To: H-1B/L-1/offshoring e-newsletter 176

"“No one goes there anymore - it's too crowded”--Yogi Berra

If there is one central point in my writings on H-1B, it's that the visa
is used by employers to avoid hiring older, i.e. 35+, Americans, who are
more expensive than the 20-somethings.  This is not the case for
branches of engineering in which there are rather few H-1Bs employed,
such as civil engineering.  (See my University of Michigan law journal
article for data.)

And I've emphasized that the word "Americans" here means not only
natives, but also naturalized U.S. citizens and green card holders.
This in turn obviously has consequences: As immigrant engineers learn
the sad truth and find after a few years that they too are being passed
over by employers in favor of H-1Bs, many send word back home that H-1B
causes tech careers to tend to be short-lived.  Meanwhile, of course,
professional opportunities in the main H-1B-sending nations, India and
China, have been growing. 

So, I've been predicting for several years now that the H-1B pipeline is
going to dwindle.  As I've written in postings here the last couple of
years, that dwindling has already started in the case of China, and may
be starting for the Indians too.

So the article enclosed below, like similar articles we've seen in the
last year or so, rather misses the boat.  It's not that "They're going
home" but instead that "They've stopped coming here in the first place."

Here, as before, there is spin doctoring in progress.  In the past,
tough post-9/11 visa restrictions were the blame that the "conventional
wisdom" people placed on the decline in foreign students.  True, some
were in fact put off by the draconian policies, but the fact is that the
decline had already started a year or so earlier.

Now, as seen below, the blame of choice is the long waits for green
cards.  Supporters of "instant green cards for foreign students" claim
we're losing the geniuses due to the backlogs, but as I've pointed out
before, the waits are short for "the best and the brightest," the EB-1
green card category.  Swaroop Ganguly, the lead example in the enclosed
article, has a good research record, and would have had a shot at the
EB-1 green card level.  But instead, he went off to Belgium, leaving his
job at Freescale Semiconductor, which sponsors tons of engineers for
green cards, according to the PERM data.  I think it's pretty clear from
that, and from his remarks below, that he really isn't very interested
in staying in the U.S., and thus an "instant green card" program would
not keep him here.

We certainly should try to keep "the best and the brightest," but in
general the H-1B program is causing an internal brain drain in the U.S.,
shutting out many engineers over age 35, and causing many college
students to avoid the field to begin with.  The various businesses that
the H-1Bs described in the article want to start sound OK, but lots of
displaced Americans would have had good ideas if they were in the field
too.

Kapil's case is interesting.  First of all, IBM is to blame for
stringing him along for three years before sponsoring him for a
green card.  If they'd sponsored him when they hired him, which used to
be typical, he'd have gotten his green card approximately two years ago,
assuming EB-2, which is likely.  This "stringing out" of the process is
a common strategy among employers that want de facto-indentured workers.

But second, the words "consultant" and "IBM" make it fairly likely that
his job involves offshoring work to India.  Again, we should blame IBM
for that, not Kapil, but if he is involved in offshoring, that makes him
a very poor choice of poster child for an "instant green card" program. 

The author of the article below seems to take it for granted that the
H-1Bs with graduate degrees are the "good" H-1Bs.  Yet she offers no
basis for that, and as I've shown before, those with graduate degrees
are in general not especially talented.  Note that the data in the Hunt
paper that I reviewed the other day, archived at
http://heather.cs.ucdavis.edu/Archive/JenniferHunt.txt indicate that
this category of H-1Bs is in general weaker than similar U.S. natives.

House Speaker Nancy Pelosi has endorsed the "instant green card" idea,
and as the article points out, Sen. Schumer and others have expressed
support.  But it's not justified, and would simply exacerbate the
displacement of American engineers.  It's the age problem again, as
usual.  Though recipients of "instant green cards" would now be free to
move around in the labor market without exploitation, the key point is
that they would almost all be young, and thus would have the same
displacement effects.

Norm

http://www.businessweek.com/print/bwdaily/dnflash/content/jul2009/db20090724_178761.htm

Public Policy July 26, 2009, 7:20PM EST

Skilled Immigrants on Why They're Leaving the U.S.

A long wait for a green card, coupled with the soft U.S. economy, is
prompting an exodus of some of the best and brightest

By Moira Herbst

Lured by the prospect of climbing to the top of his field, New Delhi
native Swaroop Ganguly came to the U.S. 10 years ago and earned a PhD
in electrical and computer engineering from the University of Texas at
Austin in 2005. He became an expert in an emerging technology called
spintronics, used to power semiconductors, and worked at several chip
companies, including Freescale Semiconductor. But Ganguly, now 32, is
moving back to India this summer. Although he has been doing
postdoctoral work at the University of Texas, he figures his prospects
for research and professional development are probably better in his
home country. "I feel quite excited about going back," he says.

Ganguly has already accepted a job as a professor of electrical
engineering at the Indian Institute of Technology, Bombay. The position
will pay a fraction of the salary he had been earning in the private
sector--about $15,000 compared with $100,000--but it will offer
considerably more job security and the freedom to do the exploratory
research he wants to do. "The real lure of being in the U.S. is to do
really innovative work, but the space for that seems to be shrinking,"
he says. "The Indian government is putting a huge amount of funding
into science and technology, so even if they can't pay high salaries,
it's an attractive prospect."

Ganguly is one of a number of highly skilled immigrants preparing to
leave the U.S. as the nation's economy slows. With the U.S.
unemployment rate approaching double digits, job opportunities are
diminishing and calls to restrict immigration have gotten louder. Those
who favor tightening the rules argue that U.S. citizens should get
first priority for jobs.

A Blow to Prospects for Economic Recovery

But the issue is tricky when it comes to the most educated and skilled
immigrants--people like Ganguly. When well-paid individuals leave the
country, that cuts into already depleted tax revenues for state and
local governments. The departure of top talent in technology and
science may also undercut the prospects for a recovery in the U.S.,
many economists say. These immigrants often start companies and come up
with technological breakthroughs, creating new job opportunities for
all.

"We benefit from a flow of really smart people coming here to work in
our companies and start new ones," says David Hart, a professor of
public policy at George Mason University in Arlington, Va., who
co-authored a study on immigrant entrepreneurship released this month.
"It's important that the U.S. remain a magnet for people who fuel
innovation and growth."

The Obama Administration has said it will push for comprehensive
immigration reform later this year, but it's unclear if any legislation
will pass or how it would affect skilled immigrants. One unresolved
issue is how to define a "skilled" immigrant. While many politicians
would support policies to attract the most educated and highly paid,
there is more controversy over foreign workers who come into the U.S.
on H-1B visas, which require only a bachelor's degree and, in many
cases, modest salaries. Senator Charles Schumer (D-N.Y.), chairman of
the Senate immigration subcommittee, said in June that U.S. policy will
aim to "encourage the world's best and brightest individuals to come to
the U.S. and create the new technologies and businesses...but must
discourage businesses from using our immigration laws as a means to
obtain temporary and less expensive foreign labor."

Other Lands of Opportunity: China and India

Advocates for skilled immigrants emphasize the value they create and
warn against developing overly restrictive policies. Dr. Jan Vilcek, a
professor of microbiology at New York University School of Medicine,
defected from Czechoslovakia in 1964 and is now renowned in his field
for treatments he developed for chronic illnesses such as Crohn's
disease. He co-founded a New York-based nonprofit called the Vilcek
Foundation to enhance the public profile of exceptional immigrants.
"Foreign-born entrepreneurs and scientists are a tremendous asset to
the U.S. economy," Vilcek says. "It is tragic that bureaucratic
obstacles are preventing more talented and motivated people from
helping to get us out of the economic slump."

For now, economic woes--and to a lesser extent, immigration
policies--are the most acute problem driving departures from the U.S. A
study by Duke University professor and Harvard researcher Vivek Wadhwa,
for example, found that among Chinese nationals who emigrated to the
U.S. and later returned home, 72% said they thought professional
opportunities were better in China. Among Indians who returned home,
56% said the same of their country. Wadhwa estimates that as many as
200,000 skilled workers from India and China will go home over the next
five years, compared with roughly 100,000 over the past 20 years.

"We're in a recession, and there is enough good talent now [in the
U.S.], but long term, it will hurt like you won't believe," says
Wadhwa, who is also a BusinessWeek.com columnist. "Losing critical
talent means arming the U.S.'s competition. The next Google (GOOG),
Microsoft (MSFT), or Apple (AAPL) could be launched in Shanghai or
Bangalore."

Green Card Applicants Have a Long Wait

Kapil, a 33-year-old software consultant for IBM (IBM) in Silicon
Valley, shares Vilcek's frustration. (Kapil asked that his last name
not be used out of concern for his job.) He joined IBM in 2001 with the
hope of gaining permanent residency in the U.S. so he could ultimately
start his own company. IBM filed an application for his green card for
permanent residence in 2004, and he has yet to receive it. Due to
limits that allow for just 9,800 green cards per year per country, the
wait for people from India and China can be up to 10 years. Kapil
estimates that his five-year wait could stretch into 7 or 10. In the
meantime, he remains on an H-1B visa tied to IBM, where he must keep
the same position to remain in the green card queue. He's earning six
figures now, he says, but suspects he could earn more if he had the
freedom to change jobs. "I'm not allowed to advance, and it's really
frustrating," says Kapil. "At this point, I'm losing my patience."

Kapil is eager to found a startup. He has developed the technology for
an online job-search engine that taps into social networks such as
Twitter, Facebook, and LinkedIn. He says he is considering launching it
from India. "Most likely, I am heading back," he says. "In a way, I
feel cheated. I've contributed, paid taxes, and even picked up a
California accent. But it's not enough."

Arun Kumar, 30, is also in the U.S. on an H-1B visa and is considering
moving to Canada. Kumar, who lives just north of Philadelphia, works
for a U.S. bank and is helping to develop a startup within the company.
His employer, the name of which he asked not be used, put in his
application for a green card last year. Kumar realizes that it could
take years for his application to move through the queue, and he's
growing restless to start his own business. He has the capital to
launch his product, an educational tool to help sixth- to
eighth-graders learn math and science. But he doesn't want to do so in
the U.S. because assuming a new job or even changing titles within his
own company would nullify his existing green card application. Kumar
and his wife are now considering moving to Toronto, where they could
more quickly become permanent residents.

"I feel restricted here," says Kumar. "I understand the U.S. has a
responsibility to its citizens, and I understand its dilemma. But the
country would be better off if it could isolate and identify skilled
workers who want to come here and build things and welcome them in."

Herbst is a reporter for BusinessWeek in New York.