Why H-1B Will Never Be Truly Reformed

Some of you may be a little startled to know I’ve been writing about the H-1B work visa and related EB green card series for…are you ready?…27 years! Yes, since 1993. My activities during that time have included writing research papers, testifying to Congress, and so on.

The only real “reforms” made over the years have been in the direction of making things even worse, accompanied of course by “feel good” changes that look pro-worker but in reality always end up with business as usual.

So I do have some perspective on the issue, and to me, a June 24 piece in The New Republic (TNR) shows vividly how H-1B/EB will never be reformed in any meaningful way. The conversation will always be sidestracked by a distracting, unwarranted and unproductive scapegoating of the Indian outsourcing firms, which I refer to as the “Infosyses,” typified by a large firm of that name. By contrast, the “Intels,” meaning any firm, large or small, that hires most of its H-1Bs from the international student populations at US universities, are presented as using the H-1B/EB programs responsibly. Many of you know that I refer to this portrayal as “Intels Good, Infosyses Bad” (IGIB).

As I’ve explained numerous times, e.g. in my HuffPo op-ed, the Intels are just as culpable as the Infosyses, arguably actually more so.  But the Intels, armed with the best PR people and lobbyists, have found that IGIB scapegoating is highly effective. And by the way, I’ve gotten the sense many times that this scapegoating is meant to be taken as a racial “dog whistle.”

The TNR article uses the IGIB argument, and unwittingly shows the argument to be empty. Here are the two main points made:

  • The Infosyses hire H-1Bs and “rent” them out to mainstream US firms, unlike the Intels, who tend to hire H-1Bs whom they themselves will employ.
  • The Infosyses usually don’t sponsor their H-1Bs for green cards, while the Intels do.

Both claims are correct — and yet neither claim justifies scapegoating the Infosyses and glorifying the Intels.

Yes, the Infosyses rent their H-1Bs to other firms. SO WHAT? Nothing terrible about that. The ostensible reason the H-1B program was enacted was to remedy temporary labor shortages. The fact that some US firms (banks, insurance companies, HMOs) find it easier to get temporary H-1B workers through an Infosys does not counter the purpose of H-1B at all.

And what about the Infosyses not engaging in green card sponsorship? Again, SO WHAT? Again, the intended purpose of H-1B is to remedy temporary labor shortages, not as a path to permanent residence. Yes, the Intels use such a path, but the notion that the Infosyses are somehow Evil because they don’t do so is absurd.

On the contrary: Green card sponsorship enables the Intels to actually be bigger abusers of foreign tech workers than the Infosyses. It renders the workers de facto indentured servants, technically able to move around freely in the labor market but in reality trapped with the sponsoring employer. This point has been made by numerous key players, e.g. the green card sponsoree advocacy group Immigration Voice and the congressionally commissioned NRC report. Yet, in an Orwellian twist, promoters of IGIB present the Intels’ green card sponsorship as actually making them better than the Infosyses. As I explained in my HuffPo piece, for the Intels, this indentured servitude is even more important than the salary savings accrued by hiring foreign workers.

The TNR article refers to some famous cases in which a US firm used an Infosys to replace an American worker in the firm. True, but the Intels do the same thing, just less directly. They wait for a layoff, then lay off mostly older US workers, then later hire younger foreign workers. The promoters of IGIB seem to have never wondered how the average age at the Intels is kept so low. Had they read the book Inside Intel, or merely put 2 and 2 together, it would have been clear that the Intels aren’t so different after all.

IGIB goes back at least to 1998, when the tech industry convinced Congress to (temporarily) double the H-1B cap, while placing some recruitment restrictions on the Infosyses. The message from the Intels was, “Yes, H-1B is widely abused, but by the Infosyses, not us.”

It wasn’t until around 2010, though, that the non-industry critics of H-1B — sympathetic researchers, immigration reform groups and so on — embraced IGIB, actually becoming the concept’s most strident supporter. They present exactly the same arguments made in the TNR piece, excoriating the Infosyses for being agents to third-party employers and for not sponsoring their H-1Bs for green cards. The fact that IGIB is so entrenched in Beltway thinking today stems in large part from promotion by the H-1B critics themselves. The TNR piece epitomizes the result of this heavy promotion. True, the H-1B critics do occasionally mention that yes, the Intels are a problem too, but for the most part, their  statements on H-1B/EB are IGIB, no different from the industry.

(Here I must insert my usual disclaimer: I very strongly support legislation that enables “the best and brightest” to obtain fast-track green cards. But most foreign workers hired by the Intels are ordinary people, during ordinary work.)

As noted, in the nearly 30 years of H-1B’s existence, employers have always found ways to circumvent restrictions; indeed, they’ve gotten those loopholes inserted into legislation in the first place. Last week’s presidential executive order, which was focused on the Infosyses, will do very little for US citizens and permanent residents in tech, but it looks good — exactly the goal of IGIB ever since 1998.

 

 

 

37 thoughts on “Why H-1B Will Never Be Truly Reformed

  1. I think perhaps Stephen Miller gets it (President Trump himself may not), just administration cannot take on the entire tech establishment, especially before election. But maybe never, as you say.

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  2. I’ve followed your blog for years. Last week, THEY got me. A female engineer, 35 years at my employer, and my job was chopped up (a little to Puerto Rico, and some to a guy here from India on an L1). It was part of a massive layoff. Apparently 50% of white collar engineering jobs to disappear in the US, Canada and Western Europe. Of course, blame our friend ‘rona, they said.

    I’m in a great position because I got a good package and have very up to date skills. I’ve been learning data science on the side, wrote a paper, took some free classes. Kids are grown, spouse still working, etc. I may or may not work full time for $$ again–because I’ll be Medicare eligible in less than 2 years, have a pension, and enough savings to maintain current lifestyle.

    I feel for those who have kids to support, etc. My state’s unemployment payment without the extra ‘rona 600 is 240 before tax a week. Because they’ve laid off so many experienced higher earners, they also laid off a lot of newer employees so no one can claim age discrimination Guess what replaced the young’uns? Engineers IN India. Because the policymakers don’t understand that SW engineering jobs don’t need factories.

    I’m also an immigrant myself, as is the spouse.

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    • Sorry to hear about your situation. Wall Street and the B-schools seem to think firing older workers is a mandatory step toward corporate survival.

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    • Sorry to hear. About 5 years ago, I read a post, maybe on this website. Two immigrants in Texas got laid off and were replaced by H-1Bs after getting their citizenship. One was Indian and the other was Chinese.

      Welcome to America!

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  3. The Infosyses (i.e. programmer sweatshop firms, both Indian and American) do seem to sponsor at least some EB-2,3 green cards – the Indian backlog in those categories simply couldn’t be so large without them.

    The Infosyses also sponsor a LOT of EB-1C green cards for “managers”, by abusing the L-1A visa route. This has caused a huge backlog in EB-1, which comprised mostly of folks who don’t have anywhere near extraordinary ability.

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    • The number of workers the Infosyses sponsor for green cards is nonzero, yes, but small. See Ron Hira’s papers for numbers. Your point about the outrageous waiting times for green cards for Indians is not contradicted by that.

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      • The reason infosyses don’t sponsor green cards is because they want to keep their pupil enslaved. Also, while most Americans don’t know this, a person working for Infosys for a substantial period of time is virtually mobile all over the world including America in the so called L1 category and several of them spend a few months annually in the US on customer’s dime using Manager/Executive titles.

        As for Intels, they would never want their employees leave indentured servitude.

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  4. As a once chronically unemployed computer science graduate who miraculously found a job as a network engineer for a tiny company after only fifteen years, I first found Dr. Matloff’s writing at least as early as 1999, so I can vouch for his tenacity, though I wish I could vouch for his success. There was nothing worse than not being able to find work while everyone repeated the lie that engineering jobs were plentiful and well-paying. It does get discouraging, but we all have to keep up the fight because it is a matter of justice– and as I have complained many times before, we all have to suffer the consequences of cheap, junky products and services that went out to the lowest bidder.

    I have a sort of stake in this because a dear friend of mine was laid off from her job as an automotive engineer ostensibly on account of Covid-19. At 54, though, I fear her chances of being rehired are slim, and I can’t help but suspect that Covid-19 is being used as a cover for more age discrimination (just as Covid-19 is being used as flimsy cover for so many other agendas). I’d not be the least bit surprised to learn that her company eventually goes out and hires cheap 20-year-old H1-B’s to replace her. I guess she was lucky to make it to 54; many 40-year olds suffer the same fate.

    Dr. Matloff is right– it’s all about keeping up appearances, rearranging the shells, blowing the smoke, and adjusting the mirrors. It reminds me of the Monty Python sketch (so much of their work seems more prophetic than humorous these days) in which a pet shop patron asks for a cat and is given a terrier, and when the patron protests, the shop owner moves the box with the terrier around and plops it back on the counter again, as if it is a different box, saying, “How about that?” We keep saying “How about real reform?” and the politicians and big tech firms move the same tired box of laws full of loopholes in front of us, and then plop it back on the counter and say, “How about that?” The worst part is that so many of us actually believe that it is a different box… sigh.

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  5. A particularly hilarious instance of IGIB appeared in the recent anti-S.386 movement. The movement was spearheaded by non-Indian foreign students, who are hired by the Intels, and want to preserve their ability to quickly get Green Cards. The immigration reform groups went along with them hook, line, and sinker.

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  6. You are absolutely correct. I am not sure if you read or watched the “Hunger Games”, but this is what the American companies want to have. Even in India, all American product companies have thousands of employees and several are redundant and whenever some “activist investor” in America decides, they will become useless.

    All the Indian owned startup in SV and even most mixed-owned have a mandatory product development in India these days. Pick an SV startup, go the LinkedIn, check the employees list. Several of these so called “Entrepreneur” who can’t even write a line of code have now suddenly become self-proclaimed CEOs using cheap labor. Note that it doesn’t take much to create a startup these days, throw a few million and hungry engineers, they can definitely build something.

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    • Harvard Prof. Richard Freeman, who has been critical of H-1B, once said (publicly) that the Indian government deliberately holds its underclass down, in order to give the Indian programmers a good living while still being cheap for US offshoring. Do you think he’s correct?

      I remember when Google went IPO, investors were saying they should develop in India, since there was supposedly a talent shortage in the US. Sounded like the VCs really believed that.

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      • If the Indian government had such meticulous planning, India won’t be in such abysmal state. The government here is really dysfunctional, so I doubt they have a program like this. It’s a country of 1.3 billion with roughly 700 million workforce and most people have a strong sense of curiosity that translates into going to college as well as higher studies. So obviously there is a talent pool of sorts, at the same time no more than 20 million people are doing well or at the same levels of SEA countries in my opinion, so sky is the limit here.

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    • “it doesn’t take much to create a startup”
      I’m witnessing the proliferation of former-H1-now-US-unemployed-citizen “entrepreneurs” who’s business model is capture a US job, take a cut, and find someone in India to do it.

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      • You are correct on this. While I don’t live in either country now and left the game long time back, I would like to see a list being created and maintained. I’d already provided one pointer on how, startup name from crunchbase, employee list from linkedin! I have also noticed several of these “entrepreneurs” made a lot of money during the boom and now they enslave their own as they cannot bend labor rules in America or find any US born person who would like to work for them / their sham companies.

        As for money, there is a plenty and just about a million will let you employ 10 engineers in india for 5 years.

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        • You would like to see a list of what, the gaming of “startup”?

          A recruiter contacted me this week, her LinkedIn profile says she’s worked for the recruiting company for 7 years. I look at the Secretary of State business registration web site, the company’s only existed for 1 year. She’d like my resume and a phone conversation, and I wonder if it’s for info gleaning, to send an unqualified for the position. Some years back, an employee of mine was leaving for Nokia, who’d apparently had it with being gamed and insisted on seeing candidates’ W2s to verify employment history before concluding with a job offer.

          Worst I’ve heard, re: startup gaming, a friend upset his ex-wife was officially laid off from her sister’s startup, so she can file for welfare benefits, while “hiring” her mother as H1. Mother brought on H1 looks after the grandkids, laid-off-collecting-welfare sister is doing the work. His beef with it, his child support is based on ex-wife being unemployed.

          Yes, the “startup” ruses could fill a database.

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  7. Norm,

    At one time (pre Y2K) was there not the requirement that there be no US workers before a guest worker could be brought in?

    I also remember a study about foreign PhDs necessary to depress the salaries of US degree holders.

    Is there a comprehensive year by year history of the changes to the guest worker programs and legislation?

    I do not recall this being an issue 50 years ago when I completed my engineering undergraduate degree.

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    • The old H-1 had a requirement re hiring Americans. H-1B, enacted in 1990, changed that.

      The study you’re referring to, more a position paper than a study, was in NSF, 1989. Its forecasts proved correct.

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  8. Hello Professor,
    I see that you seem to focus on H-1B reform when it comes to employment. But out of curiousity do you have any opinions on low skill illegal immigration from places like Mexico? Based on the studies I’ve read, that type of immigration doesn’t seem to have a significant statistical effect on native US employment, but I’m curious on your takes.

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    • Studies on immigration almost always come with a “point of view.” I can tell immediately whether a study’s conclusions about immigration are positive or negative just by looking at who the author is.

      One big rivalry is Giovanni Peri vs. George Borjas, who disagree on the famous Mariel Boatlift data. I side with George, both because I think he is fairer in his analyses, and because of some very interesting new information I received recently from a reader. I haven’t had time to post it yet, hopefully soon.

      Frankly, I’m sick and tired of being lied to by expansionists on this issue. It’s abundantly clear that Latino immigration has hurt African-Americans. My university, for instance, is striving to become officially designated as a Hispanic Serving Institution. Laudable, yes, but it’s shameful that there is nothing like that for African-Americans.

      HOWEVER, that doesn’t mean I say “build a wall” etc. IMO, Mexico is our neighbor, and our immigration relation with it should be special. I have no special proposals, and don’t know the situation well, but I believe we should do some outside-the-box thinking on this.

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    • “statistical effect”, “low skill”
      The Atlantic published an article on illegal labor effect on their construction work pay, which went negative.
      Boston Globe published an article on illegal labor in construction, using minors, wage theft, non-OSHA compliant dangerous.
      Construction claims they hire illegally because of no US skilled labor available, for which a 15 year old illegal unskilled boy is “skilled”?!?
      Is the impact “statistic effect” low, because displaced work 3 jobs to replace their formerly 1 living wage job, or because as of 1994 we no long count long term unemployed in the unemployment rate? Or both?
      “3 replacemtn jobs” has been the “job growth” due to foreign workers, occurring for years.

      Forbes published an article in 2015 on jobs changing to “contingent” at the rate of 10% a year, 40% in 2015. “Contingent”, temp, was a small percentage years ago, as they didn’t provide households economic stability. As of that article’s publication in 2015, Obama’s economic advisor, Jason Furman, said something’s wrong with our job market, because of two essential hallmarks are missing from “low unemployment rate”/”tight labor market” claims: no job mobility and no wage increasing.

      We have a labor glut, even before corona arrived, and illegal migration does just as much damage as visa’d.

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  9. Its all about the bonded labor. Down here in Australia we’ve got massive unemployment (obviously) because of the virus; but we’ve still got all the commentators etc going on about how we need ‘skilled’ migration. But, of course, its really just greedy employers wanting scared people who’ll work 70 hours a week plus through fear of being deported home. I’ve met employers who’ve openly bragged about their bonded workforce, and how cheap and hardworking they are.

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    • Here in the US, Wall St also hails migration, for fiscal benefit. For sales of cars, houses, housewares, etc.
      Moynihan, Bank of America CEO, re: immigration, “If we don’t grow the population, everything’s harder.” and “Immigration … is a growth acquisition program”
      Are they aware they supplant citizen workers? Yes.
      Bloomberg on the national news,
      “And for people who think that they have lost their jobs because of immigrants,maybe some of them have, but we have got to find ways to help them and not make it worse.”

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  10. Kids are changing their mentality towards capitalism, but capitalism with democracy is better than everything.. But we realized only after we taste the socialism, but that time our country or power been vanished….

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  11. I think the solution to this is to enact bills to stop outsourcing to other nations.

    One way to do that would be to increase taxes by several orders of magnitude for companies that ship jobs offshore.

    But on the flip side as a meme:

    You are a socialist till I pick your pocket.
    You are a capitalist till your job is outsourced.

    Isn’t all of this the result of free market bla bla ? Or the freedom this country is so proud of ?

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    • “You are a socialist till I pick your pocket.”
      That’s corruption, not socialism. We’ve incredible corporate welfare occurring, which isn’t capitalism, but corruption.
      “You are a capitalist till your job is outsourced.”
      Again, root cause, corruption, as in monopoly market capture, prolific with the non-stop extension of patents. Else foreign countries with that same labor would be importing goods, for cheaper.
      “Isn’t all of this the result of free market bla bla ?”
      Well, painted as “free market”, but it’s neoliberalism. Suggested reading, for the point at which international elite decided there was too much democracy and too much free movement of workforce, early 1970s: Trilateral Commission’s The Crisis Of Democracy.
      “Or the freedom this country is so proud of?”
      That’d be the emerging Libertarians, who want to use the Commons (infrastructure, gov, etc.), but not pay a dime toward it.

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      • DoctorsWithoutJobs.org
        US med grads are finding the slots for residencies filled with H1s. No residency, no ability to practice medicine. By the way, the residencies are paid for by Medicare.

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      • The same as we discuss here. Citizens not being able to get jobs in the medical field, medical workers laid off in middle-age, medical work being out-sourced, etc.

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        • Being as nursing and pharmacists have also been publicly declared as having a “shortage”, I expect the same is happening with those professions. “coding”, numbers assigned to specific medical procedures, has been offshored.

          As for quality of care, my niece, a nurse, upset one day, on a rant of various frustrations, mentioned arguing with a fellow nurse, “Don’t do that! You can kill someone!”, to which the coworker replied, “Well that’s how we’re taught in the Philippines!”

          Like

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