to wonder just what he's thinking. The median salary for a mid-career software developer is around $80,000, which while not subsistence-level is not particularly high. New law graduates, using a similar skill set (good analytical and problem-solving abilities, etc.) make $160K. I would assume that Greenspan is just ignorant, rather than flat out lying, but even ignorance would be highly disturbing. As the second article here points out, and as Greenspan himself has said, he had no inkling that the financial industry might implode. This is amazing, since anyone could have understood the danger of selling no-down-payment mortgages to people who can't afford them, selling "insurance" to investors on sliced-and-diced packages of those mortgages, etc. Some comments on some of the passages in the articles: # One proposal that may get traction in Congress would create an # independent commission to manage employment-based visas. The commission # would determine whether there are labor shortages and have the # authority to make annual adjustments on the cap based on economic need. # That idea was pitched by the AFL-CIO in April. This has been suggested before (including by me), but is likely a political nonstarter. After, the industry--and Schumer himself, as noted above--opposes requiring employers to recruit Americans before hiring H-1Bs, so the industry would certainly not support a commission which would have essentially that same goal. Indeed, an industry lobbyist already criticized the idea in that Associated Press report (www.miamiherald.com/692/story/1133354.html) Of course, if somehow such a commission were formed, its members would be people from industry and their allies anyway. # Angela Kelly, vice president for immigration policy and advocacy at the # Center for American Progress, a Washington-based group that's headed # John Podesta, President Clinton's former chief of staff, said an # element of any immigration reform bill would have to be its labor # protections. # # "How do we ensure that by bringing these workers in we're not # disadvantaging American workers and how do we invest in our folks for # the long haul, so that we've got kids in computer science, math, and # engineering programs, which are right now, frankly, dominated by kids # who aren't from the U.S. That's the reality and we need to deal with # it," she said, in a conference call with reporters. That is false. For example, only 6% of recipients of bachelor's degrees in computer science are nonresident aliens; see the data from CRA, http://www.cra.org/CRN/articles/may09/tables9to16.html The large numbers of foreign students occur at the PhD level. But of course Kelly's point about H-1B and offshoring discouraging Americans from studying CS is correct. http://www.computerworld.com/s/article/9135438/Analysis_The_next_H_1B_fight_begins_by_Labor_Day Computerworld Analysis: The next H-1B fight begins by Labor Day Planned legislation could include a way to raise the cap on H-1B visas By Patrick Thibodeau July 13, 2009 06:02 AM ET Computerworld - WASHINGTON -- Sen. Charles Schumer (D-N.Y.) plans to introduce a comprehensive immigration reform bill by Labor Day that seems certain to include a way to increase the H-1B cap. By introducing the bill in the worse possible economic climate, and then citing Labor Day as his deadline for introducing it, you could almost argue that Schumer is egging on his opponents. But that's not new for him. Among the people he has enlisted to help him is Federal Reserve Chairman Alan Greenspan, who testified this year at an immigration committee hearing that the cap protects U.S. workers from global competition, creating a "privileged elite." Schumer's view follows naturally from his unabashed support of the H-1B visa program and his belief that foreign workers are critical to U.S. economic success. And as head of the Senate Subcommittee on Immigration, Refugees and Border Security, Schumer is in a position to make changes. Schumer outlined his plans in an interview with Associated Press last week; the bill is still being drafted. The Senate has had no problem approving increases in the H-1B cap in the past. The Comprehensive Immigration Reform Act of 2006, for instance, proposed raising the cap on H-1B visas to 115,000 and included a market-cap provision that allowed the the number of visas to grow by 20% a year if the prior cap was reached. The cap is now set at 85,000, which includes 20,000 that are set aside for people who earn masters degree. This time around, Schumer may take a different approach on high-skilled immigration. One proposal that may get traction in Congress would create an independent commission to manage employment-based visas. The commission would determine whether there are labor shortages and have the authority to make annual adjustments on the cap based on economic need. That idea was pitched by the AFL-CIO in April. Study finds big rise in job cuts planned at IT shops Schumer will also have to deal with Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa), both of whom are on the immigration subcommittee and have introduced legislation restricting H-1B use to the ire of Indian government and industry groups, in particular. Durbin and Grassley are among the harshest critics of the H-1B visa. In a speech last month before an immigration policy group, Schumer outlined what he wants to achieve when it comes to high skilled workers. "We must encourage the world's best and brightest individuals to come to the United States and create new technologies and business that will employ countless American workers, but must discourage businesses from using our immigration laws as a means to obtain temporary and less-expensive foreign labor to replace capable American workers," said Schumer. Schumer also endorsed a report in 2007, Sustaining New York's and the U.S. Global Financial Services Leadership, prepared by McKinsey & Co., that called for increasing access to H-1B visas to help keep the financial services industry competitive. President Barack Obama has appointed a top McKinsey official, Diana Farrell, to serve in his administration as a deputy economic advisor. Angela Kelly, vice president for immigration policy and advocacy at the Center for American Progress, a Washington-based group that's headed John Podesta, President Clinton's former chief of staff, said an element of any immigration reform bill would have to be its labor protections. "How do we ensure that by bringing these workers in we're not disadvantaging American workers and how do we invest in our folks for the long haul, so that we've got kids in computer science, math, and engineering programs, which are right now, frankly, dominated by kids who aren't from the U.S. That's the reality and we need to deal with it," she said, in a conference call with reporters. http://www.computerworld.com/s/article/9132438/Greenspan_H_1B_cap_would_make_U.S._workers_privileged_elite_ Computerworld Greenspan: H-1B cap would make U.S. workers 'privileged elite' Tells Senate subcommittee quota too small, would protect workers from global competition By Patrick Thibodeau April 30, 2009 12:00 PM ET Computerworld - WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan today offered a spirited defense of the controversial H-1B visa program, telling a U.S. Senate subcommittee that the visa quota is "far too small to meet the need" and saying that it protects U.S. workers from global competition, creating a "privileged elite." Greenspan, testifying on immigration reform before the Subcommittee on Immigration, Border Security and Citizenship, said more skilled immigration was needed "as the economy copes with the forthcoming retirement wave of skilled baby boomers." This hearing was called by the subcommittee's chairman, Sen. Charles Schumer (D-N.Y.), to encourage the U.S. senate to address the issue of immigration, despite the economy. Greenspan was the marquee witness. Greenspan provided a list of reasons for increasing competition in the skilled labor force. In particular, he said it would help fix a problem -- the housing bubble -- that grew during his tenure as Fed chair, a position he held from 1987 to 2006. Skilled workers from overseas "will, out of necessity, move into vacant housing units; the current glut of which is depressing prices of American homes," said Greenspan. In 2005, Greenspan characterized rising housing prices as "froth." But what will likely prove to be the most controversial aspect of Greenspan's argument was his call for more wage competition.. He said that increasing the numbers of skilled workers from overseas "would address the increasing concentration of income in this country." "Greatly expanding our quotas for the highly skilled would lower wage premiums over lesser skilled," said Greenspan. "Skilled shortages in America exist because we are shielding our skilled labor force from world competition," he said. Greenspan said visa quotas "have been substituted for the wage pricing mechanism. In the process we have created a privileged elite whose incomes are being supported at noncompetitively high levels by immigration quotas on skilled professionals," he said. "Eliminating such restrictions would reduce at least some of the income inequality." The views cited by Greenspan are in sharp dispute. H-1B opponents say that there is no skills shortage and that the H-1B visa has been used to reduce wages, especially by replacing older workers with younger workers from overseas. One recent study found that H-1B workers are depressing wages for some occupations, including programmers. Greenspan cited failures in the U.S. educational system, in part, for the need to bring in more foreign workers. He cited the high percentages of foreign graduates of advance degree programs. Schumer cited the role of immigration in the U.S. economic development. "Because of immigration, Google, Yahoo, Intel and eBay are American success stories," he said. "In New York, one quarter of all businesses are immigrant-owned." Similarly, Sen. John Cornyn (R-Texas) said the U.S. should "offer more visas to highly skilled students who have studied at our colleges and universities and, when they can't work here, go back to their native land and compete with us and create jobs there rather than here, in the United States." Sens. Charles Grassley (R-Iowa) and Dick Durbin (D-Ill.), recently introduced legislation that would restrict the use of the H-1B visas. The measure is particularly aimed at offshore outsourcing companies and would require them to increase the size of their U.S. workforces under a rule that would prohibit employers from hiring additional H-1B and L-1 guest workers if more than 50% of their employees are H-1B and L-1 visa holders.