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.


19 thoughts on “Why the CIR Report Isn’t the Good News the Activists Think It Is

  1. While the CIR H1-B report presents a sympathetic view of the exploited nationals from India, it seems to be consciously silent regarding the unprecedented career harms to the millions of American citizens that have been permanently displaced since 1990 from their technology-based careers by employer avidity for young, imported and indentured workers. I believe that the dynamic you mentioned in the last paragraph of your commentary is both relevant and probable in explaining this omission.

    For multiple reasons, I agree with the perspective that the H-1B Visa program (and the OPT extension to the F-1 Visa) are so riddled with loopholes that the only fate these employer-designed work visa programs deserve is complete abolition.

    Liked by 1 person

      • I believe that it would require substantial changes to the H-1B and OPT legislation to remove all of the carefully-inserted loopholes that benefit employer interests while harming the career interests of experienced American citizen technology professionals. Furthermore, the existing O-1 Visa program would suffice to import the STEM talent that would actually benefit America… and there are no onerous indenture provisions in the O-1 Visa program. 🙂

        Liked by 1 person

  2. Were American workers even mentioned in the report? No. But if people cannot oppose a visa because the harm it does to American workers, at the very least oppose it on the grounds it looks and smells like indentured servitude.

    Not everyone needs to oppose this monstrosity of a visa for the same reasons. I’m just happy that it is opposed for whatever reason one comes up with.

    As to your “mend it don’t end it” comment, there is nothing to mend here. Corporations are immigration middle-men. So long as corporations are central players, the motives will always be questionable and about profit. Immigration should be about building a better nation and the family unit, not about the corporate unit. Let the motives be more benevolent.

    Finally, although I think the H-1b visa as well as other corporate controlled / indentured visas have harmed American workers immensely it deserves to be a footnote. Just look at slavery.

    Slavery undoubtedly harmed American field workers at the time who couldn’t compete with free and owned. Have you ever read about these people displaced from their jobs by slavery? Of course not, because it is slavery!

    The same thing applies towards the H-1b visa. It is a form of slavery called indentured servitude! In that context objections about the impact on American workers is like complaining about the food service while the plane is about to crash. The food service may be terrible, but the plane is crashing!

    Liked by 1 person

  3. Much as I agree with you Norm, I’m not sure that we can mend it without ending the futures of Americans.
    When I was a young kid in the navy, I heard it said of the steel workers that they would find similar or better paying jobs when their livelihoods were sent offshore.

    After studying the bls oes data for the last ten years, there are no similar or better paying jobs and I’m not willing to just give up and work at a convenience store and accept that as my lot in life.

    Liked by 1 person

      • However, if the prevailing wage requirement were set at a fair level, there would still remain the problem of having a meaningful enforcement and employer sanction mechanism. The current enforcement mechanisms are woefully underfunded. I believe that political pressure was applied since 1990 by economic elites to insure that outcome.

        Liked by 1 person

  4. While he is polite, I have never found Bay Area editor Phil Bronstein to be a particularly deep or nuanced thinker. San Francisco and the Bay Area is a highly politicized area, so I take everything which comes from there with a block of salt.


  5. A few facts, the amount of international students studying in US universities has been increasing at least for the past few years. And they account for a large portion of students majoring in STEM. And about filling the quotas, it didn’t happened happened during the financial crisis. So is it possible the large amount of application is due to higher demand with booming economy?

    As an international student myself, I completely agree that green card application is handcuffing, and it would be wonderful if it can be changed. But companies act on their best interest, even if there is no handcuffing, and nobody get higher salary. They might outsource the work to other nation to avoid hiring American workers.

    Once there is a wise man who asked me, “if you got your green card one day and you are much older, one day you get laid off because a H1-B can do my job at a lower wages, do you want that?” I guess my answer would be no I don’t want that, but what I would do is I would try to do my best so that I am not replaceable. Or I will have to accept a lower wages. Because I understand that this is how globalization works, you are competing on a global scale now. If they can move manufacturing to developing world, they might do the same for some tech sector as well.

    What I like most about here is the freedom of speech, which is not you can easily get from where I come from.


    • Actually, there were restrictions placed on H-1B during the financial crisis. But even then lots of H-1Bs, L-1s and F-1s (OPT) were hired.

      The economy is not booming, sad to say. And STEM wages, including in the “booming” computer fields, have been flat.

      The handcuffing really does reduce wages. Just basic economics. Unfortunately, the activists who dislike the H-1B program don’t focus on the handcuffing issue. They concentrate on H-1B without realizing that the green card program is just as harmful.

      Companies do act in their own best interests, but that is exactly why they don’t send most STEM jobs overseas. They know that most jobs need face-to-face interaction to be done well.

      But really, it is also in the companies’ best interests not to hire so many H-1Bs, because one cannot optimize two variables at once. If one minimizes labor costs, one cannot maximize worker quality. Of course, some employers may make a conscious decision to hire cheaper, mediocre workers instead of more expensive, higher quality ones, but most employers don’t do that. So, they are hurting themselves. And the nation is getting hurt too, because on average the foreign students are of lower quality; some international students are outstanding, and U.S. policy should be to facilitate their immigration (no handcuffing). I’ve advocated broadening the EB-1, NIW and O-1 programs.

      It’s a fine goal to simply work harder and try to be irreplaceable. In some cases that works, but in many cases it doesn’t. There are lots of reasons for this, but one of them is that employers are not very good at assessing the quality of workers. Sometimes the loudest workers are viewed as the best. 😦 Worse, they may view workers as commodities, not much difference from one to the next.

      You can offer to work for a lower wage in the scenario posed to you by the wise man. But even that is not so easy. When you apply on a company’s Web page for a job, they don’t ask you if you are willing to work for less. So they may automatically reject you, without your having a chance to say you’ll take a lower wage.

      Freedom of speech is indeed precious. But it has to be coupled with voting rights, and with a populace that exercises those voting rights in a well-informed, active way. Unfortunately, too many Americans don’t satisfy those conditions.

      Most STEM jobs are not easily outsourced to overseas. One needs the face-to-face interaction.

      Liked by 1 person

      • I appreciate your nuanced reply, Norm. However, one of the consequences of the elites intentionally pursuing technology professional gluts is the loss of American middle-class discretionary inflation-corrected income that could be applied to political purposes. The loss of income causes workers to also lose discretionary time as they work longer hours to either preserve their employment or hold a second job to make up for the decline in their inflation-corrected income. Political involvement requires both discretionary time and income. (The economic elites are not complaining about these twin middle-class losses.)

        Liked by 1 person

  6. While I agree with most of what you say, Norm, I feel that it’s worth highlighting the Indian body shops because they are intended almost exclusively to take jobs from Americans, only 3% or so of the H1-Bs immigrate to America, so there is no pretense that we are acquiring a lot of STEM ‘superstars.’

    The bodyshops will return them to India normally after 3 years here where they work on contract projects, picking up valuable American experience and connections. The hope of ‘American’ corporations is that they will continue to work on American projects when back in India, at much lower wages.

    ‘Americans would “be shocked to know that most of the H-1B visas … are going to outsourcing companies,” Sen. Dick Durbin, D-Ill., said during a recent hearing.’

    MSM covers up the real nature of the bodyshops, and most Americans are unaware of it.

    [This is an earlier post of mine, not directly related to the above, but connected somewhat.]

    My schadenfreude is showing, but I can’t resist this story. Developing countries in general are corrupt, requiring some kind of bribe to get things done. And since you can’t rely on government, you naturally tend to rely on relatives or money instead:

    The media covered up this little problem quite well, even NYT only covered it in little-read city room blogs:

    NYT has praised H1-B to the skies, along with other media, so it was only fitting that an Indian firm got the contract for the New York ‘CityTime’ project, a new payroll system for the city. ‘Technodyne,’ this (large) mom and pop operation, was given the roughly $50 million contract, and after $500 million or so was paid to them with no system produced, mom and pop hotfooted it back to India. The guy who recommended Technodyne is coming up for trial for $5 million in bribes allegedly paid to him (some by grandma), and mom and pop are being tried too in absentia, and some others.



    • So, Bill, you don’t think the mainstream (i.e. non-bodyshop) firms use the visa for cheap labor? If you agree with me that they indeed use it for this purpose, i.e. for hiring less expensive foreign workers in lieu of the Americans, then is there any real difference? I don’t see it.

      And does green card sponsorship make the mainstream firms less culpable, in your view? As I said, they use the green card to trap the foreign workers, so the mainstream firms are actually MORE culpable. And is permanently swelling the labor market with workers “better” than temporarily doing so? Granted, once a foreign worker gets a green card, and say naturalizes, he becomes an American too, and deserves full work rights, but the result remains that the green card program permanently swells the labor market.

      It’s true that many body shops engage in overtly bad behavior, but that blinds the anti-H-1B activists to the fact that the more genteel mainstream firms are doing just as much harm to the activists.


    • Belief in the plight of American tech firms in finding adequate talent domestically necessarily entails, and affirms, belief in the deficiency and corruption of the American public education system: that unionized teachers are largely feather-bedders, that too much is spent on remedial efforts on behalf of minorities at the expense of `mainstream’ students who could excel, that public schools are inherently inefficient, and should be privatized and per pupil public spending drastically reduced—and that belief is deeply and dearly held by many.

      Moreover, foreign owned, managed, and predominately or exclusively staffed companies are a much worse menace than an American business employing some immigrants, to nativist sentiment.

      Nativism, and the reflexive attribution to foreign influence of what ails the country, is a common leitmotiv for H1b activism.

      The US has become so infused with nonstandard, untraditional social elements, there’s sympathy for business proclaiming difficulties in composing the work force it wants, overlooking the contradiction that it’s asking for yet more of the undesirables.

      H1b activists have readily embraced the advocacy pitch that chain immigration, highlighted as importing more takers for the social safety net, ought to be replaced with more employment based immigration, a position that you don’t have to think too hard about to realize you’re probably shooting yourself in the foot with, if you are in the work force.


  7. Well, it looks like part of President Obama’s new Amnesty plan will be half a million new hi tech workers. Here is the relevant paragraph:

    “Tech jobs though a State Department immigrant visa program would offer another half-million immigrants a path to citizenship. This would include their spouses as well.”

    Article: Source: Obama to announce 10-point immigration plan via exec action as early as next week



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