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Wadhwa/Hira Spectacle On CNBC
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March 12, 2009, 07:15 PM
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Dr. Norm Matloff writes:
This past Monday, CNBC ran a "debate" between Vivek Wadhwa and Ron Hira. As many of you know, Vivek is a former CEO who now writes and does academic research on the tech industry, and Ron is a professor of public policy at the Rochester Institute of Technology, and who also does research on the tech industry.

Though most viewers wouldn`t know it, Vivek and Ron actually agree with each other on the issues at hand: Both are critics of the H-1B program, and both support expanding the employment-based green card program. (I agree with them on H-1B but disagree regarding green cards.) Both Vivek and Ron have made important research contributions to the H-1B issue, for the most part in mutually compatible directions. (I still take issue with some of Vivek`s research, but I have found much of it to be first rate.)

The subject matter in the debate was the recent enactment of legislation that would place certain restrictions on the hiring H-1Bs by employers who receive TARP financial industry bailout funds. For example, these employers will now be required to try to hire an American for a position before filling it with an H-1B.

As someone who likes and respects both Vivek and Ron, the video clip was painful to watch. Vivek got carried away, and said things I think he doesn`t really believe. Ron, by contrast, was very calm, with a "Why did I EVER agree to participating in this circus?" look on his face, but calm to the point of not aggressively defending his point of view.

I immediately decided not to post the incident to this e-newsletter, as it was (and is) embarrasing to write about a battle between two men who I hope I can call my friends. However, I`ve changed my mind, and have now composed the comments below. I can`t go into the details why I reversed my original decision, except to say that I`m worried that the academic careers of both men might be harmed, to some extent or other. I therefore wish to set the record straight, as I see it.

First, exactly what did occur? You may be able to watch the clip yourself, here.

I say "may," because CNBC has apparently removed the numerous sites at which they had had the video. They seem to have overlooked the above URL, but I would guess that it will be gone pretty soon too. And while it is viewable by most people, many find it won`t play; if that happens to you, try another computer.

There were two issues that arose: (a) Vivek claimed that the TARP legislation was xenophobic, and (b) CNBC thought it "tragic" that the Bank of America had rescinded job offers to some new foreign MBAs due to the the new H-1B rules, thereby depriving the bank of genius talent just when it needs it most.

Let`s take (a) first:

Vivek is an Indian immigrant, while Ron is the son of Indian immigrants, and many of Vivek`s comments, delivered in a quite pointed tone, had the theme that the TARP legislation was anti-Indian. Vivek hurled rather emotionally-toned remarks at Ron along the lines of, "Next, they`ll come after you!" And I suppose the implied subtext may also have been that Ron was somehow a traitor to Indian-Americans.

Such statements, in both substance, tone and body language. were uncalled for. The fact is that far more Indian-Americans have been harmed by H-1B than have benefitted by it. Come on—the number of Indian-American bodyshop owners and political activists is dwarfed by the number of Indian-American programmers and engineers. In short, the TARP legislation was, if anything, PRO-Indian-American, not anti-.

I wish to quickly add, though, that Vivek has a point. Since H-1B has come to be perceived as an "Indian" visa (outnumbering, for instance, Chinese H-1Bs by an 8-to-1 margin the last time I checked), one should worry that the legislation might be misconstrued by some. It would have been helpful if Senators Grassley and Sanders had explained that the VICTIMS of H-1B include many Indian-Americans, and for that matter, many others of non-European ancestry. The politicians on the Hill, who seem to accept the industry lobbyists` claim that the ones who complain about H-1B are whites, would benefit by sticking their heads in a university computer science class, because they`d see tons of Asian-American (no, NOT Asian foreign-national) students.

Vivek should be making that same point. It has been reported that Vivek has said that his own son was had had difficult finding IT work at one point, due to H-1B. I don`t know if this is accurate, but it is certainly safe to say that Vivek would agree that many Indian-Americans are victims of the H-1B program. And he should have said so on CNBC, rather than unduly alarming Indian-American viewers that Congress was out to bash Indians.

Vivek, and for that matter Ron, should have also pointed out that the TARP legislation is not the abrupt, radical change that the industry lobbyists are portraying it to be. It is merely an extension of existing law: It derives from the H-1B-dependency law, and probably more importantly in my context here, the TARP legislation`s U.S. recruitment requirement for H-1B is, in essence, the same as the corresponding requirement for employment-based green cards—a law in place for several decades. Yes, the banks now will have some extra hoops to jump through, but they and all other employers have had to do that in a related context for many years.

(And if these workers are "the best and the brightest" as the lobbyists claim, why should the banks mind going through extra hoops, given the chance to hire "geniuses"? By the way, I`m preparing a major posting on this erstwhile "best and brightest" claim, hopefully ready after this very busy week is over.)

Now for item (b):

Vivek was outraged that Ron flatly stated that the Bank of American was using H-1Bs as cheap labor. But Ron was correct. The Bank of America is not the poor, genius-deprived firm the lobbyists describe. On the contrary, the BofA has an awful track record regarding the H-1B and L-1 visas (which, as Ron`s research has shown and has been admitted by the offshoring firms, is also used to facilitate offshoring):

1. In 1997, the following report came out (Michael Liedtke, BofA Tech Workers Fear Jobs Heading Off to India), Contra Costa Times) (East San Francisco Bay Area newspaper), April 27, 1997.

Bank of America`s technology center is in the early stages of an unsettling cost-cutting experiment. The San Francisco-based bank is asking its computer engineers in Concord to undermine their own job security by helping to train potential replacment workers imported from India before shipping an untold number of positions overseas... The bank also maintains none of its Concord emloyees will be dropped from the payroll if the pilot program with the India workers proves to be a success.
That latter statement by the bank proved to be false. After completion of the outsourcing program, the bank did indeed lay off its IT workers in Concord and elsewhere in 2002 (Jim Gardner, Bank job: You`re Fired, Now Go Train Your Replacement, San Francisco Business Times, November 22, 2002):
Spreading some pre-holiday cheer, Bank of America this week announced that it is cutting 900 tech positions—with the twist that some layoff victims have to help train replacements if they want to get severance pay... The job cuts, 232 of them in the Bay Area, come as BofA is outsourcing an increasing amount of tech work abroad, particularly to India. That has earned the Charlotte, N.C.-based institution the nickname of Bank of India among disgruntled soon-to-be-ex-employees. Sure enough, dozens of Indian tech workers have been visiting BofA`s major tech centers in Concord, Jacksonville, Fla., and other cities around the country recently. They`re getting training on work they`ll do back at home for about half what departing employees are paid. The bank confirms that some laid-off workers are being required to help train new ones (and not speak to the media) as a condition of receiving severance.
Sadly, this also led to tragedy (http://www.engology.com/BobFlanagan.htm).

2. The BofA did the same thing in Charlotte, converting jobs from BofA to HCL (an outsourcing firm). The workers were still working AT the BofA, but technically not FOR the BofA—and soon afterward, they weren`t working at all, because HCL replaced them with H-1Bs for literally half their salaries. This is detailed in the excellent case study by the Programmers Guild, titled, "How to Underpay an H-1B."

In short, the industry lobbyists blew it big time by using the Bank of America as their poster child.

By the way, CNBC repeatedly used the term "foreign-born" to describe the foreign workers, giving viewers the impression that they are immigrants. This is false. These workers are merely SEEKERS of a TEMPORARY WORK VISA. Even if they do get that visa, it is, in immigration legal terminology, a NON-IMMIGRANT VISA. The employers can, either simultaneously or later on, sponsor them for green cards, so some of these workers may hope to become immigrants later on, but they are not immigrants.

Having studied the industry lobbyists for so long, I know that they choose no word carelessly. PR people want every word to have an effect, with the term "foreign-born" intended to misleadingly connote immigrants here, just like they insert the term "innovation" into the dialogue as often as possible to misleadingly convey the idea that H-1Bs are needed to innovate the U.S. out of its economic slump. The frequent use of the word "xenophobia" is deliberate too, for obvious reasons.

Anyway, there you have it. CNBC, with its in-your-face style, baited Vivek into an embarrassing televised tiff with someone who he actually agrees with. Some of you may be saying now that Vivek ought to apologize to Ron, but my own view is that CNBC ought to apologize to its audience.

Norm