To: H-1B/L-1/offshoring e-newsletter 175

Though the title of the first enclosed article below includes the word
"H-1Bs," I have not included the word in my Subject line above.  The
reason for my exclusion of the word is that Senator Schumer has not said
anything about increasing the H-1B cap, so far as I can tell.  There
have been news articles on this in the last few weeks, and to my
knowledge Schumer has made no public statements in this regard.

The quote included in the Computerworld article below,

#  "We must encourage the world's best and brightest individuals to come
#  to the United States and create new technologies and business that will
#  employ countless American workers, but must discourage businesses from
#  using our immigration laws as a means to obtain temporary and
#  less-expensive foreign labor to replace capable American workers," said

would appear to be similar to statements made during the last year by a
number of Democrats, including Obama, supporting liberalization of the
employment-based green card program.  As I've written here many times, I
am just as strongly opposed to expansion of the green card program as I
am to expansion of H-1B, as both have the effects of reducing job
opportunities for U.S. citizens and permanent residents.  Moreover,
though I definitely support bringing "the world's best and brightest
individuals" here, very few of the foreign workers are of that caliber.

So I'm not making the distinction between H-1B visas and green cards in
order to say that I support, or at least do not mind, what Schumer is
apparently planning to do.  Nevertheless it is important to know what
those plans are, and I believe the expansionary facets of them will
focus on green cards, not H-1Bs.

Of course, the second half of Schumer's comments above is designed to
give them impression that he wishes to take strong action to stop abuse
of the H-1B program.  My guess is that that is not the case at all.
Instead, I believe his legislation will simply include provisions to
stop fraud rather than abuse, via stepped-up enforcement measures.  As
I've stated so often, the main problem is loopholes in the law, not
fraud, so anti-fraud measures would be of little value.

For example, it is a safe bet that Schumer will not propose that all
employers be subject to the restrictions currently imposed on
H-1B-dependent employers, such as a requirement that the employer
attempt to fill the position with an American before hiring an H-1B.
After those were temporarily extended to TARP recipients, i.e. the
financial industry, earlier this year, Schumer vowed to overturn that
legislation.

It is interesting that Schumer on the one hand claims to be opposed to
using foreign workers as cheap labor, while on the other using Greenspan
as his star witness, who has stated repeatedly (see the second enclosed
article below) that the goal of importing the foreign workers is to keep
salaries down.  Definitely an "emperor has no clothes" moment.

Greenspan has made such statements many times in the last year or so,
and one has to wonder just what he's thinking.  The median salary for a
mid-career software developer is around $80,000, which while not
subsistence-level is not particularly high.  New law graduates, using a
similar skill set (good analytical and problem-solving abilities, etc.)
make $160K.  I would assume that Greenspan is just ignorant, rather than
flat out lying, but even ignorance would be highly disturbing.  As the
second article here points out, and as Greenspan himself has said, he
had no inkling that the financial industry might implode.  This is
amazing, since anyone could have understood the danger of selling
no-down-payment mortgages to people who can't afford them, selling
"insurance" to investors on sliced-and-diced packages of those
mortgages, etc.

Some comments on some of the passages in the articles:

#  One proposal that may get traction in Congress would create an
#  independent commission to manage employment-based visas. The commission
#  would determine whether there are labor shortages and have the
#  authority to make annual adjustments on the cap based on economic need.
#  That idea was pitched by the AFL-CIO in April.

This has been suggested before (including by me), but is likely a
political nonstarter.  After, the industry--and Schumer himself, as
noted above--opposes requiring employers to recruit Americans before
hiring H-1Bs, so the industry would certainly not support a commission
which would have essentially that same goal.  Indeed, an industry
lobbyist already criticized the idea in that Associated Press report
(www.miamiherald.com/692/story/1133354.html) Of course, if somehow such
a commission were formed, its members would be people from industry and
their allies anyway.

#  Angela Kelly, vice president for immigration policy and advocacy at the
#  Center for American Progress, a Washington-based group that's headed
#  John Podesta, President Clinton's former chief of staff, said an
#  element of any immigration reform bill would have to be its labor
#  protections.
# 
#  "How do we ensure that by bringing these workers in we're not
#  disadvantaging American workers and how do we invest in our folks for
#  the long haul, so that we've got kids in computer science, math, and
#  engineering programs, which are right now, frankly, dominated by kids
#  who aren't from the U.S. That's the reality and we need to deal with
#  it," she said, in a conference call with reporters.

That is false.  For example, only 6% of recipients of bachelor's degrees
in computer science are nonresident aliens; see the data from CRA,
http://www.cra.org/CRN/articles/may09/tables9to16.html  The large
numbers of foreign students occur at the PhD level.  But of course
Kelly's point about H-1B and offshoring discouraging Americans from
studying CS is correct.

http://www.computerworld.com/s/article/9135438/Analysis_The_next_H_1B_fight_begins_by_Labor_Day

Computerworld

Analysis: The next H-1B fight begins by Labor Day

Planned legislation could include a way to raise the cap on H-1B visas

By Patrick Thibodeau
July 13, 2009 06:02 AM ET

Computerworld - WASHINGTON -- Sen. Charles Schumer (D-N.Y.) plans to
introduce a comprehensive immigration reform bill by Labor Day that
seems certain to include a way to increase the H-1B cap.
By introducing the bill in the worse possible economic climate, and
then citing Labor Day as his deadline for introducing it, you could
almost argue that Schumer is egging on his opponents.

But that's not new for him. Among the people he has enlisted to help
him is Federal Reserve Chairman Alan Greenspan, who testified this year
at an immigration committee hearing that the cap protects U.S. workers
from global competition, creating a "privileged elite."

Schumer's view follows naturally from his unabashed support of the H-1B
visa program and his belief that foreign workers are critical to U.S.
economic success. And as head of the Senate Subcommittee on
Immigration, Refugees and Border Security, Schumer is in a position to
make changes.

Schumer outlined his plans in an interview with Associated Press last
week; the bill is still being drafted.

The Senate has had no problem approving increases in the H-1B cap in
the past. The Comprehensive Immigration Reform Act of 2006, for
instance, proposed raising the cap on H-1B visas to 115,000 and
included a market-cap provision that allowed the number of visas to
grow by 20% a year if the prior cap was reached.

The cap is now set at 85,000, which includes 20,000 that are set aside
for people who earn masters degree.

This time around, Schumer may take a different approach on high-skilled
immigration.

One proposal that may get traction in Congress would create an
independent commission to manage employment-based visas. The commission
would determine whether there are labor shortages and have the
authority to make annual adjustments on the cap based on economic need.
That idea was pitched by the AFL-CIO in April.

Study finds big rise in job cuts planned at IT shops

Schumer will also have to deal with Sens. Dick Durbin (D-Ill.) and
Chuck Grassley (R-Iowa), both of whom are on the immigration
subcommittee and have introduced legislation restricting H-1B use to
the ire of Indian government and industry groups, in particular. Durbin
and Grassley are among the harshest critics of the H-1B visa.

In a speech last month before an immigration policy group, Schumer
outlined what he wants to achieve when it comes to high skilled
workers.

"We must encourage the world's best and brightest individuals to come
to the United States and create new technologies and business that will
employ countless American workers, but must discourage businesses from
using our immigration laws as a means to obtain temporary and
less-expensive foreign labor to replace capable American workers," said
Schumer.

Schumer also endorsed a report in 2007, Sustaining New York's and the
U.S. Global Financial Services Leadership, prepared by McKinsey & Co.,
that called for increasing access to H-1B visas to help keep the
financial services industry competitive. President Barack Obama has
appointed a top McKinsey official, Diana Farrell, to serve in his
administration as a deputy economic advisor.

Angela Kelly, vice president for immigration policy and advocacy at the
Center for American Progress, a Washington-based group that's headed
John Podesta, President Clinton's former chief of staff, said an
element of any immigration reform bill would have to be its labor
protections.

"How do we ensure that by bringing these workers in we're not
disadvantaging American workers and how do we invest in our folks for
the long haul, so that we've got kids in computer science, math, and
engineering programs, which are right now, frankly, dominated by kids
who aren't from the U.S. That's the reality and we need to deal with
it," she said, in a conference call with reporters.


http://www.computerworld.com/s/article/9132438/Greenspan_H_1B_cap_would_make_U.S._workers_privileged_elite_

Computerworld

Greenspan: H-1B cap would make U.S. workers 'privileged elite'

Tells Senate subcommittee quota too small, would protect workers from global
competition

By Patrick Thibodeau
April 30, 2009 12:00 PM ET


Computerworld - WASHINGTON -- Former Federal Reserve Chairman Alan
Greenspan today offered a spirited defense of the controversial H-1B
visa program, telling a U.S. Senate subcommittee that the visa quota is
"far too small to meet the need" and saying that it protects U.S.
workers from global competition, creating a "privileged elite."

Greenspan, testifying on immigration reform before the Subcommittee on
Immigration, Border Security and Citizenship, said more skilled
immigration was needed "as the economy copes with the forthcoming
retirement wave of skilled baby boomers."

This hearing was called by the subcommittee's chairman, Sen. Charles
Schumer (D-N.Y.), to encourage the U.S. senate to address the issue of
immigration, despite the economy. Greenspan was the marquee witness.

Greenspan provided a list of reasons for increasing competition in the
skilled labor force. In particular, he said it would help fix a problem
-- the housing bubble -- that grew during his tenure as Fed chair, a
position he held from 1987 to 2006.

Skilled workers from overseas "will, out of necessity, move into vacant
housing units; the current glut of which is depressing prices of
American homes," said Greenspan. In 2005, Greenspan characterized
rising housing prices as "froth."

But what will likely prove to be the most controversial aspect of
Greenspan's argument was his call for more wage competition.. He said
that increasing the numbers of skilled workers from overseas "would
address the increasing concentration of income in this country."

"Greatly expanding our quotas for the highly skilled would lower wage
premiums over lesser skilled," said Greenspan. "Skilled shortages in
America exist because we are shielding our skilled labor force from
world competition," he said.

Greenspan said visa quotas "have been substituted for the wage pricing
mechanism. In the process we have created a privileged elite whose
incomes are being supported at noncompetitively high levels by
immigration quotas on skilled professionals," he said. "Eliminating
such restrictions would reduce at least some of the income inequality."

The views cited by Greenspan are in sharp dispute. H-1B opponents say
that there is no skills shortage and that the H-1B visa has been used
to reduce wages, especially by replacing older workers with younger
workers from overseas. One recent study found that H-1B workers are
depressing wages for some occupations, including programmers.

Greenspan cited failures in the U.S. educational system, in part, for
the need to bring in more foreign workers. He cited the high
percentages of foreign graduates of advance degree programs.

Schumer cited the role of immigration in the U.S. economic development.
"Because of immigration, Google, Yahoo, Intel and eBay are American
success stories," he said. "In New York, one quarter of all businesses
are immigrant-owned."

Similarly, Sen. John Cornyn (R-Texas) said the U.S. should "offer more
visas to highly skilled students who have studied at our colleges and
universities and, when they can't work here, go back to their native
land and compete with us and create jobs there rather than here, in the
United States."

Sens. Charles Grassley (R-Iowa) and Dick Durbin (D-Ill.), recently
introduced legislation that would restrict the use of the H-1B visas.
The measure is particularly aimed at offshore outsourcing companies and
would require them to increase the size of their U.S. workforces under
a rule that would prohibit employers from hiring additional H-1B and
L-1 guest workers if more than 50% of their employees are H-1B and L-1
visa holders.