IT Professionals Association of America, Inc - Professor Norm Matloff: On Push to Expand H-1b Visa Program

A tried and true tactic employed by the industry lobbyists to expand the H-1B program has been to push the Education Button, the all-purpose stun gun of Capitol Hill. All one has to do is push that button, and the Congress, and press are rendered senseless.

The industry's argument boils down to two main premises: (a) A lot of students in U.S. Master's and PhD CS and engineering programs are foreign students, and "therefore" there must be a "shortage" of holders of such degrees. (b) Abuse of the H-1B program is limited to holders of Bachelor's degrees, imported to the U.S. by Indian firms. Both of these premises are false, as I will explain here:

(From here on, I will use the term "graduate degrees" to mean Master's and PhDs.)

Here are the main points:

* H-1Bs with graduate degrees are used as cheap labor by big firms. Intel has claimed repeatedly that most of the H-1Bs it hires are design engineers with graduate degrees. (See my law journal paper, at http://heather.cs.ucdavis.edu/MichJLawReform.pdf pages 43-44, for various quotes.) But if you look at the Dept. of Labor H-1B Web page, you find that the median prevailing wage quoted by Intel for its H-1Bs is $65K. Contrast that to the fact that the national median salary for workers with a Master's in engineering is $82,333 and the median for a PhD is $105,500. (See reference to 2002 NSPE data at http://www.soe.stevens-tech.edu/seem/UG/SalaryArticle.pdf)

* The fact that so many U.S. graduate degrees are obtained by foreign students does not mean we "need" so many graduate degrees. One does not need a graduate degree for most work in the field, including research and development. For example, Linus Torvalds developed the Linux operating system while he was an undergraduate. Marc Andreesen developed MOSAIC, which he later refined into the Netscape Web browser, when he was an undergraduate. Tim Berners-Lee, the inventor of the Web, has only a Bachelor's degree, and it is not in computer science. None of Bill Gates, Larry Ellison and Steve Jobs, founders of Microsoft, Oracle and Apple, respectively, even has a Bachelor's degree. Even at the firm which first developed the Internet, Bolt Beranek and Newman Inc., only 4 percent of the staff have a PhD. I've mentioned before the Intel recruiters who told me "Intel is not very interested in PhDs," adding that a PhD would not have enough to challenge him or her at Intel, except in rare cases.

* If in spite of my comments in the last bullet the industry insists that it does need people with graduate degrees, then they should hire the tens of thousands of American programmers and engineers who have graduate degrees but are unemployed.

In the past, American students "voted with their feet," foregoing graduate school in favor of going directly into industry because they knew a graduate degree was not needed to be able to do the work in the field and they correctly perceived that going to grad school was a losing proposition financially. (See pp.84ff of my law journal paper cited above.) However, the poor job market of the last few years has caused U.S. tech graduate programs to be inundated with American applicants. See for example "Dot-Com Dropouts Go Back to School," by Vanessa Hua, San Francisco Chronicle, January 27, 2002.

Especially damning is that Thom Stohler, the industry spokesperson quoted in the enclosed article as saying that they need H-1Bs because Americans don't go to graduate school, concedes that there are tons of Americans in graduate school now. He conceded on CNN, "Well, in fact in the last few years it's been much better." (NEXT@CNN program, CNN, September 28, 2003.)

* Though a small percentage of the foreign students are of outstanding talent, most are not. The analysis of David North has shown that foreign PhDs are disproportionately concentrated in the weaker schools. (See pp.47ff of my law journal paper.)

The text of the bill (House version, HR 4166) is available at

http://www.ilw.com/lawyers/immigdaily/news/2004,0420-hr4166.pdf

Note that the bill attempts to ameliorate its negative impact on American workers by including a $500 "fraud prevention and detection fee" on H-1B and L-1 visas. As I have said many times, this is irrelevant (and is probably a deliberate distraction). The H-1B and L-1 laws are so riddled with loopholes that the employers underpay their foreign workers while still being in full compliance with the laws and regulations. So there is no "fraud" involved. Just look at the Intel salary data for an illustration of this--Intel is entirely within the law in paying those low salaries. Sadly, a lot of people are going to be fooled into supporting this bill because of this mainly useless provision.

Bottom line: The premise of the bill is unwarranted. If employers want workers with graduate degrees, they should hire the tens of thousands of unemployed American tech workers who have graduate degrees.

Norm

Effort afoot to exempt 20k from H-1B cap
Source: Computerworld

The bill would allow hiring of more foreign grads with advanced degrees

News Story by Patrick Thibodeau APRIL 19, 2004 (COMPUTERWORLD) - WASHINGTON -- There's a new push in Congress to increase by 20,000 the number of foreign workers holding H-1B visas. Proposed legislation would accomplish that by exempting foreign graduates with advanced degrees from the visa cap. The bill, introduced earlier this month by Rep. Lamar Smith (R-Texas), is supported by Compete America, a coalition of manufacturers, academic groups and IT vendors such as Microsoft Corp., Intel Corp., Oracle Corp., and Sun Microsystems Inc.

This year's H-1B cap of 65,000 was reached in mid-February, less than five months after the Oct. 1 start of the federal fiscal year. Smith's bill, the American Workforce Improvement and Jobs Protection Act, wouldn't raise the cap, but it would exempt from that limit up to 20,000 graduates with a master's degree or higher from a U.S. university.

Students hired by universities and research institutions under the H-1B program are already exempt from the cap.

Most of the H-1Bs that U.S. companies are hiring "are coming out of our own schools," said Thom Stohler, a vice president at the American Electronics Association, a Washington-based IT trade group that has called for a higher H-1B cap. Businesses "are not going to Bangalore to find people; they are finding them here," he said.

"It's the position of the AEA that individuals who possess a master's or Ph.D. degree are not stealing American jobs; they are creating American jobs," said Stohler. Holders of advanced degrees tend to be employed in research and development work, he said.

Under U.S. immigration law, companies were allowed to begin applying this month for H-1B visas that will be issued at the start of the 2005 fiscal year. Vic Goel, an immigration attorney in Greenbelt, Md., said he expects that there will be enough applications between now and Oct. 1 to exhaust next year's cap of 65,000 visas. He said the period for issuing new H-1B visas that will begin on Oct. 1 could close the next day.

Any increase in the number of H-1B visa holders will face opposition from labor groups, especially the IEEE-USA, a unit of the Institute of Electrical and Electronics Engineers Inc. in Washington that says its members are facing record unemployment levels.

"We question the need for a new visa exemption," said IEEE-USA President John Steadman, who noted that foreign graduate students can already work for two years in the U.S. under existing visa rules. "During that time, the company can evaluate their skills and petition for a green card on their behalf," he said.

The bill's prospects are uncertain. The co-sponsors are all Republican, and this is a contentious year for outsourcing. But Congress has acted before to increase the H-1B cap in election years.