Worse-Than-Doing-Nothing Bill Passes House Committee

Today’s Wall Street Journal ran a story reporting that the Issa H-1B “reform” bill has now passed the House Judiciary Committee. Unfortunately, the article, which at least for now you can read in full here or here, does not question the Intels Good, Infosyses Bad presumption on which the bill is based; it takes this as an “obvious” given. The article states (emphasis added)

Scott Corley, who runs the pro-immigration Compete America coalition made up of technology companies, said the bill was a welcome step toward separating high-tech companies from outsourcers.

The article offers no explanation as to why such a separation is warranted.

I’ve been warning for years that this kind of bill not only would not help matters but would actually make things worse. I won’t review the reasons for this in the current post, but did want to call attention to one passage in the article:

The California Republican also changed the definition of “H-1B dependent” to 20% of a company’s workforce from 15%. That mostly protects high-tech companies such as Facebook and Qualcomm Inc., which both have been H-1B dependent in recent years, according to Labor Department filings…

The percentage of foreign workers is growing at companies like Facebook in part because the H-1B workers don’t return home. Instead, companies sponsor them for green cards so that they can stay permanently.

But a long wait for green cards, particularly for people from India, means that workers are stuck in the H-1B status, and companies see its visa dependency rate climb.

This tack, again designed to support the false claim that the Intels use the visa responsibly, is one of the most misleading quantitative arguments I’ve seen in a long time. Even if the wait for a green card were 0 years, it still would be the case that 15% of the workforce (and likely well over 50% of the engineering workforce; see below) at places like Facebook and Qualcomm would be non-American. The fact that they would not be H-1Bs anymore is irrelevant. Instead, the relevant point is that these are jobs not open to Americans.

(And yes, many of these foreign workers will eventually get green cards and later naturlize, thus will become Americans, but that doesn’t change the fact that they do so on the backs of the existing Americans whom they block  from getting those jobs.)

And once again, that 15% bar itself is misleading, as it includes all the nonengineering staff — the accountants, the marketing people, the physical plant people, the attorneys, the manufacturing line workers, and so on. (The article actually does mention this, I was pleased to see.) It’s unfortunate (though intentional) that when Congress set that 15% bar back in 1998, it didn’t restrict the denominator to STEM workers. It is likely that most of the engineers being hired at those firms are foreign workers (H-1B, OPT, etc.). If for example engineers form 1/4 of Qualcomm’s workers, that 15% figure means 60% of the engineers at that firm are H-1Bs. See this LinkedIn page for an illustration of this.

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What Does Trump Really Think of Immigration?

A reader of this blog kindly forwarded me a  New York Times article that purports to give the inside scoop on Trump’s views on immigration. Since the NYT admits to a bias in favor of high (unlimited?) levels of immigration, one must take the article with a grain of salt, but I assume that much of it is true. I do wish to comment on this passage, though:

Those who know Mr. Trump say that his attitude toward immigrants long predates his entry into politics.

“He’s always been fearful where other cultures are concerned and always had anxiety about food and safety when he travels,” said Michael D’Antonio, who interviewed him for the biography “The Truth About Trump.” “His objectification and demonization of people who are different has festered for decades.”

Friends say Mr. Trump, a developer turned reality TV star, grew to see immigration as a zero-sum issue: What is good for immigrants is bad for America. In 2014, well before becoming a candidate, he tweeted: “Our government now imports illegal immigrants and deadly diseases. Our leaders are inept.”

The claim of “objectification and demonization” is an editorial comment, so let’s put that aside.  Instead, I wish to make the point that one thing about Trump, whether a fault or a virtue depending on one’s point of view, is that he seems to have little or no willingness to keep any of his thoughts to himself. This must be kept in mind when the people in the article say things like the above. I am quite sensitive to this kind of thing, and have observed exactly the same, if less direct and overt, attitude in virtually everyone I know, especially in academia. It is natural, and the fact that Trump would voice it while others don’t does not mean the others don’t have such feelings.

And though “familiarity breeds contempt” in some cases, as a longtime student of race relations I have found that familiarity can also be part of the solution. Even this unsympathetic article seems to give Trump credit for developing genuine concern for the DACA kids and young adults after meeting some of them, and some of the Latino leaders seem to agree. If they and their allies in Congress would just concede that even Barack Obama expressed doubts about the legality of his (Obama’s) executive order, we might actually have a real dialog on DACA.

But the Times wouldn’t like that, would they?

Much Ado About Something Already Well-Known

Occasionally I receive so many e-mail messages about a certain news article that I feel compelled to blog about it. Such as the case for the Pro Publica/New York Times article, “Report: Major companies excluding older workers from job ads on Facebook, Google, and LinkedIn.”

What were firms like Amazon, Verizon, Goldman Sachs, UPS, and Facebook caught doing? They were placing job ads in social media sites that targeted young people — targeted in the sense that only young people received the ads. So you say, “Aha, gotcha!”, right? Not really.

The article’s expose’ is merely a reflection of the REAL problem, which is that these employers are earmarking these jobs for young people in the first place. All the major tech firms have ads explicitly stating that the jobs are for “New or Recent College Graduates” (along with internal documents using acronyms NCG/RCG). Or the ads will state “3 years’ experience,” meaning that applicants with 15 years of experience are “overqualified” and automatically rejected. So the article is not news. And since the vast majority of new graduates are young, it makes practical sense for the firms to target their social media ads to the young.

Not that I am defending any of this. On the contrary, I have written extensively about age discrimination in tech, and on the fact that it is fueled by the swelling of the young labor pool by the H-1B visa workers, who are almost all young. (A point that Pro Pub./NYT would not state even if they knew about it.)

Instead, my point is that it is futile to treat the symptom and not the disease. If these firms stop restricting dissemination of their ads only to the young, they still will be restricting their hiring to the young. And they still will hire lots of young H-1Bs.

Interestingly, KQED, a Bay Area NPR station, ran a piece Thursday morning on Facebook and the age issue. It profiled a 54-year-old man with extensive, sophisticated tech background who lives just a few blocks from Facebook but has failed repeatedly to get even an interview with the firm. Facebook and the reporter spun this as problem of a large firm that would like to hire people like this man, but has problems connecting the right applicants with the right managers. But not to worry, Facebook is going to set up a special program to remedy this. As you can see from my comments above, this is not the problem at all, and the special program will help only a few token hires.

So the social media targeting issue is a distraction from the real issues. The same statement holds for the “Intels Good, Infosyses Bad” false dichotomy that I rant about here so often. The claim is that the “Infosyses,” firms that hire H-1Bs and then rent them out to other employers, are the main abusers of the H-1B program, while the “Intels,” who hire H-1Bs directly, typically as foreign students at U.S. campuses, use the program responsibly. Again, that is just a distraction from the real issue, which is that the Intels are just as culpable.

Take a look at this LinkedIn page. Almost all of the Facebook engineers appear to be foreign-born, and most of those would be current or former H-1Bs. Indeed, Facebook has recently “qualified” as an H-1B-dependent employer. Mind you, those engineers are probably well-qualifed, but Facebook is rejecting lots of U.S. citizens and permanent residents who are also well-qualified. I’ve called attention here before to similar LinkedIn pages showing the same pattern for eBay. (Largely Indians there, compared to the Chinese-dominant Facebook.) Once again: Congress could shut down all the Infosyses entirely, yet Americans still wouldn’t be getting these jobs. 

“Keep your eyes on the prize” — not distractions.

 

 

Lies, Damn Lies, and Fifth-Grade Math

Looks likes USCIS Director Lee Cissna didn’t do his homework for his press conference yesterday. But neither did the reporters who were hounding him.

Cissna was promoting the RAISE Act, which would move U.S. immigration policy in a more skills-based direction. In particular, it would end chain migration, i.e. X sponsors his sister, she later sponsors her mother, who in turn later sponsors her new husband, who then sponsors his sister, etc.

Cissna brought up the recent NYC bombing attack as evidence that current immigration policy needs improvement. His claim was, essentially, that using skills rather than family connections as the basis for choosing immigrants should bring us fewer people who are prone to become terrorists. He didn’t offer data on that, but no one — even those reporters badgering Cissna — would dispute the fact that almost all immigrant terrorists in the U.S. have come here in categories other than the skills-based.

But Cissna allowed the press to change the issue. They started bringing up the usual line that the crime rate among immigrants is lower than that of natives. Likely true, depending on definitions, but IRRELEVANT. Note again what I said above. An immigrant admitted on the basis of skills is less likely to become a terrorist than someone admitted through family connections or refugee status.

If Cissna had fully explained that to the press yesterday, they would have had to back off. But no, he allowed them to change to an irrelevant subject.

It’s really an issue of grade school math, rates and proportions. “What proportion of Group X has Trait Y?”  This is fifth or sixth grade stuff. Cissna correctly began with the relevant proportion, yet allowed the reporters to switch to an irrelevant one. In other words, Cissna, who has a physics degree from MIT, was outwitted by a bunch of English majors who had trouble with algebra back in high school.

The other point is that one journalist dismissed the recent NYC attack as “an isolated incident.” Yes, the 9/11 and San Bernardino attacks were isolated incidents too. But I think all would agree that we must formulate policy, including immigration policy, to avoid such cases as best we can. As I have written before, we must take a critical look at what benefit we hope to get from immigration (not necessarily economic), and how much we are willing to “pay” for that benefit (not necessarily monetary); one such cost is an increased number of these horrific and tragic incidents, even if they are rare.

I hope Cissna does his homework before future press conferences. And NO, I do NOT support the RAISE Act myself; I just support clear, unbiased thinking.

By the way, this is a bit related to my old Bloomberg op-ed, “Software Engineers Will Work One Day for English Majors.” 🙂

Why Is the Tech Industry Keeping Mum?

In the current debate on tax reform, one topic that has arisen is that the House bill would tax graduate students on the tuition benefit they receive in their graduate stipends. Though not the topic getting the most attention, it has been covered quite a bit in the print and electronic media.

The grad students are speaking out against the proposal. So are the universities. The rhetoric is that this provision would destroy graduate programs. But in the dozen or so articles I’ve read on the topic, one group conspicuous by its absence is the tech industry.

The industry lobbyists have told us repeatedly that they hire H-1B workers from U.S. graduate programs because not enough Americans pursue grad study. Really? If so, the tech leaders should be up in arms. Yet not a peep out of them.

Of course, a possible answer is that they are salivating so much at the proposed cuts in corporate tax rates that they want to keep a low profile. This is probably part of it, but this can’t be the full explanation.

I suspect that the main reason they don’t care about the issue is that (a) they really don’t need people with graduate degrees after all, and (b) they are counting on the fact that, as one university dean put it, “Foreign students will do anything to stay in the U.S.,” tax or no tax (plus mitigation by tax treaties).

Yes, Who Indeed Is Qualified for an H-1B Visa?

I’ve stated many times that the H-1B work visa should be reserved for “the Best and the Brightest.” Thus I read with keen interest the New York Times article, “Is Anyone Good Enough for an H1-B Visa?,” by a foreign student from China.  The final paragraph is typical of the sense of entitlement I see so often among foreign students these days:

As I make plans to go back to China, I find myself wondering: If I am not qualified to stay in the United States, then who is?

Ms. Yu may well be among the Best and the Brightest, what with her degrees from Oxford and Stanford. But I must admit to some skepticism. Even if you speak no Chinese, you’ve probably heard the word guanxi, literally meaning relationship but of course actually meaning connections that one can exploit. I know that guanxi sometimes plays a big role in building up impressive re’sume’s. And as you will see, on one key aspect of her claim, I am more than just skeptical.

Yu mentions that she has a letter of recommendation from a Nobel laureate. Nice, but how did that arise? Many years ago I chaired my department’s graduate admissions committee. One day I received a phone call from a Nobel laureate in support of an applicant whose record was quite mediocre. The caller did have a connection to UC Davis, so he needed to be taken seriously, and frankly, I was rather naive at the time. We did admit the applicant, and she did mediocre work. It turned out later that the caller was an old friend of the applicant’s father, who was in a prominent position in China. Lesson learned for me.

The Nobel claim may allude to the fact that a co-founder of Yu’s company is the recipient of a different prize, a nice one, but far from the Nobel. If so, Yu’s claim is unconscionable.

Ms. Yu’s LinkedIn page has no endorsements from Nobelists. Quite the contrary, the only recommendation she has is from a former mentor who says simply, “Smart determined and hard working,” hardly the phrasing one would use for the Best and the Brightest.

Yu claims to be an expert in artificial intelligence and big data. Here I will go further than mere skepticism, and say that this would be almost impossible given her complete lack of technical background; her background has been entirely in law and business. I am unable to find any research publications in the field by her. None of her various online bios mentions AI or big data,  She may well have taken a class or two during her MBA, but even then, it would not justify her claim to be an expert in the field. This is key, because Yu is complaining that she was turned down for a visa that she feels she deserves because of her expertise in this field.

Yu also claims to be returning to China. and given the theme of her piece, the message is that the U.S. has just lost a top talent. But I will be very surprised if she doesn’t return to the U.S. permanently within the next few months. I’ve been fooled by such statements before as well.

I really do believe in facilitating the immigration of the Best and the Brightest. I have publicly supported liberalizing the two main related aspects of immigration law, the O-1 work visa and the National Interest Waiver for green cards. I’ve acted on that conviction on various occasions, including actively promoting the hiring of faculty colleagues whom I felt were outstanding talents. In two cases, one Chinese and the other Indian, originally my department wanted to hire someone else but I convinced my colleagues to hire these two outstanding applicants. I’ve helped top foreign students get jobs in Silicon Valley, and a couple of years ago, I wrote a very strong letter supporting a certain foreign national for the O-1. He got it, and is now working down the road from Ms. Yu.

If Yu had claimed that she is a brilliant expert in international law, and used her Oxford and Stanford credentials to support the claim, I might still have a bit of doubt, but I would have accepted it. But I must say I am troubled by her case.

 

 

 

Tax Reform and Foreign Students

I have made frequent reference to a 1989 internal document at the National Science Foundation, our federal government’s primary science agency. The author pointed out that liberalization of immigration policy pending at the time (the bill, which among other things established the H-1B work visa, was enacted the following year) would, in essence, drive American students away from STEM graduate study, as the foreign influx would suppress wage growth for doctorate holders. This forecast proved to be correct.

I’ve also pointed out that the prevalence of international students would grow even further if “Staple a Green Card to Their Diplomas” legislation were to be enacted, under which all foreign graduate students in STEM would in essence receive automatic green cards.

The tax reform plan passed this week by the House would have the effect of making U.S. universities even more dependent on foreign students, because it would count as taxable income the tuition waivers given to most PhD students. How so? Well, a little known fact is that most nations that send large numbers of foreign students to the U.S. are covered by a tax treaty. For instance, students from China and India, the two nations with the largest foreign student populations in the U.S., are basically exempt from paying income tax.

In other words, some American students who would otherwise have pursued a PhD would now choose not to do so, while there would be no impact on the international students. Result: Universities would depend even more on foreign students than they do now.

I am neutral on the tax bill (though I oppose Staple and think the number of work visas sand employment-based green cards should be reduced), as I simply don’t know enough to have a truly informed opinion. But there would be an adverse effect on something on which I am quite well-informed, as explained above.

Update, November 22: As I mentioned above, the tax code is extremely complex. My analysis above is oversimplified. Apparently foreign students are not completely exempt from paying tax, though post docs apparently are. But clearly, the impact would be as I described, though possibly much smaller in general.

Also, the universities could react to this aspect of tax reform in various ways, such as declaring research assistantships as scholarships, which are not taxable. MozView points out that then the universities would not be able to require the students to do research, but that is not a problem; the students are doing the research for their PhD dissertations, so they have to do the work anyway.

Also, most universities have a status known under various names, e.g. Advancement to Candidacy, bestowed when a PhD student has completed coursework and is now just doing his/her research. Under that status, students pay greatly reduced tuition. My guess is that universities will simply relax the rules on that status.

Another Highly Misleading Aspect of H.R. 170

In my post yesterday, I should have mentioned another crucial point about the $60,000 threshhold.

As I explained yesterday, this bar only applies to the issue of the extra “hoops” that H-1B dependent employers must jump through. Currently, in order to be exempt from these hoops, an employer must pay at least $60K. This number was set way back in 1998, and the authors of H.R. 170 make a big point of noting that the figure was not indexed for inflation. H.R. 170 would modernize the figure to at least $90,000, and have it updated for inflation in future years.

This is highly misleading. It is NOT the case that under current law, an employer who wants to avoid the hoops can typically get away with paying an H-1B worker only $60K. The reason is that the employer is still subject to the prevailing wage requirement. Prevailing wage is a lowball figure to begin with, actually the worst aspect of the statute and regs, but still, it’s much higher than $60K. In 2014, for example, the national mean salary for H-1Bs in the computer fields was $83,000.

In discussions of H.R. 170 and earlier proposals, it has become common for the authors to refer to that $60K figure as a “loophole.” But again, that is very misleading, for the above reason.

The REAL loophole is the four-tiered prevailing wage system. As I have emphasized so strongly over the years, the core problem with H-1B is that it allows employers to hire younger, thus cheaper, H-1Bs instead of older, thus more expensive, U.S. citizens and permanent residents. The four-tired system, with its tiers based on experience level, a proxy for age, is the enabler of that core problem.

H.R. 170 does replace the four-tiered system by a single tier in the case of H-1B dependent employers if they place workers at the sites of clients. Fine, but as I explained yesterday, in the end it will still be business as usual, with employers having a number of workarounds at their disposal.

Please note again: The value of an H-1B reform bill can ONLY be defined by its ultimate impact on American workers. Feel Good bills that claim to “at least solve part of the problem” but actually have no impact are worthless.

If the authors of the bill want to live up to their claims to protect American workers, they need to replace the four-tiered system entirely. The bill could be extremely short (“Fits on a postcard”), simply saying that all H-1B workers must be paid at least the 50th percentile (DPE has proposed the 75th percentile, much better) of wages in the given occupation and region.

The other approach, which has been mentioned by many, would be to dole out the visas in order of offered salary, highest first. Simple, and something that could be legitimately done by executive order. Actually, I would prefer that it be ranking by scaled salary, i.e. ratio of salary to median for the occupation and region, so that the computer fields don’t have unfair access to the visas.

Orwellian Bill Passes House Committee

I have been hectoring activists, labor groups, immigration reform groups, and last but not least, all you readers about the fallacy and danger of IGIB — Intels Good, Infosyses Bad — a doctrine that holds that abuses of the H-1B work visa are committed mainly by Infosys and the other outsourcing firms. The firms that hire their H-1Bs from among the international students at U.S. universities — the Intels, for short, but also including tons of smaller firms in addition to Intel, Google and Facebook — are viewed as using H-1B responsibly, indeed for the national benefit. But on the contrary, I’ve shown many times how the Intels are in fact just as culpable as the Infosyses.

Over the years, I’ve warned in particular that promoting the IGIB myth would result in legislation making conditions even WORSE for U.S. citizen/permanent resident STEM professionals. Well, now we have our first concrete example, H.R. 170, which passed committee earlier this week.

The bill involves “reform” of the H-1B dependent employer status, which has been part of H-1B law since 1998. Under this provision, any employer for whom at least 15% of the workforce consists of H-1Bs has extra hoops to jump through in order to be allowed to hire foreign workers.

Well, H.R. 170 would increase that figure to 20%. The House Immigration Committee, in its supreme benevolence, wants FEWER employers to have to jump through the hoops. And Committee Chair Bob Goodlatte is presenting this as a move to protect American workers. In other words, the committee aims to “protect” American workers by SCALING BACK a provision aimed at protecting them — an amazingly Orwellian claim, even by DC standards.

And worse, no one in our gullible press has noticed that contradiction. (Neither, sadly, did NumbersUSA, in an otherwise excellent analysis.)

But what is the motivation for that relaxing of standards anyway?  It is the same motivation for that 15% figure being chosen back in 1998, rather than a more stringent bar of 10%, as had been considered during the early stages of developing the legislation. The motivation is … IGIB! Then and now, the goal has been to surgically set the threshhold — 10%, 15%, 20% — at a level designed to clobber the Indian outsourcing firms while letting the U.S. firms, from Intel on down to the Bank of the West, to go scot free.

A couple of years ago, Facebook, which had exceeded the 15% threshhold, asked Congress for an exemption. They were denied then but not now. H.R. 170 is the Catering to Facebook Act of 2017.

Supporters of the bill would say, “Yes, but the bill updates another threshhold, $60,000 to at least $90,000.” This would refer to the existing statute, under which H-1B-dependent employers are exempt from having to jump through the extra “hoops” if they are paying a salary of at least $60,000. This is a master political move, because it sounds so plausible (and because they knew the press would misquote it as requiring $90K as a hard floor wage for these H-1Bs).

The crux of the fallacy here is that, in actuality, those hoops, while nuisances, are not real barriers. Take the recruitment requirement, for instance. “TubeGate”,  in which a partner of a prominent immigration law firm said, “Remember, our goal in satisfying the recruitment requirement is to NOT find an American for the job.” And his clients were Intels, not Infosyses. (He was discussing green cards, which do have a universal recruitment requirement.)

If an employer — Intel, Facebook, on down to the Bay Area chain, Bank of the West — tells DOL, “We absolutely need someone with data science experience with the R programming language, version 3.4.2, not the R 3.3 that this American applicant has,” the bureaucrats at DOL are in no position to dispute it. And TCS, one of the major Infosyses, requires experience in its own proprietary software, which of course Americans lack; it’s only for project management, not app building, but again, who is DOL to dispute it?

So, IGIB is the core idea behind this new bill. And, as mentioned, IGIB is a myth. As TubeGate and numerous other examples and data analyses have shown, the Intels are just as culpable as the Infosyses in abusing H-1B and related programs. Moreover, even if Congress were to take the drastic step of banning all Infosyses, the current clients of Infosyses would continue business as usual, e.g. by contracting with U.S. outsourcing firms such as IBM, and — note this — by hiring foreign students just like the Intels do. As I’ve said before, Disney for instance could hire foreign students from the various colleges and universities in Florida. They may not be of very highly caliber, say an Information Systems major rather than a Computer Science major, but they would still be cheap, and good enough for those employers.

Someone who supports the bill and is sympathetic to the notion that H-1B is widely abused asked me the other day, with exasperation, “Norm, this bill has so many good reforms. What do you really want?” I answered,

What I want is very simple: I want more of these jobs going to Americans instead of foreign workers. This bill will NOT help in that regard, and in fact will make things WORSE.

As long as Congress — and sadly even many critics of H-1B — define the H-1B problem in terms of IGIB, we will never get any meaningful legislation.

 

The Schools Can Decide the Definition of STEM for OPT?

Optional Practical Training (OPT) is a controversial aspect of the F-1 foreign student visa. It allows a foreign student to work in the U.S. for one to three years after graduation, with the longer period being for Science, Technology, Engineering and Math (STEM) fields.

It should be no surprise that OPT is controversial. As Ron Hira has pointed out, it amounts to claiming that the international student, typically with a master’s degree, still needs a three-year internship. It is also controversial because both its origin and later expansions have come through Executive Branch action, not Congress. A lawsuit against the expansion, based on this point, is still pending (contrary to recent claims in the press that the courts have already upheld the action, which don’t disclose the fact that the one court decision along these lines was later vacated).

Oddly, USCIS has publicly admitted that their reason for extending OPT is that they wish to use the program as an end-run around the “shortage” of H-1B visas. So much for “practical training,” eh?

What is interesting is that, on top of the dubious legal status and demonstrably false rationale for the program, it turns out that apparently the colleges and universities can make their own determination as to what qualifies as STEM.

In other words, OPT has been a sham, right from the start and has been becoming more and more of a sham in recent years. But where is the outrage? With occasional exceptions, critics of H-1B just don’t mention OPT.

Sadly — may I say tragically? — this lack of outrage is due to those same critics buying into the Intels Good, Infosyses Bad myth. IGIB holds that use of the H-1B program by outsourcing firms such as Infosys is abusive, while it is quite fine and salutatory for the Intels — both the big household name tech firms, and the myriad small tech firms — to hire foreign students and sponsor them for H-1B.

Because of the IGIB myth, H.R. 170 by Rep. Darrell Issa is moving right along, having been marked up by the House Immigration Committee earlier this week. I will post a full analysis here when I have time, but suffice it to say that this is a Feel Good bill that actually make things worse for American tech workers, not better. The issue is NOT that it is only a partial solution to the H-1B problem; I contend that it will make things worse. To those of you who are activist on the H-1B issue: If you see an organization interested in H-1B claim that H.R. 170 is worthwhile, call them out on it.

As long as Congress believes in IGIB — and importantly, as long as critics of H-1B believe in it — forward progress, even limited, in reforming H-1B and related visas will be absolutely impossible.