California Legislature Discovers H-1B

There is no state that is politically more pro-immigration than my state of California, especially as we grow more and more Latino demographically. And yet our Assembly has now passed a resolution calling for an investigation of the H-1B work visa. Indeed, even the list of sponsors of the bill is striking in terms of surnames:  Two of the authors are named Garcia and Hernandez, and the coauthors include many legislators from immigrant-dominated Latino, Asian and other communities, such as Chiu, Garcia, Gonzalez, Alejo, Bonilla, Bonta, Calderon, Campos, Chau, Chu, Gomez, Lopez, Medina, Nazarian, Rodriguez, Salas, Santiago and Ting.

Another interesting irony (though irony seems to be the norm in today’s world of politics): The companion bill, also authored by Hernandez, expresses concern that such a sensitive sector as an electric utility could rely so heavily on foreign workers for IT and engineering operations, potentially creating avenues for terrorists. Sounds like a classical conservative concern, yet these are liberal Democrats. To me, this sounds like a well-founded worry, one that people of whatever party should have. (I’m a Democrat, as some of you know.)

How on Earth could this happen? Well, these same staunchly pro-immigration legislators are also very pro-union, and the workers at SCE who were replaced by H-1Bs are unionized! Someone at SCE just didn’t think this through.

Resolutions are fine, especially as barometers of current politics, but they have no teeth. The companion bill aims to have bite; it would require that utilities use only “direct” employees, as opposed to the situation with SCE, Disney and so on, in which the employers fired their American workers and replaced them by “rented” workers supplied by IT services firms (colloquially, “bodyshops”) such as Infosys. And it is here that the bill fails, quite badly.

The bill, for example, would do nothing to prevent SCE from hiring its own H-1Bs. And as I’ve often warned before, most of the bills introduced in Congress in recent years on foreign tech workers have included provisions to grant fast track green cards to foreign students studying at U.S. universities. Companies like SCE would have no problem hiring them, and again these would be cheap hires, due to the youth of new/recent graduates, which is mainly the same reason firms like Infosys can provide their foreign workers so cheaply.

Moreover, if the legislature is that concerned about the “furriners” getting access to the power grid, they might consider the fact that most of the Chinese industrial espionage cases, including those in the defense industry, have involved former foreign students who studied at U.S. universities, such as this one involving former students at USC, a few miles away from SCE headquarters, or for that matter, even closer to the LA Dept. of Water and Power; with green cards, they’d be eligible to work at these utilities.

In other words, the Assembly’s bill’s emphasis on the word direct really misses the boat; it misses the entire harbor! But I can’t blame them, because for years the tech industry lobbyists, with the unwitting complicity of many prominent critics of H-1B, have sent the message that the main problems of H-1B have come from indirect hiring through the bodyshops. No wonder the bill’s author (and possibly even the union) got confused.

Not that Hernandez’s bill has a chance anyway. As pointed out in Pat Thibodeau’s article, New Jersey Governor Chris Christie vetoed a 2012 bill that would have banned the offshoring of IT call centers. There were a number of failed bills like this in the early 2000s, including a 2004 bill by Carol Liu, passed by the legislature but vetoed by Gov. Arnold Schwarzenegger on the grounds that it would be a “restriction of foreign trade.” Count on Democratic Governor Jerry Brown to veto Hernandez’s bill too, if it’s not quashed earlier in the legislative process.

PNAE Is Poltically Tone Deaf Too

I’ve enjoyed poking fun at the H-1B expansion lobbying group several times in this blog, for its series of highly embarrassing foot-in-mouth public statements that hurt their cause. In one case, it apparently resulted in the firing of president Joe Green.

I would have assumed more political sophistication for the Partnership for a New American Economy, an advocacy group founded by a politician, former NYC major Michael Bloomberg. But now PNAE chair John Feinblatt is actually defending Disney, in spite of the firm’s recent replacing of Americans by H-1Bs.

Aside from the questionable accounting of Feinblatt’s claim that Disney “added 70 tech jobs” during the “restructuring” action, the fact remains that Disney did fire Americans and replace them by H-1Bs, giving the program the black eye in the public perception that it deserves. One would think that PNAE would have the sense to simply not comment on the Disney case, rather than say something to make it worse.

John Miano Suggests That Journalists Open Their Eyes

I urge all readers to take a careful look — or five or ten careful looks — at John Miano’s latest blog entry, which calls upon people of the press to stop being so naive about congressional intent regarding the H-1B work visa. (He could easily have written a similar post about the related topic of employer-sponsored green cards.)

John, in case you are not aware of his work, is in a unique position to ferret out the truth about H-1B and Congress, as he is a former programmer turned lawyer. He has a book on H-1B coming out with Michele Malkin. He is the attorney involved in suing the government for its end run around Congress in extending OPT, a program that allows foreign students to work in the U.S. for a period after graduation, which is in various senses even worse than H-1B.

I often hear from programmers and engineers who are sure that employers are violating the law by hiring H-1Bs instead of Americans. I find that these people are so trusting of Congress that they take it for granted that Congress wouldn’t allow such a thing. Well, Congress has indeed allowed it, consciously so, as John’s blog post shows so well. In fact, Congress has deliberately stacked the deck in favor of employers.

Note that John details how destructive the current four-tiered system for H-1B wage floors is. This is a topic I mention frequently, as a core mechanism enabling firms to employ H-1Bs instead of Americans. (Note that I’m including in my phrasing here both the situation in which employers replace Americans by H-1Bs and the setting in which they hire H-1Bs instead of Americans; both are equally harmful, but sadly only the former case is being discussed these days.) As I’ve explained before, the reason H-1Bs are so cheap for Disney and SCE is this four-tier system, which corresponds roughly to age. In essence, Disney and SCE replaced older Americans by younger H-1Bs, who are cheap because of their lower level of experience.

The four-tier system replaced an earlier two-tier one in 2004, and of course the new lowest tier is much lower than the old lowest tier. In other words, Congress took positive action to make H-1Bs even cheaper than before. The immigration lawyers had been pushing for this change. And if my memory is correct, IEEE-USA, which claims to “represent” 250,000 American engineers, lobbied Congress in favor of the change.

Getting back to John’s broader point, the press is not the only sector that needs to jettison its naivete about congressional intent. Those who seek to make the law fairer to U.S. workers need to understand this too. Beware of seemingly-plausible solutions coming from members of Congress; they are likely going to be unhelpful, if not downright worsening the problems.

In particular, as I have been warning, all the recent commotion about employers using IT services firms to replace American workers by H-1Bs will likely result in Congress mildly punishing the IT services firms (VERY mildly, if the examples John cites are any indication), while tripling the cap on general H-1B visas and setting an infinite cap on one particular type of H-1B visa.

Rubio Ducks Disney Question, Then Calls for Reform

A reader has brought to my attention this Daily Caller article on Sen. Marco Rubio. Apparently Rubio had earlier declined to answer questions about Disney’s firing Americans and replacing them with H-1Bs, but now his office says, “If the program was misused, then people should be held accountable…Senator Rubio supports reforms that would make the system stronger and less subject to abuse without unduly burdening American businesses that work within the program in good faith.”

Knowledgeable readers will notice two coded messages in that second sentence:

  • Rubio opposes requiring employers in general to certify that no qualified Americans are available for the jobs they wish to fill with H-1Bs.
  • Rubio believes that the main abuse of the H-1B program comes from the IT services firms, “rent-a-programmer” companies such as Infosys.

Presumably Rubio is not claiming that the I-Squared bill, of which he is a cosponsor, addresses the abuse. On the contrary, it is the most flagrantly pro-employer bill I’ve ever seen, vastly expanding the overall H-1B cap, setting an infinite cap on one important aspect of the program, and greatly liberalizing the employer-sponsored green card program. It contains no protections for U.S. workers whatsoever, not even the pretense of protection as some bills include.

I must say, though, that it’s hard to blame Rubio for the his views in the two bulleted items above. As I’ve often pointed out, even many H-1B critics agree with the second item (albeit quite mistakenly), and the second item essentially implies the first. Even the other statement by Rubio’s spokesperson, “The program is designed to protect, not displace, American workers,” is consistent with the second bulleted item,” as the law places special restrictions on the IT services firms, a provision whose enactment was motivated by a perception that they are the main abusers of the visa.

As my reader pointed out to me, none of the politicians calling for expanding H-1B are addressing the fact that expansion is unwarranted, as there is no labor shortage, either in STEM in general or in IT. Wages have been flat, as even the pro-H-1B researchers concede.

It will be interesting to see what the politicians will propose to counter actions like those of Disney, SCE and so on. Disney, for example, is closely tied to the major industry lobbying group, and as the firm has a major presence in Florida, Rubio might be reluctant to do much to clip their wings. Sen. Hatch, the primary I-Squared sponsor, has proposed raising the wage floor for the IT services firms from the current $60,000 to $95,000. That is not in his bill, and I don’t believe for a minute he was sincere in that idea. And even if he were, the IT services firms would rightly howl, asking why it’s OK for the other firms to pay their H-1Bs less than $95,000.

Another reader, a Silicon Valley engineer, suggested recently to me that the tech industry is on the verge of another 2000-like implosion, and that the industry is currently scurrying to get an H-1B expansion bill passed before that occurs. He points to the fact that many of the startups are burning through funding right now with little or no positive results. This is indeed what happened in 2000, a year that culminated in both mass layoffs and legislation that increased the H-1B cap from the then-limit of 115,000 to 195,000.

In discussions of H-1B politics, this is seldom noted — a major H-1B expansion enacted just weeks before a surge of tech layoffs. The few responsible dwellers of Capitol Hill ought to keep this in mind.

As I’ve noted before, all of this is at least making for good theater.

Fortune Magazine Warns We’re Losing the Foreign MBAs

The industry lobbyists’ massive PR campaign for expanding the H-1B work visa program includes making suggestions to journalists for articles. Typically these articles, amazingly, turn out to be sympathetic to the industry’s point of view, with little or nothing telling the other side of the story. (This typically arises from lack of due diligence on the part of the journalists, rather than pro-industry bias.)

One of the common types of such pieces is to present the current, “greatly oversubscribed” 65,000+20,000 yearly cap on new visas as causing the lose many superstars who could make extraordinary contributions to the American economy if they were only allowed to stay here. The typical article will profile a few supposedly brilliant foreign students, and say that we are losing (or have already lost) them. Today’s Fortune article, “Foreign B-School Grads Left Out in the Cold in U.S. Job Market,” is a case in point.

These articles are highly misleading, for a number of reasons. First, as I showed in an August 1, 2014 blog post, many of those profiled turn out, upon closer inspection, to be ordinary people, graduating from ordinary universities, and doing ordinary work, not of the implied superstar quality. One example I cited was Sandeep Nijsure, whom Vivek Wadhwa had highlighted in a column titled, “They’re Taking Their Brains and Going Home.” I commented,

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.

Second, many of these “lost” workers turn out to be working in the U.S. after all. My favorite example was described in that August 1 blog post, where I said, regarding former foreign student 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…told me that he had written about such “loss” [of talented foreign students] 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.

How do these seemingly “gone” people turn out to be working in the U.S. after all? First, it is important to note that, contrary to the rhetoric used by the lobbyists and the politicians (the former teaching the latter what to say), we do NOT “send the foreign students home after they graduate.” Due to the OPT part of the F-1 visa, foreign students in STEM can work for 29 months after graduation (which the Obama people want to change to 36). During this time, they have full work rights, and the employer can use this as a holding pattern until the worker gets an H-1B visa.

Another major route to take is the L-1 visa, for intracompany transfers. The employer sends the foreign student to work for a foreign branch of the firm, and then brings him/her back to the U.S. under L-1, which by the way has no cap. The Fortune article mentions this. L-1 used to be used mainly by the IT services firms, but recently the mainstream tech firms have found it to be a gold mine.

Finally, have you been so foolish (I was, actually) to believe those numbers concerning how many more H-1B visa applications there are compared to the 65K+20K cap? As reported by the Wall Street Journal, in many cases multiple applications are being submitted, by different employers, for the same worker. The lucky worker, having received several job offers, waits until it is known which of those employers have gotten a visa for him/her, and then simply accepts one of those offers. Classical political ruse, double counting.

Now, what about those foreign students profiled in the Fortune article — are they superstars? Since I generally take a dim view of MBAs, that will be a tough sell with me. The lead exhibit, Sudhanshu Shekhar, seems to be a very social type who is active in student organizations, but is that all Fortune can offer as evidence of potential stardom? He seems to have developed a clever marketing package for Best Buy, and he is an IIT grad, good, but really, he doesn’t seem that special. And again, the U.S. isn’t losing him anyway; according to the article, his employer will put him in Holland for a year and then bring him back to the U.S. as an L-1.

By the way, the article contains a curious bit of cognitive dissonance. On the one hand, it says that “U.S. MBA programs have admitted larger and larger numbers of students from outside the U.S. to increase diversity and bring more of a global mindset into the classroom,” but on the other hand notes that “Many of the companies that refuse to consider foreign-born MBAs…[cite] cultural differences.” Maybe the globalist view being promoted by the schools don’t jibe with business goals?

And once again, note the use in that quote of the lobbyist-supplied phrase foreign-born, which is calculated and misleading, and is a sure sign that this reporter got “help” in writing the story. Even more telling is this passage:

But now, Shekhar, who graduated from Kellogg with an MBA last year, is about to leave the U.S. in frustration, the victim of a controversial, lottery-based work-visa program that puts international MBAs in the same category as foreign mid-level IT workers accused of taking jobs from Americans.

This of course is example of something I frequently criticize, efforts of the part of the mainstream industry to portray the IT services firms as the main abusers of the system — thus deflecting attention from the fact that abuse of H-1B pervades the entire industry. Once again, the article has all the earmarks of a “plant.”


More on HP Job Ads

In following up to my last posting, I just went to LinkedIn and plugged in “HP software engineer graduate” and found a number of ads for new and recent graduates. Most of them also have that same “proficiency in English and the local language” requirement, in spite of all being in U.S. locations (Roseville CA, Fremont CA, Houston, Montgomery AL, Vancouver WA).  One of them is again for a position with that same bizarre title, Associate Software Engineer.

I then removed the “HP” part of my search query, and came up with other interesting cases. Here’s one titled, Software Engineer, PhD University Graduate, at YouTube. There are very, very few jobs in industry which really need a PhD, and interestingly, this job’s Minimum Qualifications are pretty generic:

  • PhD in Computer Science or related technical discipline.
  • Large scale systems design experience with knowledge of Unix/Linux.
  • Programming experience in one or more of the following: C/C++, Java, Python.

Even the list of Preferred Qualifications is very generic, except for research experience, and even the latter is not specific either — you have your choice of 10 different areas, including the catchall Systems. Based on my experience, I’d say the odds are high that the employer, YouTube/Google, has a specific foreign student they want to hire, and this ad is just for the purposes of fulfilling green card requirements.

The generic nature of these job requirements puts the lie to the industry’s favorite line that it hires only young people because only new grads know the latest technologies. Well, there is nothing avant garde about any of the technologies lists.

A lot of jobs that came up in that search were for Google. One for Qualcomm was interesting for how NON-generic it was, with the hugest alphabet soup of acronyms for wireless protocols you’ve ever seen. There’s no way a new grad would know more than one or two of them, and even then no very well. Again, this sounds like a green-card camouflage ad to me, and of course Qualcomm has always been one of the most vociferous firms pushing Congress to expand the H-1B cap.

Once again: If you think the main abusers of H-1B are the IT services firms, think again.

Blatant HP Job Ad

One aspect of the H-1B work visa program that I frequently emphasize — yes, yes, that I harp on — is that a core issue of H-1B is age. Younger workers are cheaper, and the vast majority of H-1Bs are young.

Concomitant with that is that the few Americans that U.S. employers do deign to hire as programmers tend to be new or recent grads. (Note: See Hal Salzman’s research for justification of my word few here.) Intel even has acronyms NCG (new college graduate) and RCG (recent CG), and earmarks jobs accordingly. This is common among the large employers, and I’ve pointed in the past to specific job ads like this for Intel, Facebook and so on.This discriminatory practice is of questionable legality, according to a prominent employment lawyer I asked a few years ago, but no one has ever challenged it.

Yesterday an alert reader came across an HP job ad that is not only is explicitly excusionary toward older American workers, but is also apparently exclusionary toward Americans, period. The position is for an Associate Software Engineer (odd title, more on this below) in Roseville, CA, a major HP site, near Sacramento. Here’s what it says.

First, it states that only NCGs/RCGS need apply:

Must be a recent graduate (2015) or graduating by January 2016.

Second, it has the following odd requirement (emphasis added):

Good written and verbal communication skills; mastery in English and local language.

My reader joked, “Hey, does Roseville have a local dialect of English?”

Of course, it’s clear what is likely happening here: HP has a foreign student that they want to hire, for a job requiring some foreign language, and they want to justify sponsoring the student for a green card, hence the language requirement.

Some of you will say, “But this is a legitimate use of the H-1B/green card programs. They need to hire a foreign worker, because they need the foreign language.” Well, you’re wrong. There are many programmers, born abroad but now naturalized U.S. citizens who almost certainly could do that job. Their only problem is that they’re not cheap, which brings me to the issue of that job title.

“Associate” Software Engineer? Are you kidding me, HP? This is NOT a standard job title, and it is reminiscent of the Junior Programmer titled used by the Indian IT services firms. It is clearly a device to set a lowball salary.It is also an additional mechanism to exclude the older Americans, who would be rejected as “overqualified.”

As I’ve often mentioned, the age issue could be easily fixed. Congress merely would replace the four-tiered system for determining prevailing wage, the legal wage floor for H-1B/green cards, by a single level, not broken down by age/experience.

Once again, what is sadly overlooked in the recent cases in which H-1Bs were used to replace American workers at Disney and SCE is that the foreign workers were cheap due to their AGE, or more precisely speaking, their low level of experience, which qualified them for the lowest of the four wage tiers.

The bills introduced in the past by Senators Grassley and Durbin would have changed the current four-level structure to a single level, in which prevailing wage would be defined as the 50th percentile salary for the given occupation and the given region — and NOT for a given experience level. DPE, and more recently EPI, have even suggested using the 75th percentile, on the grounds that the industry claims the H-1Bs are “the best and the brightest” or have rare skills, something employers would have to pay more for on the open market. In this light, I strongly recommend Daniel Costa’s recent op-ed (though I disagree with his focus on the IT services firms).