Two Close-Up Views of the Problems of H-1B/OPT/Etc.

Those who view the issue of foreign tech workers in the abstract — meaning many policy makers, researchers and so on — should be assigned two news items as required reading. The first article, an op-ed on an independent Connecticut news site, directly addresses the H-1B work visa, and questions CT Senator Richard Blumenthal’s judgment on this issue. The second, in the Wall Street Journal, is not about H-1B but it just as relevant, actually more so.

I’ve characterized the current Durbin-Grassley H-1B reform bill as woefully ineffectual, for a number of reasons. I pointed out that the only really useful provision, to reform the prevailing wage requirement, was the first thing to be emasculated when the authors introduced legislation in previous Congresses, and other provisions were not just unhelpful but actually harmful.

In the above-linked op-ed, John Miano gives an excellent explanation of how the lobbyists and the politicians horribly mislead the public on legislation dealing with H-1B and the like:

…if you read the statute, it says right at the top, ‘All H1B workers should be paid the prevailing wage,’ so if you speak to an industry lobbyist, they say ‘this can’t be used for cheap labor, it says so right there at the top, they have to be paid the prevailing wage!’ But then when you scroll down, you find further down that they have a special prevailing wage system that allows them to pay H1B workers at the 17th percentile, so yes, they can be underpaid. The whole statute is written so that it looks like it’s doing one thing but then contains other provisions that undermine what it said before.

Miano’s remarks may not apply to Durbin-Grassley, but it is cogent description of the deception which is rife on this topic. Unfortunately, the article, in quoting Blumenthal’s response to the author’s query, does not really explain how the senator is being so misleading. The between-the-lines thrust of his remarks is that he thinks the “Intels” (mainstream U.S. firms) are using H-1B legitimately, while the “Infosyses” (Indian-owned firms that “rent” programmers to U.S. companies) are the main abusers. The Durbin-Grassley bill, sad to say, takes that point of view.

The WSJ article is dynamite. The first two paragraphs are fraught with relevance to H-1B (even though the author is likely unaware of this):

After more than 20 years as an electronics engineer, Pete Edwards reached the low six-figure pay level. Now, as he looks for a job following a layoff, he finds that salary success a burden.

Although his experience includes the sought-after field of 3-D printing, the 53-year-old hasn’t been able to land a permanent full-time job. Time and again, he says, employers seem to lose interest after he answers a question that they ask early on: “What was your last salary?”

This is the story of H-1B in a nutshell. Age — read wage — is one of the two central issues of H-1B; employers hire younger, hence cheaper, foreign workers in lieu of older (age 35+) Americans. (The other major reason employers like hiring foreign workers is that, if the worker is being sponsored for a green card, he/she is essentially immobile.)

Moreover, did you catch that part about 3-D printers? Whenever the industry lobbyists are asked about older Americans, they dismiss the latter as having failed to keep their skill sets up to date. In most cases, that is simply false.

It’s really unfortunate that even critics of H-1B rarely if ever mention the central role of age. I’ve noted, for instance, that in spite of all the hoopla over companies like Disney replacing American ITers by H-1Bs, it is almost never recognized that the prime reason the foreigners are cheaper is that they are YOUNGER.

Read these two article, both highly informative.

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25 thoughts on “Two Close-Up Views of the Problems of H-1B/OPT/Etc.

  1. During my day job, I do C#, SqlClient, OleDb, VB.net, SQL Server, Access, etc.
    During my evening job, I do php, mysql, javascript, google maps, and I’m learning ajax and jquery.
    And I have 30 years experience as a systems analyst which is the most sought after H-1B application filed.

    Exactly where and how are my skills not up to date?

    Yet I can’t buy an interview and I only lucked into this job that I started 3 weeks ago.

    Like

  2. Well the old Google backchannel for reading WSJ articles seems to have closed at last, so I’ll just react to the opening comments – which are disgusting and offensive, that a high salary is some kind of *burden*. Are we really supposed to believe that working for a low salary is virtuous? How about a discussion of the “value proposition”, what does one *get* for so many dollars paid in salary? Being obtuse and offensive on these kinds of issues is exactly why I stopped reading WSJ ten years ago, and they’ve only gotten worse any time I glance back at them.

    But what *about* companies who “don’t want to pay high wages”? Norm, you like to say it’s especially that they don’t want to pay them to older workers and that there is age discrimination involved. Well, let’s look at that for a moment. Let us say that, once upon a time, say about fifty years ago, this made a kind of sense. Fifty years ago not that many people ever went to college, the technologies were new so hadn’t been taught in college even twenty years earlier, and older workers might have no clue as to what was going on. Even continuing education was a novel idea fifty years ago.

    But those days are not these days. Most STEM workers today over age 50, certainly over age 35, have gone to college and already worked through two or three generations of technology, and are survivors and tested and strong – the weak ones are long gone by age 50. It makes no SENSE for technology companies to discriminate AGAINST older workers. And indeed, now and again I find one that does not, that indeed hires more older workers than younger, and they seem to do just fine.

    So it’s the whole game here that is in question, not whether older workers this or salary levels that, those are the statistics but not the answers. The question is simply why don’t companies know how to manage rationally any more, such that they decide first on low salaries and only second on success. That’s what has always fried my bacon about this whole topic.

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    • I believe that much of the problem is the “professionalization” of HR, which involves a very formulaic approach to personnel management. They might even argue that it is necessary to do this for large companies. Under such formulas, old is old, and intangibles about the virtues of experience don’t fit into the equation.

      Well, if they want to shoot themselves in the foot, that’s their business. But when they ask Congress to aid and abet, by importing more young H-1Bs, that’s where I draw the line.

      Liked by 1 person

      • HR is exactly the problem. In the past, you would speak directly to the person hiring. Now, HR controls the gate. The ‘purple squirrel’ ads require that persons have huge and expansive skills, or be on the short list of the H-1Bs. No one not on the short list gets through the gate keepers.

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    • @jrstern

      I think what you are missing is this.

      The salary is NOT a burden for the technology companies.
      What happens when you get forced out of the tech industry is you have to get a job, any job, to provide for your family.

      And all the jobs in America are already full except for the “churn” jobs where they hire you at convenience stores, etc. and the technology companies will not hire you no matter how impressive your credentials are.

      Problem is, when they look at your resume (in my case) they see you have made $113,000.00 per year at the upper end and on avg $75,000.00 per year.

      And they do not understand the H-1B, or any non immigrant visa situation that is happening now.

      So they automatically disqualify you because you have made too much in the past and you won’t stay when times get better and you are over qualified.

      All of this works together to totally eliminate you from the work force (in my case, 5 years with no job)

      This is why our previous salaries are working against us

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      • And there are still recruiters who refuse to consider anyone unemployed more than 2 months (“they must be a problem”). And they win’t consider anyone willing to take a job for less (“because they will bolt at the first opportunity to earn more”).

        What shocks and disgusts me is how much the reporters euphemize, soften, under-state the dysfunctionalities of USA job markets since about 1986 (more or less; there were some related problems starting to show by 1980).

        Oh, it is worth following the links in those articles. For all the effort I put into tracking these issues, I had missed several of them.

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  3. Everytime I read your blog, I get quite depressed about my future in STEM. The only way out seems to be to get into cybersecurity(where jobs exist only for Americans) or something super specialised like maybe game development or detour into theoretical CS or hard math. These are positions that few F1 students or H1B workers would be qualified enough to get into.

    The unfairness of the situation is unpalatable. Corporations have unlimited access to cheap labor and ordinary workers are in a poor bargaining position.

    I look forward to the day when all the editors and lawyers and other pro-immigration sellouts have their jobs replaced by immigrant labor.

    Liked by 1 person

    • @alex

      This is why I say that we are at war and why we must all work together (Americans, not just STEM workers) as all jobs are on the line if we keep on this path as there are 7 billion people needing work to provide for their families and only 161 million jobs available if we only look at American jobs,.

      As for cybersecurity, I too was thinking along those lines but I’ve noticed a large percentage of those getting hired for those jobs are non immigrant visa holders or companies that supply non immigrant visa holders.

      Mr. Matloff has stated it numerous times here.
      I have stated it numerous times at Keep America At Work.

      We are being defeated because we cower behind cubicles thinking it will not happen to us so we have no skin in the game, and we think that until it does happen to us and then it is too late as we simply are not creating enough Computer and Mathematical jobs (On avg about 120,000 per year) to handle the Americans that want these jobs and the foreign born that want these jobs and since “Foreign Born” are getting the jobs at the expense of “Native Born”, Americans like myself are being cast aside.

      I can understand my case as I’m one of the least educated ones working in software and I am now 58.

      But at the same time I’m one of the best analysts out there as I suffer from no preconceived notions and I follow the trail no matter where it goes.

      Sadly when you study the stories, you see that having the best education does not insulate you from what the least educated are going through as I’ve seen numerous stories of people that have several degrees from places like MIT that are now working for ten dollars per hour just to survive.

      This is why it is an educational process.

      We must educate the general public who have no idea what is happening here.
      The mainstream media will not tell that story.

      BUT, they will tell that story if we pay them to carry our advertisements (greed is good sometimes)

      Which is why we must produce these ads and pay for them.
      Which is why we need to establish a war fund to pay for them.

      There are about 18 million STEM workers of all persuasions.
      Imagine what we could do if we put up $100 each.

      There are 161 million American workers minus 25 million foreign born workers so lets say we have 135 million American Workers.
      Imagine what we could accomplish once they began to realize their jobs are not safe either.

      We can defeat these people.
      We have the resources, the skills that they do not have, and the determination.

      What we don’t have is the realization that our neck is on that guillotine as one of the former Disney workers recently described.

      And the Disney, SCE, Fossil, Toys R Us, etc. stories are rapidly changing that.

      Like

  4. In addition to HR today’s upper IT management is often drawn not from technical workers but from MBA management grads with little technical background.

    I actually faced a situation recently where after a career of 30 years in IT I was asked to learn a technology platform entirely new to me when a co-worker who had been responsible for it suddenly resigned (due to stress from overwork). I was glad to do that; even enthusiastic. I was then expected to do his job AND my old job; soon they brought in a guest worker “resource” to replace him. The new “resource” didn’t know my job or my co-worker’s job so I had to train him from the ground up.

    I wanted to move within the company to a job more appropriate to my long-term technical skills, but upper IT management said that the only job I would be allowed to do was the one I had inherited from my co-worker recently. Upper IT management said “You’re only good for whatever you’ve done technicallly most recently.” I noted that it had taken me only two weeks to learn my co-worker’s platform and that I only had about six months total with it. The upper IT manager shrugged as though, hey, that was the only position I should be doing from that point forward.

    That is the kind of thing that experienced older workers are facing these days.

    Liked by 1 person

  5. “Upper IT management said “You’re only good for whatever you’ve done technicallly most recently.” I noted that it had taken me only two weeks to learn my co-worker’s platform and that I only had about six months total with it.”

    Yes. Definitely. I’ve figured out certain things and put them in production in an afternoon (and made use of it and taught others over the next few weeks or months) and had a recruiter claim that no one could possibly become productive short of a month of training and additional months of experience. There are many such things encompassed by “IT”. This gives rise to suspicion of alterior motives.

    Liked by 1 person

  6. I claim that “type 2 savings” (younger workers cheaper) do not apply to “gold collar” workers (physicians, attorneys, dentists).

    When the federal government reimburses physicians it does NOT take into account the age or experience of the doctor. The government takes into account the geographic practice cost index (GPCI) and the procedure’s relative value unit (i.e., the RVUs for work, practice expense, and malpractice). All doctors are paid the same for a geographic area and a procedure. A heart surgeon is a heart surgeon and not a level 1 or level 2 or level 3 heart surgeon or a junior heart surgeon or an entry level heart surgeon.

    According to the Physician Fee Schedule, procedure 32551 (Insertion of chest tube), the cost is just under $200. There is no “type 2 savings” for having a younger doctor. For procedure 33401 (Valvuloplasty open) the cost is about $1500. Again, no “type 2 savings” for a younger or less experienced doctor or a doctor who had some training outside of the US.

    When the federal government (NASA) hires engineers they pay them according to experience and hence age. They have a “GS scale” for engineers. Engineers allow themselves to be ranked by experience and hence they are paid differently.

    There was a great fear in the legal community. It was feared that attorneys would bid for legal work on the Internet, lowest bid wins. It never happened. The lucrative contingency fees have not changed. There was no “race to the bottom”. It is considered taboo in the legal community for an attorney to tinker with the contingency fees. The contingency fees are about the same whether the attorney just graduates law school or has decades of experience. Attorneys as a group have solidarity.

    When an engineer gets out of school he has no qualms undercutting the pay of an older and more expensive engineer. There is no taboo stuff. He does not mind being labeled as a entry level engineer or a level 3 engineer or whatever and being paid less than an engineer with more years on the job. Engineers as a group do not have solidarity.

    A dentist fresh out of dental school is not going to rationalize that he is inferior to an older dentist and thus have to provide a “type 2 discount” to patients. He is not going to advertise himself as being an entry level dentist, or a junior dentist or whatever.

    Economists agree that workers could earn more if they share salary information. If only engineers could specify their salary at a particular company on the LinkedIn website. Other engineers could then demand the same salary when applying for a job at that particular company. The salary would be the same regardless of experience level.

    Ironically many engineers complain that engineers are becoming a commodity. If this is true then there should be no “type 2 savings”. Engineers should work for the going rate, just like doctors, lawyers (contingency fees), and dentists. No entry level engineer or level 2 engineer, or GS-9 NASA engineer labels.

    Physicians, attorneys, and dentists are “H1B proof jobs” because they require training or additional training at a US school and a license that requires a US degree. The schools set the numbers of these professionals allowed to work in the US and not guest worker laws. Yes, someone trained outside the US can be admitted to a US school but the overall number of these professionals is controlled by the US schools.

    Finally, there is a lot of talk about age discrimination in engineering. To me age discrimination is a signal for an oversupply of engineers.

    Liked by 1 person

  7. The requirement to pay the prevailing wage in and of itself makes the H-1B about cheap labor. Applying the basic economic law of supply and demand, if a skill set is in short supply, as is alleged, then in a free market that skill set should command a premium wage not an average or prevailing wage. Since the employer pays the prevailing wage instead of the higher free market wage the H-1B provides labor cheaper than that same skill set could be had if the H-1B did not exist. This lead Noble laureate Milton Friedman to call the H-1B a subsidy saying

    “There is no doubt, that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy.”

    In 1776 in his “An Inquiry into the Nature and Causes of the Wealth of Nations” Adam Smith anticipated the H-1B law being about cheap labor saying

    “Whenever the law has attempted to regulate the wages of workmen, it has always been rather to lower them than to raise them.”

    Liked by 1 person

    • One other advantage to employers of paying the prevailing wage is that it is created based on the existing wages in the area. If everybody pays the prevailing wage in an area, how will it ever go up except for yearly increases to compensate for inflation? So you get the double bonus of paying less than real demand and artificially keeping wages low by keeping the prevailing wage from going up.

      Like

  8. There’s been minimal coverage of the H1B issue in the news & specifically in the Presidential debates anymore. It’s falling off the radar. All the coverage is about illegal immigration. If Cruz or Rubio bring it up, they refer to H1Bs as ‘guest workers’.

    Maybe someone here lives in a town/city where Trump or Sanders is going to have a rally and ask him specifically “If elected, what will you do about the problem of H1B foreign IT workers being brought here to take American IT workers’ jobs?”

    Trump will be doing a CNN Town Hall this Thursday in South Carolina. Anyone in the area?

    Like

      • Trump has scheduled another town hall with MSNBC tomorrow (Wednesday). It was at the MSNBC debate where they asked Trump specifically about the ‘H1B visa’ problem and also mentioned Rubio being called Mark Zuckerberg’s ‘personal senator’. That was the peak of interest in the H1B problem in these debates.

        Any readers here in the South Carolina area?

        I’m pretty sure once the Florida primary comes around and town halls will be held, one or more people will bring up the H1B visa question. Probably one or more IT workers from Disney. There’s already a group in Florida that has launched a $1 million ad campaign.

        http://www.lifezette.com/polizette/anti-amnesty-group-targets-bush-rubio/

        From the article:
        “This issue needs to be discussed in Florida in February and March,” said Federation for American Immigration Reform President Dan Stein, whose organization is paying for the ads. He said the campaign may be expanded to other states.

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    • I’ve been trying to create a new site that we could direct the small mom and pop newspapers and radio stations too as well as Presidential Candidates, etc.

      I want the message to be clear that these so called “Guest Workers” Displace Americans on a 1 for 1 basis.

      That is why I chose the name H-1B Hunting License.

      http://h1bhuntinglicense.com/

      Feel free to send this site to anybody and everybody.

      I will be creating more and more sites along these lines as I start to get paid.

      Bottom line, if we wait for somebody else to speak up, our silence simply enables more and more of this nightmare that is destroying the future of, and all of the work that Americans have spent the last 30 or more years building skills for.

      And we are fools if we think that it will be only the tech jobs that “Guest Workers” are imported for.

      Like

  9. **Edit:

    “If elected, what will you do about the problem of H1B foreign IT workers being brought here to take American IT workers’ jobs, lower wages and discriminate against older IT workers?”

    Like

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