To: H-1B/L-1/offshoring e-newsletter Sat Mar 2 07:42:06 PST 2013 To: matloff Sat Mar 2 07:23:05 PST 2013 My recent EPI paper was reported in an article in TechCrunch, a tech blog. The reader comments provide an important "teachable moment," which I'll describe below. I'll also report an ironic aftermath to an age discrimination lawsuit in the tech field. All of this will vividly ilustrate the salient issues concerning H-1B and green cards. But bear with me, and I will first discuss some context. Congress regularly holds hearings on H-1B. You can read my reviews of some recent ones at http://heather.cs.ucdavis.edu/Archive/HouseHearingFeb2013.txt http://heather.cs.ucdavis.edu/Archive/TISaysNoShortage.txt.txt http://heather.cs.ucdavis.edu/Archive/HouseHearing.txt (these are in reverse chronological order, for February 2013, October 2011 and April 2011). Whether the choice is deliberate or not, the selection of witnesses for these hearings tend to be heavily weighted toward the industry point of view, only occasionally inviting a mild critic of H-1B or one who is perceived as holding the "safe" view that the "Intels" use H-1B responsibly while the "Infosyses" abuse the program. Ron Hira is perceived that way, for instance, though he definitely does not hold that view. That view is wrong, as I've shown statistically and otherwise, but it would seem that for congressional testimony it is the "safe" view. I have to interject at this point that I was invited to testify to the House Immigration Subcommittee in 1998. I did accept the invitation, and did testify. But I later declined two subsequent invitations to the same committee. I simply felt it was not worth my going through two full travel days (California to DC and back), to speak for five minutes to a committee that has already made up its mind. In declining the invitations, I did suggest that the committee invite American (U.S. citizen and permanent resident) programmers and engineers who believe they had been harmed by the H-1B program. The committee did do this a couple of times in that period, but to my knowledge neither the House or Senate has done so since then. That lack is a real loss to the democratic process. Doesn't Congress want to hear from the victims? Even more interesting would be testimony from the other group of victims--the H-1Bs themselves. Granted, in the hearing held last month, there was a representative of Immigrant Voice, an organization of H-1Bs that lobbies Congress to speed up the green card process. But that representative is certainly not going to emphasize the cheap labor nature of the H-1B program; his job was to get Congress to speed up the green card process. He did make a brief allusion to the "handcuffed" nature of the foreign tech workers, but his overriding theme was "We foreign tech workers are saving the U.S. economy with our skills." (That's a paraphrasing, though Vivek Wadhwa actually said this explicitly at the same hearing.) Unless Congress is going to have witnesses testify with paper bags over their heads, it will not hear from the real "immigrant voice," i.e. the H-1Bs themeselves, explaining their plight. If you were in their shoes (as a number of readers of this e-newsletter have been), you wouldn't risk speaking out either. There have been occasional outbursts. Back in 2000, Murali Devarakonda, a member of the Board of Directors of the Immigrant Support Network (similar to today's Immigrant Voice) said, "This is legal human rights violation in America...You [as an H-1B] are an indentured servant, a modern-day slave..." on TV (Straight Talk, a weekly television program produced by the Santa Clara County Democratic Club). My guess is that Murali's organization was not pleased with Devarakonda's blurted remark, coming as it was as a board member. Well, it turns out that the TechCrunch piece on my EPI paper is providing a rare window into the life of H-1Bs. A large number of the reader comments, http://techcrunch.com/2013/03/01/study-stem-immigrants-are-neither-better-nor-brighter-than-u-s-workers/ are from former or current H-1Bs (though there seems to be the usual immigration lawyer or two or their proxies), and though many of them resent my doing the EPI research, most do agree with my conclusions: 1. They agree that most of the H-1Bs are not "the best and the brightest," but instead are ordinary people doing ordinary work. 2. They agree that the H-1Bs are typically used by employers as cheap labor. 3. They agree that the H-1Bs are typically used by employers as "handcuffed" labor, unable to switch jobs, a huge attraction for the employers. (H-1Bs do have the right to change jobs, of course, but in practical terms it's difficult in some cases, and unthinkable in the case of green card sponsorees.) 4. They even agree that many Americans go into law or finance instead of tech, because tech pays too little. Most read only TechCrunch's summary of my paper, not the paper itself, so they don't realize that that wage discrepancy between law/finance and engineering is due to H-1B cheap labor. They also say H-1Bs are hired for skill shortages, again oblivious to the findings of my paper. But many, I believe most, of the former/current H-1B posters, do agree with my main points. Here is a typical comment, from one JPS Bajwa: "US workers may be more skillful and brighter than the immigrants but output wise and cost wise the latter are definitely better...." (ellipsis in the original). I'm not sure what "output" means, but the poster's point is clear. Ironic that the H-1Bs are agreeing with me? Not at all. Recall that Vivek--now a vociferous proponent of expansive po;licies regarding foreign tech workers--also agrees with me on the above points. He has even admitted to hiring H-1Bs as cheap labor himself when he was a CEO. (Vivek, by the way, writes for TechCrunch.) What IS ironic is that many of those H-1Bs will discover when they reach age 35 or so, with green card or natualized citizen status, that it is harder for them to get a tech job; they will be perceived by employers as too expensive--relative to you-know-who. Then THEY will be Americans (if they have naturalized), and the shoe will be on the other foot. They will find, as my former-H-1B readers have, that even if they have the exact skill set in the employer's job description, they do not even get so much as a phone call. This is the reality, contrary to the industry lobbyists' claim that H-1Bs are hired in lieu of older Americans because the latter lack up-to-date skills. Vivek has said that too, that the older worker with the desired skill set won't be hired, on the basis of perceived cost. Which brings me to an age discrimination suit brought against Best Buy in 2005, the filing for which is at http://www.clearinghouse.net/chDocs/public/EE-MN-0082-0006.pdf One of the plaintiffs was Xianmin Shane Zhang, a software engineer, laid off at age 43. He appears to be the one of the same name (both Chinese and his English name Shane) on LinkedIn with a degree from the University of Houston, etc. Also, he appears likely to have come to the U.S. as a foreign student, fitting the usual pattern of undergrad degree in China followed by grad work in the U.S. I'll assume these things below. I should state at the outset that I am not saying Zhang is not among "the best and the brightest"--he was a physics major at a top school in China--but his case is an interesting one for a couple reasons. First, it shows my above point: Today's H-1B is tomorrow's victim. To tech employers, age 35 is age 35, whether you are a U.S. native, a naturalized citizen or permanent resident, and you are liable to be laid off, with difficulty getting a new job. (Zhang got a contracting job about a year after being laid off.) This is quite significant in light of the industry claims that it hires H-1Bs because older Americans don't have up-to-date skills. I've refuted that claim elsewhere, but for the sake of argument, suppose it's true. Then why does Congress want to give foreign students special green cards? In 10-15 years, their skills would be out of date too. The second point of interest about Zhang is what he's doing now: He runs an offshoring company! This is the supposedly-evil act that is always cited by those who say that the "Intels" use H-1B responsibly while the "Infosyses" abuse the program. Those same people point out that the "Intels" hire foreign students NOT for offshoring work. Yet here we have a former foreign student opening his own offshoring firm. Here I must remind the reader that I have constantly defended the "Infosyses" (as has Vivek), not because I think offshoring is good, but because I regard the singling out of these firms as scapegoating. Abuse of H-1B is just as widespread among the non-offshoring firms. And to an American techie experiencing difficulty finding a job in tech, it makes no difference whatsoever whether a job is shipped abroad or filled with an H-1B in the U.S.--either way, that job is not available to the American. And needless to say, I don't blame Zhang for utilizing the comparative advantage he has, i.e. his access to labor in China. Yet, Zhang's case illustrates the fact that giving green cards to foreign students can lead to offshoring as well. Anecdotally I believe this is common, though I have no data. This of course also goes to the "entrepreneurship" the industry lobbyists claim for the former foreign students. Opening an outsourcing firm hardly qualifies as the innovative action claimed by the lobbyists. Norm