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.

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15 thoughts on “John Miano Suggests That Journalists Open Their Eyes

  1. Let’s see. First, of course H-1B favors employers. In no case was it written to favor labor. We even have the absurd assertion today that H-1B workers help the mix so much they create more jobs. One might find a mix where that even works! It’s not the mix that actually exists, but it’s vaguely credible in some academic sense. Second, if Disney or anyone wants to replace all their 39 year old workers with 23 year old workers, there’s no law against it. Turns out there is a law offering some small protection to workers over 40, though one can quibble about when it applies. And, it seems to me paying less experienced workers less money may be reasonable! Not *productive*, but reasonable. Maybe crazy, but the devil is in the details.

    So for all that, if there are problems with H-1B it is not in any of those areas. And indeed there are severe problems with H-1B. But neither substantially nor rhetorically is the discussion going anywhere, if those are the worst accusations you can find.

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    • I’ve mentioned before that, as I understand it, federal laws on age discrimination do not forbid favoring younger workers because they are cheaper. But H-1B law is even worse, in the sense that it actually codifies this.

      The real issue is that H-1B law and its proponents claim to protect American workers. As you said, it does not actually do so, and the 2004 change in wage floor was knowingly harmful to Americans.

      Regarding productivity, we’ve debated this before; I believe that many employers look at programmers as commodities, each one as good as the other, and thus do not realize that their policy is “penny wise, pound foolish.”

      But as I’ve also said, I believe that Disney and SCE will claim to investigators that their “restructuring” is aimed at improving productivity, and that the H-1Bs are not actually replacing the Americans. The foreign workers will perform some of the tasks that the Americans used to do, but will require more American supervision. In other words, the H-1Bs are hired into lower-level jobs than those held by the Americans.

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      • I’ve actually been approached very recently for an IT architect position at Disney! The hiring process is supposed to flow through a big outsourcer. So far I haven’t heard back. Again, I am hardly surprised.

        At another local company I was approached for a similar job, where the local team has been working 60-hour weeks for a year, to clean up the work products of the off-shore team.

        It is this massive irrationality of the whole structure that gets me.

        Time and again it is shown that in IT the best way to go is with a small, elite staff. Time and again organizations instead go to lowest common denominator staffs, at much, much higher direct and opportunity costs. It is no doubt some modern form of Gresham’s Law. And to see these organizations spending huge money to make things worse, is just beyond words.

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        • I’ll visit you in Anaheim next time I’m down south. 🙂

          “Too many cooks spoils the broth,” especially if they are BAD cooks. 🙂 Again, that irrationality you cite comes from thinking of programmers as commodities.

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        • Management makes overly optimistic schedules. When they are not met the lower and mid level managers cannot say that the schedules were garbage from the get-go. They have to show a positive response. That response is usually we don’t have enough people to get the job done and they are right. If they would have started with 10 more people two years ago they would now have 10 really productive people. instead management opens up recs for 40 people because really the people cost is insignificant compared to the lost opportunity in the market. Those 40 people actually cost the group time as they have to get up to speed and are wasting the time of the experienced people. Management asks why the schedule is still slipping. Any guesses as to what the response is?

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  2. > 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.

    I agree that it’s an excellent blog post. It clarified at least a couple of issues for me. First of all, it explains how the labor condition application (LCA) process works with the Department of Labor to approve all LCAs within seven or 10 days. That helps explain why the LCA’s are rife with errors as can be seen in errors listed at http://econdataus.com/lcainfo.htm and http://econdataus.com/lcaerrs.htm .

    Secondly, his explanation of the four skill level prevailing wages does an excellent job of explaining how this allows employers to pay foreign workers extremely low wages while staying inside the law. His listing of the percentage of workers in each level was especially instructive. It would seem that it works as a sort of reverse Lake Wobegon where only 6 percent (rather than all) of the children are above average!

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    • What is especially interesting about those percentiles in the four-tier structure is that no one seems to know where they came from. A Dept. of Labor researcher told me she had tried pretty hard to track this information down, but couldn’t find anything.

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      • > What is especially interesting about those percentiles in the four-tier structure is that no one seems to know where they came from. A Dept. of Labor researcher told me she had tried pretty hard to track this information down, but couldn’t find anything.

        With some googling, I just found the source. It comes from page 97 of a January 2011 GAO report titled “H-1B VISA PROGRAM – Reforms Are Needed to Minimize the Risks and Costs of Current Program” at http://www.gao.gov/assets/320/314501.pdf. The report states:

        “GAO also reviewed data from Labor’s LCAs on the top 150 employers of H-1Bs in fiscal year 2009, including whether the employer is H-1B-dependent; whether the employer is a willful violator; and the number of petitions requested at each of the four possible skill levels. As indicated in table 9, among the 150 companies for which Labor provided data, 24 were H-1B dependent, and 9 of which were also deemed “willful violators.” The remaining 126 firms were neither H-1B dependent nor willful violators. In addition, on average, these firms indicated that they would pay workers at the prevailing wage for skill-level one 52 percent of the time; the prevailing wage for skill-level two 30 percent of the time; the prevailing wage for skill-level three 12 percent of the time; and the prevailing wage for skilllevel four 6 percent of the time.”

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        • No, this doesn’t explain how DOL came up with their percentiles, e.g. defining Level I as consisting of the 17th percentile in the wage distribution.

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    • I agree, Mr. Miano’s blog entry “Primer for Reporters Looking at H-1B Program” is excellent and to the point.
      http://cis.org/miano/primer-reporters-looking-h-1b-program
      So good, I would recommend Mr. Matloff asking permission to include it (with prominent attribution of course) as an entry in his own blog.
      Why? – Because Mr. Miano’s CIS.org site has unfortunately become stigmatized as “anti-immigrant”, something which Mr. Matloff has thus far skillfully avoided for the most part. Mainstream reporters are highly unlikely to give briefest consideration to anything on the site, or even to click through it (so much for impartiality). It would be a shame for the piece to not get the views it deserves…

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      • I’d be happy to put John’s post on my site (I’m sure he would be willing), but I really have to ask, who is stimatizing CIS as “anti-immigrant”? Yes, I know about SLPC, but I don’t see anyone on the pro-H-1B side making these claims. Besides, they may well characterize me as “anti-immigrant” too; these people are quite deft at this kind of thing.

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        • Stigmatized not so much in the H-1B debate, but in the wider “immigration reform” debate.
          He’s going to be getting lumped in with Ann Coulter (book – Adios America) and now (gulp!) Donald Trump.

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  3. There are two particularly damning summaries of the controversial H-1B Visa program. The first is the 2002 observation by Nobel economics laureate Milton Friedman that the H-1B Visa program is a “government subsidy” because it allows employers to import lower-cost higher-skilled workers instead of hiring experienced American citizen technical professionals. The second was the observation by India’s Commerce Minister Kamal Nath in the 15 April 2007 New York Times that the H-1B Visa is the “Outsourcing Visa.” I have written elsewhere about the national security harms that are inherent in this and similar work visa programs.

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