Senators Cantwell, Cornyn, Leahy and Hatch declare war on American tech workers

Amendment #1249 to the comprehensive immigration bill, sponsored by Senators Cantwell, Cornyn, Leahy and Hatch, is a declaration of war on American tech workers. Their bill would:

• Authorize employers to displace qualified U.S. workers with H-1b foreign workers
• Authorize employers to sponsor H-1b workers without first recruiting qualified U.S. workers.
• Allow employers to fill the bulk of U.S. tech jobs with virtual indentured servants by adding 140,000 employer-sponsored greencards each year.
• Set the base H-1b quota at 150,000 per year (Incorrect)
• Provide Unlimited exemptions for advanced degrees from U.S. universities PLUS unlimited advanced degrees in Science, Technology, Engineering, and Math (STEM) from foreign universities

June 5th Correction: This bill does not set the H-1b quota to 150,000 per year. On May 30th details were sketchy, and I apparently confused the 150,000 that AeA is calling for with a provision in the bill.

Aside from a sham "prevailing wage" that allows employers to pay wages far below average and still be in compliance, the above points are the key H-1b reforms that U.S. tech workers have needed.

The fifth bullet point alone could potentially flood in several hundred thousand foreign workers independent from the 150,000 quota. Why would employers hire new U.S. BS grads when the market would be flooded with workers with advanced degrees, willing to work cheap in exchange for one of the 140,000 annual green card sponsorships?

Note that for U.S. grads the exemption applies to degrees in ANY major - including the proverbial "basket-weaving" - even in professions where Americans cannot find work.

There are about 3.5 million total tech jobs in the U.S., and roughly 200,000 of those become open each year, mostly due to attrition. (Bill Gates cites 2 million new jobs in the next decade - that's what he's referring to - mostly just replacement of people that move on - by choice or by displacement.)

In 2004 American colleges and universities awarded 233,492 undergraduate Science and Engineering degrees, according to Robert J. Samuelson in "A Phony Science Gap." The vast majority - perhaps 90% - of these were awarded to U.S. workers.

Clearly there are enough American graduates to fill all jobs. But these Senators intend to fill at least 150,000 (plus other exemptions) with foreign workers. Then employers will use the 140,000 green card sponsorships to create virtual indentured servants of these workers.

These Senators must be held accountable. Please phone them and your two state senators today! (Find them at www.congress.org)

• Senator Maria Cantwell (D-WA) : (202) 224-3441
• Senator John Cornyn (R-TX) : (202) 224-2934
• Senator Patrick J. Leahy (D-VT) : (202) 224-4242
• Senator Orrin G. Hatch (R-UT) : (202) 224-5251

Apparently Compete America is behind this bill. Among the companies that Compete America represents is Motorola. Today Motorola announced that it will lay off 4000 more U.S. workers. IBM also announced a layoff of another 1500 workers today.

If there were truly a tech labor shortage, then the degreed and experienced U.S. workers included in these layoffs would be quickly picked up by other Compete America member companies. But that rarely happens.

"This amendment puts U.S. immigration control in the hands of foreign and multi-national corporations whose interests are often contrary to the best interests of the United States," warns Kim Berry, president of the Programmers Guild. "The bill literally allows citizens of other countries to petition their fellow foreigners for U.S. green cards, without regard for the impact on Americans or America."

Oracle opposes $1200 annual H-1b fee to provide $15,000 scholarships to American engineering students

As reported by the New York Times on May 27, 2007:

Senator Bernard Sanders, independent of Vermont, won adoption of an amendment that would increase the fee charged to employers for such a visa, known as an H-1B, to $5,000, from $1,500. The money would be used to finance scholarships for American citizens studying engineering, mathematics, computer science or health care.

Robert P. Hoffman, a vice president of Oracle, said the higher fees represented “an onerous tax increase on America’s most innovative companies.”

This “onerous” fee is less than a $1200 annual increase in the current H-1b fee ($600 foremployers with less than 25 employees). But it could substantially improve America’s competitiveness. Many American students must compromise their studies by working part time, while foreign students are free to devote 100% of their time in study groups. Others never reach their potential due to the financial realities of attending college today. So instead universities fill these slots with foreign students.

Compete America, headed by Hoffman, claims that “too few American students are seeking degrees in science, engineering and mathematics.” (Public Policy Institute of California recently made a similar claim.) But rather than support a $15,000 annual scholarship so that Americans can attend American universities, Hoffman proposes that “the H-1B and green card programs should exempt foreign-born Masters and PhD graduates of U.S. universities from arbitrary visa caps."

(The Programmers Guild refutes that there is any shortage of Americans students, citing declining salaries and tech workers over age 40 unable to find jobs. A recent Duke University study reached the same conclusion: "we did not find any indication of a shortage of engineers in the United States.")

America has made Larry Ellison one of the richest men in the world, with a net worth of $20 billion. He owns several yachts, including the 4th largest in the world valued at $200 million. He owns several aircraft, and lives in $20 million estate. (See Ellison’s home in this Google Earth Link here.)

In a May 24th press release Compete America claims: “Our companies are committed to advancing math and science education over the long term, as our future competitiveness depends on it,” but the press release bemoans that this $1200 fee “could make the H-1B program cost-prohibitive, especially for smaller businesses.”

Oracle has about 1850 H-1b on staff. Thus the annual cost to Oracle would be slightly over $2 million, providing $15,000 scholarships for 143 American students. So which is more harmful to Oracle’s global competitiveness – a nominal increase in the H-1b fee, or Ellison’s extravagant lifestyle?

As spokesman for Compete America, Hoffman also represents the opposition to these scholarships by: Google, Hewlett-Packard, Intel Corporation, Microsoft Corporation, and Sun Microsystems. All of these U.S. companies prefer to spend millions lobbying for more H-1b rather than part with $1200 to assist American students.

Oracle’s objections do not stop at the scholarship. Oracle also objects that H-1b reforms would limit their ability to displace qualified Americans with H-1b workers, and to lay off Americans while retaining H-1b workers. Hoffman says such provisions "are a huge requirement that might violate international trade laws." Industry also deems the new H-1b requirement to attest to having made a good faith effort to hire an American as overbearing.

Only a handful of companies applied for more than 500 H-1b workers in 2006. Those are predominately huge corporations for which the scholarship fee would be insignificant.

The top users of H-1b are Indian consulting firms that admit to underpaying their H-1b workers: "Our wage per employee is 20-25 per cent less than US wages for a similar employee," boasts Tata Consultancy Services (TCS) vice president Phiroz Vandrevala. The $1200 fee does not begin to offset this underpayment advantage, and the Durbin/Grassley bill would address this wage underpayment - which is currently perfectly legal under H-1b statutes.

This highlights the flaw in the current prevailing wage provision, and the Programmers Guild calls on Congress to include the prevailing wage provision of the Durbin/Grassley bill.

India now denies their prior admission that they abuse H-1b by paying way below market wages

On the May 18, 2007 edition of CNN's "India 360: Indian IT troubles for US," Indian companies categorically deny that they use the H-1b to hire Indians at wages below what Americans earn:

Two American senators have alleged that Indian IT companies are displacing American workers by hiring Indians at lower wages and are misusing the H1B visas. . . Indian companies have reacted to this saying these allegations are unfounded and that there has been no abuse of H-1B visas on their part.

In this CNN video, U.S. India Business Council (USIBC) president Ron Somers states that "certainly there has been no abuse" of H-1b visas by these member companies of the India Business Council. NASSCOM also denies that any abuse is occurring.

CALLING INDIA'S BLUFF

However, according to the Hindustan Times in September 2006, a top user of H-1b within the U.S. admitted to substantially underpaying their H-1b workers, citing that underpayment as their "competitive advantage":

Tata Consultancy Services (TCS) vice president Phiroz Vandrevala even admitted that his company enjoys a competitive advantage because of its extensive use of foreign workers in the United States on H-1B and L-1 visas. "Our wage per employee is 20-25 per cent less than US wages for a similar employee," Vandrevala said. "Typically, for a TCS employee with five years experience, the annual cost to the company is $60,000-70,000, while a local American employee might cost $80,000-100,000. "This (labour arbitrage) is a fact of doing work onsite. It's a fact that Indian IT companies have an advantage here and there's nothing wrong in that. The issue is that of getting workers in the US on wages far lower than the local wage rate."

According to this list compiled by InformationWeek, TCS is the 4th largest user of H-1b visas within the U.S. Most likely InfoSys, ranked number one, and Wipro, ranked number two, are also abusing the H-1b to execute similar "competitive advantage" against American workers.

Senators Durbin & Grassley question top H-1b users

Senators Durbin and Grassley have sent a letter to nine H-1b users inquiring about their usage. In that AP article, Compete America counters that H-1b “abuse is the exception rather than the rule.” FULL TEXT OF DURBIN/GRASSLEY LETTER IS HERE.

Programmers Guild rebuttal to Compete “America”:

• If “abuse” includes hiring H-1b without first demonstrating an attempt to recruit qualified Americans, then abuse occurs in over 99% of H-1b petitions.


• If “abuse” includes paying a wage substantially below what average Americans earn in the same job classifications, then about 80% of H-1b petitions qualify as abuse, by paying Level 1, 17th percentile wages.
  
• If “abuse” includes engaging in statistically discriminatory hiring practices based on nationality, then virtually all Indian bodyshops are abusing the H-1b program.
  
• If “abuse” includes first hiring H-1b workers and then submitting their resumes to U.S. job openings – in direct competition with American workers – then most bodyshops are abusing the H-1b program.

Which begs the question, how does Compete America define “abuse”?

Furthermore, why is Compete AMERICA concerned with this inquiry? None of the nine entities are AMERICAN companies – most are based in India. Compete AMERICA should support this inquiry as potential unfair competition with AMERICAN firms that COMPETE for available H-1b visas.

DIRTY SECRET: Perhaps the connection is that the letter cites I-Flex, which is a majority owned subsidiary of Compete America member Oracle, and that Robert Hoffman is both Co-Chair of Compete America and Vice President for Government and Public Affairs at Oracle.

I-FLEX LCAs are here. The vast majority are for $60,000 salary, the precise salary that permits an employer to be comprised of 100% H-1b workers and still not be deemed “H-1b dependent. How is Oracle not "abusing" H-1b? I-Flex: 212-430-5800.

The Durbin/Grassley list includes several H-1b users that the Programmers Guild had previously identified as the "lowest paying H-1b users"

• TATA is #5 at less than $38,000


• Patni Computer Systems #27 with an average LCA wage of under $42,000
  
• Mphasis Corporation is #64 at less than $45,000


• Wipro Limited is #92 at less than $48,000

These wages are far below what average American EE/CS grads command upon graduation with ZERO experience. But Compete America claims that H-1b brings in the “best and brightest” workers with “specialized skills.” How is paying the worlds top talent below average starting wage not “abuse”?

Last month the Congressional Research Service reported how H-1b fails to protect American workers from displacement.

Still, rather than fix these flaws, many in Congress intend to expand the program.

COMPETE AMERICA CONTACT: Eric Thomas 202-822-9491
__
On the Net:
Sen. Chuck Grassley: http://grassley.senate.gov/
Sen. Dick Durbin: http://durbin.senate.gov/

John Miano's H-1b Wage Study "Bottom of the Pay Scale" - clearly the underpayment of H-1b workers is not an "exception":

Congressional Report documents that H-1b violates the U.S. worker protections of the Immigration and Nationality Act

On April 27, 2007 the Congressional Research Service prepared Immigration of Foreign Workers: Labor Market Tests and Protections, which documents many of the flaws in the H-1b program. (All page numbers are the PDF page number.)

Many H-1b proponents claim that the H-1b program is more restrictive than in the past. But in fact the number of H-1b have tripled since the dot-com era of the late 1990s:

The number of visas for employment-based temporary nonimmigrants rose from just under 600,000 in FY1994 to approximately 1.2 million in FY2005. In particular, “H” visas for temporary workers tripled from 98,030 in FY1994 to 321,336 in FY2005. (Page 2) (See also Figure 2 on p.13)

The report reveals that the H-1b program violates the Immigration and Nationality Act (INA):

The labor certification ground for exclusion covers both aliens coming to live as LPRs and as temporarily-admitted aliens (i.e., nonimmigrants).The INA specifically states:
Any alien who seeks to enter the United States for the purpose of performing skilled or unskilled labor is inadmissible, unless the Secretary of Labor has determined and certified to the Secretary of State and the Attorney General that — (I) there are not sufficient workers who are able, willing, qualified ... and available at the time of application for a visa and admission to the United States...

But Table 1 on page 17 reveals that no effort to first recruit U.S. workers is required by the H-1b program. And Footnote 34 on page 14 documents that, as long as H-1b are paid at least $60,000 OR have at least a masters degree, H-1b workers can comprise 100% of an employer's workforce, yet they will not be deemed "H-1b dependent" employers.

We will continue to research details and update this blog. But in 1998 Bill HR 3273 circumvented the INA: "To treat certain information technology occupations as if the Secretary of Labor had made a determination under section (a)(5)(A) of the Immigration and Nationality Act, to limit such determinations, and for other purposes. " (NOTE: On further review it appears that this Bill never became law. But the purpose seems unclear since there was already no requirement to recruit or attest that no qualified Americans are available.)

Java Programming positions at Accenture - over age 40 need not apply

According to the CSUS Career Website, Accenture is offering a fantastic opportunity to receive four weeks of Java and Oracle training, and then, upon successful completion, placement in a permanent position utilizing those skills.

This would be a great opportunity for many under-employed programmers in their 30's and 40's, whose primary skills are in obsolete technologies, like C, Paradox, Firefox, VB6, and so on. And if there were truly a shortage of candidates, Accenture would not place artificial bars to entry. But they do:

* You must have less than 6 months of professional programming experience

The Programmers Guild does not condone blatant age discrimination, and therefore encourages everyone with experience in VB6, C++, C, or Java that would be willing to be trained in San Francisco for four weeks and then accept full-time employment with Accenture to send their resume to ats@on-campus.com

U.S. corporations are purging top American tech workers

Getting hired by Intel or IBM has never been easy. Generally they select from the top talent from the top schools. But in spite of claims that employers cannot find qualified workers, according to ERE Networking, Intel and IBM are slated to purge thousands of American tech workers within the next few months.

Additional coverage of the Intel layoff is here. Intel is a member of Compete America coalition that lobbies for more H-1b workers.

Nationwide over 70,000 Americans were laid off in April 2007, a substantial jump from both the month and year prior.

Where are the desperate employers lining up to hire these workers? Why won't Congress suspend the H-1b program until these skilled American workers are re-employed?

Lies, lies, and more lies about H-1b

In the past week the media has been flooded with articles containing gross misrepresentations of the H-1b program:

Misconceptions dominate the immigration debate - (Grant Sovern is an immigration attorney and partner in the Madison office of Quarles & Brady, LLP)

The most widely held misconception is that H-1B workers drive down U.S. salaries. However, in order to get an H-1B, employers must show the Department of Labor they are paying H-1B workers either the prevailing wage or the actual wage (the same as other employees at the same company). The prevailing wage is the weighted average wage for a specific position in a specific geographic area.

FACT: The "prevailing wage" for the purposes of H-1b is about the 17th percentile of what average-skilled Americans are being paid in the same job classifications. (See documentation here.)

The problem, one that apparently we all agree on, is that the U.S. is not producing enough homegrown talent in the areas of math, computer science, and engineering.

FACT: The Programmers Guild disagrees. The problem is that employers have become spoiled into demanding 5+ years experience in the precise laundry list of skills they desire, rather than hiring degreed American professionals with a wide range of skills and willingness to learn on the job. Intel and HP are purging top U.S. workers at the same time they lobby for more H-1b.

The H-1B program has other built-in safeguards. Employers who use a lot of H-1Bs first must try to find U.S. workers before they can hire an H-1B.

FACT: As long as these "best and brightest" are either paid at least $60,000 OR have an MS degree, the employer can have 100% of their staff on H-1b and never be required to recruit or consider qualified Americans. (Keep in mind the at MSc degree in India is roughly the equivalent of a BS degree in the U.S.) (Reference: PDF p.14, footnote 34)

Calendar Reform...Again

Recently imposed restrictions on H1B visas, the type foreigners need to hold a job that requires a Bachelor’s degree, have put pressure on Harvard’s international seniors. In order to enter the lottery for such a visa, seniors need documentation from University Hall asserting they hold or will soon hold their degrees.

FACT: No new restrictions have been "recently imposed."

Demand for H1B visas outstrips supply

This year, the US government had to run a computer-generated random selection process or a lottery for H1B visas since applications far exceeded the number of visas available.

FACT: USCIS had the legal right to give preference to the higher-paying positions - which presumably represented the most experienced or specialized workers. But USCIS chose to hold a random lottery.

Everyone will benefit with immigration reform, part #3

The H-1B visa quota for high skilled immigrants is filled early every year. Companies then have to out-source their work, or worse, not be able to start new projects or do research and development. Some of these jobs don’t require college degrees, but they do require bright young people who are educated in high school math and science and can be trained in the high tech jobs.

AGE DISCRIMINATION: Why do companies only require "bright YOUNG people"? Most Congressmen, Judges, and CEOs are over age 40. If people over age 40 can run this country, they should still be qualified to work in the IT field.

U.S. Universities, Research Parks Hit Hard by Government Cap on H-1B Visas

RESTON, Va., May 2 /PRNewswire-USNewswire/ -- The current U.S. cap on the number of skilled-worker visas (H-1B) severely handicaps the ability of U.S. universities, science and technology-related companies and research facilities in their ongoing missions to develop new technologies, medicines and other innovative products that put the country on the leading edge of the global economy, according to the Association of University Research Parks (AURP).

FACT: Universities and non-profit research centers are exempt from the H-1b cap, and there are still available slots for foreign graduates of U.S. colleges with a masters degree or higher.

Skilled Masses - Washington Post Editorial

Congress temporarily raised the ceiling to 195,000 for fiscal 2001 through 2003,
only to let it relapse out of neglect.

FACT: The cap did not lapse "out of neglect." The total number of IT jobs in the U.S. declined between 2001 and 2003. Combined with a record number of H-1b flooding in, in November 2003 DOL's Bureau of Labor Statistics personnel acknowledged that upwards of 20% of U.S. computer programmers were either unemployed or had been displaced from the profession, and that actual unemployment could have exceeded 30%!