Joe Green of Fwd.us Has a Relapse of His Foot-in-Mouth Disease

Joe Green is President of Fwd.us, a group founded by Facebook’s Mark Zuckerberg to advocate for relief to unauthorized immigrants, and expansion of the H-1B work visa and employer-sponsored green card programs.  Green was a friend of  Zuckerberg at Harvard.

Some of you may be surprised to know that I first heard of Green when he was a senior in high school.  A TV documentary ran at the time on how difficult it was for kids to get admitted to top colleges, and Green was one of those profiled.  I mention this as full disclosure, as I recall that I found the kids’ attitudes to be very cynical, more interested in prestige than in a desire to learn.  I’m saying, in other words, that this has prejudiced me against him somewhat.

Yet even without that, Green’s famous gaffe in Fwd.us advocating that the tech industry muscle its way around DC, would have been enough to set up a permanent red flag in my mind:

We control massive distribution channels, both as companies and individuals…We have individuals with a lot of money. If deployed properly this can have huge influence in the current campaign finance environment…

Green later issued an apology, but now he’s said something much worse, if more subtle.  Asked why the tech industry wants to hire more foreign workers at a time when Microsoft, Cisco, HP, Intel, IBM and so on are laying off Americans, Green explained that the foreign workers are better than the Americans.  I’ll come back to this issue of worker quality shortly, but the salient point is that Green is admitting that the industry is firing U.S. citizens and permanent residents, and replacing them by H-1Bs.

Other than the special subcategory called H-1B Dependent Employers, it is perfectly legal to replace American workers by H-1Bs (and for that matter, to hire the H-1Bs in lieu of Americans in the first place).  But this was a highly, highly impolitic statement for Green to make, as it completely undermines the industry’s claim that it hires the H-1Bs only as a last resort, when no qualified Americans can be found for the jobs.  In this case, the Americans were qualified by definition, as they had in fact been doing the jobs before the layoffs.

Indeed, if an actual tech CEO, say Zuckerberg, had made such a statement, he might encounter problems getting his/her foreign workers green cards, as the latter do require the employer to show that no qualified Americans could be found for the jobs.

Now, what about that issue of quality that Green brought up?  His statement, “The difference between someone who’s truly great and just sort of okay is really huge,” is definitely correct.  I’ve often said the same thing, and once again must interject that I strongly support facilitating the immigration of “the best and the brightest” from around the world..  But is his claim, that weaker Americans are being replaced by stronger H-1Bs, really true?  Even one of the interviewers asked Green, “Are you saying that all of the [Americans] who are laid off are not talented and all the people from these other countries are valued employees?”  Green, realizing how unreasonable his remark sounded (and was), didn’t really answer, but since he did say it, let’s take a look.

I’ve mentioned my EPI paper before, which is on this very topic, specifically the quality of the former CS and EE foreign students who are now in the U.S. tech workforce.  Note that this is the group highlighted by the industry lobbyists as being of special interest to them, and in fact Green mentioned them.  In the CS case, the former foreign students turned out to have lower per-capita patenting rates, attended less selective universities, and were less likely to work in R&D, all compared to U.S. natives.  For EE, the former foreign students were on par with the American natives on the first criterion, no data was analyzed on the second, and the EE former foreign students were weaker than the Americans on the last one.   All of this is counter to Green’s claim.

But there’s more.  I submit that the industry actually is not that obsessed with having quality engineers.  Their first priority is to have cheap, immobile workers, where I remind you that here “cheap” implies young, in addition to often implying foreign. Yes, quality matters a lot–but only after the hiring pool has been narrowed by the filters of cheapness and immobility.  (I’ve cited other factors now and then, including convenience of hiring, meaning being able to pick up the workers one wants at university campuses rather than casting a wide net.)

Here’s a personal example.  Some years ago I gave a talk in a public debate on H-1B, and after the talk a man came up to me, introducing himself as the CEO of a Silicon Valley firm.  He said, “You’re wrong about our hiring H-1Bs as cheap labor.  There really is a tech labor shortage, and my company is having real trouble finding software engineers.”  I replied, “Well, my wife is a software engineer.  I’ll have her apply for a position in your company, and we’ll see what happens.  Her surname is different from mine, so you won’t know it’s her.”  He immediately backtracked, protesting, “No, that’s not fair, she’s probably making too much money!”  Indeed. Clearly this CEO had cheap labor as his first priority; quality didn’t even enter into the conversation.

I’ve seen this happen countless times.  In a recent posting, for instance, I described my encounter with a Dropbox VP:

A few months ago I was invited to participate in an industry panel whose featured speaker was a Dropbox Vice President. Actually, an over-35 friend of mine had just applied to Dropbox the week before — and had been summarily rejected the next day, with the firm not even bothering with a phone interview. My friend has a Harvard degree, 20 years of software development experience, and most important, specific modern skills that Dropbox wants. When I mentioned this, the Dropbox VP, who is in charge of recruiting, admitted that he doesn’t have time to even glance at the tons of CVs his firm receives.

Clearly Dropbox’s summary rejection of my friend shows that quality isn’t Dropbox’s priority filter either.  Instead, he too was perceived as “making too much money.”   And remember, Dropbox was one of the major founders of Fwd.us.

And that makes for a bit of irony.  My friend was a top math student at Harvard.  So here we have Green, whose struggles with high school math made him worry that he wouldn’t get into Harvard, is now, a dozen years later, defending a company that automatically rejected the former Harvard math star for a job.

Again, the second irony is that Green’s comment about engineer quality being so important was correct.  That’s why the industry’s hiring policy, to filter on cheapness/youth first and then apply the quality criterion on those who remain is penny wise, pound foolish.

DIY Legislating

My title here of course refers to President Obama’s plan to circumvent a Congress that is deadlocked on immigration legislation, by issuing Executive Orders aimed at accomplishing part of what the Senate tried and failed to do. Regarding foreign tech worker policy, Computerworld reports that President Obama is contemplating finalizing action such as granting spouses of H-1B visa workers (who hold H-4 visas)  the right to work, and not counting spouses in green card caps.

The degree to which such measures would impact U.S. citizen and permanent resident tech workers is unclear.  Opening the labor market to the H-4s would clearly have an adverse impact on those already in the market, but the degree is uncertain.  As I’ve pointed out many times, one of the major attractions of the H-1B program to employers is that the H-1Bs are essentially immobile if they are also being sponsored for a green card, and sometimes of limited mobility even if not currently being sponsored (e.g. the employer promises sponsorship in the future).  The H-4s would have no such restriction, which ironically may reduce their chances to find a job.  And since many have been out of the labor market for quite a while, they may quickly learn what many Americans have found–if you’ve been out of a job for six months or more, many employers won’t touch you.

Though unfortunately neglected by many of the H-1B critics, including researchers, green card issues are just as important as H-1B.  The Senate would give fast-track green cards to foreign STEM students in U.S. graduate schools, a measure I’ve strongly opposed, as the new grads are almost all young, thus exacerbating the already-disgraceful age discrimination problem that is rampant in the tech industry.  But the effect of speeding things up for those already in line waiting for green cards is less clear.

Of course, the aspect that should trouble Americans of all political persuasions is whether Obama–a former constitutional law professor–has the right to do all this.  It would seem obvious that he has no such right.  The courts tend to stress legislative intent, in this case presumably meaning that if Congress had meant the H-4s to have work rights, Congress would have said so.  Yet, when President George W. Bush changed the work rights period for newly-graduated STEM foreign students from 12 months to 29, a Programmers Guild lawsuit opposing the action was dismissed.  The cause for dismissal was a lack of standing, but don’t we all have standing, in the sense that OUR Constitution is being flouted?  Congress did say 12, after all; Bush (later reaffirmed by Obama) can’t say that Congress meant 29.

As noted in the above Computerworld article, former congressperson Bruce Morrison, who chaired the committee that wrote the H-1B statute in the Immigration Act of 1990, claims that that status makes him an authority on whether Obama can unilaterally change the Act.  Yet Morrison is now a lobbyist, with a vested interest (via his client) in such changes–how can he have any credibility?  And it is irritating that Morrison continues to say his client, IEEE-USA, represents U.S. engineers on foreign-worker issues, when in fact it has never polled its members on the topic.  (The organization, formerly in the vanguard of objection to foreign-worker programs, changed radically after coming under industry pressure around the year 2000.)

The recent Computerworld article cited above also reports that Obama is being asked to institute a priority system for years in which H-1B is oversubscribed, with the Indian “bodyshops” being given lower priority.  As I’ve frequently argued, this is a scapegoating effort to distract attention from the fact that the entire industry abuses the foreign worker programs, not just Tata et al.  But a prioritization does seem to be within the Executive Branch’s powers, and if so, a much better approach would be to prioritize by salary offered, as has been proposed by some.  This would likely reduce the amount of abuse, though certainly not eliminate it.

And where does this all stop?  If presidents can get into the legislation business, will their “laws” be, say, exempt from the Bill of Rights?  The latter uses phrasing such as “Congress shall make no law…,” but what happens when the president makes “laws”?  Surprisingly, this issue seems not to have been settled, making the recent actions by Bush and Obama all the more troubling.

Where Are They Now?

You know the genre.  Occasionally a newspaper or magazine will run an article titled, “Where Are They Now?”, and dig up the whereabouts and current activities of previously famous but now obscure movie stars, athletes or politicians.  Well, not the politicians, as we already know what they’re doing now–they’re lobbyists. :-)

Speaking of lobbyists, it occurred to me the other day that asking “Where are they now?” would be an instructive exercise in viewing the “poster children” the tech industry lobbyists and their allies have used as examples in the press over the years.  The message has always been, “Mr. X is brilliant, so the U.S. is lucky that he is working for an American firm on an H-1B visa” or “Ms. Y is brilliant, and American firm Z would love to hire her, but the visa cap is filled, so we’re going to lose Y to one of our competitor nations.”

A couple of my recent posts here have concerned the slickness of the industry’s PR people–the industry may not hire “the best and the brightest” engineers, but they definitely hire the slickest PR people–and my topic this evening will continue that theme  Specifically, we’ll look at those former poster children.  Did Mr. X indeed turn out to be brilliant?  Did we lose Ms. Y, either to her home country or to a third nation that has a broader immigration policy than ours?  I’ve done a search in my archives, and have come up with a few former poster children.  Where are they now?

I’ll take them in alphabetical order.  I wish to state first, though, that presumably all or most of them have green cards by now, with some having naturalized.  They are either now Americans or on their way to becoming so, and I welcome them.  My complaint is with the employers and the lobbyists, not these former foreign workers.  So, here there are:

Saurabh Awasthi:

This is a case of special interest to me, as a reporter who had written about Awasthi back in 2008 called me a couple of months ago.  The reporter, Mark Roth, was worried about cases like “Ms. Y” above, saying that he believed the U.S. is currently in the process of losing lots of foreign talents due to lack of visas.  Mark told me that he had written about such “loss” in 2008, using Awasthi as an example of a foreign student graduating from a U.S. school but who had been forced to return to his home country because of a shortage of work visas.

After the call, I looked up Awasthi, and found his LinkedIn entry.  Turns out that he had not been forced to return to India after all!  He landed a job with a U.S. firm in the financial field, which had been his goal.  We don’t know whether Awasthi is brilliant, like Mr. X and Ms. Y, but as a CMU grad let’s stipulate that he must be bright.  However, the 2008 fright that “Awasthi is being forced to return home” turned out to be unfounded.

Amrita Mahale:

She was mentioned in a Wall Street Journal article about H-1B.  I’ve long supported facilitating the immigration of “the best and the brightest” to the U.S., and I believe that Mahale may well qualify.  For example, according to her LinkedIn profile, she had been a gold medalist at one of the campuses of the Indian Institute of Technology, India’s top engineering university.  Alas, she didn’t stay in engineering, choosing instead a business career, and after a couple of years at Google she returned to India.   However, this was not due to lack of a work visa, as the WSJ article said she did hold an H-1B visa.  So she was not like Ms. Y, and though Mahale may be very bright, her career has been in business management, hardly consistent with the “STEM innovator” image promoted by the lobbyists.

Cristina Martinez-Mortolo:

She was the star witness in a Bloomberg Businessweek piece titled “America Losing Technology Workers Denied in Visa Lottery.”  Martinez-Mortolo warned that without the visa, she would have to leave both her job and her husband, and return to Panama.  That was in March 2013.  It’s not clear what her husband’s status is, etc., but her LinkedIn page says she is still here, still working for SendHub.  At any rate, though she is presumably doing a fine job in Customer Support for that firm, that is hardly an earthshaking job that a U.S. citizen or permanent resident could not do.  As I pointed out at the time, a message she sent out to customers certainly didn’t sound like her job was so special:

Cristina – SendHub Support

Jan 21, 2013 06:42AM PST SendHub Agent

 

Hi!

Thank you for reaching out with questions – we’ll be happy to
help.

The Free plan includes 500 messages perm month. Messages you send
and receive will be discounted from your 500 available messages.

We hope this helps. Please let us know if you have more questions,
and thanks for checking out SendHub!

This mundane job may have its challenges, as most jobs do, but it certainly doesn’t live up to the breathless title of the Businessweek article.  Lots of Americans could tell customers about the Free plan too.

Sanjay Mavinkurve:

He was the hero in a New York Times article titled “Tech Recruiting Clashes With Immigration Rules.”  Mavinkurve, it seems, had an H-1B visa at the time (2009) while working for Google, but his wife didn’t, so he moved to Google’s Toronto office.  The article claimed that Mavinkurve had solved a knotty problem that had stumped Google’s engineers.  John Miano disputed this, pointing out that Mavinkurve’s solution actually used a well-known old algorithm.  But the guy is a Harvard grad, so let’s count that as best/brightest (though I know a number of Americans with similar high-powered STEM degrees that can’t get STEM work).  So, did we lose him to Canada or some other foreign country?  No, apparently not.

His LinkedIn profile says he’s cofounder of a startup in Seattle, since 2011.  Maybe his wife is in Vancouver and he commutes to Seattle, assuming his H-1B is still good.  But the bottom line is that he is cofounding an American company, not one in India as the NYT had feared.

Sandeep Nijsure:

Nijsure is Vivek Wadhwa’s lead example in a column not-so-subtly titled, “They’re Taking Their Brains and Going Home.”  Yet, by Vivek’s own account, Nijsure is the epitome of my characterization of most H-1Bs as “ordinary people, doing ordinary work”:  Degree from University of North Texas, working in Quality Assurance, i.e. software testing.  No doubt he is a solid engineer, but seemingly not out of the ordinary.  He is currently back in India, working for Symantec offshore.  Vivek writes that Nijsure had a visa and was being sponsored for a green card, but “he worried about his aging parents. He missed watching cricket, celebrating Hindu festivals and following the twists of Indian politics. His wife was homesick, too, and her visa didn’t allow her to work.”  So, the availability of a visa was at most one part of the reason he went back, and as mentioned, he was NOT indispensable in the U.S.  There are lots of qualified Americans who could do that work.

Girija Subramaniam:

She was another example in that same 2009 column by Vivek.  She was being sponsored for a green card by TI, but got fed up with the long wait, and Vivek reports, “Frustrated, she has applied for fast-track Canadian permanent residency and expects to move north of the border by the end of the year.” But no!  She’s actually in DC.  She’s been working continuously in the DC area since 2008.  She too is a test engineer, a very ordinary job that could be done by many Americans.

These are all the poster cases I could find in my archives, but the theme comes through loud and clear even in these few examples:   The lobbyists’ claims that we are losing outstanding technological talents to our competitor nations due to low visa caps is just false.  There must be some examples somewhere, but the examples given by the advocates themselves just don’t support their claims.

Note:  H-1B is only one possible path for hiring a foreign worker.  The foreign STEM students can work for 29 months after their degree; a company with foreign branches can send the worker abroad for a year, then bring him/her to the U.S. on an L-1 visa after a year; for really outstanding people there is the O-1 visa; etc.  The H-1B may be more convenient, but the notion that either it’s H-1B or not hiring the person at all is generally not true.

As Senator Grassley put it so well about the industry’s claims, “No one should be fooled.”

When Did Foreign Students Become ‘International’?

I take my posting title here from the book titles How the Irish Became White and How the Jews Became White, chronicling the gradual societal acceptance of ethnic minorities in the U.S.  I’d also cite the excellent memoir by my University of California, Davis colleague, King Hall Law School Dean Kevin Johnson, How Did You Get to Be Mexican?, telling us of his transformation from Anglo wannabe to a super Latino and a strident booster of expansive immigration policies.  (Kevin’s mother was Mexican.)  These books are not completely analogous to my post this evening, but they have the common theme of change in societal perceptions of certain groups, and as well as self-perceptions.  So far, so good, but it gets scary when positive perceptions are subtly created, by special interests who often have hidden agendas.

This is what Noam Chomsky famously called manufactured consent, in which powerful special interests would use subliminal PR techniques to build popular support for policies that would benefit those interests. This may be motivated by money or power, or in the case of some individuals, simply a craving for the limelight, but typically the motivation is not apparent to the populace who are being manipulated.

As far as I know, the American people have had a positive perception of foreign students over the years, not just passively but even engaging in activities such as serving as host families and so on. But somewhere along the line the lobbying groups’ PR experts decided that the word foreign was a negative, connoting, say, “alien” and worse, “not one of us.”  Thus the term foreign students was dropped, for example, in the media, in university administrator statements,and in the pitches made by political lobbyists and their allies.  The foreign students became international students.

This subtle linguistic movement has been in progress for some time now.  I remember being interviewed on CNN in the late 1990s, and the producer saying to me, “Oh, oh, you used the word ‘foreign.’  This is against CNN policy.  But it’s our fault; we should have warned you.”  If you want a bit of amusement, from now on, watch the statements by the lobbyists and their allies regarding the H-1B work visa; you’ll see that they almost always use the term foreign-born in lieu of foreign, and go to great lengths to avoid the forbidden word.

Look for instance at the paper by two academics, sponsored by an industry lobbying group, titled Talent, Immigration and U.S. Competitiveness.   The term foreign-born is used 27 times, often in such close proximity that it reads quite awkwardly.  All this effort, just to avoid using the word foreign at all costs!  And it’s also inaccurate; lots of my American students are foreign-born but became U.S. citizens or permanent residents long before entering college.  To lump these students in with the foreign students is very misleading (as is much else in that lobbyist-funded study cited above).

Even the National Association of Foreign Student Advisers, one of the most active lobbying groups on Capitol Hill, decided it was better to avoid the F-word, and formally changed its name to their acronym, NAFSA.

Mind you, I’ve always strongly supported our nation’s foreign student program, and I still do.  But as I said in my last post, I don’t like being lied to.  We’re told, for instance, that the foreign tech students are typically brilliant, innovative and a boon to the U.S. economy if they stay.  But on the contrary, they are somewhat below the Americans in quality.  My study found that the foreign students in computer science who later joined the U.S. workforce file fewer patents per capita than do Americans of the same background; this jibed with a more general study by Professor Jennifer Hunt of Rutgers (see qualifier in my study).  I also found that the former foreign students were less likely than comparable Americans to be employed in R&D positions, and that they tended to get their degrees at somewhat less-selective institutions, similar to the findings of an NBER study.  Some foreign students are indeed of outstanding talent, having deep insights or great, creative ideas, people who greatly benefit the U.S. if they stay; but they are the small minority.

Even the usual claim that the foreign student program exposes Americans to people of other cultures is, sadly, way overblown.  Once the students of a given nationality reach critical mass on a campus, the amount of mixing with other groups tends to decline drastically.

So, why all this push to place foreign students in a positive light?  Just what are the vested interests here?  I explained in a previous post that employers love to hire foreign students because of their immobility.  Indeed, even some faculty like the “loyal” nature of the foreign students; Stephen Seideman, dean of the school’s college of computing science at the New Jersey Institute of Technology, gushed in a 2005 interview that foreign students “will do everything they can to stay here.”

And many small private colleges with funding problems view foreign students as cash cows, people who will pay full freight.  These days public institutions view things the same way, especially since they charge foreign students higher tuition.  The obsession to get their hands on this money reached such a fever pitch at some California State University campuses that one of them, CSU East Bay, even closed Master’s degree admission at one point to domestic students, allowing only foreign students to enroll.  Indeed, even before CSUEB’s dramatic move, 90% of the graduate students in computer science were foreign.  Professor Maria Nieto of CSUEB also stated that the quality of the foreign students was low.

I’ve written many times about the internal National Science Foundation report that advocated expanding the foreign student program in order to hold down PhD salaries in STEM.  (The NSF is one of the two main federal science agencies.)

I’m bringing all this up now partly in response to a recent article by the flamboyant Vivek Wadhwa, a former tech CEO turned tech pundit.  Vivek and I have enjoyed friendly banter over the years, both in public and in private e-mail (in one case, a bit more than banter), and agree on a lot more than we disagree on, such as agreeing on the widespread (but legal) abuse of the H-1B program for cheap labor.

Nevertheless, Vivek has become an outspoken advocate of an expansive tech immigration policy, the main theme of this new piece.  After listing various recent technological advances, he states (without support for the claim) that “Foreign-born engineers, scientists and entrepreneurs are helping lead the charge in all of these areas.”  (Did you catch that magic phrase?)

Vivek, echoing the talking points of the lobbyists, claims that a shortage of visas (both H-1B and green cards) is causing “immigration limbo” for many recent foreign graduates of U.S. schools, and is causing many to return home–presumably a great loss to the U.S. economy, especially since these returnees will contribute to the economies back home.  As he puts it, “The loser is the United States, because it is limiting its economic growth and creating its own competition.”  He supports legislative proposals aimed at keeping them in the U.S.

Though this may sound plausible on the surface, it flies in the face of the facts.  The data show that recent stay rates are still quite high, and that jibes with my personal experience.  I teach graduate students in computer science, electrical engineering and statistics, and I’ve never known a single case in which the foreign student wanted to immigrate to the U.S. but could not do so.  And the much-ballyhooed long waits for green cards are for the EB-3 category, which is for the “ordinary” workers, in contrast to EB-1 and EB-2, the green card categories for the extraordinary talents, presumably the ones we want to keep.

And more important, keeping them in the U.S. doesn’t keep them from aiding the economies of their home countries.  Even the strongly pro-H-1B Berkeley professor AnnaLee Saxenian found that more than 80% of the Indian and Chinese engineers in Silicon Valley share technological information with firms in their home countries, with over half investing in tech back home.  (Please note:  This is NOT meant to imply industrial espionage.)  So, to use Vivek’s phrasing, we are “creating our own competition” anyway.

There are lots of good reasons to have a thriving foreign student program.  We “educate the world,” especially the Third World countries that need technical help; we expose foreigners to American culture–sometimes shocking them, but typically earning their respect–and there is at least some cultural transfer in the other direction.  And yes, in some cases it does bring “the best and the brightest” to the U.S.  But we should support the student visa program for those laudable reasons, not to satisfy hidden agendas.  We should not support the legislative goals of the special interests that are harmful to the national well-being. And please, no more CSU East Bay fiascos, OK?

A Fly-on-the-Wall Look at the Putative Tech Labor Shortage

Some years ago I knew a researcher whose nonprofit organization employer had gotten a grant to study how HR works in Silicon Valley.  It was arranged that the researcher would act as a “fly on the wall” in the HR office at a major firm, Cisco if I recall correctly.  Unfortunately, her employer folded, and the study never took place.

For you researchers and policy makers out there, let me tell you–you would have been profoundly shocked at the results had the project gone through.  It would be clear in a very concrete way why the tech industry’s claims to be unable to find qualified workers is a joke.  Well, I’ll present to you here a weak but I believe powerful substitute for that ill-fated Cisco study。

Over the weekend the Baltimore Sun ran a piece on the claimed tech labor shortage, and the claimed need to remedy it by expanding the H-1B work visa program.  It ran true to the usual formula:  Give examples of local employers who turn to the H-1B program out of desperation when they can’t find qualified U.S. citizens or permanent residents; quote “experts” stating that the current H-1B cap is woefully inadequate; and present a couple of token quotes from some naysayers.  Not much new so far, but let’s take a closer look at the article’s poster firm, Merkle, Inc., which “builds more than 1,000 complex computer models each year for marketing clients who want to know more about their customers’ behaviors and preferences.”

Merkle is an excellent example for a change of pace from my usual analyses, in that it’s not a software company.  Instead, it specializes in data science and analytics, fancy new terms referring really to old statistical methodology applied to huge data sets (“Big Data”).  This is a currently hot area, and for instance I would estimate that over half the startup tech firms in San Francisco’s trendy South of Market (SOMA) area are in this business.

Those who are well familiar with my research know what telltale signs to look for first in a company–a hiring focus on the young.  The First Central Employer Motivation for hiring H-1B visa workers is to cut costs by employing young H-1Bs in lieu of older (35+) Americans, as the latter cost more in both wages and benefits. (Hiring young H-1Bs is cheaper than hiring young Americans too, but the age aspect is where the big savings are to be made.)

Sure enough, Merkle’s Careers Web page has openings for Junior Analyst, Junior Data Scientist and so on, and one of the positions as a “Senior” Analyst requires only two years of experience!   And the firm can’t even give the usual software firm’s excuse that it hires young “because the technology is changing so fast” (a red herring anyway)–because it isn’t.  Most of the methodology is well over 20 years old. There are a couple of new tools for implementing them, and one or two new-ish methods, but the pace of change is certainly much slower than in the software world.

Now go a level deeper, by reading Merkle employee comments on Glassdoor.   No, not a scientific sample, but telling nonetheless, especially since most of the commenters say they would recommend the company to a friend; these are not malcontents.  Yet there is a consistent theme in the comments that the firm has an alarmingly high turnover, e.g.:

“…they struggle to retain talent”; “The turn-over rate is way too high, and most people live[sic] for more money”, “The turnover rate is quite high”, “Pathetic pay”, “the great talent mentioned above gets tired and leaves
-I’d estimate at least 80% of the employees have been there less than 2 years. Think about that turnover for a minute with almost 2000 employees”; “no promotion, no real bump in salary”; “Poor attrition rate, due to burn-out or dissatisfaction, both really common with most exits”; “Incessant burn out pace- good people leave for lack of any sense of accomplishment or gratitude”; “Lots of turnover – job burnout – aggressive delivery timelines – long hours. Projects often were disrupted because someone left the company”; “Burn n churn”

That ties right in with the Second Central Employer Motivation for hiring H-1Bs:  A desire for immobile labor.  Unfortunately, this aspect is almost never mentioned in debates about the foreign tech worker programs, and indeed is not widely known even by researchers.  But to many employers, especially the newer ones, it is of the utmost importance.  Clearly, Merkle, with its horrendous turnover problem, would find the “solution” of hiring immobile foreign workers irresistible.

Immigration lawyers openly pitch this to employers.  By sponsoring a foreign worker for a green card, the employer in essence renders the worker immobile, trapped there for years.  I cited several public statements by lawyers in my University of Michigan Journal of Law Reform article, and more recently have been quoting David Swain’s document.  (Swain, it should be noted, writes that he was the architect of the immigration policy for Texas Instruments, one of the most active firms promoting expansion of the H-1B visa.)

But even better is Swain’s newest, pitching specifically to employers who wish to recruit foreign students (F-1 visa category). Imagine how appealing a retention-challenged company like Merkle would find the following statements, taken from that new document:

“Most college graduates leave in less than two years. F-1 students who
want permanent residence must stay seven to twelve years…In most cases
the employee is required to wait under an extensive quota system which
can be anywhere from five to ten years, depending on the position and
the employee’s place of birth. It is this step in the process which
allows the employer to maximize the retention advantages of hiring
international students…[Concerning the cost of green card
sponsorship:] Since the legal system requires the international employee
to keep the same employment for seven to twelve years, the ‘cost’ [the
lawyer says $8,000] of that employee should be viewed in the greater
context of the value that employee brings to the company…minor
compared to the overall compensation.”

(Swain adds that, of course, the employer has no obligation to keep the worker for  “seven to twelve years.” )

Again, this issue is not widely known, but it is one of the two central employer motivators for hiring H-1Bs.  It is de facto indentured servitude, highly abusive, all perfectly legal, and has a clear adverse impact on Americans:  If an American and a foreign student of equal quality apply for a job, the above considerations would give the foreign student a major advantage over the American.

Now what about the type of H-1B abuse discussed more often, the payment of lower wages to an H-1B than to an equally-qualified American?  To those who don’t know the nature of the jobs, the PERM data for Merkle would appear to indicate that in some cases the firm is paying its foreign workers quite generously, well above the legally-required prevailing wage.  For instance, here is one of Merkle’s PERM records from 2011:

A-11187-90670,09/27/11 15:25:25,Certified,PERM,MERKLE INC.,7001 COLUMBIA GATEWAY DRIVE,,COLUMBIA,MD,21046,5416,Management, Scientific, and Technical Consulting Services,Other Economic Sector,15-2041.00,Statisticians,Statisticians,Level I,OES,56243,yr,85000,,yr,Columbia,MD,CHINA,H-1B

The prevailing wage is $56,243 while the offered wage is $85,000.  (Actually, the offered wage may be less than this, due to a loophole I won’t go into here.)

I’ve explained before why the legal prevailing wage is typically substantially below the market value the foreign worker would have if he/she were a free agent.  But in the case of data analytics jobs like those at Merkle, the inadequacy of prevailing wage is especially acute.  Here’s why:

The government job category often used in Merkle’s PERM records is 15-2041.00, Statisticians. As mentioned above, this category is technically right, as the workers are using statistical methodology.  But those in data analytics are perceived as knowing far more, such as use of the cloud programming language Hadoop.  (And Merkle’s job ads do ask for experience in Hadoop and similar tools.)  So, the going rate for data science is $90,000 on the low end, and goes much higher than that.  See for instance the O’Reilly survey.

In other words, the 15-2041.00, Statisticians wage category is not the right one for Merkle’s foreign workers at all.  The prevailing wage figures Merkle is using are for, say, a Bachelor’s graduate with a Statistics degree who is doing small-data statistical work at, say, a small bio lab. So no, the evidence does not show that Merkle is paying its foreign workers well, and indeed it would appear the opposite is the case, as many of the Merkle PERM records show it is paying only the prevailing wage.

Finally, what about the other industry claim, to hire H-1Bs because they are “the best and the brightest”?  Sounds like Merkle would be hiring foreign students from the likes of MIT, Stanford and UC Berkeley, right?  Well, a search for Merkle in LinkedIn doesn’t confirm that at all.  Of the ones from China that I found, they had attended universities at home such as Tsinghua, Zhejiang, Huadong, Hong Kong Baptist College and the Shanghai University of International Business and Economics.  Of these, Tsinghua is first-rate, Huadong and Zhejiang are middling, and the rest are considered weak.  The Chinese students had then attended American schools such as Penn, San Francisco State, BYU, Sonoma State, Bentley University, University of Chicago, George Mason, Johns Hopkins, University of Louisville, University of Delaware and so on.  So, there is a wide range of selectivity, and with my usual disclaimer that quality of institution does not necessary mean quality of its graduates, we see there is no general pattern here of Merkle hiring “geniuses” from China.  The results are similar for India.

Wrapping up:  The above information suggests that Merkle, notorious for retention problems, must hire like crazy to fill the jobs vacated by the high turnover, rather than indicating a “labor shortage,” as Merkle claims.  Moreover it is likely, I believe from my experience, that Merkle views the indentured nature of foreign workers to be the solution to its retention problems, as opposed to hiring Americans who can and will leave after experiencing the company’s onerous working conditions.

The statistical evidence, notably flat wage trends, shows the claim of a tech labor shortage to be false.  But I believe a look at the qualitative side, as we’ve had here for Merkle, yields further understanding of the invalidity of the shortage claims.

Diverse Cooks Make a Nice Broth

Among us researchers who question the tech industry’s claim of a labor shortage and the related claim of a “need” to expand the H-1B work visa and employer-sponsored green card programs, there is a ton of mutual respect but still considerable divergence of opinion.  For instance, I differ from some of  the rest in that I consider the focus on the outsourcing firms to be unwarranted and counterproductive.  

“Too many cooks spoil the broth,” the saying goes, but USA Today is now running an op-ed by a very diverse group of five of us, and I must say that I like the result.  We are a diverse group not only in terms of the outsourcing issue, but also in terms of geography, gender, ethnicity, public-vs.-private institution, and political party.  (I’m a Democrat, and I know of at least one Republican in the group.)  And I think it captures well our view of what we consider a self-serving sham push by the industry for legislation that would be harmful to the U.S. economy and well-being.

There have been some interesting developments lately on these issues, and I have two more blog posts planned for the next few days.  The first, to be titled, “A Fly-on-the-Wall Look at the Claimed Tech Labor ‘Shortage’,” will run this evening if I have time.

Globalism, Sincerity and a Desire for a Decent (Not Lavish) Life

The trigger for my topic here is one of Alan Tonelson’s posts today, titled “Why U.S. Globalization Policies Need More ‘Narrow’ Nationalism.”   Actually, it prompts me to make a number of points I’ve wanted to bring up for quite a while.

In the above post, Alan takes umbrage at a recent column by prominent economist Tyler Cowan on the effects of globalization.  Cowan points to research showing that globalization (a category in which Cowan includes immigration, citing George Borjas’ work) has slammed the middle and lower classes in wealthy nations like the U.S. Cowan notes wryly that these findings are “contrary to what many economists had promised.”

Many who read Cowan’s article must have laughed at the economists’ lack of common sense.  And THAT is my real problem with them, even with Cowan, of whom I am a longtime fan.  Most of them have never experienced serious economic hardship, say a period of extended unemployment or a home foreclosure.  Hence, they just don’t get it.

And that’s why Cowan’s second point is rather hollow:  The good news, he points out, is that globalization has generally (though not in all cases) improved standards of living for the world’s poor.  Alan retorts, in essence, “Fine, but don’t ignore people in the U.S.”  Again, to someone who has always had a comfortable life financially like Cowan, Alan’s words sound selfish.  But I believe most other people know exactly what Alan means.

I do agree that the improvement of living standards in the Third World is good news, as Cowan says.  I’ve been passionate about this issue ever since college, and in fact this was one of the main motivations I had for specializing in statistics.  (I’m a former stat professor, and am still quite active in the field even though I’ve taught computer science most of my career.)

And though I’ve written extensively on the problems of the H-1B work visa, I’m far from doctrinnaire about trade issues.  I’ve mentioned here before, for instance, that I’ve always driven Japanese cars, as I believe they are better made (especially important for someone who lives 60 miles from work, as I do).  I feel the same way about services as about goods, and have actively supported bringing in “the best and the brightest” from around the world.

But the key point that Cowan does NOT address is, to what degree is it possible to have a it both ways–continued progress in living standards in the Third World while still maintaining reasonable levels here?  Clearly, if Cowan doesn’t have an answer to that question, then neither do I.  (Though I don’t lack for ideas on ameliorating the negative effects on Americans.) But what we at least CAN ask for is an honest dialog–and we’re not getting one.  The globalists’ rallying cry, “American consumers benefit in lower prices,” is rarely critically examined, even though the information is out there–the research and even “thought experiments” show that the price “savings” accruing from trade are typically quite small. Indeed, occasionally even those with self-interest, such as the National Association of Manufactures, publicly admit it.

Given my work on the H-1B issue, I see this problem up close.  The industry lobbyists excel at manipulating a generally gullible and even innumerate press.  One of my favorite retorts in that game is one I use when the lobbyists say, “The tech industry is forced to hire mainly new or recent graduates, including foreign students at U.S. campuses, because only the young new grads know the latest technologies.  The older engineers don’t have these new skills.”  I reply, “Well, who taught those young people the new skills?  It’s old guys like me!”  Actually, a bright child could see that gaping hole in the lobbyists’ argument–so why can’t the journalists see it?

Sadly, academia, supposedly a bastion of truth and impartial inquiry, is the source of a lot of the industry PR–paid for by them, in the form of research funding.  Call me old-fashioned, but I simply cannot understand why presumably self-respecting economics professors (I don’t mean Cowan) would take industry funding for research that–surprise!–turns out to support the funders’ views.

So we have government and policy making by lobbyists and others with vested interests.  Yes, part of this is due to the generous campaign donations the tech industry makes to Congress, the president and the political parties.  But I’ve had enough interaction with people on the Hill to know that most of them really believe this stuff.  To them, America’s economic strength depends on importing engineers, and evidence to the contrary is simply cognitive dissonance, automatically dismissed.

So is all the evidence showing chicanery by Microsoft in particular on the H-1B issue, including a recent New York Times op-ed by Bill Gates (plus Warren Buffett and Sheldon Adelson, but I’ll focus on the tech guy here, Gates and the firm he founded). The article told how the H-1B workers are “badly needed” by the tech industry.  Yet days later, Microsoft announced a huge layoff, and then announced that it was going to reduce the work it assigns to its independent contractors.  Microsoft actually has a long history of saying one thing but doing another in connection to the H-1B and alleged tech labor shortage issues.

Folks, Cowan has a point about the up side of trade for the Third World, but I don’t like being lied to by those PR hacks.  Do you?