Thread: Why the H-1B visa cap will increase

Norm Matloff On Reasons 6,7 And 8 why the H-1B visa cap will increase
[James Fulford] @ 10:21 am

Norm Matloff [send him mail] writes:

Enclosed below is an excellent blog by Computerworld report Patrick Thibodeau, listing five reasons why Congress will raise the H-1B cap, and boy, did he nail it.[Five reasons why the H-1B visa cap will increase: http://blogs.computerworld.com/five_rea ... l_increase Patrick Thibodeau March 15, 2008] He even correctly noted that the opponents of the H-1B program can’t count on IEEE-USA, a putative H-1B-critic. We still don’t know what will happen in Congress, but there are now two mew bills to expand H-1B, and I think Thibodeau’s analysis is right on the mark. However, I must add a few reasons to his list:

Reason 6: Congress won’t see through Bill Gates’ misleading testimony.

Gates has an aura, certainly not deserved in the view of many of us techies who eschew his software (I’m a longtime Linux user), but definitely effective on Capitol Hill, which is populated largely by gullible technophobes. Yet you don’t have to know a byte from a bite to see that Microsoft has been outrageously untruthful. Consider for example the following:

- Microsoft claims they need H-1B to keep jobs in the U.S., and only resort to offshoring if they can’t find workers here. Yet in an internal presentation made to managers, Microsoft said, “Pick something to move offshore today.â€

While I am not a member of the Programmers Guild, let me come somewhat to their defense. If you are in a profession, say IT, there are basically two ways for you to get displaced. One is if, say, your company fails or is downsizing and you get laid off, and then find that there are very few jobs to apply for. This is increasingly because there is no law that says a job in America has to be advertised where an American can see it and apply. People erroneously believe that a company can file for an H-1B only if they tried to find a qualified American and couldn't. Usually that's not the case at all. What that means is that 65,000 jobs per year (the yearly H-1B cap) can be effectively reserved for foreign workers. That's not always what happens, but increasingly so.

The second way is for a contracting outfit, staffed with low-paid foreign workers (who often live in shared apartments), to contact your company about your company's 'staffing needs' and gets their foot in the door. Then they make a lowball offer to take over a business function, usually starting with IT, promising your management that this will lower costs. Often they promise other things, such as more educated and skilled workers. What they deliver is typically younger workers with more recent degrees and certs, that your older workers didn't have the time or the need to get - until the contracting outfit showed up. Now you have foreign competition for your own job on American soil, and it's not just IT anymore. They can take over all sorts of business operations, such as HR, accounting, document processing, you name it. That is what happened this year at Chrysler - they gave the entire IT operation to Tata, and now Tata is rumored to be salivating for some non-IT technical functions as well.

At first the contracting bring people onsite to learn the business. Later they offshore as much of it as they can. It is these contracting outfits, often foreign companies with a US division, who pose the biggest threat to incumbent American workers who are (were) in their prime earning years. The foreign worker can live on much less because he typically doesn't have the big bills an American professional has typically amassed by mid-career. Also, until recently, the cheap rupee made the economic equation of them vs. us compelling. (not so much any more) Paying them a small US salary translated to a big nest egg when they finally went home, back when the rupee was around 50 to the dollar. (Now it's around 39. I read somewhere that if it hits 35 or 33, the Indian outfits will be out of business so far as we're concerned.)

Programmers Guild is targetting the contracting firms, or as we refer to them, bodyshops. Most of us will never work at Microsoft, but the bodyshops are a threat to every white collar job in this country.

Tata, an Indian bodyshop that does business in America as TCS, recently opened a new headquarters in Cincinnati with much fanfare, claiming that it will hire lots of American workers. But the buzz is that this is all PR, and that the facility will be used primarily to rotate L-1 visa holders (like the H-1B, only shorter term) in and out.

So, if the companies couldn't body-shop the guestworkers, that would seriously cut down on American job loss. And that is what he is targetting.

Bill Gates can send his recruiters to Wall Street and numerous other financial companies such as Countrywide. There is net job loss in the US. We need about 150,000 net job growth each month to sustain those seeking employment.

Go to NUMBERSUSA and fax your legislator in opposition to any H-1B visa increase.

I lived near and worked around Indian businesses and people. They are very biased and discriminate against anyone not of their ethnicity. They even wanted to change the name of a part of a city to "Little India". The residents were up in arms. But I dare you to go into any of their businesses and find an American Caucasian. Won't happen.

For years I've noticed that all the IT help can barely speak English, I cannot understand any help desk tech I would call and get frustrated. I would them return the software to the store and tell them why. I REFUSE to purchase or work with software when their help desk can't speak understandable English!

Lately, I've started noticing these companies offer you TWO help desk solutions. For $xx.00 you get the basic support and for $xx.00 (higher) you get a help desk in the US with and English speaking tech. I always choose the better package because I will be guaranteed to understand whatever the tech is telling me!

More of us have to complain and scream when we get someone of the phone that we cannot understand! It's counter-productive for the company because the call takes twice as long, just to make out whatever the tech is talking about!

Originally Posted by miguelina

For years I've noticed that all the IT help can barely speak English, I cannot understand any help desk tech I would call and get frustrated.

Let me tell you a funny experience I had with Dell. For their business customers their tech help is Americans based in Austin. Our business had a computer problem, and our computer guy is a Vietnamese immigrant with a heavy accent. Well the American tech guy could not understand him!! I had to talk to the tech helper!! Kind of your situation in reverse. I had to ask the tech guy "you don't have any Vietnamese tech support workers?" To me it was hilarious, the trouble the Dell rep had trying to understand our Vietnamese worker. Now they know how you feel!!

Maybe we should take alexcastro's advice here:
http://www.alipac.us/ftopicp-649962-.html#649962

There is openoffice.org. You can download it for free! You don't have to buy Microsoft products.

It would be funny if the majority of American's switched...then he certainly wouldn't have a need for as many foreign workers...would he!

http://www.openoffice.org/
I am checking this out!

A positively messianic attitude is emerging towards us, the idea that by taking our jobs they are helping our economy out of recession. Here's an example. Notice who they are helping, and how.

[quote]Subprime make IT cos lend helping hands to clients
22 Mar, 2008, 0815 hrs IST, TNN

BANGALORE: Barely a quarter back, the biggest frown line on IT services companies was caused by a volatile rupee. Most companies were pushing their case with clients for price revision and experimenting with new forex cover options to minimise the currency shock. But, the scenario has undergone a sea change in just a matter of weeks. With the US subprime crisis and recessionary trends unfolding a story which has led to even more uncertain times, India’s IT services companies, predictably, are prepared for a cautious outlook on rupee.

The IT industry faced the brunt when the rupee rose dramatically and almost gained around 15% in 11 months. However, the rupee has remained stable against the dollar in the last six months, hovering around 40 mark.

By and large, for every one per cent rise in rupee against the dollar, the operating margins of IT companies is hit by 40-50 basis points. At the same time, companies have been able to use various levers to hedge against the appreciating rupee. According to a study done by Tholons, a offshore advisory firm, “Many companies focused on acquiring businesses in other currency geographies and also focusing on domestic business, which were immune to currency fluctuations.â€

Fact : Alipac..Numbersusa..programmersguild..are not going to influence anybody..common man has no voice even in the greatest democracies.

H1B quota is not going to be an issue for the general american public. 9 out of 10 americans pulled off the street would not have heard about it.

The issue right now is about bluecollars..foreclosures..health insurance..for working class.

U cannot go against bill gates..well some morons think they are giving it back to Bill Gates by using linux. mircosoft is a huge company with a huge clout..so are all big techs.

So u cannot win the argument that "H1B quota should be limitd or done away with" ..

However companies look to hire H1bs because H1B is really not free labor. Many rules make jumping jobs diffcult for a H1b..Net result they tend to stick with employers and are less demanding than US workers. Fight for rights of H1B workers. Make H1Bs a true free labor.

If a H1B can change jobs without restrictions as an American worker, u are taking away the very foundation that makes an american company want a H1B.

Industry can forward a 1000 reasons why H1 quota has to be increased but cannot fight a resolution to give full labor rights to H1Bs..that would amount to an open acknowledgement that they want cheap and bonded labor.

Find the door to get to the otherside..dont pound against the wall.

Labor Shortages: Myth and Reality
With higher pay, there are plenty of U.S. workers to fill jobs, some economists say
by Moira Herbst

How tight is the U.S. labor market? At 4.6% of the workforce, the official unemployment rate is certainly low by historical standards. In industries from agriculture to construction, to health care and high tech, employers complain that there aren't enough workers to fill positions (see BusinessWeek.com, 4/9/07, "Where Are All the Workers?").

Many fear it'll get worse in the wake of the Bush Administration's decision to crack down on undocumented workers. Construction companies say offices and highways may not get built. Farmers talk of crops rotting in the fields, as illegal immigrants flee and Americans refuse to take up the plow. "Who will be there to put meat and vegetables on American dinner tables?" says Craig Regelbrugge, co-chairman of the Agriculture Coalition for Immigration Reform and spokesman for the American Nursery & Landscape Assn. "The only unaffected group will be Americans who do not eat." (See BusinessWeek.com, 8/14/07, "Immigration Rules: An Economic Disaster?").

Exaggerated Worries?

David Rosenberg isn't buying it. A North American economist at Merrill Lynch (MER), he is one of a number of economists who say the concerns about too few workers are vastly overblown. Rosenberg recently studied the issue and put out a report entitled Is There a Labor Shortage? If employers are having trouble filling jobs, "perhaps they're not looking hard enough," he says.

The issue may not be the number of workers, but rather the level of pay. Economists like Rosenberg argue that in a market economy, there's really no such thing as a true shortage. If you want more of something, you can pay more and have it. When employers say that there's a worker shortage, what they really mean is they can't get enough workers at the price they want to pay, the argument goes. "While it makes for nice cocktail conversation, the data aren't saying there is an acute labor shortage in this country," Rosenberg says.

Consider the numbers. Even as the unemployment rate has declined in recent years, millions of Americans have left the workforce and stopped looking for jobs. The government's Bureau of Labor Statistics has a dedicated category for "discouraged" workers who believe no positions are available to them. If the percentage of Americans participating in the workforce were the same now as it was in 2000, the number officially counted as unemployed would be 9.1 million, rather than 7.1 million. The unemployment rate would be 5.8%, instead of 4.6%.

What the Price of Labor Says

Rosenberg argues the simplest way to gauge whether there's a worker shortage is to look at the price of labor. According to the basic laws of economics, the tighter the supply of labor, the more it should cost. So if the economy were operating with full or near-full employment, we would be seeing an "explosion in labor compensation," he says.

The price of labor, however, is hardly surging. In fact, key indicators of employee costs show they are tracking or trailing inflation. Average hourly earnings are running at 3.9% year over year, and the employment cost index is at 3.5% year over year.

Most Americans certainly aren't finding their incomes exploding. The wages of 80% of the U.S. workforce—made up of nonsupervisory workers—have been stagnating since the late-1990s boom ended. On Aug. 20, the government released data that showed the average household income increased 4.1% in 2005, to $55,238. But that's still below the average household income in 2000.

To be sure, there are plenty of economists who agree with employers that there is a serious labor shortage. "We are physically out of bodies," says Edward Yardeni, president and chief strategist for investment firm Yardeni Research. "We've run out of homegrown labor, and become more and more dependent on immigration, legal and illegal."

Employee costs are not an accurate yardstick, Yardeni says. He says workers are currently paid according to how productive they are, and it would be destructive to raise wages "willy-nilly" to attract more workers. That is, employers can only afford to pay workers in keeping with their value, and not solely to fill positions. "In a competitive global marketplace, the only way you're going to pay workers more and manage to stay in business is to tie compensation to productivity," says Yardeni.

Just Pay More?

But some economists and worker advocates argue the concept of a labor shortage is simply being used to keep wages down. "Employers are very quick to raise the specter of a labor shortage, but often it's another way of saying they can't find the workers they want at the price they're paying," says Jared Bernstein, senior economist for the Economic Policy Institute, a left-leaning think tank in Washington. "They are unwilling to meet the price signal the market is sending, so they seek help in the form of a spigot like immigration."

Many employers look to workers from abroad when they're having trouble hiring. In agriculture, an estimated 70% of the workers are undocumented immigrants. In construction, foreign workers play a key role. And technology companies such as Microsoft (MSFT), IBM (IBM), Google (GOOG), Intel (INTC), Oracle (ORCL), and Sun Microsystems (SUNW) have been active participants in visa programs like H-1B, hiring foreign workers for computer programming and project management positions in the U.S. They've even joined together in lobby groups like Compete America to advocate for more foreign workers, both temporary and permanent.

Such moves infuriate American workers in engineering and computer science. "We don't believe that there is a labor shortage," says Kim Berry, president of the Programmers Guild. "There is perhaps a shortage of people willing to work at the salary being offered because those rates are now being set by visa programs like H-1B. But you'll attract the best and brightest [U.S. workers] if the price is right," (see BusinessWeek.com, 8/6/07, "Skilled Workers Deserve True Visa Reform").

The truth may involve shades of gray. "There is not a general labor shortage in the U.S.," says David Wyss, chief economist for Standard & Poor's, which, like BusinessWeek, is a unit of The McGraw-Hill Cos. (MHP). "There is a shortage of people willing to do grunt work for low wages—the kind of shortage you want—and a shortage in high-skilled jobs like scientists and engineers."

Still, Rosenberg, Bernstein, and other skeptics remain wary of proclamations that workers simply can't be found. "I'm a trained economist," says Bernstein. "I can't sign on to the idea that there are jobs people won't do at any price."

Herbst is a reporter for BusinessWeek.com in New York.
http://www.businessweek.com/bwdaily/dnf ... 451283.htm