Date: Wed, 11 Aug 2010 14:18:26 -0700 From: Norm Matloff To: Norm Matloff Subject: Schumer bill is blatant scapegoating To: H-1B/L-1/offshoring e-newsletter As some of you may have read, Senator Schumer has introduced a measure that would fund beefed-up border security through a new H-1B employer fee, imposed on the rent-a-programmer "body shops." He used the pejorative term "chop shops" to describe them, and said that they "don't play by the rules," implying that the mainstream employers of H-1Bs act responsibly. Most of the body-shops are owned by ethnic Indians. As pointed out in the articles enclosed below, they are offended at what they consider a discriminatory bill--and I agree with them. Some H-1B reform activists were quite pleased to find that Schumer had finally taken some action against H-1B, after consistently being a very vocal supporter of expansion of H-1B and employer-sponsored green card programs. But I consider it a setback for reformers, as well as scapegoating and worse. This has long been a tactic of the industry lobbyists and their allies in Congress--blame the Indians. I first noticed this back in 1998, when Rep. Zoe Lofgren made disparaging remarks about the Indian firms at a hearing on H-1B. Since then there has been a constant theme from the lobbyists that the Wipros and Tatas of the industry abuse the H-1B program while the Intels and Microsofts don't. For those readers here who are not techies, let me state--once again!--that abuse of the H-1B program is not limited to the Indian body shops, nor to body shops in general. On the contrary, ALMOST EVERY EMPLOYER OF H-1BS IS ABUSING THE PROGRAM, definitely including the household-name mainstream firms. The latter may be more subtle about it and often hire a higher class of worker, but they are basically all abusing the system, hiring visa workers instead of U.S. citizens and permanent residents, in order to save money. The problem, as usual, is not failure to "play by the rules," but on the contrary aggressive exploiting the rules, using loopholes. I think Schumer knows this, not only because he's part of the body that wrote those rules, but also because if he really felt it was a rulebreaking problem, he'd move to punish the rulebreakers, rather than paint all the Indian firms with such a broad brush. No doubt about it; this is deliberate grandstanding and obfuscation. Now concerning those rules, I'm sure most people would readily believe that any firm such as, say, Intel makes aggressive use of loopholes in the tax code. Well, the same is true for loopholes in the immigration code, as I've shown before, such as the Intel case in http://heather.cs.ucdavis.edu/Archive/IntelH1BWages.txt I've shown the irresponsible behavior in foreign labor programs of Microsoft, Cisco, the Bank of America etc. See for instance: http://heather.cs.ucdavis.edu/Archive/CohenAndGrigsbyPrevailingWage.txt http://heather.cs.ucdavis.edu/Archive/BankOfAmWadhwaHira.txt http://heather.cs.ucdavis.edu/Archive/FragomenAudit.txt http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBelied.txt http://heather.cs.ucdavis.edu/Archive/MicrosoftClaimBeliedMore.txt So while the Indian firms are hardly blameless, they are only a small part of the general H-1B problem--12 per cent, to be exact, according to the Washington Post figures below. Moreover, as Ron Hira points out in Computerworld http://www.computerworld.com/s/article/9180240/Senate_raises_H_1B_fees_to_fund_border_security an additional fee of $2,000, whether imposed just on the Indians or the field as a whole, would have no impact anyway, since the salary savings accrued by hiring H-1Bs are far greater than that even in one year, not to mention multiplied by the six-year-plus life of the visa. As mentioned earlier, the industry lobbyists love to scapegoat the Indian firms, to shift the spotlight away from themselves. That's what makes the Schumer proposal so insidious: It gives Congress a chance to wash its hands of the H-1B issue, declaring victory and leaving the scene. Schumer, who announced several months ago plans to introduce legislation to expand the H-1B and employer-sponsored green card programs, can now do so and say that he took care of the abuses. This bill is misleading at best, and exhibits an unhealthy racial attitude at worst. H-1B reform activists should not be making common cause with Sen. Schumer on this legislation. Norm http://voices.washingtonpost.com/political-economy/2010/08/indian_government_calls_h1b_vi.html Indian government calls H1B visa fee hike 'discriminatory' By Ariana Eunjung Cha The government of India is protesting a bill in Congress that passed the House Tuesday and the Senate last week that would significantly raise U.S. visa fees for skilled workers. In a letter to U.S. Trade Representative Ron Kirk, India's Commerce Minister Anand Sharma said the bill unfairly targets Indian companies and estimated it would cost the country's firms an extra $200 million a year. "It is inexplicable to our companies to bear the cost of such a highly discriminatory law," Sharma wrote. The additional fees from the popular H-1B and L visas programs would be used to build operating bases and deploy unmanned surveillance drones to better secure the U.S.-Mexico border--one of the rare issues both Democrats and Republicans have agreed on. The legislation targets companies that lawmakers say "exploit" U.S. visa programs. A summary of the Senate version listed Wipro, Tata, Infosys and Satyam as such firms, saying that they fly thousands of employees to the U.S. to work at as technicians and engineers for their clients. The Indian government argues that the bill, which raises fees by $2000 from $2500, is discriminatory because it will primarily impact Indian firms even though they account for fewer than 12 percent of the total visas issued. U.S. companies, such as Microsoft, use these visas in larger numbers but there's a loophole in the bill that says they will only see an increase if 50 percent of employees are on H1B or L visas. Sen. Charles E. Schumer (D-N.Y.) inflamed Indian media outlets in debate in the Senate on Thursday when he called Infosys, the IT outsourcing giant, a "chop shop"--the term often used for the place where stolen cars are dismantled for resale. He said such companies outsource high-paying American tech jobs to immigrants willing to take less pay. He said he did not want the bill to affect companies that employ Americans and "play by the rules." The USTR and Schumer's office did not immediately respond to requests for comment. http://www.washingtonpost.com/wp-dyn/content/article/2010/08/06/AR2010080606413.html By Rama Lakshmi Washington Post staff writer Saturday, August 7, 2010 NEW DELHI -- Representatives of India's booming information technology industry said Friday that a border security bill passed by the U.S. Senate would promote protectionism and flout international trade practices. The bill, approved Thursday by the Senate, calls for boosting surveillance along the U.S.-Mexico border by deploying more enforcement agents and aerial drones. The House could take up the measure next week. Indian technology executives are rattled that the $600 million funding for the additional measures proposed in the bill, introduced by Democratic Sens. Charles E. Schumer (N.Y.) and Claire McCaskill (Mo.), would be raised by increasing the visa application fees of companies that employ 50 or more non-immigrant, skilled foreign employees. This would affect companies that bring into the United States highly skilled workers under "H-1B" visas or "L" visas. The proposal would hit Indian IT-outsourcing companies that send thousands of workers to the United States to work on short-term projects that extend from three months to three years. For long-term projects, Indian companies hire locally within the United States. Schumer and McCaskill say the bill would improve border security without adding to the deficit. "America must do a better job of securing our borders. This bill will help in a big way," McCaskill said in a statement after the bill's Senate passage. "We do understand that the U.S. needs to secure its borders. But the notion that Indian IT companies should pay for sealing their border with Mexico is incongruent," said Som Mittal, the president of the National Association of Software and Services Companies in New Delhi. "This is a populist measure that is protectionist and discriminatory and is not compliant with the practices of the World Trade Organization." He said that mixing trade and immigration issues is a mistake. "You are running on thin ice if you curb trade to talk about immigration," he said. The booming IT services industry has contributed a big chunk to India's impressive economic growth in recent years. Industry representatives say the new law is likely to impose an additional expense of more than $200 million annually. Last year, out of the 121,000 H-1B visas issued by the United States, Indian companies got 12,000. The bill, which affects renewals and transfers as well as new visa applications, was passed quickly by the Senate just before senators left for the August recess.