The New H-1B “Reform” Bill: Part III

As I stated in Part II, the ONLY possible criterion for the value of any H-1B reform bill must be, Would it result in substantially more Americans being hired in jobs currently done by holders of the H-1B or similar visa? To say that the current bill “at least is an improvement in terms of required wage floor” is simply wrong if it doesn’t get US citizens and permanent residents hired.

Again, the bill was crafted to benefit the “Intels” (mainstream US firms who hire H-1Bs from pools of foreign students at US universities) and punish the “Infosyses” (mainly Indian rent-a-programmer firms who US firms such as banks and insurance companies contract with for outsourcing IT work).

From the Infosyses’ point of view, their only worry regarding the current bill would be that wage floor issue. The Infosyses generally hire at Level 1 in wage scale, while for the Intels it’s usually Level 2. (The Intels do pay more, since they hire higher-quality workers, but they are still getting a bargain for the given level of quality.) But does that mean that those banks and insurance companies would now start hiring Americans? No!

Come on, don’t be naive. Does anyone truly believe that, if this bill were enacted, the yearly cap of 85,000 for new H-1Bs would not fill within days of its April 15 opening every year, like it does now? Of course it would fill up quickly. And does anyone believe that the employers’ passion for hiring cheap labor would subside? Of course it wouldn’t.

The outsourcing firms would have to raise their prices to the US firms a bit, and absorb some reduction in profits. They would turn more to hiring OPTs, typically with US Business degrees rather than Indian Computer Science, and enjoy the fact that OPT workers are not subject to payroll tax. And some US firms would calculate that it’s more favorable for them to insource, again with OPTs as a very attractive option.

Moreover, keep in mind that H-1B and green card sponsorship, especially the latter, gives employers a huge nonmonetary benefit — worker “loyalty.” I describe it in my Huffington Post op-ed:

…most Silicon Valley firms sponsor their H-1B workers, who hold a temporary visa, for U.S. permanent residency (green card) under the employment-based program in immigration law. EB [green card] sponsorship renders the workers de facto indentured servants; though they have the right to move to another employer, they do not dare do so, as it would mean starting the lengthy green card process all over again.

This immobility is of huge value to many employers, as it means that a foreign worker can’t leave them in the lurch in the midst of an urgent project. In a 2012 meeting between Google and several researchers, including myself, the firm explained the advantage of hiring foreign workers: the company can’t prevent the departure of Americans, but the foreign workers are stuck. David Swaim, an immigration lawyer who designed Texas Instruments’ immigration policy and is now in private practice, overtly urges employers to hire foreign students instead of Americans.

Water finds the lowest level. And so do employers in their hiring practices.

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The New H-1B “Reform” Bill: Part II

As I wrote in Part I, the bill is built 100% on the very faulty premise that the “Intels” use the H-1B program responsibly, with the “Infosyses” being the main abusers. Let’s see how that translates to actual points in the bill.

Wage floor:

Slight reform of the definition of the wage floor for H-1Bs. Currently there are four wage levels, 1 though 4, technically defined in terms of experience and responsibility, but in actuality serving largely as proxies for age. The new floor would be at least Level 2 or the median wage, each calculated for the given occupation in the given geographical region.

Granted, this would be a bit of an improvement over the present system, and I myself formerly supported setting the floor at the median, because of the key role H-1B plays in age discrimination: By allowing employers to hire new foreign grads of US schools, the H-1B program swells the supply of young workers, so the firms avoid hiring older (age 35+) US citizens and permanent residents. Setting the wage floor at the overall median, without regard to age, would have ameliorated that back in the old days.

However, things have changed in recent years, notably in playing games with job titles. For example, HP concocted the bizarre job title Junior Software Engineer. Another example is that Wall Street hires people to do math modeling that firms pay dearly for on the open market, but for which they can get a bargain by hiring an H-1B under the job title Mathematician, which has a lower scale. Keep in mind, the new wage floor would mean Level 2 FOR THE GIVEN JOB TITLE and median FOR THE GIVEN JOB TITLE.

The new bill’s setting the wage floor at Level 2 or the median, whichever is higher, is very telling — it’s the level at which the Intels do most of their H-1B hiring. What a coincidence! Again, this entire bill is aimed at benefiting the Intels. No surprise, of course, given the Khanna connection and the general IGIB orientation of the authors.

Requirement to give hiring and retention priority to qualified Americans:

Sorry, there is none. The bill would require employers to post job openings with the DoL, but NOT require them to hire the qualified Americans who apply. The firms would have a full green light to hire H-1Bs, just as they do today.

Sec. 209(b)(4), ANNUAL H-1B EMPLOYER SURVEY, is tragicomic:

The Secretary of Labor shall— (A) conduct an annual survey of employ-19ers hiring foreign nationals under the H–1B visa program; and (B) issue an annual report that— (i) describes the methods employers [are] taking good faith steps to recruit United States workers for the occupational classification for which the nonimmigrants are sought, using procedures that meet industry-wide standards; (ii) describes the best practices for recruiting among employers; and ‘(iii) contains recommendations on which recruiting steps employers can take to maximize the likelihood of hiring American workers…

“Industry-wide standards”? “Best practices”? Their standards and best practices are to hire foreign workers instead of Americans! The phrasing above presumes that the employers are currently wringing their hands, saying, “Darn it! We’re trying so hard to find Americans to fill our jobs, but we just can’t find them! Hopefully DoL can come up with some firms that do this well, and let us know how they do it.”

Earlier bills banned hiring of H-1Bs by a company that had had recent layoffs, or was about to engage in one. That has now been softened to an anti-replacement/displacement provision, aimed at the Infosyses.

Visa awarding priority:

Rather than doling out the visas by lottery as is currently the case, the bill would grant the visas in a certain order.

Top priority would go to STEM foreign students earning advanced degrees at US schools. I know that some critics of H-1B who are non-techies naively think this is reasonable; it is NOT. Any American techie has seen lots of H-1Bs with a Master’s degree (PhDs are a small minority among computer-related H-1Bs) who are quite weak in technical skill. Same for the American MS holders, of course; the degree just doesn’t mean much. (Keep in mind all the greats in the field without even a Bachelor’s degree, e.g. Gates, Zuckerberg, Ellison etc.)

Oddly, those being hired at Level 4 only would get second priority. Assuming wages offered have at least some semblance to economic value, this is odd, as is the next priority category, foreign students NOT in STEM. Gotta make sure we don’t have a shortage of Greek Mythology majors, y’know.

Other:

The bill is very heavy on other provisions aimed at the Infosyses: Site inspections, worker complaints, verification of sufficient funds to pay the H-1Bs etc.

THE BOTTOM LINE:

As I’ve said before, there is only one criterion by which to judge reform proposals regarding H-1B etc.: Would it result in more US citizens and green card holders being hired by the tech industry? This is key, because I know some of you will say, “OK, it’s not a great bill, but it would bring some improvement.” In my opinion, it would NOT meet my key criterion — would it result in substantially more Americans being hired? If this bill were enacted, rhe employers would still hire the new-grad foreign student with an MS in Business Information Science from San Jose State in lieu of the older American (I have an actual person in mind here) with a Master’s in Statistics from UC Berkeley, one of the top Stat departments in the world.

To use my favorite quote of Grassley, long ago: “No one should be fooled” by the industry PR people. Unfortunately, the industry itself has written Grassley’s new bill.

What then is my solution? As always, my view is that we should return H-1B to the stated purpose of the old H-1 — bringing in “the Best and the Brightest” workers from around the world. The H-1B visa itself should have a very small yearly cap, say 5,000, used only for genuine labor shortages, and the scope of the O-1 visa should be greatly expanded. For example, any foreign student earning a PhD from a top US university should qualify. There should be a corresponding fast-track green card program for such outstanding talents.

(Continued in Part III.)

 

 

New H-1B Bill Sadly “More of the Same”: Part I

So, turns out that “the usual suspects” have introduced a new H-1B reform bill, proudly announced in a press release last week. Let’s see…we have Grassley, Durbin, Pascrell etc., and the new kid on the block, Khanna. To understand the bill, one must first understand the views of these men. I’ll explain the background in this post, and then present my analysis of the bill in the next one.

Khanna displaced longtime Rep. Mike Honda, a Democrat, for the latter’s Silicon Valley seat in 2016, on his second try. As a Democrat himself, not yet 40 years old, Khanna would have under ordinary circumstances failed to unseat Honda. But Khanna had enormous support from the Silicon Valley moneyed and powerful. As Politico reported at the time,

The hottest new startup in Silicon Valley isn’t a tech company; it’s Ro Khanna… The 36-year old attorney and former Commerce Department official, who is challenging six-term incumbent Rep. Mike Honda (D-Calif.) to represent Silicon Valley in Congress, has the overwhelming support of the deep-pocketed tech community’s CEOs and venture capitalists…Khanna’s donor rolls read like a who’s who of the Bay Area tech community: Google chairman Eric Schmidt, Yahoo CEO Marissa Mayer, Facebook’s chief operating officer Sheryl Sandberg, eBay CEO John Donahoe, and dozens of other tech or venture capital bigwigs…

Not surprisingly then, Khanna, with whom I had a formal public debate sponsored by the Voice of America in 2017, completely toes the Silicon Valley party line re H-1B:  “Intels Good, Infosyses Bad,” meaning that the mainstream firms who hire H-1Bs from the pools of foreign students at US universities, use the H-1B program responsibly, while the Indian outsourcing firms such as Infosys are the main abusers of the visa.  Note that the “Intels” include not only the household-name megafirms, but also smaller ones such as for instance the Bank of the West; the key defining property is hiring foreign students from US campuses.

(The above link is the last of four posts in which I reported on the debate and its aftermath. Follow the links if you are interested in more about Khanna.)

As I’ve explained in numerous blog posts (click here for a summary), the “Intels” are just as culpable as the “Infosyses,” actually even more so. So the “Intels Good, Infosyses Bad” is false and highly misleading. Yet, IT SELLS. The American people, and in particular Congress and the press, generally have a high opinion of the Intels. So when the latter say in unctuous tones, “Yes, H-1B is badly abused but not by us; it’s those Indian firms,” it sounds plausible. Again, it’s blatant scapegoating — I strongly suspect the industry PR people go out of their way to insert the word “Indian” — but the PR people know very well what sells. Sadly, even many of the H-1B critics have bought into IGIB.

So, what about those other authors of the new bill? In summary:

  • Grassley, a very decent, common sense person, was originally quite a critic of the visa, and at first was introducing good legislation (though it never got anywhere). However, at some point he “fell in with the bad kids,” and has had the IGIB view for some years now.
  • Durbin has always viewed the issue in IGIB terms.
  • Pascrell, though also an IGIBer, has also introduced some good, though also unsucessful legislation.

So — my gosh, what a surprise! — this new bill is all IGIB. In fact, in the above-linked press release, the quotes of ALL 7 POLITICIANS each boil down to IGIB.

Next post: My analysis of the bill itself, and what GOOD reform should look like.