Dr. Norm Matloff: American Programmers And Engineers Are Digging Their Own Graves.
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April 04, 2013, 06:41 PM
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Dr. Norm Matloff writes to his email list:

American programmers and engineers are digging their own graves.

Not only have they failed to really organize (due to ignorance, lack of the "activist/protestor" personality etc.), but the organizations that do exist are playing right into the industry`s hands.

At this point, a few of you may have guessed my topic, which concerns the techie organizations` intensive focus on the Indian bodyshops. The point is this:

By putting the blame on the Indian bodyshops, these organizations are enabling Congress to enact legislation which will make things WORSE for the members of the organizations, and for STEM workers in general.

As I`ve mentioned before, though I obviously have very strong opinions on the matter, H-1B has no personal impact on me. But I do worry about the profoundly adverse impact the pending legislation will have on the U.S. economy (greatly reduced innovation levels etc.), and of course I have deep sympathy for the programmers, engineers and other STEMers who find it difficult to get work in their fields.

A big part of that sympathy is that I hate to see innocent people duped. And that is exactly what is happening. I`ll explain this shortly.

Today I received e-mail from a long-time subscriber to this e-newsletter, a programmer who was quite excited by the column Hyped as source of tech talent, H-­1B visas usher in cheap replacements for US workers, By Farah Stockman, Boston Globe March 31, 2013

I replied that columns and articles like this, which seem to be favorable press for H-1B critics, are actually harmful, not helpful, because they give the impression that abuse of H-1B occurs only (or mainly) in the Indian bodyshops. My reader then wrote back to me, saying (I`m paraphrasing), "But it`s true! The bodyshops are awful! I`ve seen some of them myself, and my friend who works for one of them confirms that it`s just as bad there as in the [abovementioned Boston Globe] column!" He went on to talk about his programmer friends, most of them contractors I think, who are living on their savings, etc.

I then said that of course the bodyshops abuse the system. But so do the mainstream firms, and pushing Congress to blame the bodyshops would BACKFIRE.

I of course have explained this before (plug "business as usual" into Google), but usually in bits and pieces. So, in the current posting here, I will explain in one self-contained document (with a number of new details) how I think things will play out in Congress, due to the techie organizations` misguided focus on the bodyshops.

Imagine you are a member of Congress. Let`s say that you want to do the right thing (and are not overly influenced by the industry`s campaign contributions, your party`s pressure to go along with visa expansion, etc.) Here is the input, you as a member of Congress, have:

1. Due to the industry`s huge PR efforts over a period of years, you believe that we have a STEM worker shortage and that the foreign tech workers are key to keeping the American tech industry innovative and world-dominant.

2. You at the same time believe there is abuse in H-1B, yes, BUT it is limited to the Indian bodyshops. You hold this belief in part because the techie organizations have said so. After all, the abuse must be limited to the "Infosyses," because if it were the "Intels," the techie organizations would have complained about them too.

With this input, what kind of legislation do you, the member of Congress, support (or even write)? It`s abundantly clear what to do, given points 1 and 2 above, isn`t it? You support legislation that does the following:

A. Due to point 1, you support an INCREASE in tech work visas—either H-1B or a new STEM visa, or both.

B. But in view of point 2, you also want the legislation to clip the wings of the Indian bodyshops.

And you think to yourself, by doing this, everyone`s happy. The industry`s happy. The techie organizations are happy.

But there is one more thing, though, which arises somewhat later in the legislative process. You`re told that the "Infosyses," now meaning the BIG Indian bodyshops, don`t abuse the system either. It`s only the mom-and-pop Indian bodyshops, that hire maybe a dozen H-1Bs or two, that are the abusers, you hear. And where do you hear this? Well, "everyone in DC knows it"; this is a common statement made by people in the federal government. See here. And, of course, there is the "senator from Punjab" problem; the bodyshops have some political clout too; so you know you can`t just shut the Infosyses down.

So, you eventually support legislation that leaves the bodyshops, certainly at least the big Infosyses, enough loopholes to do business as usual. The Infosyses might have to pay slightly higher wages, and hire a few more U.S. citizens and permanent residents, but will have business as usual.


I. More visas than before (H-1B and/or STEM visas).

II. No real dent in the operation of the bodyshops.

III. So BOTH the Intels AND the Infosyses keep hiring foreign workers instead of Americans—EVEN MORE THAN BEFORE.

Remember, this goes back to the naivete of the American techie activist organizations. They don`t realize that by focusing on the Indian firms, they are giving Congress "permission" to raise the visa counts (as long as Congress zaps the Indian firms). Of course, the techies, being largely unorganized, don`t have the clout needed for Congress to ask their permission in the first place, but any member of Congress who has at least some concern about the U.S. techies` plight can now assuage that concern now by saying it`s OK to issue more visas—the techies themselves said so.

Now if you accept the above scenario as plausible—if not, I`d certainly like to hear why not—then you can understand why I stated at the outset of this posting that the technie organizations are playing right into the industry`s hands. I`ve mentioned before that the industry lobbyists love it when some Indian bodyshop is found guilty of abuse to much publicity, because the lobbyists want the public to have this image that the Intels are good and the Infosyses are bad. See here for an instance in which I correctly predicted the industry behavior in one such incident.

And that`s not all. Here is a new prediction for you (something I believe may happen, not a certainty of course). Watch for an extension of the OPT (Optional Practical Training) part of the F-1 student visa. For STEM students, it is already of 29 months duration. Vivek Wadhwa has proposed lengthening it to five years.

Just think about it: OPT has no cap, no wage requirements, no employer fees—and would have a duration of five years, under Vivek`s proposal. This is longer than many employers actually want to keep even American programmers and engineers. Wonderful!

The other day we saw an employer, well connected on Capitol Hill, who had hired an OPT and had stated that he liked OPT because there were no user fees; see here.

And you are a member of Congress who is convinced that the STEM foreign students are the "good" H-1Bs, then why not implement Vivek`s suggestion?

Finally, remember how easy it would be for those "good H-1Bs," the STEM foreign students, to get a programming job even with a degree in biology. These days most science students take at least one programming course, and there are the quickie schools that will lead them right into an H-1B visa; see Tech Companies` Push to Expand Skilled Worker Visas Rankles Critics.

So, the so-called "STEM visas" could get even the biology majors programming jobs.

Meanwhile, Congress wants to open the floodgates at the low-skilled level too. And lo and behold, the plan is to have a four-tiered prevaling wage structure! That has a good track record, right? Oh, sure, and swelling the labor market doesn`t bring down wages that much, right?

Sorry for the sarcasm, but I am floored that this is actually endorsed by the AFL-CIO. The Democrats, putatively pro-labor, are going along with it too, if not pushing for it. Why are the unions and the Democrats betraying their legacy? Because they are obsessed with they think (possibly wrongly) will be a bonanza of Latino votes. Is this a good tradeoff?

As I see it, we are really at a crossroads here, economically.


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