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Dr. Norm Matloff: An Open Letter to Those Waiting for an EB-* Green Card
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December 09, 2011, 03:16 PM
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Dr. Norm Matloff writes to his email list

A number of people and organizations redistribute my postings to this e-newsletter. My brief comments on H.R. 3012, a bill to remove the per-country caps on employer-sponsored green cards, apparently reached many beyond the e-newsletter subscribership. (The posting is here.)

I received many responses, some of whom are potential beneficiaries of the bill. Although I can easily understand their frustration with long years of waiting, it was also clear that they have no inkling of why many people are critical of H-1B and employer-sponsored green cards. What follows below is an amalgam of my replies to them, and to others in their shoes over the years. I`ll address it to a pseudonym, in honor of a professional hero of mine.

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Dear "Calyampudi Radhakrishna,"

Thanks for your thoughtful messages on H.R. 3012. I of course I have a number of comments.

In my December 4 posting, I wrote "I`ve never had strong feelings regarding the 7% per-country caps...," a statement you asked me to clarify. Let me be clear: I am neutral on the issue of repealing the 7% caps. However, I strongly support Senator Grassley`s HOLD on the bill.

H.R. 3012 does not address what from my viewpoint is a much larger problem than the caps, by far: The widespread abuse of H-1B and the EB-series green cards. If those programs were used properly, the question of the per-country caps would be moot, since the demand for both types of visas would be well below the caps.

To me, Sen. Grassley`s putting a hold on the bill at least calls attention to these vital issues. If he were to propose a rider to the bill that involves some genuine, broadly-applicable fix (note those qualifiers) to H-1B and green cards, and get that modified bill through committee, I would probably even support the bill. Needless to say, that`s a lot of ifs, given the industry`s power over Congress (not just via their large campaign contributions but even more so, by the massive public "education" program they`ve carried out over the years); but I do want you to know where I`m coming from regarding this bill, which brings me to the central point:

Green cards are typically an immigrant`s first step to becoming an American, i.e. a naturalized U.S. citizen. Hopefully you will follow that path. If so, I ask you, what kind of America do you want? What kind of America do you want for your children?

I will presume that the answer is that you want the country to be welcoming, indeed a mecca, for the best and brightest of the world, but at the same time not one whose government undermines its own citizens` ability to make a living. I presume as well that you don`t want America to be a place in which immigration policies cause our own best and brightest to decide that business and law offer more lucrative and long-term careers than do the STEM professions.

For that IS what America has devolved to. Do you know that a recent study showed engineering to have the lowest rate of wage growth of any major profession? Tony Carnevale of Georgetown University, author of that study, told the Wall Street Journal, "If you`re good at math, you`d have to be crazy to pursue a STEM career." Well, guess why. Clearly, the large influx from abroad has suppressed wage growth in the field.

I should insert a disclaimer here that Carnevale does not make such a claim, but anyone who has watched the tech labor market over the years can see it. Moreover, a report by a division director at the NSF explicitly called for such an approach at the doctoral level back in 1989: Fearing that PhD salaries were rising too rapidly, the report called for bringing in large number of foreign students to swell the labor market and thus hold down wages. The report also pointed out that the resulting stagnant salaries would drive away Americans from STEM, into—are you ready for this?—business and law. And based largely on NSF "shortage" testimony, Congress enacted H-1B the following year. See here.

And what about the positively disgraceful post doc situation in the U.S.? One can reach age 40 and still not know if one will have a career in the field. The government might as well make it illegal to pursue a career in lab science research. Well, does the fact that about 60% of the post docs are H-1Bs have any impact on this horrendous situation? You be the judge.

Again, is this the type of America you want to join? One in which immigration laws are used to hold wages down, knowing that it will drive American students away from STEM?

The key point, not well understood even by critics of H-1B, is that immigration policy is causing an Internal Brain Drain in our country, pushing our "best and brightest" into corporate law and Wall Street "optimization" analyses, both of which are of questionable social or even economic value. This is an important point too in discussions of immigrant entrepreneurship; how many potential brilliant tech American entrepreneurs might we have had if they hadn`t gone to Wall Street?

Note carefully that the NSF goal was to keep wages low. One of the nice things about discussing the H-1B issue with actual H-1Bs is that, unlike my talks with journalists and academics, I don`t have to convince the H-1Bs that the program is exploitative; they KNOW. Interestingly, some of them say, "Yes, many H-1Bs are underpaid but not ME"; but when I ask them if they could get higher pay if they could move freely in the labor market, they always say yes—and they realize that means that they too are underpaid.

So, H-1Bs are on average paid less than comparable Americans. But that isn`t even the main issue; instead, the major point of H-1B and green cards involves AGE. The real savings employers get from these visas is that it allows them to hire young foreign nationals when they run out of young Americans. (This too is a point not well understood by critics of H-1B.)

In the pre-H-1B days, one could make a career in the software field. Granted, some people still manage to do this now, but employers are far more less welcoming these days for those past age 35.

Take Intel as an example. Tim Jackson`s book, Inside Intel, reports that a management consultant advised the firm to reduce the average age of its workforce. We don`t know for sure that they heeded that advice, but we do know that its former CEO, Craig Barrett has stated "The half life of an engineer is only a few years." We also know that Intel, like other firms, has special categories for hires of new/recent graduates, and so on.

Even Vivek Wadhwa has written about the problems of older workers in this field. He says it`s because (a) they don`t have newer skill sets and (b) they`re simply too expensive. I`ve explained elsewhere why (a) is often not the case, but (b) is ALWAYS the case. And what better way to deal with (b) than the way the NSF analyst recommended—flood the market with young people from abroad?

No one should be guaranteed a job, of course, and one shouldn`t fear competition. I`ve always strongly endorsed facilitating the immigration of "the best and the brightest." But bringing in "the average and the ordinary" to hold down wages is unconscionable.

You said that the Indian "bodyshops" abuse the H-1B program. Well of course they do. But so do the mainstream U.S. firms (albeit the abuse is on a higher class of worker). Again, just look at yourself, working for a mainstream U.S. firm—you could make more money if only you weren`t trapped as an H-1B. That means your employer is abusing the system too. Indeed, you said it`s common these days for mainstream employers to actually gave preference to hiring Indians and Chinese over other foreign workers, BECAUSE the 7% cap makes the "ICs`" term of de facto indentured servitude much longer.

I mention this because of bills by Sen. Schumer and Rep. Lofgren that call for "reform" only for the Indian firms. Since the abuse is NOT limited to the Indian firms, those bills amount to scapegoating the Indians. Imagine the unhealthy images of Indians that these bills play to. (And recall Schumer`s "chop shop" remark.) If the Indian firms were in fact the main abusers of the program, I`d have no problem with politicians pointing that out, but as mentioned above, those bills are not based in fact. They thus scapegoat the Indians. They are just as bad as those hated 7% caps, which my understanding were motivated by a desire to keep the U.S. "European."

I mentioned that I hope Sen. Grassley can push through some real reform of H-1B and EB into H.R. 3012. The way to do that would be to revise the definition of prevailing wage, in both H-1B and the green cards. Actually, the Durbin/Grassley bill, introduced in the past, has such a provision, defining prevailing wage to be the overall median for the given occupation (NOT the median for a given experience level in that occupation, a key point). That extraordinarily simple provision would go a long way to solving the problems. The AFL-CIO`s proposal, setting prevailing wage at the 75th percentile, is even better, and would be eminently justified, given the industry`s claim to want to hire "the best and the brightest." Again, "reform" that scapegoats, or which does not plug the huge loopholes in prevailing wage, would not be acceptable.

You can read a lot more in my "magnum opus," a paper published the University of Michigan Journal of Law Reform (99 pages, 300+ footnotes, all data drawn from publicly-available sources). I have a copy of it here. You can also read my bio here,  much of which may surprise you.

Good luck to you.

Norm