The SCEs of the Future

Let me put it as succinctly as I can.

Recently Southern California Edison was exposed as laying off its American IT workers and replacing them with workers imported from India.  After Congress “reforms” the H-1B and employer-sponsored green card programs, that will change:  Now firms like SCE will lay off their American workers and replace them with newly-graduated foreign students hired from U.S. colleges, instead of hiring them directly from India.  Whoopee!

Pardon that last sarcasm, but my meaning should be clear:  After the “reform,” firms like SCE will still be hiring foreign workers, just sourced differently.

I’m referring, of course, to a common theme of mine — the inaccurate and destructive distinction made between the “Intels” and “Infosyses,” the former meaning companies that hire foreign workers from U.S. campuses and the latter meaning the IT service firms that bring in foreign workers directly from abroad.  The claim is that the “Intels” use the H-1B program responsibly while the “Infosyses” abuse it.  The fact is that BOTH types of firms abuse the program, with the result being reduced job opportunities, reduced wages and increased misery for U.S. citizens and permanent residents.

Various bills introduced in Congress in recent years have been based on this Intels vs. Infosyses (false) dichotomy, and have proposed rewarding the Intels by devising special immigration deals for the foreign students.  Unfortunately, even many critics of H-1B have bought into that dichotomy, and I’m beginning to hear things coming out of DC that suggest that we may well see legislation enacted featuring sweet deals for foreign students.

What people keep forgetting is the intimate connection of H-1B to age.  Younger workers are cheaper, and giving special privileges to foreign students means adding thousands of YOUNG workers to a labor market already suffering grievously from age discrimination.

If such legislation does go through, SCE will have lots of YOUNG foreign workers to hire to displace its expensive older American workers. The only difference is that it now will be able to hire them from local colleges.

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22 thoughts on “The SCEs of the Future

  1. Amen.
    Folks, I’ve been doing a lot of data mining and mapping of the LCA Applications (H-1B, H-1B1, & E-3) for 2014 and 2015 and I’ve noticed what Mr. Matloff is talking about.

    As an example, Intel has 2,497 applications in 2014 and Microsoft has 3,724.

    Seems Microsoft is laying off a lot of people to be applying for so many visa holders, doesn’t it?

    But there is an even bigger part of the situation that I never hear nobody discuss.

    When a person is in the age range of 45 +, even if they are divorced, they typically have kids and families to support in some way or the other.

    So not only are we destroying the 45 plus year old person, we are also destroying the mentor that their children desperately need.

    Are we proud of ourselves yet?

    And what is even worse is I have been working with some H-1B’s to understand what is happening here and even they say America is being scammed, all for greed and little else.

    To put it into perspective, the last time I had steady work was in 2002.

    I had a short project each year from 2003 to 2010.

    Since 2011 I have not been able to buy an interview at any level and my story is not unique as I believe there are millions in my shoes based on the stories I’ve read and heard.

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    • > As an example, Intel has 2,497 applications in 2014 and Microsoft has 3,724.

      Interesting stats. They also have an interesting LCS stat sheet at http://www.foreignlaborcert.doleta.gov/pdf/H-1B_Selected_Statistics_FY2014_Q4.pdf . It shows that there were nearly half a million Labor Condition Applications certified last year. Also, I took a look at the 2014 disclosure data at http://www.foreignlaborcert.doleta.gov/docs/py2014q4/H-1B_FY14_Q4.xlsx and found that it is still full of errors. I created a column containing LCA_CASE_WAGE_RATE_FROM (column P) divided by PW_1 (prevailing wage in column W) and filtered for just those rows where the application status is CERTIFIED and both wages are for year. I then sorted by the column I created (Pn / Wn). Only two rows were below 1 with values of 0.99991 and 0.926408 signifying wages slightly below the “prevailing wage”. However, there were 40 rows with a value of 10 through a maximum value of 2326. That last row was for a yearly wage of $201,313,899 for a PROGRAMMER ANALYST. It’s possible that the 2013 at the start is meant to be a year and the actual salary was $13,899 for a prevailing wage of $86,528. The fact that this is in the disclosure data suggests that it was never caught and that those who certify the applications just run a simple filter on it looking for applications where the starting wage is less than the prevailing wage. Hence, if you want to pay less than the prevailing wage, you can just “accidentally” make an obvious data entry error that makes the starting wage appear to be larger than the prevailing wage.

      Of course, as pointed out here and by many others, there’s many other ways to get around the prevailing wage. For certain unique skills, the prevailing wage is very much understated and an employer and always hire an highly-qualified worker for a low level job and have them do work that would command a higher prevailing wage. But it’s still disturbing to see the LCAs full of errors that anyone familiar with LCAs and Excel can find in a few minutes. I’ve listed some of the errors from prior years at http://econdataus.com/lcainfo.htm .

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      • Just now seeing this.

        Yes, lots of garbage in their data which is why I don’t filter anything.

        I just let the user see for themselves what we are dealing with.

        I’ve been working with some H-1B’s the last couple of weeks and I’m finding out that they don’t even get the so called prevailing wage as their are MANY LAYERS out there with their hands on the check before the worker gets it.

        Lots of fraud and corruption.
        Maybe not at the big companies, but the Indian companies appear to be bad.

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  2. What I cannot understand is the reluctance of our elected representatives to require an honest search for a US citizen or current legal resident for a position before a guest worker can be offered the job. Employers are not even required to look for a US worker before hiring an H-1B worker.

    There is a silver lining though, Once the guest worker receives a green card and then citizenship, they become one of the displaced workers due to age and supposedly stale skills. They will also be replaced by younger guest workers.

    No one has mentioned what will happen to OPT if they start handing out green cards to graduates. Since there are tax advantages to the employer as well as the employee, international graduates like to maximize their time on it.

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    • H-1B was specifically designed to not require employers to give hiring priority to Americans over foreign workers. Its precursor H-1 did have such a requirement.

      Many politicians write letters to their constituents claiming that H-1B has that requirement. But after it’s pointed out that there is no such requirement, the same politicians oppodr instituting one. The rationale for this is that in the hyper competitive, fast-changing tech market, employers need to hire people right away, not slowed down by searches for Americans.

      Although you are correct in noting that former H-1Bs are victims just like the natives, most of them are NOT going to become politically active on this issue, as most come from countries/cultures in which speaking out is discouraged. They’ll just accept it and change professions.

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      • The need for the worker must not be so immediate since the filing for a new H-1B worker generally comes 6 months before the worker can appear for work and the fact that many are not used at the earliest opportunity. Unlike in many countries where it is a “use it or lose it”, an H-1B worker once approved can wait for years yet still be granted entry for work on a position or even for a company that did not exist at the time of the initial approval. The companies’ cries that they need help immediately do not ring true.

        I think part of the problem in communicating with our elected officials is few of their family and friends are in the STEM fields most often associated with H-1B and L-1 visas. Since these visas are not limited to STEM fields and since more unemployed and underemployed young people are in the fields of business and related to the liberal arts, the effects on the guest worker visas on these US workers need to be publicized. If it were to come closer to home for our elected officials perhaps they would understand that THEIR children and grandchildren are going to be living in the officials’ basements due to lack of opportunities then they will take action not because it is the right thing to do for all but it is the right thing to do for their own selfish interests.

        Even lawyers are not immune from displacement in favor of guest workers. I recall several years ago noting that Microsoft had filed for an H-1B for an attorney as though there are not many unemployed attorneys who would have loved the opportunity.

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        • I think many of the politicians do have family or friends who have been harmed by H-1B. Rep. Zoe Lofgren even stated publicly that her neighbor had been harmed. But the politicians have an easy out here, which is to blame the Indian bodyshops, the “Infosyses,” while claiming that the “Intels” are the Good Guys. So even putting aside the effect of the industry’s campaign donations, this “blame the Infosyses” notion allows the politicians to assuage whatever guilt they might have.

          Tomorrow there will be an important hearing on H-1B in the Senate. I know many critics of H-1B are pinning their hopes on this hearing, but various signals I’m getting from DC suggest that the disaster I’ve been warning about for years, in which the pernicious “Intels are good, Infosyses are bad” view is used to justify EXPANDING the number of foreign tech workers, may actually start tomorrow. Hopefully I’m wrong — but mark my words.

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          • American workers are those with the most to lose and they have little or no say in what is happening; we do not have a seat at the table much less proportional representation in the discussions.As individuals, we do not have enough money to get their attention and as a group we are simply trying to survive. Even guest workers have lobbing groups (i.e Immigration Voice for one) who seem to be able to influence labor and immigration policies in the US. Our few groups and individuals – Norm included – speaking up receive a courtesy nod but do not seem to be taken as seriously as they should be even though their positions are verifiable, well articulated and reasonable.

            I do not find any of the employers to be entirely honest. This goes for not only companies but also government agencies, universities and other non-profits. I find it hard to believe that the spokesmen believe the line they are trying to sell; their statements often defy logic. I also have seen first hand the ethnic bias effect of foreign born in the position to make hiring decisions to the benefit of their countrymen. This is particularly true at the university level and in smaller, privately owned companies.

            I do wonder how foreign based companies are able to sponsor green cards for their employees based in the US. At least they need to have a US subsidiary registered in and subject to the laws of the US. These companies can use their foreign registration to justify disparate hiring practices and then justify the green cards by the assertion that they cannot find US citizen or LPR workers for the position.

            I sympathize with guest workers who are being taken advantage of by their employers, but a large number have brought it on themselves. The “you cannot cheat an honest man” adage is very appropriate; many self report “buying” H-1B applications through the payment of fees and bonds. Of course, the conduct of many is so far from that expected of professionals working in the US that it is understandable why employers try to recover some of the costs. I continue to be stunned by the number self reporting that they have no intention of ever working for their initial H-1B sponsor. Because of personal experiences, I trust no one completely and some less than others.

            It is essential that the issues of employment based and other based immigration be treated separately – but consistently. A case in point is that Indians and Chinese want the per country limits removed for employment based green cards as this benefits them; however, Mexicans and Filipinos benefit when the country limits are removed for family reunification green cards. I suspect that there is an unseen struggle between the regional interests that are trying to achieve a benefit for employment based without losing in family reunification and vice versa. While this does not directly impact H-1B, the green card process cannot keep from influencing policies for all visas leading to permanent residency.

            I also believe that the foreseeable but ignored consequences of the proposals will lead to disappointment among the individuals seeking H-1B visa and green card regulation changes. These workers will join the ranks of the unemployed and underemployed workers as they are displaced by younger and cheaper H-1B and recent graduate workers. Unfortunately, once the process begins, it will be difficult if not impossible to reverse.

            “I told you so” will be small comfort for the destruction of the opportunities from the proposed changes to immigration rules. I do not know whether to be angry or to cry at the future our elected leaders are creating.

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          • I agree with almost all your points, except that one that the former H-1Bs who now become victims of the program will speak up. They will not. Most come from cultures in which speaking out is discouraged, and in any case they come to the U.S. in the first place for very practical reasons. Being a Don Quixote is not consistent with the latter.

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  3. There are many millions of college graduates in both China and India who can’t find professional work. If foreign graduates of U.S. STEM masters programs have green cards or work permits ‘stapled to their degrees’ we will be swamped. I believe Norm has written that U.S. masters programs will tend toward diploma mills – the cost will go up, the quality will go down, and Americans will have a hard time being admitted.

    [CHINA]

    http://www.nytimes.com/2013/06/17/business/global/faltering-economy-in-china-dims-job-prospects-for-graduates.html

    HONG KONG — A record seven million students will graduate from universities and colleges across China in the coming weeks, but their job prospects appear bleak — the latest sign of a troubled Chinese economy.

    Businesses say they are swamped with job applications but have few positions to offer as economic growth has begun to falter. Twitter-like microblogging sites in China are full of laments from graduates with dim prospects…

    A national survey released last winter found that in the age bracket of 21- to 25-year-olds, 16 percent of the men and women with college degrees were unemployed.

    But only 4 percent of those with an elementary school education were unemployed, a sign of voracious corporate demand persisting for blue-collar workers.

    http://www.nytimes.com/2013/11/06/business/international/chinas-leaders-confront-economic-fissures.html?ref=international-home&_r=0

    “I see the problem mostly as an education mismatch problem,” Mr. Jin said. “I’m willing to pay more than 3,000 renminbi a month, which is more than what fresh college graduates are getting.” (That’s about $500.) “I’m also willing to give training, but the young people now with college degrees just don’t want to work in factories.”

    _______________

    [INDIA]

    http://www.theatlantic.com/international/archive/2013/10/behind-the-bad-indian-coder/280636/

    Tuition costs are low, so more students get into higher education, but resources are scarce and there’s very little innovation in classrooms. Curriculums are outdated, and schools are far more bureaucracy-laden than those in some other countries.

    “Rote learning is still the major reality for teaching pedagogy in India,” Kugelman told me…

    As many as 75 percent of the country’s technical graduates lack the skills to get jobs in their field, and so some of India’s home-grown tech companies actually hire coders who have been trained abroad, Kugelman explained.

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      • I contend that a big reason for international student enrollment in PhD programs and as post docs is to: 1. legally remain with a F-1 or J-1 visa until they can obtain a job and 2. the fast track to a green card that EB-1 processing give, It is almost essential for an individual to have a PhD for the credentials required for EB-1 or self sponsorship in an EB-2 category.

        If green cards are granted for a US masters, masters or higher degree holders from other countries will come to the US to obtain the masters degree and the green card. The PhD student and post doc supply will vanish; this is actually a benefit because universities will then have to hire full time, regular employees to assistant in research or the faculty will have to go back to doing their own work. (Do you realize for some grants, a PI is required to spend only 1 hour per week on the grant!)

        Since there is little quality control on masters and PhD programs – including “distance learning” ones, we will be inundated with incompetent degree holders vying for the few available jobs.

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        • I agree with you 100%. The universities, currently pushing for liberalizing of STEM immigration, will be in for a rude awakening if auto-green card for STEM students is enacted. It will be the most radical change in academia seen for many decades.

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  4. I’m aware that transfer of Western technology to Asia through H1-B and other globalist policies has helped some poorer countries and people, which is a real achievement, but it is not as great as often assumed.

    The Indian poor, including 400 million in the lowest category of income of $1.25 a day or less, have surely gained from India’s increasing wealth, but some say not very much.

    From two recent book reviews:

    http://www.foreignaffairs.com/articles/138715/atul-kohli/poverty-amid-plenty-in-the-new-india

    ‘But the Indian government suppresses labor activism, and its antipoverty programs do not work. The exclusion of the poor from a fair share of the benefits of economic growth helps explain why they have resorted to caste-based violence and even to the Maoist, or Naxalite, rebellion that smolders in the eastern part of the country.’

    http://www.foreignaffairs.com/articles/140546/jean-dreze-and-amartya-sen/an-uncertain-glory-india-and-its-contradictions

    ‘India has experienced two decades of rapid economic growth, yet half of Indian households lack indoor toilets, nearly 40 percent of the country’s adults are illiterate, immunization rates there are among the lowest in the world, and 43 percent of its children are underweight. The benefits of growth have flowed to the top 20 percent of the population, while the profoundly poor — who represent 28 to 80 percent of the population, depending on where the line is drawn — have gained little. The authors, two distinguished economists, use unfavorable comparisons with Bangladesh, China, and the countries of sub-Saharan Africa, among other places, to shame India’s politicians, corrupt bureaucrats, media, and self-interested economic elites, whom they blame collectively for the country’s pattern of “biased growth.”’

    I’ve seen reports of Indians returned from technology work in the West, choosing to live in gated communities that try to mimic their Western life styles, staying as far away as possible from old India and its deep rooted corruption.

    When Western businesses get established in low wage countries in general the last thing they want to see is reform, which would bring in a whole new set of locals they’d have to make arrangements with. Globalism tends to help local corruption continue, and most of its economic benefits go to the local elite.

    _____

    In much more efficient China there has been substantial lifting of people out of poverty, but even here the wealth gap is a huge and corrosive issue. But the little problem that globalists don’t want to see is that China is our enemy. That’s not because we wish it so, but China is smoldering with resentment at the ‘century of humiliation’ at the hands of the West, which is by no means imaginary if you look at things like the Opium Wars.

    China is grateful for all the technology they have acquired from us, and are using it to threaten their neighbors in the nearby seas, many of them our allies whom we are bound to defend by treaty. They’re bullying Western corporations as well, and their controls on rare earths show that their belief in free trade is not sincere.

    http://www.nytimes.com/2015/03/09/world/in-a-test-of-wills-japanese-fighter-pilots-confront-chinese.html

    The high-velocity encounters over the East China Sea have made the skies above these strategic waters some of the tensest in the region, unnerving Pentagon planners concerned that a slip-up could cause a war with the potential to drag in the United States. Japan’s refusal to back down over months of consistent challenges also represents a rare display of military spine by this long-dovish nation, and one that underscores just how far the rise of China and its forceful campaign to control nearby seas has pushed Japan out of its pacifist shell.

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    • NYT seemed to back me up today.

      http://www.nytimes.com/2015/03/16/opinion/in-rural-india-hoping-for-jobs-and-education-in-a-growing-economy.html

      For all of India’s advancement — it has one of the world’s fastest-growing economies — fewer than 10 percent of workers have regular jobs with legal protections and social security benefits and as much as 5 percent of the population falls into poverty every year, Mr. Krishna said.

      —–

      http://sinosphere.blogs.nytimes.com/2015/03/16/china-becomes-worlds-third-largest-arms-exporter/

      China Overtakes Germany as World’s Third-Largest Arms Exporter

      “The equipment you get nowadays from China is much better than 10-15 years ago,” said Siemon Wezeman, a senior researcher at the institute. Customers who used to buy Western or Russian equipment can now turn to China and often secure weapons of similar quality at far lower costs, he said.

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      • Harvard economist Richard Freeman has found that the Indian government is not anxious to improve the economic condition of its masses, in order to keep a high standard living for its IT workers (who generate huge incomes for the nation by doing America’s work in India) while keeping the absolute wages of those same workers low to make their labor attractive. It’s hard to accept a government being that diabolical, but then, look at our own. 🙂

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      • Have you read any articles recently about the massive problems with the San Francisco Bay Bridge? Steel from China, bolts twice hardened in China due to lax quality standards and oversight, leading to the steel becoming brittle and allowing hydrogen to penetrate into micro fractures, causing numerous serious problems. Many of the large bolts hold down the large main tower, and there is no way to dig into the foundation of the tower to replace those faulty bolts. It’s a travesty.

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        • Here is a video discussing that of a guy in CNC manufacturing that I’ve been following so that I can find a way to get our industry to do similar things.

          Folks, do you realize there are 3.6 million of us.
          Twenty dollars each is a lot of money.
          One hundred dollars each is a lot of money.

          We have the ability to take on the industry in the media where this battle needs to be fought.
          But so far nobody seems to want to work together to do such a thing.

          A link to his website is https://titanamericanbuilt.com/

          We need to step up to the plate.

          And don’t tell me we don’t have 20 or 100 bucks.

          I’m penniless.
          I’ve lost everything.

          But i will find a way to come up with 20 or 100 bucks if it will help me and my kids get back to work and stay working as Americans in America.

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        • China can produce high quality goods, and the ‘China price’ is justly famous, but in practice there are often problems.

          http://www.wsj.com/articles/peter-neville-hadley-book-review-chinese-rules-by-tim-clissold-1420132080

          “Chinese Rules” joins a bookshelf of competing titles that amount to the China-business equivalents of Victorian-era cautionary tales for children. From “Beijing Jeep,” Jim Mann ’s classic 1989 account of the failure of the first Sino-American joint-venture car manufacturer, to “Poorly Made in China,” Paul Midler ’s 2009 collection of assorted fiascos in beauty-product manufacturing, these are the books foreigners doing business in China need to read, not the fashionable but futile “Art of War,” a 2000-year-old compilation of Chinese military strategy.

          Mr. Clissold’s well-received “Mr. China,” published in 2004, described his involvement in increasingly desperate attempts to find suitable Chinese ventures in which to invest more than $400 million. Much of this money drained away through mismanagement, fraud or outright theft…

          He demonstrates that seeing foreigners profit in China is often inimical to Chinese peace of mind, and foreign naiveté provides opportunities for exploitation…

          His suggestion that China thinks long-term is contradicted by numerous examples of an inability to see beyond squeezing the maximum profit out of the order immediately at hand.

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          • Here’s another important example of how free trade works in practice, in medicines. Until recently overseas manufacturers got a big advantage because American regulators, the FDA, did far more exacting inspections of American manufacturers, and essentially ignored shoddy practices in the developing world.

            Our establishment generally favors developing countries, in the spirit of globalism and Davos. H1-B is an example of helping foreign countries by training them in American technology. American laws against bribery make it difficult for American companies to operate in less developed countries, so they can legally bribe them with American jobs and technology. It opens doors for them in those countries. They see it as ‘serving God and growing rich,’ or ‘doing good and doing well.’

            http://www.nytimes.com/2014/02/15/world/asia/medicines-made-in-india-set-off-safety-worries.html

            NEW DELHI — India, the second-largest exporter of over-the-counter and prescription drugs to the United States, is coming under increased scrutiny by American regulators for safety lapses, falsified drug test results and selling fake medicines…

            This absence of oversight, however, is a central reason India’s pharmaceutical industry has been so profitable. Drug manufacturers estimate that routine F.D.A. inspections add about 25 percent to overall costs. In the wake of the 2012 law that requires the F.D.A. for the first time to equalize oversight of domestic and foreign plants, India’s cost advantage could shrink significantly…

            American businesses and F.D.A. officials are just as concerned about the quality of drugs coming out of China, but the F.D.A.’s efforts to increase inspections there have so far been frustrated by the Chinese government.

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    • See my reply to Catherine Kane’s reader comment earlier this evening. Ron is well-meaning, but his article here will be interpreted as meaning that only the “Infosyses” are the problem, and that it is OK and in fact desirable to give the “Intels” MORE foreign workers.

      Like

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