The Obama Plan for Executive Action on Foreign Tech Workers

Though the main attention on Obama’s speech on immigration last night will be on his plans for the unauthorized immigrants, he definitely included provisions regarding foreign tech workers, specifically regarding H-1B, employer-sponsored green cards and the F-1 foreign student visa.  His proposals have something for the employers, something for the foreign workers, but nothing to help American workers. In this post, I’ll explain the proposed changes and their likely impact, and also discuss what executive action a labor-friendly president could have taken.

From my point of view, the President’s plan has three major elements:

  • Granting work rights to spouses of H-1Bs.
  • Further extending the Optional Practical Training (OPT) part of F-1.  OPT gives foreign students the right to work for a period after graduation.  For years, the period was 12 months, but George W. Bush used executive action to change that to 29 months, and there are reports that Obama may change this to 48.
  • Allowing green card sponsors to switch employers much earlier in the green card process.

There are obvious adverse impacts here to American workers, by swelling the labor market, thus reducing job opportunities and wages for Americans.  This is especially true in that the foreign workers are overwhelmingly young, thus exacerbating the rampant age discrimination that we already have in the tech world.

Some readers may be surprised to hear that I strongly support one of those proposals, but they shouldn’t be surprised at all.  I’ve been stating for years (e.g. in my 2003 article in the University of Michigan Journal of Law Reform) that, for many tech employers the appeal of hiring foreign workers is to have not just cheap workers but even more important, immobile ones.  As a result, employers often hire a foreign worker over an equally-qualified U.S. citizen or permanent resident.  The third point in Obama’s proposal above would actually be beneficial to American workers, as it would make the foreign workers’ period of de facto indentured servitude much shorter, thus rendering the foreign workers less attractive to hire in the first place.

However, the key word in the last sentence is would.  For the reasons I’ve given, employers will NOT like that provision, which by the way, the foreign tech worker organization Immigrant Voice is taking credit for.  So, the employers may work behind the scenes to quash it.  In doing so, they would have to speak carefully, as they don’t want to admit that they prefer hiring foreign workers for their indenturability.  But the lobbyists are very good at spin, and they will likely say something like “Why would any employer pay $10,000 in legal fees for green card sponsorship if the worker can jump ship to another employer?”  One mitigating factor is that the employers do want the potential foreign workers to find work in the U.S. attractive, and freedom of movement would help in that regard, but again, it’s vital to keep in mind that indentured servitude is hugely valuable to many employers.  I don’t think they’ll go quietly on this one.

Now, what actions could Obama have taken to help the American worker?  In a more positive tone, what could he still do now?

  • He could roll back the OPT period to the original 12 months,  instead of extending it.
  • He could enforce the section of green card law (note:  NOT H-1B law) that states that the Secretary of Labor must ascertain that employer-sponsored immigration does not adversely impact American workers.  This could be applied to the definition of prevailing wage, the defining of jobs by employers to be entry-level (negatively affecting Americans over age 35), and so on.
  • He could apply federal age discrimination laws to the foreign tech worker issue.  I mentioned one example in the previous bullet, and here is another.  While most H-1B employers are not required to give priority to American workers, those employers are still subject to age discrimination laws like anyone else.  Since a large part of the wage savings accrued by hiring H-1Bs comes from their youth, enforcement of age discrimination laws could really reduce H-1B usage; they wouldn’t want to hire older foreign workers in most cases.  Of course, those laws are complex and subtle, but much could be done with this.
  • He could direct federal agencies to give contracting preference to those vendors who hire large percentages of American engineers and programmers (no, NOT American secretaries,  janitors, accountants and marketers).

But all indications are that the Obama administration simply doesn’t care about American workers, so the above is just blue-skying.

The Trouble with State-by-State Analyses of H-1B

A number of researchers on H-1B and related issues rely on state-by-state, or city-by-city, comparisons.  Notable in the genre are my UCD colleague Giovanni Peri, HBS’ Bill Kerr (and his coauthors) and Madeline Zavodny.  The latter, who wrote on H-1B as a member of the Dallas and Atlanta Feds, is currently a professor at Agnes Scott College.

A couple of weeks ago, R. Davis, a Silicon Valley software developer, contacted me regarding Prof. Zavodny’s  2011 research, sponsored by industry groups.   She found:

The data comparing employment among the fifty states and the District of Columbia show that from 2000 to 2007, an additional 100 foreign-born workers in STEM fields with advanced degrees from US universities is associated with an additional 262 jobs among US natives.

Skeptical of those findings, Davis asked my opinion of the study, and exactly how Zavodny had done the analysis.  I’d been critical of the research in the past, but suggested that Davis write to Zavodny and interact with her.  He did so, and she replied instantly, sending him her data and Stata code.   This showed real class on her part, as most researchers would not send their code and data, unless required by law.

Davis set to work.  Stata is an expensive commercial product, but I steered him to the R language, which is both free and very high-quality.  R is the lingua franca of the statistics community, and I’m quite active in the R world.  Davis has now posted his analysis of the Zavodny research, replicating her numbers but also uncovering a fascinating story underlying the data, which I’ll explain shortly.

But first, I wish to emphasize quite strongly that I’ve never thought highly of the “H-1B creates x jobs” kind of analysis, as it suffers from a huge issue of causality.  Zavodny is careful to use the phrase “is associated with,” which is a lot better than Peri’s repeated claims of finding a “causal” relation in his April 2014 report, but let’s be real, folks:  The industry paid for Zavodny’s work, and are surely representing it as causal as they spread it around Capitol Hill.

Association is NOT causality.  Any decent undergraduate who’s worked with data knows that.  In Zavodny’s case, for instance, what would happen if employers were to hire 100 additional U.S. citizens and permanent residents instead of H-1Bs?  (See qualifier coming up.)  Would they not “cause” 262 jobs to be created?  Indeed, given the poorer average quality of the H-1Bs, wouldn’t hiring 100 more Americans produce MORE than 262 new jobs?  (The industry lobbyists, of course, claim there aren’t 100 more Americans available, but research by Salzman, Lowell, Kuehn, Costa,Teitelbaum and so on has pretty much laid those claims to rest, as even some pro-industry economists seem to concede.)   Actually, this was one of my major criticisms of a paper by the Kerrs and Wm. Lincoln.

Worse, region-by-region analyses are notorious for being unreliable and misleading.  For example, there have been numerous studies on capital punishment, both pro and con, based on comparing states that do and do not have capital punishment., in terms of murder rates and so on.  They can’t all be correct.

The other point I wish to make before turning to the Davis analysis is her use of the terms foreign-born and native-born.  In addition to objecting before to the industry lobbyists’ calculated, labored use of the term foreign-born instead of foreign, such an analysis is highly misleading.  There are many STEM students who are foreign-born but are either naturalized U.S. citizens or permanent residents.  So a lot of STEM workers in her “foreign-born” category are actually Americans, and were never H-1Bs or foreign university students.  Zavodny does not make this clear (and likely is unaware of it), and while she has a separate number for H-1Bs (183 instead of 262), again we all know that on the Hill and in the press, people will take “foreign-born” to mean “H-1B.”  Indeed, this is basically the thrust of Zavodny’s Recommendation 3:

Recommendation 1: Prioritize immigration by workers in STEM fields who hold advanced degrees from US institutions.

Well, then, what about the Davis analysis?  I was floored by his figure titled, “Foreign STEM Workers, 2000-2007.”  Look at the states with big H-1B usage, such as California, New York and New Jersey.  The data are basically flat!  Within states, an increase in the number of foreign-born STEM workers with advanced degrees is NOT associated with a trend of increasing STEM employment for natives.  On the contrary, Davis finds that the foreign-born are replacing the natives, something that even Giovanni has written (which may come as a surprise to those who cite his work).

So, basically we have a situation in which, within groups, the graph of mean Y vs. X is flat, yet after aggregation it appears that increases in X are associated with increases in mean Y — Simpson’s Paradox.   In other words, Davis has uncovered a fundamental flaw in Zavodny’s work, which may well apply upon closer inspection to other region-by-region research on H-1B and related issues.

One more point:  While she was in the immigration neighborhood, Zavodny threw in an analysis of the famous “They pay more in taxes than they take in services” claim so popular among advocates of expansive immigration policies:

Highly educated immigrants pay far more in taxes than they receive in benefits. In 2009, the average foreign-born adult with an advanced degree paid over $22,500 in federal, state, and Federal Insurance Contributions Act (FICA, or Social Security and Medicare) taxes, while their families received benefits one-tenth that size through government transfer programs like cash welfare, unemployment benefits, and Medicaid.

To begin with, the whole “net fiscal gain/loss” issue is a can of worms.  There are so many effects, effects of effects and so on, that it really is an impossible question to answer.  I wish Zavodny had not tried to do so.

But now that she has, let’s take a closer look.  First, the obvious problem — she hasn’t factored in the LOST tax revenue resulting from H-1B and related programs.  Cheaper workers pay less in taxes (some actually pay NO income taxes, due to U.S. tax treaties with their home countries); a glut of workers brings down overall wages, again reducing tax revenue; and the displaced American STEM workers are generally making less (after being forced to change fields) than they used to before displacement, and thus making smaller tax contributions as well.

But less obvious is that a large number of immigrant STEM workers consider one of the major benefits of naturalizing the ability to sponsor their elderly parents for immigration, and later put them on welfare — cash payments, Medicaid, subsizied senior housing and so on.  In Silicon Valley, this is absolutely standard among Chinese and Indian immigrants.  I and others have quantified this, such as in my 1996 Senate testimony.

But that’s a side issue.  I recommend that everyone read Davis’ analysis.  In the future, every time you hear about a state-by-state or city-by-city analysis of the wondrous benefits of H-1B, keep that Davis figure in mind.

Why the CIR Report Isn’t the Good News the Activists Think It Is

The Center for Investigative Reporting (CIR), is a very prestigious organization that prides itself on doing in-depth investigations that the mainstream press lacks the resources — or the journalistic stomach — to pursue.  The organization is headed by the distinguished Bay Area editor Phil Bronstein, and I’ve always been one of CIR’s admirers.

Yet I was highly disappointed by a recent piece on the H-1B work visa  that CIR did with NBC Bay Area, with a focus on illegal behavior by certain employers.  I generally have no interest in reports involving violations of H-1B law, which I believe are counterproductive, in a very real sense:   Such investigations actually harm the chances of attaining real, fair reform of the H-1B program.  I will explain why below, but first let’s look at what happened with CIR.

Actually, I had suggested to CIR back in March 2013 that they look into the H-1B issue.  I’m one of the organizers of the Bay Area R Users Group (R is a programming language), and we held our meeting that month at CIR.  After the meeting, I briefly explained to CIR’s Coulter Jones the problems with H-1B, and he promised to look into it.  I don’t know whether this led to the recently-published report, but I’m told by another researcher that CIR started working on it more than a year ago, so maybe they did heed my suggestion.

But if so, that was the last advice CIR took from me.  Their reporter, Matt Smith, contacted me in May 2014, outlining the scope of his project for me, which focused on illegal behavior of Indian “bodyshops” (rent-a-programmer agencies, sometimes called “IT staffing firms” or “outsourcers”).  He had listened to the media briefing on H-1B organized by Sen. Sessions’ staff, in which I had been a participant.

Smith was particularly interested in my point that H-1Bs, at least those being sponsored for green cards, are immobile, “handcuffed” by their employers.  Smith mistook that to mean the Indian bodyshops, rather than the Silicon Valley class of employers I had discussed.  (The bodyshops rarely sponsor their workers for green cards.)  I corrected him, and explained that I could not participate in investigations like his, as they amount to unwarranted scapegoating of the Indian firms while ignoring the abuse that pervades the entire industry.

I told Smith,

The handcuffing I was referring to involves the Googles and the Intels, NOT the [Indian] H-1B-dependent firms. If the employer sponsors the H-1B for a green card, the H-1B is basically immobile. As I said this morning [in the Sessions briefing], the Silicon Valley firms hugely value this, even more than having cheap labor.

The (mainstream) industry lobbyists have engaged in a conscious effort to demonize the Indian firms, so as to deflect attention from themselves. For this reason, I make it a principle to NOT discuss the H-1B-dependent firms with the press…

You may find the following of interest: “Stop Blaming Indian Companies for Visa Abuse,” Bloomberg View, Aug. 26, 2013.

Smith should have known that my remarks in the briefing concerned the Silicon Valley firms, not the bodyshops, because I had emphasized the point.  In fact, there was an exchange on this during the briefing between Michael Teitelbaum and me.  I never heard from Smith again, and there is not even a single mention in the CIR report of abuse by the Silicon Valley firms.

The green-card based handcuffing is well-known, having been noted for instance in the congressionally-commissioned NRC report.  Prominent immigration lawyers pitch handcuffing as one of the most attractive features to employers of hiring foreign workers, as seen in this posting by the former designer of Texas Instruments’ immigration policy.  All legal, of course.

It’s ironic that CIR quotes a Cisco spokesperson as saying the firm has the highest ethical standards and would not knowingly allow such abuses.  If CIR had chosen to do a broader investigation, it would have found that Cisco itself had been investigated by the Dept. of Labor for its own direct hiring of H-1Bs (not its use of the bodyshops), in which it had been placing deceptive job ads that apparently had the goal of excluding Americans from the jobs in question.  DOL found the practice to be legal, which unfortunately is true.  As I’ve often said, the only difference between the Silicon Valley firms and the bodyshops is that the former hire lawyers and lobbyists who wear more expensive suits.

Now, why does it matter?   The answer is simple — Senate Bill 744, the immigration reform bill.  Reports like CIR’s send the message that though there is some egregious abuse by the bodyshops, the H-1B program is fundamentally sound, and it is used responsibly by the Googles and Intels (and Ciscos).  If you were a member of Congress, armed with this information and the further claim by the Googles and Intels that H-1B is crucial to the tech industry, wouldn’t you vote to expand foreign tech worker programs, as proposed in S.744?  The bill would greatly increase the yearly H-1B cap, and establish a new green card program that is in effect a backdoor H-1B increase in its own right.  Meanwhile, the minor restrictions on the bodyshops could be circumvented in various ways.

Though I have strong views on H-1B, I don’t consider myself to be a political activist on the issue.  But I do offer advice to the activists (who unfortunately don’t heed it any more than Matt Smith did :-( ), and for the reasons presented above, I tell them that they are shooting themselves in the foot by highlighting reports like this one by CIR.  S.744 would make wages and job opportunities for U.S. citizens and permanent residents in the tech field WORSE, not better.  And all because the activists, the press and so on essentially gave Congress “permission” to expand H-1B in the manner of S.744, by supporting the notion that the H-1B program is fine except for use by the bodyshops.

The industry lobbyists are well aware of this dynamic, and consciously build this image of “Intel Si!, Infosys No!”  Instead of being embarrassed by revelations such as CIR’s of illegal actions, the lobbyists exploit it, by saying that fines of bodyshops for illegalities show that “the system is working,” and that if anything, Congress should appropriate more funding for enforcement.  This deftly distracts attention from the central systemic problems of the H-1B program itself.

But what might explain this highly selective reporting by CIR? There may be various factors at work, but the fact that CIR’s board of directors includes executives from Twitter, Square, and several tech-oriented venture capital firms must be considered a possibility.  Such entities may or may not have put pressure on CIR concerning this report, but at the very least, one does not offend friends of one’s boss, right?  It’s easier to take the “safe” route, by limiting the report to the bodyshops.  In any event, my previous admiration for CIR — which by the way has been a leader in use of computers for graphic visualization in reporting — has greatly declined.

Some New Perspectives on the Age Discrimination Issue in Tech

The national engineering accreditation agency requires that curricula provide students with some exposure to ethics.  My department decided to fulfill this requirement by teaching our own, in-house ethics course, and it’s my turn to teach it.  I’m taking the theme of ethical decisions the students may need to address as future engineers, engineering managers, tech entrepreneurs and so on.

As you can see from the course reading list, I’ve chosen age discrimination as one of the topics.  This generated an especially lively class discussion, including on a couple of points that I believe are new to the tech age discrimination debate, which I will bring up here.

A few weeks ago, I reported on STEM shortage skeptic Michael Teitelbaum’s visit to Davis, including a visit to my ethics course.  Among other things, the students were startled to hear from Michael that Microsoft automatically rejects half of its job applicants by computer algorithm, unseen by human eyes.  I believe it’s a safe bet that a major portion of those rejected in this way are older, which as many readers will recall I define as being over age 35.

One of my course’s reading items, from a 2011 Computerworld series, is titled, “Recession Hit Older Tech Workers Harder, Labor Data Shows,” concisely summarizing the data compiled by the Computerworld reporters.  One quick point to make on this is that it counters a commonly heard assertion, that “Yes, there is age discrimination in tech, but hey, that’s a problem in any profession.”  No, it IS worse in tech, specifically in the computer fields, which I’ve shown before have careers are much shorter than in say, civil engineering.

But the content of  another reading item, a 2012 AP article, was especially interesting in our class discussion.  Specifically, the students were intrigued by the claims, both in research studies and in perceptions by some, that older engineers are less innovative.  This can’t be the case for all older engineers, the students argued, and thus automatic rejection of older applicants is unfair and can amount to lost opportunities for employers.

We then discussed a remarkable point that to my knowledge has never been raised in discussion of the age issue:  What if the AP article, instead of quoting and making assertions that older workers are less innovative, had discussed similar assertions for specific racial or cultural groups?  There would have been an uproar!  Or actually, the AP would simply not run such a piece in the first place.

In other words, why is age fair game but not race?  A case could be made that on average, East Asians are less innovative — there is research along these lines, and all East Asian governments have tried to remedy the problem — but no AP article would defend the blanket rejection by employers of East Asian applicants.  Not only would this be counter to American racial sensitivity (including my own), but also it would — just as my students pointed out in the case of age discrimination — result in missed opportunities for employers.  Whatever the average level of innovation among East Asians is, there are many who are quite talented in that regard.

So, why does the industry get a free pass on age by the press?  As I do in various other matters, I attribute this to the slick job the industry PR experts have done in mesmerizing the press into giving credence to the Youth Culture notion in tech.

Which brings me to the other remarkable issue that arose in that class discussion on age.  I mentioned that the standard line given by the industry for not hiring older engineers is that the latter don’t have the up-to-date skill sets that the employers need.  I cited a New York Times article, for instance, that claimed a shortage of Python programmers (even among the young).

Well, my students were outraged that employers would reject an otherwise high-quality applicant simply because he/she didn’t have experience with Python.  A typical student comment was, “Python is such a simple language, something you can pick up really quickly.  What’s the big deal?”

The reality, of course, is that employers are willing to hire YOUNG applicants who lack Python background, whereas the older ones will be ignored unless they have actual work experience (not just coursework or self study) in the language.  Python etc. are largely just pretexts for rejecting the older workers.  But the fact is that my students, all of them Computer Science majors who have learned a number of programming languages, were shocked that employers would screen so stringently on such things (or at least claim to do so).  And their shock is even more profound because most CS programs tell their students, in the words of a department that prominently echoes the industry claim of a labor shortage, “The department will prepare you well to adapt to the new technologies, tools and methodologies…”, i.e. that older engineers who stay current won’t have trouble finding work.

The sad truth is that the industry knows that “Python programmer shortage” claims sell.   Journalists tend to be easy prey in this regard, since, as one NPR reporter told me only half jokingly “We’re innumerate and proud.”  If they are told that prior background in Python is crucial, who are they to question it?  And the industry has been so effective in shopping around this celebration of “innovation” — President Obama uses the word often in his speeches — that reporters can give credence to industry claims that age discrimination is justified on innovation grounds.

The press would do well to consider a statement by one of my students:  “Do all the engineers in a company need to be innovative?  You maybe want a few who might come up with ideas, but you need a whole lot of engineers to implement those ideas.”  Well put.

Maybe the press should interview a few CS students for these articles.

Things Chinese — One Light, One Not

I’ll cover a couple of China-related items in this post, first briefly discussing Mark Zuckerberg’s humorous but admirable efforts to learn to speak Chinese, and then on a more serious aspect, give my view of the Hong Kong protest movement.

So, in case you haven’t heard, Facebook’s Mark Zuckerberg held a Q&A at China’s Tsinghua University the other day — completely in Mandarin Chinese!  No, this isn’t a joke.  Zuck has been learning to speak Chinese in the last few years, using a private tutor.  The ostensible reason is that he would like to be able to converse with his Chinese-American wife’s grandmother.   I’m sure that Zuck is sincere in that, but since Mrs. Zuck’s family speaks Cantonese, purely family issues might suggest Cantonese as the language he should learn.  And as a Cantonese speaker myself (I speak Mandarin when I need to, but that’s not often and I’m never comfortable in it), I favor that particular brand of Chinese.  But Zuck is undoubtably aware of the salutary effect his linguistic efforts will have on developing business in China, especially the all-important right for Facebook to be freely used within China, and Mandarin is the official language of China.  Mandarin is of course the obvious choice.

So, how did Zuckerberg do in the Q&A?  Well, his accent is truly awful, so much so that I stopped listening after the first 30 seconds or so; it was too painful to watch.  He seems oblivious to tones, a core aspect of any Chinese language.  It made me think, “OMG, do I sound that bad too?” :-)

But other than creative tonal structure, he wasn’t bad at all.  He was fluent — i.e. his sentences flowed well, without pauses — and I was able to understand him.  His level is well above that of, say, a university student with two years of coursework and no prior background.  If he keeps up with this, I’ve no doubt that he will become quite skilled at the language.  While I disagree with some of his political views, I say 加油, 加油 Zuck!

While Zuck was cavorting linguistically in Beijing — he constantly had a broad smile on his face while wowing the crowd — on the other end of China the pro-democracy protests were continuing in Hong Kong, much longer than many people had expected. What’s the real story there?

To begin with, I hesitated when I typed the phrase pro-democracy above, because this is something the Western press often gets wrong.  As a notable example, the comparisons we’ve been seeing on CNN etc. the last few weeks of the Hong Kong protests to the 1989 student movement in Beijing are way off base; those students in Beijing were just as anti-democratic as Deng Xiao-ping was, elitists who opposed enfranchising the populace with real voting rights.

The motivation in the 1989 protests was primarily economic:   There was ravaging inflation that threatened the civil service sector, at the time the main source of jobs for them after graduation.  They didn’t use the term democracy until they noticed that it was a magic word with the Western press.  I won’t go into the whole mythology that was built up, such as the post facto claim that the protests arose spontaneously upon the death of pro-reform party official Hu Yaobang, but let’s just say that a lot of what you read is incorrect, much of it calculated.  (I’m also not going to get into the issue violence that ensued on June 4; a pox on the houses of all sides.)  If you wish to know more, I recommend J. Unger’s academic book on the demonstrators, or even a careful reading of TIME and Newsweek of that period.

By contrast, my strong impression is that the students currently protesting in Hong Kong are sincere.  I’ll go into some of the reasons, including a quite central one that has rarely been mentioned in the U.S. press.

Before beginning, some disclosure:  I’m highly partial to Hong Kong, have been for 30 years. My wife is from the area and still has family there.  We visit often, and I’ve given talks at HK universities a number of times.  I love the mixture of East and West, and never tire of riding the Star Ferry from Kowloon to Hong Kong Island, with the thrilling view of the city skyline and the mountain backdrop.

As many of you know, the core of HK was granted to Britain “in perpetuity” in the 19th century, as the spoils of war.  Then in 1897 further lands were leased to Britain, with the leases expiring in 1997.  At that latter point, Britain handed all the lands, even the core, over to China.

The Basic Law, a mini-constitution for Hong Kong developed after the 1997 handover, promised that HK would continue to enjoy its freedoms, e.g. freedom of speech and the press, for 50 years.  But the document’s call for “universal suffrage” in elections, like lots of terms in legal documents,  is open to interpretation.  And as has been pointed out often in recent weeks, most HKers had been quite content under British rule without democracy.  (An interesting side issue recently discovered is that even in the 1950s Britain felt pressured by China not to institute democracy, under the threat of China fomenting civil disorder in HK.)  But the difference is that HKers never felt the need for it before now.

Today, a big issue is “immigration,” i.e. migration from inland China to HK.   The complaints are quite similar, unsurprisingly, to what we hear in the U.S. about immigrants:  “They’re taking our jobs!  They’re flooding the housing market!  The schools are becoming overcrowded!”  And indeed, these things aren’t disputed, while they are in the U.S.  (Also missing in HK:  the Race Card, which advocates of expanded immigration policies sometimes play in the U.S.)

Both within China proper and between China and HK, migration is restricted in various ways.  But the popular perception in HK is that the government is allowing too much migration into HK from inland China, creating great resentment.  Even tourists who visit HK from China are disliked,  accused of boorish behavior.

Thus democracy has suddenly become a big issue for what had been one of the most apolitical peoples in the world.  This is why the recent protests have enjoyed so much sympathy from the HK populace (though many are beginning to think enough is enough).  Though again part of the motivation is economic, the aim is to give the people a say in economic issues, rather than restrict power to the elites as the 1989 Beijinger students wanted.

But the “elephant in the room,” perhaps THE central issue, is that most HKers don’t identify with China as the Motherland.  They regard themselves as Chinese culturally, of course, but to many China is rather like a foreign country.  Before 1997, they were OK with rule by a foreign country that largely acted benevolently, but today are uncomfortable under rule by what they see as a less benevolent foreign power.

As is often the case, language plays a key role, as seen for example in what occurred in 1997 with HK elementary and high schools.  With the handover, many schools switched from English to Chinese — but meaning Cantonese, not Mandarin.  The latter is China’s national language,  thus arguably the natural candidate for a new China orientation in Hong Kong.  For reasons of commerce, most HK adults today can speak Mandarin, but the refusal to switch the schools to Mandarin speaks volumes.  And the action, eventually reversed, of the Chinese government a few years ago to suppress use of Cantonese in neighboring Canton (Guangdong) Province must have made many HKers even more leery of China.

Indeed, the official slogan devised by China for Hong Kong’s status after 1997, “50 years, no change,” 五十年不變, flows and rhymes much better in Cantonese than in Mandarin.  Some might argue that the concept itself behind the slogan flows better in HK than in China.

One small, personal observation I’d offer as the pride HKers take in their home involves the many ethnic Chinese foreign students we’ve had in our Computer Science graduate program.  A number of those from HK have returned home after graduation, while I’m not aware of a single example of this among students from China.

I would argue that the Chinese government would benefit from understanding this “Hong Kong pride” in the current crisis.  This leads to the broader question of how those in the Chinese government — and for that matter, many ordinary citizens in China — are viewing the situation.  One irritant to them is that there appear to be U.S. connections to the HK protestors.  By all accounts, these ties are quite weak, and no one really denies that the concerns voiced by protestors are heartfelt.  Yet such ties add one more obstacle to resolution of the crisis.  And besides, American preaching about democracy must sound hollow to people in China, given our perenially deadlocked Congress, and the legal bribery of the members of that body via campaign donations.  Yes, the press in China exaggerates this, and really doesn’t fully understand it to begin with, yet we must admit democracy in the U.S. isn’t working too well these days.

Nevertheless, the Chinese government can easily afford to make concessions regarding the situation in HK.  China has much to be proud of economically — one new subway line in Shanghai every year! — and there has been some political progress as well. Surely there are some face-saving but concrete actions China could take to show the HKers that the latter’s concerns do have some validity.

Letting the Chinese populace access Facebook wouldn’t be such a terrible thing either.

EFI and Me

Though I write extensively on the H-1B work visa and related issues, I am generally not involved politically in the issue.  If an activist asks me to attend a meeting with a politician (locally), I sometimes make myself available, but I am not pro-active.

I do, however, offer my advice to the activists if they seek it, and one point I’ve made repeatedly is that they should NOT highlight cases like the scandal that emerged today with a Bay Area tech firm, Electronics for Imaging (EFI).  My point is that the industry lobbyists themselves, especially those representing the Googles, Facebooks, Intels and so on, LOVE such cases.  Why?  Because it gives them a chance to say, “Yes, isn’t it terrible?  Congress should allocate more money to the Dept. of Labor for enforcement of the law — which the record shows that WE strictly adhere to”  –  deftly distracting attention away from the law itself, which is full of huge loopholes that the lobbyists put there so that their firms could stay legal while abusing the program.  In one case, I even correctly predicted that the industry lobbyists would react publicly in this way, using a scandal to their advantage.

So, ordinarily I would not be making a blog posting about this EFI scandal.  But I can’t resist telling a story about my interaction with them some years ago.  (Long enough ago that few, if any, of the people involved are still there, so readers should not draw conclusions about the firm currently from this anecdote.)

It all started when a student of mine, “Jack,” applied for a position with EFI as a new graduate.  Jack was absolutely brilliant, but with poor grades.  He did get an interview with the firm, as he had friends there, but was rejected.  Jack asked me to write a letter to EFI, explaining why they should hire him in spite of the poor grades.  I stated that if they were to hire him, he would turn out to be their best engineer.  Well, they did hire him, and I was told that he did indeed turn out to be one of their top people.

A year later, I had another student, “Bob,” who was a very solid engineer with good grades, but who had not yet found a software development job.  (He had been offered a QA position at a very attractive salary.)  Through Jack, Bob did get an interview, but was rejected.  A manager then called me, apologizing for not hiring Bob in spite of my recommendation, but that Bob “wasn’t a good fit” (polite way of saying he didn’t measure up).

The manager then said he would like to take me to lunch sometime, to keep up the relationship so that I’d send EFI other job candidates in the future.  I said I didn’t see the point; since it was already clear from Bob’s case that EFI’s assessment of engineering talent and mine diverged (the case with Jack doesn’t really count), why should I send them anyone else?  The manager agreed, and decided to interview Bob again.

A few days later, a higher-level manager called me, profusely apologizing, as they had again decided against making Bob an offer.  I asked the manager whether he was aware of my writings, media interviews and so on regarding H-1B.  He replied that yes, he was quite aware of that.  I then said that what happened at EFI with Bob epitomized what I write about, American employers passing up well-qualified U.S. applicants in favor of hiring foreign workers who typically are not “the best and the brightest.”  The manager’s reply?  “I think we should hire Bob.” :-)

And in fact they did hire Bob, and gave him a good, challenging project to work on, and he worked out well.

Might Obama Use Secret Pacts to “Enact” His Own Green Card Reform?

President Obama announced a couple of months ago that he would postpone taking executive action on immigration — in essence, legislation by fiat — until after the election, apparently fearing his actions would move the electorate in some way.  Concerning H-1B and related issues, there has been much speculation as to what actions Obama would take, and whether he has the authority to take them.

A possible hint as to what Obama might do regarding foreign tech workers may lie in a letter to the editor published in the October 21 edition of the Wall Street Journal by Bruce Morrison, a former congressperson who was involved in crafting the Immigration Act of 1990.  That legislation created the H-1B program (replacing the old H-1), and expanded employer-sponsored green card programs.  Morrison wrote

President Obama can move the lines for green cards much faster. How? In 1990 Congress authorized the president, if he chose, to stop counting dependents of the principal immigrant n both the family and employment-based legal immigration categories. I know because I was part of the team that wrote the statutory language when I was in Congress.

The Wall Street Journal op-ed by Michael Malone, to which Morrison was responding, itself raises some interesting questions, which I will address shortly.  But first, let’s look at Morrison’s claim.

Since I have high respect for certain people close to Morrison who read this blog, I do not relish portraying him in a negative light.  But the fact remains that Morrison is not the innocent former public servant making a helpful point, but rather a highly-paid lobbyist for an organization whose leaders have a vested interest in the green card issue.  I’m told he or his firm has made over $500,000 through lobbying on this and related issues; I’ve not done a tabulation myself, but interested readers can do so at the Lobbying Disclosure Act Database.   Morrison and the organization, IEEE-USA, have been pushing Congress to enact legislation to automatically award green cards to foreign STEM students at US universities, which I have explained is harmful to the rank-and-file members of IEEE-USA, who are not even aware of the lobbying efforts.  Morrison mentions none of this in his letter.  All’s fair in love, war and lobbying, I guess.

Given all that, I certainly look at Morrison’s WSJ letter with some cynicism.  He uses the term statutory language, but the statute appears to have no provision for excluding the dependents.  (See a blog post by John Miano at  CIS for details.)  Yet presumably the well-connected Morrison has the White House’s ear regarding his dependents claim, so what does he have in mind?  Is there some internal House document from that era that indicated an intent to give presidents some leeway on this issue?  Granted, the courts sometimes give weight to legislative intent, but when privately expressed intent is starkly counter to the actual wording of a statute, executive action based on a claimed intent would seem to be on shaky legal grounds.

But what about the larger question, the possible merit of Morrison’s proposal?  As a strong believer in process, especially regarding the Constitution, I basically dislike the proposal; the President is supposed to implement the laws, not make them.

But on the other hand, it does address an issue I have strongly emphasized in my writings on foreign tech workers:  One of the major attractions to employers in hiring the foreign workers is that that H-1Bs who are being sponsored for green cards are de facto indentured servants, IMMOBILE.   This makes a foreign applicant for a position much more attractive to an employer than a similarly-situated U.S. citizen or permanent resident.

On paper, the auto-green card proposals in Congress would appear to remedy this, by expediting the process of making the foreign workers free agents in the labor market.  However, they would be YOUNG free agents, thus exacerbating the other major type of harm that foreign worker programs bring to Americans — age discrimination.  I’ve thus strongly opposed such proposals.  Excluding dependents from the caps would not directly have that effect, but since the H-1Bs are overwhelming young, the adverse impact would be similar.

Now to the Malone op-ed:  Malone is the author of a major book on Intel’s founding, so he does know something about the industry, but his piece on H-1B and green cards is quite poorly-informed.  His main source seems to be Vivek Wadhwa, but he seems not to have made any attempt to get the other side of the story.  He cites the usual misleading points, which I won’t list or discuss here.  Instead, the point worth mentioning is that Malone accuses the industry of the same thing I write so much about — the industry’s exploiting the foreign workers for their immobility.  He claims that the industry always pushes Congress and the President for more H-1B work visas, rather than more green cards.

As I said, Malone is correct in claiming that the industry likes, indeed exploits, the long waits that many foreign workers have for green cards.  But they have at least paid lip service to supporting reform in this regard, and in fact may actually support Morrison’s proposal.  Here’s why:

  • As mentioned, the industry uses the H-1B program as a means to avoid hiring older (age 35+) U.S. workers, who are more expensive, not only in wages but also in benefits.  The H-1Bs who have been waiting for green cards for 5 years or so (for many, it’s close to 10) are starting to be problematic to employers, taking on exactly the characteristics the employers were hoping to avoid by hiring the young foreign workers.  These H-1Bs have gotten some raises — smaller ones than Americans get, according to the NRC report, but still of some size — and they now are more likely to have families, which increases the cost of medical benefits.  In short, they have largely outlived their usefulness.
  • A number of those in the waiting line are in the very last stage of the process, under which the law does give the worker mobility in the labor market.  Thus the employers’ hold on them is gone.
  • The workers experiencing long waits are concentrated in the EB-3 green card category, the one for “ordinary” people, as opposed to EB-1 and EB-2, which are designated for those of outstanding ability.  So, Morrison’s proposal would primarily affect workers whom the employers are not that keen on retaining anyway.
  • Much as the employers love the foreign workers’ immobility, some are beginning to worry that this will become a disincentive against the foreign workers coming to the U.S. in the future.  Having a mechanism with which to render workers immobile isn’t very useful if they don’t come here in the first place.
  • Supporting Morrison’s proposal serves as a shield against charges against the industry like those leveled by Malone.

There actually are actions that President Obama could, and should, take, things that are squarely in the realm of regulation rather than legislation.  For example, he could greatly tighten up the procedures for determining whether an employer seeking to sponsor a worker for a green card demonstrates that no qualified, willing American worker could be found to fill the job.  He should have the Department of Labor pounce on every job ad that specifies new or recent graduates (read young), examples of which I’ve shown for companies like Intel and Facebook.   He could direct that “hot” skill sets be taken into account in prevailing wage determination, for both H-1Bs and green card sponsorees.  He could direct government agencies to use their purchasing power to pressure firms to give real priority to hiring American workers.  And so on.

I’ve said this many times:  If government were to take actions limiting the use of H-1B and employer-based green cards to legitimate cases, the H-1B cap would never come close to being filled, and green card waits would be short for all.  Quotas simply would not be an issue.