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Obama`s Commerce Picks Are All H1-B Fans
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February 06, 2009, 09:11 PM
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Dr. Norm Matloff writes

Sen. Gregg has now been formally announced as Obama`s choice for Secretary of Commerce. As I reported recently, Gregg is a hard-core supporter of H-1B. I also noted that McKinsey`s Diana Farrell, a promoter of offshoring, has also been appointed to the Obama administration. Enclosed below are several pieces on the details.

It is interesting to compare the Computerworld take on this situation with the Hira op-ed. Both note that the Gregg and Farrell appointments bode serious trouble for H-1B critics hoping that the Obama administration would bring Change. But Computerworld`s Pat Thibodeau sees Gregg as the bigger threat, while Professor Hira highlights Farrell.

I must say that Farrell may well end up just as harmful as Gregg, maybe even more so. Gregg is very open in his view that business interests must take priority. By contrast, Farrell, though clearly of the same school of thought, cloaks her writings in terms dear to the hearts of the Democratic Party—jobs training. Yes, offshoring of tech work produces some American victims, Farrell concedes, but that can be handled via job retraining programs.

This is exactly the pitch that got the first H-1B increase through in 1998. At the time, I and others (notably IEEE_USA, whith its excellent Misfortune 500 Web site) pointed out that many older (age 35+) highly-educated programmers and engineers could not get tech work despite the Dot-Com Boom. The industry claimed that this was due to a lack of up-to-date skills in those workers. In response, Congress imposed a user fee on H-1B employers, with the proceeds to go to retraining programs. I warned at the time that the skills issue was phony, just a pretext to replace the older workers by young H-1Bs, and that the retraining idea was thus a nonsolution: Given a choice between the older/more expensive American who has just learned the Java programming language, and a younger/cheaper American with newly-acquired Java skills—and an even cheaper young H-1B with Java—the 35-year-old American will not be chosen. Sadly, my analysis was later confirmed, both by a Dept. of Commerce study and a remarkably frank statement by Sun Microsystems to the press.

My point, then, is that Farrell speaks exactly the language that the Obama people want to hear, so she may actually be given more credence than Gregg, and thus present more of a problem to H-1B critics. But Gregg will be pernicious from the viewpoint of H-1B critics too, of course, and not just in advice he gives to the president. Under Gregg the DOC study I mentioned above may not have been undertaken in the first place. Or it may have been suppressed by DOC, as DOC did to its offshoring study during the Bush years; see here.

Gregg`s speech in the Cato video came right out of the industry lobbyists` list of talking points. Among them is the notion that while there is some abuse in H-1B, "especially involving Indian-related companies and their basic flooding of the market in this area and then having people return to India with knowledge that they gained here...that can be corrected fairly easily with minor adjustments in the program." By "minor adjustments" he means beefing up enforcement, and probably some cosmetic special rules for the Indian bodyshops. This strategy—blame the Indians—has long been employed not only by the industry but also by their allies in Congress. Rep. Zoe Lofgren of Silicon Valley, for example, actually ridiculed the Indian shops during a House Immigration Subcommittee hearing in 1998. All of this is designed to give the false impression that the big mainstream U.S. firms are using the H-1B and green card programs properly, and most importantly, to distract attention from the core issue in H-1B and employment-based green cards, which is the loopholes in the law.

I must say again that while emotionally I would like to see this young, inspiring president succeed, I`ve long predicted he would have a policy of Business As Usual on most major economic issues, and worse, he has a knack for symbolic gestures without substance. Every time I a remark of mine along these lines with "I hope I`m wrong," Obama makes another move that shows I`m right.

Norm