All That Glitters Is Not Gold

Nice analysis by David North on coverage by the NYT and SJ Mercury News regarding the Optional Practical Training program, under which international students can work for 1-3 years after graduation (counted as part of their foreign student visa). Note in particular the item on the “fleet-of-foot Yale University.”

I would take issue with David on one point, though:

The Times article focused…on an interesting set of “victims”, all of whom are former or current students at Ivy League universities. This gives a lopsided view of the program that routinely provides subsidized jobs to more than 200,000 alumni of less highly regarded institutions.

The fact is that even the “highly-regarded institutions” are treating international master’s degree students as lucrative revenue sources, with lower admissions requirements as long as the students can pay full freight. See for instance my post on Columbia and UC.

14 thoughts on “All That Glitters Is Not Gold

  1. One very important point that the article makes is that “Neither article [Times and Mercury News] mentioned the approximately 8 percent tax break that employers of foreign grads, but not of American grads, get under OPT.” I find it stunning that we should be maintaining this disadvantage for American graduates. We are essentially paying employers to favor foreign graduates over American graduates. If we feel that the 8 percent tax cannot be legally designated as FICA taxes, then why not collect the 8 percent as a fee to be applied to STEM retraining?

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    • No FICA, no federal unemployment insurance either. To bill (and it should be standard for all employment) but then claim it’s for “retraining” is to perpetuate the fraud that we’ve a skills shortage, when we don’t.

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      • I agree that we don’t have a skills shortage and funding a “retraining program” may be a poor choice. In addition, our whole approach to retraining is questionable. Andrew Yang mentions at https://www.yang2020.com/blog/ubi_faqs/cant-just-retrain-people-lose-jobs/ that “[t]he Trade Adjustment Assistance (TAA) program, a Federal program for displaced manufacturing workers, was found to have only 37% of its program members working in the field of work they were retrained for.” Also, the Atlantic has an article on the problems with our current retraining programs at https://www.theatlantic.com/education/archive/2018/01/the-false-promises-of-worker-retraining/549398/ . Many of the false promises could be avoided if the companies would do retraining themselves, like they used to. Otherwise, many people get scammed into receiving training for jobs that no company is likely to hire them for. At least for relatively minor upgrading of skills, that would likely be done best by the companies doing the hiring.

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        • First, TAA retraining has income limits for which most tech don’t qualify (have to have made less than X).
          Second, TAA retraining is limited to courses at community colleges and have max $ they pay for, far short of careers that’d replace a tech’s former salary.
          Last and most important, typical person using TAA retraining end up in jobs that pay less, than those who didn’t use TAA retraining at all.
          TAA retraining is an epic failure, even for it’s intended deflection purposes.

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  2. “treating international master’s degree students as lucrative revenue sources, with lower admissions requirements as long as the students can pay full freight”
    A change from the early 1990s, when foreign students were given a “scholarship”, and had the F1 campus captive, for easy $10 an hour Bachelors’, for ultra cheap “research assistants”.

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  3. I hear the colleges in Canada are turning into diploma mills for anybody who will pay tuition. Canada gives residency to anybody who invests in the country, so you can buy your way in by buying a property, then your tuition will probably be low to free.

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  4. I suspect the recent Hollywood Elite admissions scandal was a sacrifice to cover up the far wider scams associated with visas and foreign admissions schemes. The elites in Sili Valley, D.C., and the media conglomerates simply threw some folks under the bus, like a jet fighter ejecting chaff to mislead a guided missile.

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  5. FICA taxes should be paid by employers on the entire wages paid even when individuals are not required to pay FICA taxes.

    The analysis is even worse than just FICA taxes when you look at take home pay and project the income required by OPT verses non-OPT employees since FICA is paid on gross income which affects income taxes. It explains why people try to stay on OPT and CPT as long as possible. (in addition to the extra time added to H-1B. Perhaps it should limit the combined work time of OPT/CPT and H-1B guest worker programs.)

    In addition, the Social Security system requiring only 40 quarters (effectively 10 years) of employment out of a work career of now 40 to 50 years is outdated. Now people will work for 10 years and return to their home countries and collect. It is frustrating because SS payments are weighted to low income workers based on the 35 year average Long time low income workers can have the same net SS income base as short term high wage workers.

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    • An OPT or CPT should not be eligible to use H1B or L1 or any other program in which they stay.
      The entire purpose of OPT and CPT is to gain experience “before returning home”.

      I could be wrong, but I thought SS was based on highest 10 years income.

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    • ps – recently heard an OPT asking an immigration attorney why their employers take as long as they can answering RFEs from USCIS when putting in an H1B application for them. Clearly OPT is employer tax break, so it’s in their favor to drag out transition to H1B, also in their favor to extend entire OPT/H1B indenture.

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