Sunday, May 27, 2007

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.

9 comments:

Chris V said...

I do hope you realize that the H1-B program will soon become meaningless.

Once immigration reform goes through for the 12-20 illegal unskilled workers already in our country, companies will use that exact same program to import cheap skilled workers as well.

What they've done to us thus far with the H1-B workers will be small potatoes compared to what happens next. Kiss your ass goodbye.

Anonymous said...

Your career is inextricably linked to "free" trade.

Why? Here's just another example. Oracle states that passing laws to benefit US workers and citizens (like requiring a fee to support education of US citizens) might violate international trade laws. And where do such international trade laws come from? "Free" trade treaties and unelected groups such as the WTO. Oracle's Hoffman said:

such provisions "are a huge requirement that might violate international trade laws".

So if Oracle wants to prevent US law X from being passed (in this case increased H-1B visa fees to pay for US scholarships), they lobby trade agreement negotiators to write a rule into "free" trade treaty ABC that explicitly prohibits X - thus bypassing US law.

So now "free" trade has trumped you and your career. You can ask your Congressional representatives to be treated fairly - and they can accurately state "Sorry, laws written into free trade deal ABC prevent me from helping you. Too bad - maybe your Bachelors in Engineering can help you find a job at Wal-Mart".

2Truthy said...

Mr. Berry,

EXCELLENT article, complete with photos and tag lines to depict the sociopathy of Larry Ellison, Silicon Valley's technology general in the War on the Middle Class.

Although Bill Gates gets all the credit for being the mastermind behind selling out our educated, upwardly mobile middle class computer scientists and engineers, Larry Ellison rules as the DARTH VADER of Silicon Valley (only to be seconded by John Chambers.)

We complain about our elected officials (rightly so) of colluding
with sociopathic businessmen like Ellison and his hubris soaked henchman water-boy Robert H. but where are the media to report these details front and center? Whatsmore, where is the righteous indignation from the People?

My son graduated last weekend from high school with honors and a 3.9 GPA (on 4.0 scale) and will be attending the U of Chicago at a rate of 50K a year. Our family has received ZERO dollars for any aid due to our income bracket (despite the SF bay area high cost of living/inflation etc. this tuition is astronomical.) As an honors student, he will be forced to work part-time instead of devoting that coveted time to his studies. Several of his other honors student friends and former classmates won't even be attending college this fall but will stay at home, find jobs and take part-time classes at the community colleges due to the financial hardships of many of their unemployed or underemployed parents caused by the greedy practices of outsourcing and H1b's by "leaders" like Ellison. The sick truth is that our best and brightest are not wanted by these frat boys running companies.
2Truthy

Prithu said...

Why are u such a big bigot racist and xenophobe. From where do you come to the conclusion that foreign students do not work part time to support themselves ? Stop slandering people !!

Anonymous said...

Prithu thinks that foreign students "work" along with study. Their student visas do not allow them to "work."

Foreign students are no different than the H-1Bs. They compete for free rides in education that Americans would otherwise be chosen for.

If the US doesn't fill the pipeline with Americans for education and work, then there will cease to be a US. As it is, Citizenship is not that big a benefit since a foreigner can get nearly the same benefits except voting.

Anonymous said...

Dude the visa allows them to work for 20 hrs per week.... Check your stats... Many get funding but many bring fees from home and work to pay that debt and expenses...,

hinduzionkafir said...

my SAT score of 1420 was not a hard earned one. In fact I was kind of disappointed. However, it was enough to place me in the 97th percentile for ALL test takers, majority of whom were obviously Americans. With this score I managed to secure admission to UC Berkeley, Grinnell, Macalester, Vanderbilt, Colgate and Knox. I got a full ride at Coe when they normally do not give one to anybody. They made a special exception for me because of my high academics. So don't tell me that I took a free ride from an American. Stop thinking that 1100 on the SATs are OK and aim higher and then if your kids don't get into colleges that international students like me get into, you ca complain. Till then, try raising smarter kids.

Alag Arasan said...

I don't think 65000 H1 visas will make that much of a diff to job opportunities for American Engineers. Let's keep in mind that these visa's were instituted to address shortage of skills in the first place which resulted in ridiculous billing rates like $150 per hour for Cobol programmers in the 90's. Thanks to businesses having a choice, costs have become more meaningful. Second, the furious pace of technology development requires resources from wherever we can get them. Otherwise, we cannot have all the new gizmos like iPhone, etc, as fast and at these prices, which create higher growth for US companies, higher productivity and actually create more jobs in the US. So what if we lose some programming jobs to countries which have better efficiencies, if in the final analysis we create more jobs of different kinds in the US. I think one has to see Bill Gates and Larry Ellison's views in this context.

Anonymous said...

There is a mistake in the article. Larry Ellison doesn't live in a $20 million dollar estate, he lives in a $500 million dollar estate in Woodside, CA. His estate is a re-creation of a Japanese Shogun's castle. Mr. Ellison pays about $47 million dollars per year in property taxes on this estate. He also owns a home near the San Francisco Yacht Club, and likely owns homes in other places as well. This information is published on a fairly regular basis, in Bay Area periodicals like the San Francisco Chronicle, San Jose Mercury News, etc.