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.”



8 thoughts on “Fortune Magazine Warns We’re Losing the Foreign MBAs

  1. Sadly no mention is made of the plight of the American “Native Born” citizen that has received a MBA and is forced to mow lawns to make ends meet like I just posted in this article.

    Folks, those 3 charts will show you why all of this is happening and yes, I realize I’m preaching to the choir but if you have not taken a look at these three charts, you really need too.


  2. This L-1 visa explains so much more. In my Fortune 100 company, the IT people (and likely others, maybe engineers), will “work” for a year overseas and then come here. This just explains it.

    They’re also almost all given the title “manager” over there, before they come over here. I was told that this was a cultural thing, and we needed to make them a “manager” for social status reasons otherwise they wouldn’t work for the company. But is the reality that they need to be pretend managers in order to get the L-1 visa?

    As far as I can tell, this routine of working for a year overseas before coming here was the path of the many hundreds if not thousands of Indians working for our domestic facilities.


  3. > 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.”

    There was another editorial today that seemed to blame IT services firms as the chief abusers. It’s titled “TEXAS VIEW: H-1B visa abuse hurts workers” and is at . I was especially struck by the following paragraph:

    > “We stand by the H-1B visas program, especially after hearing the strong case made by advocates from various universities, employers and politicians such as Republican Kay Bailey Hutchison, the former senator from Texas. Many employers have told us the H-1B, when used properly, is anything but a money saver, and they’re horrified to learn that abuses are occurring.”

    Oh yes, they’re so horrified that they’re all falling over each other to suggest ways to curb the abuse. NOT! The editorial continues:

    > “The U.S. Department of Labor makes clear in its directives that companies seeking to hire H-1B holders must first take “good-faith steps to recruit U.S.
    workers for the job.” Additional conditions mandating equal salaries and benefits for foreign hires were designed to block employers from hiring H-1B workers on the cheap.”

    Of course, the claim that “companies seeking to hire H-1B holders must first take “good-faith steps to recruit U.S. workers for the job” is false. This is addressed in an editorial by Michelle Malkin titled “The Big, Fat ‘American Worker Recruitment First Lie’ of H-1B” at . Similarly, the idea that there is a mandate for “equal salaries and benefits for foreign hires” is also false. There is a “prevailing wage” but, as shown at , the applications to validate those wages are full of errors and easily circumvented. In addition, “equal salaries” are not enough when H-1B workers are tied to the company that sponsors them. In any case, the editorial concludes:

    > Congress is correct to scrutinize abusers and consider ways to plug loopholes. This good program deserves to be fine-tuned, not overturned because a few employers are exploiting it to save a buck.

    Of course, all companies are seeking to “save a buck” in a sense of not wasting money. To avoid abuse, we need rules that cannot be easily circumvented. Some examples are those proposed by the Programmer’s Guild in the yellow section at the bottom of .


    • The fact that the LCAs often have errors is of secondary importance, as is the fact that some employers play games with job titles (e.g. the Associate Software Engineer title in a recent HP job ad).

      By far the most important way that employers use the H-1B program for cheap labor is through the age issue. The H-1Bs are overwhelmingly young, thus much cheaper than the older Americans. Again, a simple change to the law — doing away with the current four-tier experience system for determining prevailing wage — would go a long way toward fixing the problem.


  4. In that case how should the prevailing wage be determined for a particular position? If you are asking to discard the four tier system that means the prevailing wage of a particular position lets say “Systems Engineer” will be the same for all irrespective of an individual’s academic credentials or industry experience

    To make my question more clear.. The current system gives 4 different wages based on which experience level you choose…So in the new system where there is just one standard wage for all.. where should that number tweak? Towards the experience level 4 or experience level 1?


    • The proposals have been to set the prevailing wage at the 50th percentile (some advocate the 75th) for the given occupation and region. I’ve read that that would work out to somewhere between Levels II and III in the present system.
      The academic credentials of the worker do not enter into prevailing wage determination under the present system.


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