Springtime, and the Planted Articles Are Blooming

Planted? Why, yes, what else could one call this article in today’s San Francisco Chronicle? It is chock full of quotes from immigration lawyers promoting the Intels Good, Infosyses bad point of view, with just a token nod to the other side. And guess what? The stars of this article are related to FWD.us, the Mark Zuckerberg organization pushing for more H-1Bs and a broader immigration policy in general. The poster girl H-1B, Angie Gontaruk, works on Marketing and Strategy for FWD.us, and the lawyer quoted in the article, Ann Cun, is connected to FWD.us too. How convenient; FWD.us provides all the seeds, and the reporter merely plants and adds water.

The lawyers claim that H-1B is not about cheap labor after all, as far as the Intels are concerned. They supposedly pay their H-1Bs more than the Americans. Before refuting the lawyers’ claims, I should remind readers of a key point that I’ve mentioned often in these discussions: For the Intels, the attraction of the H-1B program is more about immobile labor than cheap labor. If the employer is also sponsoring the H-1B for a green card, as is typical for the Intels, the worker is essentially trapped, not daring to leave for another employer, as the worker would have to start the green card process all over again at the new company. This is of huge value to employers, who don’t want to be left in the lurch when a worker jumps ship during an urgent project.

Now concerning wages, the primary point is that the official prevailing wage is well below what would be the market wage for that worker,  i.e. the wage that worker would command in the open market, given her skill sets, talent level and so on. The official wage floor is defined to be the AVERAGE wage for the given occupation, region and experience level (I, II, III or IV). The employers claim to be hiring the H-1Bs for their rare skill sets, and people with rare skill sets by definition earn ABOVE average wages. So, the official prevailing wage is legal sleight-of-hand to begin with, and the quoted lawyers here are happy to shift those shells around much faster than your eyes can follow.

In my Migration Letters paper, I show that the prevailing wage is typically undervalued by 20% or more, for the same experience level. It is on the order of 50% when accounting for the fact that a core goal of the H-1B program is to hire younger, thus cheaper foreign workers in lieu of older, thus more expensive Americans; see my paper on this topic. So, the point made in the Chronicle article that the employers have to pay several thousand dollars in legal fees is irrelevant; over the 5-10 years the employer has the H-1B, the employer will save WAY more in wages than he pays in legal fees.

And there’s more. In fact, the Intels — by which I mean the firms, large and small, that hire H-1Bs directly rather than renting them from the Infosyses — do indeed pay many of their foreign workers at that lowball official wage figure. Again, see my Migration Letters paper for details. Intel itself, for instance, pays 38% of its foreign workers being sponsored for green cards at that figure, which as noted above, is 20-50% lower than what an American with comparable job qualifications would get.

Shame on the Chronicle for running an article like this, especially since its coverage of the topic has usually been well balanced.

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24 thoughts on “Springtime, and the Planted Articles Are Blooming

  1. I read that Google has been outed for underpaying women. The H1Bs also suppress the wages of American women tech employees because they are usually under all the men in the pay scale.

    At a consulting firm I worked for, they paid a man I hired, more than I was making leading the team. I quit and they lost a contract. This is all standard fare for women in tech.

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    • It makes no sense to pay someone differently solely based on gender… It’s irrational, which is something that you would NOT expect from a supposedly “rational” and “scientific” high-tech industry.

      And then you have the occasional lady manager with a grudge, who wants to “balance the scales” by paying her women more than her men. I’ve seen that, too, although it’s still a rare exception.

      The gender issue is also deeply tied to H1-B, since almost all the H1-B’s being imported are men. Then the know-it-alls running the big tech companies wonder where all the women are…

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  2. My friend who was here from Europe on an H1B visa saw HR data which showed they were underpaid – at that company – by 30 percent.

    He also said they employed various tactics to slow down the green card process, I.e. forgetting to file this or that form with the government for 3 or 6 months. He considered himself an indentured servant. He finally gave up, went back home.

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    • Hi Bill,
      Wow, it seems the industry uses all sorts of dirty tricks to delay the green card process so as to maximize the employee retention time.

      Combine these dirty delay tactics with long green card wait times for Indian nationalities, we have a employee that has to stay with that employer for 10-12 years.

      And in all of this, the employer is all too happy to keep paying the same wage to the H1-B holder without any pay rise. Ultimately they would push a H1-B to the limits of how much abuse / indentured servitude he/she can take all for a green card.

      And when the employee gets the green card and demands a pay rise, rinse and repeat the whole process, get the next batch of H1-b’s in.

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  3. It’s amazing that a so-called professional newspaper would run such a story without disclosing that the subject, Angie Gontaruk, was an activist on the topic.

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      • Tech industry journalism has been that way for decades. It really kicked in when Microsoft was taking off in the 1990’s. We saw plenty of “planted articles” back then…. Like the one with a graph showing sales of IBM’s competing OS/2 software “disappearing”, but if you noticed the scale on the left-hand column, the x-axis was placed at 200,000 units a month, not at zero. It wasn’t labeled at that point; you had to use the tic-mark spacing from the rest of the graph to figure it out. To the typical observer, the assumption is always that the x-axis is shown crossing the y-axis at the (0,0) point. Very sneaky.

        The headlines are usually a dead giveaway. A tiny quote in the article that says something negative, is used to build a headline, even though the rest of the article (and supporting data) often says the opposite from the headline. Example: “OS/2 Users Head for the Exits” on another article, but the data from surveys showed more companies were *increasing* their OS/2 investment, than were *decreasing* it. If you just glanced at the headline, you’d get the intended narrative, but if you read the article without the headline, you’d get the exact opposite.

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  4. Google, Facebook and Apple make more than $1 million per employee per year. Maybe prevailing wage is not the benchmark that should be used anyway.

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    • And yet they claim an engineer making $60K working 80 hour weeks is “highly paid”. Surely Apple can afford to pay each person $100K instead of $65K. They would still be making over $990K per employed. From these numbers one can see why $200K per employee salary per year isn’t really all that outrageous. These people give up their entire lives and all their free time and in some cases their health in order to work for Apple. What is a mere $100K one way or the other in these cases. Apple and Google can definitely afford it.

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  5. The gist of the message hidden in the article is this:

    It costs more to pay an H1-B than it does to pay a college fresh-out of the same age, BUT,
    it costs less to pay an H1-B than it does to pay an experienced engineer or programmer who just got fired.

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      • Professor Matloff, I have met graduates come out of US Masters program who can’t code their way out of a web paper bag.

        The vast number of them attended a no name school in India or China to get their undergrad. Back when I was in university some 20 years ago, not only was it impossible to get into a CS masters program in Canada, it was much harder to actually excel in those courses.

        Would you say this deterioration of the standards is actual or something perceived?

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        • It’s an interesting question. There are several factors at work, I believe.

          First, there has been a steady escalation of the difficulty of programming assignments in U.S. CS programs over the years. Ironically, that has resulted in a DECLINE of programming ability. Many instructors feel that the assignments are so hard that they need to give detailed hints on how to write the code, defining data structures, functions/methods and so on. If a student does not develop code from scratch, spending time planning out the structure of the code and so on, he/she will never really learn programming.

          Second, in academia, numbers are power. So there is a natural tendency to accept more students, thus reducing overall quality (both domestic and foreign).

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          • There is no better teacher than a good example, or a really bad one.

            I’ve had the opportunity to work on assembler code that was beautiful with the comments to match. I tutored my son through a C class and went out of my way to show him some of the nifty practices, even his teacher hadn’t seen some of them. There is nothing wrong with showing the students code, it’s what they are paying for.

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        • Real for sure:

          Asia’s rampant cheating problem

          http://www.salon.com/2012/01/04/asias_rampant_cheating_problem/

          And China even has companies you can hire to fly people to USA to take your GRE for you!

          Most of these people are outright frauds. They see the big $ and prestigous jobs and in they come. Every successful system attracts parasites.

          Many of them are foreign industrial spies. They use their US STEM jobs to steal and transfer our industry and tech know-how back to their own countries.

          http://www.ibtimes.com/indias-tcs-fined-940-million-us-trade-secrets-lawsuit-2355025

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  6. > Now concerning wages, the primary point is that the official prevailing wage is well below what would be the market wage for that worker, i.e. the wage that worker would command in the open market, given her skill sets, talent level and so on.

    I also noticed that there are some strange things about the table labeled “Valley of Opportunity”. You can try to reproduce it by going to http://www.myvisajobs.com/H1B-Visa/Search.aspx , entering the given Employer and Job Title, selecting Certified for Status, California for Work State, and 2017 for Fiscal Year, and pressing Search. For the six companies in the table (Infosys, Google, Wipro, Apple, Tata Consultancy Services, and Facebook), you get 2, 6, 4, 1, 37, and 96 matches in the Bay Area, much less than the 4.707, 4,082, 1,861, 1,523, 1,179, and 942 listed in the table. In fact, you can duplicate the smaller numbers if you look at the original source file at https://www.foreignlaborcert.doleta.gov/docs/Performance_Data/Disclosure/FY17/H-1B_Disclosure_Data_FY17_Q1.xlsx . Looking at the file, the numbers represent the number of applications. Even looking at the Total Workers just increases the numbers to 2, 6, 18, 1, 37, and 929. The last number is high due to 13 applications that specify 50 workers and 2 which specify 99 workers, likely more than were actually hired. In any case, the numbers in the table are higher than the totals for ALL positions in the entire U.S. in all but one case so I have no idea where these numbers came from.

    You can also look at the prevailing and actual wages in the file as these are not available at http://www.myvisajobs.com unless you upgrade to a paid account. Some of the numbers match those in the table but most of them do not. Still, the key point that is obvious is that the creator of the table selected seemingly random positions at the six companies. A casual reader might think that the positions listed are the default names for programmers or technical managers at the six companies. In fact, they are just positions that represent a small minority of all of the H-1B positions. That and the fact that, as Norm points out, the prevailing wage is well below the market wage for that worker makes the table useless, if not extremely misleading.

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  7. The biggest FRAUD in the H1B Visa scam is that neither the employer nor the employee Visa holder are required to pay the 15% payroll tax for Social Security and Medicare! So, right off the bat on a $100,000 salary the employer saves $15,000. Of course, we all know that not contributing to Social Security does not preclude anyone from eventually collecting Social Security especially if you’re a foreigner from a third world country.

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  8. I had a conversation with a top dog at a small start up, his third. He is now hiring programmers in Asia. He kept saying, “It’s not about money, it’s not about money… we want people who are committed to our vision.” After about an hour he admitted, “Well, we also do save money.”

    Really, they now save money in multiple ways.

    Like

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