To: H-1B/L-1/offshoring e-newsletter Fri Apr 25 20:24:57 PDT 2014 Before getting into today's topic, I wish to note an e-mail issue. My "official" address is matloff@cs.ucdavis.edu However, that is essentially an "alias." A couple of years ago, our university outsourced its e-mail to Gmail, and although technically Gmail allows us to retain our old addresses, for various reasons there are sometimes glitches, some due to the alias, some due to Gmail's spam filter, and so on. Bottom line: Please continue to send to me at matloff@cs.ucdavis.edu but if you get no reply, please resend to my personal Gmail account, normmatloff@gmail.com Now, what about the title of this message, "sob stories on both sides"? It refers to these two recent articles: Computerworld, "An IT worker writes: 'Emotionally, we are broken'": http://blogs.computerworld.com/it-outsourcing/23833/it-worker-writes-emotionally-we-are-broken Palo Alto Online, "Foreign entrepreneurs try to gain foothold in U.S.": http://www.paloaltoonline.com/news/2014/04/25/foreign-entrepreneurs-try-to-gain-foothold-in-us The first item profiles an American worker who is training his H-1B (or L-1 etc.) replacement, in preparation for the job being shipped overseas. The second article claims there are lots of Steve Jobs-class would-be entrepreneurs out there who are frustrated at not being able to get a visa under which to work their startup magic. I must say that I am irked by both articles (irked by the articles, not by the people profiled in them). It's clear why I don't like the second article--it's built on false premises, and ignores the plight of Americans harmed by the foreign worker programs--but some readers will be surprised at my dislike of that first piece. Other readers of this will get my point about the first article immediately, though: This focus on the Indian offshoring firms is factually unwarranted and actually harmful. Yeah, "There he goes again," I admit it. But it's true. Pat Thibodeau, the Computerworld reporter, correctly describes the despair felt by the profiled worker, not just because he is losing his job but because that loss has been faciliated by U.S. government policy (the policies on H-1B, L-1 etc.). A fair point, of course, but there are just as many such stories involving the big mainstream U.S. firms. Recall for example the case of Cisco, the networking infrastructure giant. (See the items in http://heather.cs.ucdavis.edu/Archive with file names beginning with "Fragomen.") Independent consultant David Huber, with a long record of success with big-name clients, applied for a job with Cisco, based on a newspaper ad he'd seen. More or less by accident but with some detective work on his part, David found that the contact person in the ad, M.E. Clarke, was not a Cisco HR person. Nor was she a recruiter contracted by Cisco. No, she was a staffer with Fragomen, the largest immigration law firm in the nation. After seeing the infamous Cohen & Grigsby law firm video, in which one of the partners said, "Remember, we're trying to NOT find an American worker for the job" when sponsoring a foreign worker for a green card, David put two and two together and realized he had been set up. Fragomen was simply trying to "NOT find an American worker for the job," and David was one of the workers they were trying to not find. This led to an investigation by the Dept. of Justice, which for the most part found that Cisco was acting in compliance with the law here (which I predicted at the time). I'm making two points: 1. It's not just the Indian offshoring firms who abuse H-1B, but also the big mainstream American firms such as Cisco. (See my Migration Letters paper for some data.) 2. Just like the poor guy in Pat's article, David TOO was a victim of his own government's policy, both statutory and regulatory. Fragomen was making use of loopholes deliberately placed in the policy. (The industry lobbyists have occasionally admitted publicly to writing H-1B legislation.) I've made the point all along that the big mainstream U.S. firms are just as culpable as the Indian offshoring firms, but that the former are much more subtle about it, not overt like in the latter case. The worker in Pat's article knows exactly why he is being laid off and its connection to H-1B, whereas David Huber only discovered the shenanigans with Cisco by accident. The fact that Cisco covered its tracks better than, say, Wipro does, doesn't make Cisco's actiona any more acceptable. Indeed, many might say that Cisco was worse, as the ad carried a highly misleading statement along the lines of "U.S. citizens and permanent residents only." I know a lot of people don't like to hear this. Some are tired of hearing it, but a few readers -- you know who you are :-) -- strongly take the position that the main abusers of H-1B are those Indian firms, not the Ciscos, Intels, Googles and so on. These people trust the big American firms, in spite of numerous reasons they shouldn't do so. The latest such reason, of course, is the revelation of e-mail messages in which CEOs of the household name firms apparently conspired to violate the Sherman Antitrust Act by agreeing not to hire each other's workers: http://www.reuters.com/article/2014/04/24/us-apple-google-lawsuit-exclusive-idUSBREA3N28Z20140424 And as one of my readers put it today regarding the settlement of the case, "It's a slap on the wrist. Some of these companies are sitting on tens of billions in cash reserves. There will be no executives in orange jumpsuits as long as companies like Google outspend Lockheed Martin on the beltway." No, no one in the government--or for that matter, in the press--will notice that, hey, maybe criminal charges ought to be brought here. By the way, I don't think the main motivator was savings on salaries here. It was undoubtedly one factor, but the bigger one, I believe, was that they wanted to prevent key engineers from leaving in the midst of an urgent project. I've often mentioned that to many employers, especially the big U.S. firms, this is also the biggest attraction of hiring a foreign worker: If you sponsor them for a green card (and to some extent, even if not), they are yours, almost no risk of losing them. In the Computerworld piece, the mention of the offshoring aspect muddies the waters. Rather than it being the central issue involving the role of U.S. government in faciliating offshoring, the salient point is that policy does not require priority in hiring (and in this case retention) for American workers. That is the key problem with the worker in the Computerworld piece, and likewise is the core issue with David Huber's Cisco fiasco. The main H-1B law doesn't require such priority at all, and even the laws that do require it are riddled with loopholes, again shown in the Cisco example. Even the provision in the recent Senate bill that would have (somewhat) strengthened H-1B law in this regard was removed, under heavy pressure from the industry. The Palo Alto Online article, in spite of its one-sidedness, is actually quite good--well researched, with few if any factual errors, and with interesting (if not compelling) examples. Some of you may be awestruck at just how many ways there are to stay in the U.S. (something I've known for many years, ever since a distant relative of mine, an immigrant, remarked, "If you want to stay here, there is always a way"). A rather ironic example of that occurred just last week. A reporter for a fairly prominent newspaper interviewed me on H-1B, and mentioned a piece he'd written on the subject in 2008. In that piece, he'd profiled a foreign student at a top-10 engineering school who had failed to get a job in the U.S., due to a shortage of H-1B visas, and thus had been forced to return home to India. Or not! After the interview, I went to the LinkedIn site, and looked up that hapless foreign student. Turns out that he hadn't gone home after all. He had gone to work as a quant for a U.S. prominent investment firm, which had been his expressed goal in the article, and has been in the U.S. ever since. By the way, one of the foreign entrepreneurs quoted in the Palo Alto Online article admits to paying less than prevailing wage--regarding his own salary. But it doesn't take too much guesswork to see that he probably is doing the same for his other workers. And remember, the legal prevailing wage is less than market wage to begin with. Norm Archived at http://heather.cs.ucdavis.edu/Archive/SobStoriesBothSides.txt