Issues for H-1B and Green Cards: a Minimal Outline
Norm Matloff
Below is an outline. If you prefer quotes form ("sound bites"),
click here .
-
Don't scapegoat the Indians! Abuse of H-1B is across the board,
not just in the Indian outsourcing firms. The
mainstream U.S. firms are culpable too, including in their
hiring of foreign students from U.S. universities.
-
Core issues:
-
Type I cheap labor: Legally required wage for H-1B below true
market wage for the given worker.
-
Type II cheap labor: Employers hire young H-1Bs instead of older (35+)
Americans.
-
No STEM labor shortage.
-
Employers want foreign workers in order to "handcuff" them.
-
Quality of the foreign workers lower on average than Americans; glut
of foreign workers is causing an internal brain drain, thus real
damage to economy.
-
What should be done/should not be done to reform.
-
Prevailing wage (legally-required wage for H-1Bs):
-
Legal definition makes it UNDERVALUED.
-
The industry says it hires H-1Bs because they are special, in some
way, yet the prevailing wage is defined as the AVERAGE wage. It
doesn't account for "hot skills" (e.g.Android), degree from top U.S.
university, etc., etc., etc. On the open market, an employer would
have to pay extra for those, 20% or more.
-
Thus prevailing wage easily undervalued by 20% or more.
-
My analysis of government data:
-
PERM (green card) data.
- Mainstream U.S. firms; excludes the Indian outsourcing firms.
-
Shows the vast majority in CS/EE are paid at or near the
prevailing wage.
-
Prevailing wage is 20% or more too low.
-
Therefore, vast majority paid approximately 20% below their true
market value.
-
Age issue:
-
"Older workers" means 35+.
-
Vast majority of H-1Bs young.
-
Employers save money, typically about 50%, by hiring young H-1Bs
instead of older Americans.
-
Skills issue ("Older workers don't have the latest skills") is a red
herring. (Americans training their foreign replacements; Wadhwa
quote; my University of Michigan paper.)
-
Immobile workers:
-
H-1Bs are often sponsored by their employers for green cards.
-
This makes them effectively immobile.
-
Many employers, especially in Silicon Valley, LIKE this de facto
indentured servitude, even more than the cheap-labor aspect.
-
Lack of a STEM shortage:
-
2007 Urban Institute report (bachelor's level).
-
2013 EPI study (bachelor's level).
-
2011 Texas Instruments House testimony (bachelor's level).
-
NSF report, NIH report, CRA report, UCB Brown's research
(graduate level).
-
Unemployment rates not meaningful, since people are forced to leave
the profession.
-
Quality issue, internal brain drain:
-
Former foreign computer science students who went on to work in
the U.S.: On average, FILE FEWER PATENT APPLICATIONS per capita,
are less likely to work in R&D, and get their degrees from
lower-ranked schools, compared to Americans of the same age,
educational level etc. (But the truly outstanding should have U.S.
immigration facilitated.)
-
Internal brain drain: Foreign workers cause stagnant wages, shorter
careers for Americans; so Americans leave the field or avoid it in
the first place.
-
Damage to economy: Losing the higher-quality Americans, replaced by
lower-quality foreign workers.
-
What should/should NOT be done to reform:
- "The Devil is in the details."
-
The H-1B and green card caps are irrelevant. If the cheap and
immobile labor incentives for employers were removed, the caps would
never come close to filling.
-
Don't focus on the Indian bodyshops; the problem pervades the entire
industry.
-
DON'T set up a new visa type for STEM foreign graduates of U.S.
universities; they are young, so such visas would still cause the
age problem, and on average they are of lesser talent than the
Americans.
-
I support the Grassley/Brown bill. But NOT its
enforcement provisions, irrelevant. Abuse is mainly due to
loopholes, legal; they must be plugged. Core provision of G/B is
the legal definition of prevailing wage. G/B puts it at median,
WITHOUT breaking down into experience categories. That latter point
(no breakdown by experience) is crucial.
-
I support one particular aspect of the Moran bill: Taking green
card sponsorship out of the hands of the employers.
-
Scapegoating of Indians:
-
Unwarranted; H-1Bs underpaid across the board, not just in the
Indian firms.
-
"Infosyses" buy "Corollas" for 20% discount; "Intels" buy "Camrys"
for 20% discount. Same thing!
-
Yes, many of the bodyshops send work offshore. But so what?
Whether a job is sent abroad or it is filled by an H-1B in the U.S.,
either way that job is not available to Americans (U.S. citizens and
permanent residents).
-
Mainstream firms actually worse, as they use the green card process
to handcuff their workers.
-
Racial overtones, e.g. Schumer "chopshop" remark, "rats" comment by
Compete America's Scoot Corley.
-
details: