To: H-1B/L-1/offshoring e-newsletter Thu Mar 28 10:38:32 PDT 2013 This post will concern the article at http://www.bloomberg.com/news/2013-03-28/america-losing-technology-workers-denied-in-visa-lottery.html But first, a brief clarification on something I said yesterday, at http://heather.cs.ucdavis.edu/Archive/GrassleyForbes.txt Stuart Anderson, a longtime advocate of H-1B expansion, had objected to the Grassley/Brown bill, which would eliminate a breakdown by experience level in computing the legally-required wage, known as the prevailing wage. In my posting, I explained why this action (eliminating the experience levels) should be taken. But I also said that if Stuart thinks the experience levels should be retained, then we should require the 75th percentile within an experience level, to reflect the industry lobbyists' claim that the H-1Bs are hired because they are above-average, say in skill sets. This would address what I call the Type I problem. A couple of people pointed out to me that the so-called experience levels are not actually calculated on the basis of experience. Instead, a complicated formula is used on wage distributions, which in the end is supposed to serve as an approximation to amount of experience. So, in the end, the DOL comes up with a SINGLE WAGE NUMBER that defines a given experience level for a given occupation in a given region. An example would be Stuart's $93K figure for Level II electrical engineers in Silicon Valley. I had been aware of this, but the implication hadn't hit me: The 75th percentile I discussed would be the 75th percentile of a single number, i.e. the 75th percentile in a distribution with zero range! So, for this to work, DOL would have to use real experience numbers, not indirect formulas. Now, to the Bloomberg article at the above URL. Nicely done, but there is an emperor-has-no-clothes aspect to it. Its star witness, Ms. Martinez Mortola, "manages customer support" and has "a master’s degree in engineering management." Isn't something wrong with this picture? Presumably Martinez Mortola is doing a fine job, but what is so special about her work and her degree? As I often say, the vast majority of H-1Bs are ordinary people doing ordinary work. There are many Americans who could do Martinez Mortola's job quite well. Indeed, if her visa doesn't come through, her boss Garrett Johnson probably WILL hire an American. Or maybe not. A cynical view would be that the Americans who could do the job are not new graduates like Martinez Mortola, and thus would cost Johnson more money than he wants to pay. In this scenario, he'd just call USC back and say he needs another new grad who has OPT status. (Optional Practical Training, part of the F-1 student visa.) I've often mentioned that although the job market for new CS graduates is currently good, the operative phrase is "new graduates"; people 10 or 15 years out of school are much less welcomed. That's the dirty little secret, as Vivek Wadhwa has put it. Consider the Intel job ad, titled "2013 Software College Grad," at http://www.linkedin.com/jobs?viewJob=&jobId=4750771&srchIndex=3 "Job Description By applying to this prescreen, you are expressing interest in potential College Graduate opportunities with Intel. To qualify as a College Graduate, you must have graduated or will graduate within 18 months from today's date. Intel invites people of all ages currently enrolled in an academic institution (or graduated within the last 18 months) to apply..." Intel has had such a policy for years--I once was shown an internal Intel document on it--and it is common elsewhere. I've talked to many employers who quite sincerely believe they're not abusing the H-1B program. But when I ask them, "Couldn't you find a U.S. citizen or permanent resident who could do the job well, but is not a new graduate?" they reply, "Oh, sure, but they would be too expensive." I then pounce on them, saying, "Aha! For you, H-1B is about cheap labor after all!" Actually, I'm much more polite than that :-) but they get the point, and so should you. As Vivek has pointed out, it is not fundamentally about skill sets, because even when an older applicant has an exact match of skill sets, the employer will turn to the younger applicant, who is much cheaper. A few years ago, one employer wrote to me in an outrage over my writings on H-1B. He insisted he could not fill a current opening, and attached a document with his complete applicant file to show it. He then said, "Look at that first one on the list. He has exactly what I want, but look how much money he expects!" In other words, we don't have a shortage of STEM workers; we have a "shortage" of workers at the price employers would like to pay. Peter Capelli of Wharton has pointed this out many times. I've also talked to many H-1Bs who insist they are fairly paid. But when I asked if they could get a higher salary if they had full freedom of movement in the marketplace, say after they get their green cards, they immediately agree. I then point out, "So you are underpaid after all." Again, it's not just salary suppression that makes that "handcuffed" status of many foreign workers so attractive to employers. The latter want workers who can't leave them in the lurch in the midst of urgent projects. The employers don't have this leverage with American workers, hence the keen preference for hiring foreign workers. Another interesting facet of the above Intel ad is this: "BS-level candidates must possess permanent, unrestricted right to work in the United States without sponsorship from a company." This is similar to the Texas Instruments testimony in a 2011 House hearing that I often cite. TI said that they have plenty of American job applicants at the bachelor's degree level, but not at the advanced degree level. That completely contradicts the standard industry lobbyist mantra that "American kids don't study engineering, they can't do math etc." What it does say, as I've pointed out before, is that the wage premium for an advanced degree is too small to make graduate study financially worthwhile. And the smallness of that wage premium is in turn due to the glut of foreign students, just as the 1989 NSF document forecast. Norm Archived at http://heather.cs.ucdavis.edu/Archive/UnfilledJobs.txt