<<<<< JOB DESTRUCTION NEWSLETTER  No. 1931 -- 10/22/2008 >>>>>

Forbes magazine published one of the worst op-ed iditorials I have seen in
at least a month or two; maybe all year! There are too many things wrong
with this iditorial to discuss in one newsletter so I have chosen two of
the worst ones to debunk.

<<<>>>

It almost seems that the author did nothing more than copy and paste random
talking points from a Compete America position paper, but she goes a step
further by stating that the current housing crisis could be mitigated by
letting more H-1Bs into the U.S.:

   America's financial markets and economy won't fully recover until
   the slide in the housing market is stopped. Selling homes to
   skilled immigrants would not solve all our housing woes, but it
   would be a step in the right direction--without an additional
   penny needed from Uncle Sam.

In case you are wondering what kind of bonehead would make such an absurd
statement; it was written by Diana Furchtgott-Roth, who in the past did
stints as Chief of Staff of President Bush's Council of Economic Advisers
and as Chief Economist at the U.S. Department of Labor. If that isn't
enough to explain her faux pas here is one more: she is listed in a book
called "101 People Who Are Really Screwing America", by Jack Huberman. You
can read the book by doing a Google search -- the link is very long so I
didn't include it here.

Replacing American workers with H-1Bs accomplishes nothing more than
evicting an American family out of a house so that a new foreign worker can
buy a cheap foreclosure. Destroying jobs and wrecking our skilled domestic
labor force exacerbates the housing and banking crisis instead of making
the situation better. Following Furchtgott-Roth's logic, we could solve the
entire housing crisis by allowing unlimited numbers of skilled foreign
workers into the U.S. 

Even considering Furchtgott-Roth's dubious titles as economist and analyst
there is no excuse for this fallacy of logic:

   This figure [number of H-1Bs in the U.S.] represents a minuscule
   portion of the American labor force of 155 million. Even if green
   card and H-1B quotas were raised to 750,000, that would be only
   less than half of 1% of the labor force. A higher quota would
   still block admission to the majority of applicants, who are
   discouraged from applying due to the small likelihood of success.

Furchtgott-Roth seems to be using the BLS statistic of 155 million to
estimate the total American labor force. It's a suspicious number to use
for her calculations because the entire population of the United States is
about 305 million. Does anybody seriously think that one out of every two
Americans is participating in the labor market, and that each of them is
potentially affected by the H-1B visa program?

She minimizes the effect of H-1B by comparing the total number of H-1Bs
with the entire U.S. labor force of 155 million workers. That's a red
herring because H-1B doesn't impact the entire American workforce in
proportion to its deleterious affects on workers in the fields of science,
technology, engineering, and mathematics (STEMS). It's unclear whether she
is advocating a cap of 750,000 for both H-1B visas and green cards
combined, or separately, but the affect is hardly miniscule. Half of 1% is
a gross underestimate -- the correct percentage would be more like 15% to
30%.

FACT CHECK: H-1B visa holders already hold about 16% to 32% of the total
number of STEM jobs and that doesn't include the large number of employment
based (EB) green cards. If Furchtgott-Roth got her way those percentages
would go way up. Estimates of the number of STEMs vary -- the NSF says
there are about 5 million but it varies depending on the definition of STEM
worker. There are about 800,000 H-1B visa holders currently employed in the
U.S. although some estimates are as low as 330,000. 


<<<<< Important Links  >>>>>

To read more about the effects of H-1B on the STEM labor force, go to page
71 of "ON THE NEED FOR REFORM OF THE H-1B NON-IMMIGRANT WORK VISA IN
COMPUTER-RELATED OCCUPATIONS", by Norm Matloff.
http://heather.cs.ucdavis.edu/Mich.pdf

For more statistics on the number of STEMs, read "U.S. S&E Labor Force
Profile", by the NSF at:
http://www.nsf.gov/statistics/seind08/c3/c3s1.htm#c3s12

For statistics on the number of H-1Bs, read "H-1B Temporary Workers:
Estimating the Population", by B. Lindsay Lowell
http://www.ccis-ucsd.org/publications/wrkg12.PDF

For labor force numbers read, "Employment Situation Summary", by the Bureau
of Labor Statistics
http://www.bls.gov/news.release/empsit.nr0.htm

You can also click the links on the left part of this page:

http://www.jobdestruction.info/ShameH1B/

"9 out of every 10 new job openings for computer/IT were taken by H-1Bs"

"Negative job growth in Computer/IT for U.S. citizens"

"If it wasn't for H-1B the unemployment rate for Computer/IT workers would
be 0%"


+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.forbes.com/opinions/2008/10/19/homes-sale-immigrants-oped-cx_dfr_
1020furchtgottroth.html

Commentary
Houses For Sale--To Immigrants
Diana Furchtgott-Roth 10.20.08, 12:00 AM ET


How do we renew confidence in credit markets? We know what hasn’t worked
so far: Treasury’s $700 billion bailout plan with purchases of preferred
equity in banks, the Fed’s willingness to purchase commercial paper and
coordinated interest rate cuts from central banks.

On Friday, the Census Bureau reported that housing starts and building
permits declined to new lows. We should consider ameliorating the
underlying problem--the weak American real estate market, with its large
overhang of unsold housing--by increasing visa quotas for immigrants who
want to come here to live and work.

Many potential immigrants have money. We have empty homes, whose spiraling
downward prices are contributing to our financial chaos. Why not raise visa
allowances to encourage home purchases, at no cost to the government?

Currently, more than 2.25 million vacant homes and condominium units are
for sale, according to the Census Bureau, and the vacancy rate is 2.8%.

This is far higher than the 1 million and 1.8% that were the norm before
2006.

A study by the Kauffman Foundation, which promotes entrepreneurship,
concludes that 1 million skilled workers are competing for 120,000
permanent residency visas, causing talented workers to choose to live--and
buy or rent homes--elsewhere.

In addition, the number of temporary H-1B visas for skilled workers is
capped at 65,000 per year. This year more than 130,000 applications were
received, and the lucky recipients were picked by lottery.

During the 1990s, Congress temporarily raised the quota to 195,000, a
number that did not exceed demand, but the quota reverted to 65,000 in
2004.

This figure represents a minuscule portion of the American labor force of
155 million. Even if green card and H-1B quotas were raised to 750,000,
that would be only less than half of 1% of the labor force. A higher quota
would still block admission to the majority of applicants, who are
discouraged from applying due to the small likelihood of success.

Increasing the number of permanent residency visas, or green cards, for
skilled workers would not only help the housing market, but would bring a
stream of talented immigrants into America.

The biggest objection to increasing numbers of green cards and H-1B visas
comes from those who say that this will hurt employment opportunities of
native-born Americans, especially in a time of recession and rising
unemployment.

Most economic studies show that in the long run immigrants don't lower
Americans' wages, they raise them. According to a study by Professor
Giovanni Peri of the University of California at Davis, immigrants raised
the wages of average workers in America by half a percent since 1990. In
another study, he finds a strong positive correlation between immigration
and housing prices.

These wage increases, admittedly counterintuitive, are based on changes in
the long-run productivity of the economy. They occur because most
immigrants have either lower or higher skills than native-born workers and
are not competing for the same kinds of jobs. Most Americans don't want to
pick fruit in California or get Ph.Ds in math and science.

With more immigrant talent, American businesses can expand, creating more
jobs for everyone. Without it, businesses are tempted to move offshore,
reducing American employment--and making it harder for Americans to pay
their mortgages.

The expansion of visas and green cards to encourage home sales should
require recipients to purchase basic health insurance so that they do not
burden the public health system.

These restrictions would not be a problem. Skilled immigrants are not
likely interested in social programs. And most will pay Federal and state
income tax, in addition to local property and sales taxes.

Giving visas or even citizenship to immigrants with economic talent is
nothing new. Britain, Australia and Canada have a system to rank the
desirability of such applicants.

In Canada, highly skilled workers, entrepreneurs, investors and
self-employed persons are eligible for visas if they show that they can be
self-sufficient. Investors must have a net worth of $672,000 and must place
an investment of $336,000 in a government investment fund. Entrepreneurs
need only demonstrate a net worth of $252,000.

America's financial markets and economy won't fully recover until the slide
in the housing market is stopped. Selling homes to skilled immigrants would
not solve all our housing woes, but it would be a step in the right
direction--without an additional penny needed from Uncle Sam.

Diana Furchtgott-Roth, former chief economist at the U.S. Department of
Labor, is a senior fellow at the Hudson Institute.

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