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Friday, March 01, 2013

H1-B And The Screwing of The American IT Worker Continues into 2013

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The new bill to boost H-1B visas is based on a lie
There’s no brain drain, no salary explosion, and no critical shortage of skilled IT workers. A higher cap is not the answer.

By Bill Snyder
InfoWorld
February 28, 2013

The recession is over, salaries are going through the roof, and there’s a shortage of trained IT workers stifling the competitiveness of U.S. companies. It makes sense, then, to finally RAISE THE CAP ON H1-B VISAS, the legal document that allows technology companies to hire foreign nationals to work in the United States. You should support the bipartisan move in Congress to do just that.

None of the above is true. If you believe it, you’ve fallen victim to the propaganda churned out by technology companies eager to find a source of relatively low-paid workers whose desire to stay in the United States makes them unusually complaint and ripe for EXPLOITATION. What’s more, the very simple laws of supply and demand will tell you that a glut of IT workers would have the effect of lowering wages and working conditions for everyone in the industry.

This is not just my opinion. Two of our colleagues at Computerworld, a sister publication, have done SERIOUS REPORTING ON THIS ISSUE and shown exactly who has imported the most workers under the H-1B program. The largest single users of H-1B visas are offshore outsourcers, many of which are based in India or, if U.S.-based, have most employees located overseas.

All seven of the companies that lead the pack when it comes to importing workers under H-1B are outsourcers, according to an analysis of U.S. Citizenship and Immigration service data by Computerworld. They are: Cognizant, Tata, Infosys, Wipro, Accenture, HCL America, and Mahindra Group.

“This is just affirmation that H-1B has become the outsourcing visa,” said Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher of tech immigration issues.

There’s no shortage of IT workers

Before I go further, I’ll repeat something I always mention when I cover the immigration issue: In no way do I think the foreign workers themselves are the problem. Like people everywhere, they simply want to make a better life for themselves and their children. An overhaul of our entire immigration system is long overdue. But raising the cap on H-1B visas is not the right way to go.

Under the Immigration Innovation Act of 2013, authored by a bipartisan group of senators including Orrin Hatch (R-Utah), Amy Klobuchar (D-Minnesota), Marco Rubio (R-Florida), and Chris Coons (D-Delaware), the maximum number of H-1B visas for high-skilled foreign workers would jump from 65,000 to 115,000. That number would be adjustable based on economic demand and could eventually go as high as 300,000 a year. Dependent spouses of H-1B visa holders would be allowed to work in the United States as well.

The bill has the support of major U.S. tech firms, including MICROSOFT and IBM, both heavy users of H-1B visas, and rests on the premise that there is a shortage of skilled IT workers. “It’s critical that America address the shortage of workers with science, technology, engineering, and math skills. There are high-skilled, high-paying jobs being created by American businesses across the country that are being left unfilled because of this gap,” said Microsoft general counsel and executive VP Brad Smith.

While there’s no doubt that the jobs picture for IT workers is much, much better than it was during the darkest days of the recession, there simply is not a glut. Unemployment in IT-related jobs is 3.7 percent—low, but still twice as high as it was before the financial meltdown.

When labor is truly short, salaries tend to spike. But that’s not happening. I’ve spoken to many employers over the past two years as I’ve reported on the IMPROVING EMPLOYMENT PICTURE, and almost none has said that salaries are exploding as they did in the years leading up to the dot-com bust.

Indeed, salaries in computer- and math-related fields for workers with a college degree rose only 4.5 percent between 2000 and 2011, says Ross Eisenbrey, the vice president of the Economic Policy Institute. “If these skills are so valuable and in such short supply, salaries should at least keep pace with the tech companies’ profits, which have exploded,” he wrote in an opinion piece for the New York Times.

But WHAT HAPPENED LAST YEAR ON THE SALARY FRONT as the recovery kicked in? Not much. IT salaries inched up by less than 2 percent in 2012, pushing compensation back up to January 2008 levels, according to a study by Janco Associates, a research company.

Brain drain? There isn’t one

Are employers working harder to find the best workers? Sure they are. But that’s a normal part of the labor market when a recession winds down, and not a symptom of a critical labor shortage. Anecdotal stories of unfilled jobs—I’m sure to hear them as soon as this post is published—simply don’t belie what real statistics show us.

Bloviators like Times columnist Thomas Friedman bemoan the alleged fact that there’s a brain drain in the United States and that we foolishly train FOREIGN STUDENTS, then send them packing to work for our foreign competitors. That’s baloney. As Eisenbrey writes:

According to the Congressional Research Service, the number of full-time foreign graduate students in science, engineering, and health fields has grown by more than 50 percent, from 91,150 in 1990 to 148,900 in 2009. And over the 2000s, the United States granted permanent residence to almost 300,000 high-tech workers, in addition to granting temporary work permits (for up to six years) to hundreds of thousands more.

The bill’s proponents argue that for the sake of our global competitiveness, we shouldn’t train, then return the tens of thousands of Chinese and Indian students who come here every year. But almost 90 percent of the Chinese students who earn science and technology doctorates in America stay here; the number is only slightly lower for Indians. If they’re talented enough to get a job here, they’re already almost guaranteed a visa.

“The failure of Congress and the Obama Administration to close loopholes in the H-1B program is reducing job opportunities for American high-tech workers and undermining their wages,” said Hira, the Rochester Institute of Technology researcher.

He believes the H-1B usage data should give pause to the lawmakers who introduced the Immigration Innovation Act. “If that bill were to be passed we’d see a major hemorrhaging of American jobs and it would discourage American kids from studying high-tech fields,” he said.

Am I wrong? I’m always open to that possibility, but before I admit it, I’d want to see real evidence, not the self-serving fictions of the technology giants and their credulous helpers in the media.

I welcome your comments, tips, and suggestions. Post them here (Add a comment) so that all our readers can share them, or reach me at . Follow me on Twitter at BSnyderSF.

SOURCE

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Who’s Hiring H-1B Visa Workers? It’s Not Who You Might Think

By Martin Kaste
NPR
April 3, 2013

The tech industry wants more skilled workers from overseas. Companies are lobbying hard for Congress to raise the limit on H-1B visas ח visas for people with specialized skills researchers, for instance, or software engineers.

Brad Smith, Microsoft’s general counsel, recently told NPR that more H-1B visas can’t help but be good for the country.

“We need to continue to attract some of the best and brightest people in the world to come and join us in world-leading [research and development] efforts,” Smith said.

But that “best-and-brightest” argument doesn’t quite match up with reality - especially when you look at which companies are using the most H-1Bs.

Who Is Using the Visas?

If you scroll through the government’s visa data, you notice something surprising. The biggest employer of foreign tech workers is not Microsoft not by a long shot. Nor is it Google, Facebook or any other name-brand tech company. The biggest users of H-1Bs are consulting companies, or as Ron Hira calls them, “offshore-outsourcing firms.”

“The top 10 recipients in [the] last fiscal year were all offshore-outsourcers. And they got 40,000 of the 85,000 visas ח which is astonishing,” he says.

Hira’s a professor of public policy at the Rochester Institute of Technology. He’s also the son of Indian immigrants and has a personal interest in questions of labor flow across borders.

For the past decade, he’s been studying how consulting firms use temporary work visas to help American companies cut costs. He says they use the visas to supply cheaper workers here, but also to smooth the transfer of American jobs to information-technology centers overseas.

“What these firms have done is exploit the loopholes in the H-1B program to bring in on-site workers to learn the jobs [of] the Americans to then ship it back offshore,” he says. “And also to bring in on-site workers who are cheaper on the H-1B and undercut American workers right here.”

The biggest user of H-1B last year was Cognizant, a firm based in New Jersey. The company got 9,000 new visas. Following close behind were Infosys, Wipro and Tata ‑‑ all Indian firms. They’re not household names, but they loom large in tech places like the Seattle suburbs.

Cutting Costs

Rennie Sawade, a software designer with 30 years of experience, grew up in Michigan watching the decline of the auto industry. And so, he went into computers in search of a more secure career. But that’s not how it turned out.

“Basically, what I see is, it’s happening all over again,” Sawade says.

Programmers like him tend to be freelancers, or contract workers, and the big consulting firms are the competition. Sawade remembers when he almost landed a plum job at Microsoft.

“I remember having phone interviews and talking with the manager, having him sound really excited about my experience and he was going to bring me in to meet the team,” Sawade recalls.

And then: nothing. He called his own placement agency to find out what happened.

“And that’s when they told me, ‘Oh, they hired somebody from Tata Consultancy.’ And they actually told me on the phone, the woman I was talking to said her jaw just dropped when they found out how little Microsoft was paying this person from Tata Consultancy to do this job,” he says.

Not Being Replaced, ‘Not Right Away’

Sawade is active in the labor organization WashTech, so he gets complaints from IT workers around the country. The H-1B consultancies are especially big in banking, insurance and pretty much any industry that runs on big computer systems maintained by aging, increasingly expensive American tech workers.

He laughs at the notion that a cost-cutting insurance company somewhere is in dire need of hotshot foreign programmers with specialized skills. Because the businesses require current employees to train the new hires from India, he says.

“And maybe the people from India aren’t necessarily there to replace them - at least not right away. They’re just learning the job,” Sawade says.

Learning the job, he says, so the consulting firm can eventually provide the same service from somewhere cheaper.

What H-1B Employers Say

NPR repeatedly tried to interview the biggest H-1B users, but none agreed to talk. We were able to reach Dean Garfield, head of the Information Technology Industry Council, which counts Cognizant among its members.

“Some of the companies are companies -yes - that are providing services that bring greater efficiencies to businesses. But what’s wrong with that?” Garfield says.

He rejects the notion that Cognizant is using foreign tech workers to undercut Americans. He points out that H-1B workers are supposed to be paid “prevailing wages.”

In practice, though, that rule is rarely enforced. In a 2011 report, the U.S. Government Accountability Office said worker protections are “weakened by several factors” and that oversight is “cursory.”

Garfield acknowledges the system isn’t perfect.

“The main, legitimate criticism right now which is one we would level as well ח is that the accountability mechanisms are not fully integrated and not seamless. It’s more a ‘check the box,’ “ he says.

But he also takes exception to criticism that lumps the consulting firms together something he calls “offensive.”

“There is a lot of anti-India sentiment in many of the criticisms and articles around this that I think are completely unfounded and unnecessary,” Garfield says.

Domestic Outsourcing

But it’s not offensive to Neeraj Gupta, who is a U.S. citizen. He came here on a student visa for his master’s degree in electrical engineering.

Gupta spent part of his career working for the Indian consulting firm Patni (now called iGate), and he says it was obvious they were using H-1B workers to replace Americans.

It happened on almost every one of his projects, he says. On some of those projects even the clients had misgivings.

“I had people come to me and tell me that the No. 1 issue that they faced ח even as they were offering this work was the fact that they had longstanding employees, and the implications of them losing their jobs,” Gupta says.

He now runs what he calls a “domestic outsourcing” company ח also a consultancy, but his workers are American.

So he does have an incentive to criticize the H-1B system. At the same time, he doesn’t want to eliminate it. He believes U.S. tech companies are in dire need of highly skilled foreign workers. The problem, he says, is that so many of the visas are gobbled up for middle-of-the-road tech jobs already being done by Americans. [Copyright 2013 NPR]
TRANSCRIPT:

ROBERT SIEGEL, HOST:

Well, now, to another issue occupying the president and the Congress, immigration, specifically the push for more H-1B visas. These are visas for workers from overseas with specialized skills - researchers, for instance, or software engineers. American tech companies are lobbying hard for an increase in H-1B visas. Here’s Microsoft’s point man on the issue, Brad Smith.

BRAD SMITH: We need to continue to attract some of the best and brightest people in the world to come and join us in world-leading R&D efforts.

SIEGEL: Well, that best and brightest argument doesn’t always match with the reality of how H-1B visas are used. That’s what NPR’s Martin Kaste found when he looked at the companies using the most H-1Bs.

MARTIN KASTE, BYLINE: If you scroll through the government’s visa data, you notice something surprising. The biggest employer of these foreign tech workers is not Microsoft. Not by a long shot. Nor is it Google or Facebook or any other name brand tech company. The biggest user of H-1Bs are consulting companies or, as Ron Hira calls them, offshore outsourcing firms.

RON HIRA: The top 10 recipients in the last fiscal year are all offshore outsourcers, and they got 40,000 of the 85,000 visas, which is astonishing.

KASTE: Hira is a professor of public policy at the Rochester Institute of Technology. He’s also the son of Indian immigrants, so he has a personal interest in questions of labor flow across borders. For the past decade, he’s been studying how consulting firms use temporary work visas to help American companies cut costs. He says they use the visas both to supply cheaper workers here, but also to smooth the transfer of American jobs to IT centers overseas.

HIRA: What these firms have done is exploit the loopholes in the H-1B program to bring in onsite workers to learn the jobs of the Americans, to then ship it back offshore and also to bring in onsite workers who are cheaper on the H-1B and undercut American workers right here.

KASTE: The biggest user of H-1Bs last year was Cognizant, a firm based in New Jersey. They got 9,000 new visas. Following close behind are Infosys, Wipro and Tata, all Indian firms. They’re not household names, but they loom large in techie places like the Seattle suburbs.

Rennie Sawade is a software designer with 30 years experience. He grew up in Michigan watching the decline of the auto industry, so he went into computers in search of a more secure career. But that’s not how it turned out.

RENNIE SAWADE: Basically, what I see is it’s happening all over again.

KASTE: Programmers like him tend to be freelancers, contract workers and the big consulting firms are the competition. Sawade recalls the time he almost landed a plumb job at Microsoft.

SAWADE: I remember having phone interviews and talking with a manager, having them sound really excited about my experience and that he was going to bring me into meet the team.

KASTE: And then, nothing. He called his own placement agency to find out what had happened.

SAWADE: And that’s when they told me, oh, they hired somebody from Tata Consultancy. And then she told me on the phone, the woman I was talking to, said, her jaw just dropped when they found out how little Microsoft was paying this person from Tata Consultancy to do this job.

KASTE: Sawade is active in a labor organization called WashTech, so he gets the complaints from IT workers around the country. The H-1B consulting firms are especially active in banking, insurance, and pretty much any industry that runs on big computer systems maintained by aging, increasingly expensive American tech workers. He laughs at the notion that a cost-cutting insurance company somewhere is in dire need of hotshot foreign programmers with specialized skills.

SAWADE: They require that the current employees are in that department to train the people they bring over from India. And maybe not - the people in India are not necessarily there to replace them, at least not right away. They’re just learning the job.

KASTE: Learning the job, he says, so the consulting firm can eventually provide the same service from somewhere cheaper. NPR tried repeatedly to get interviews with the biggest H-1B users, but none would agree to talk. We did reach Dean Garfield, head of the Information Technology Industry Council, which counts Cognizant among its members.

DEAN GARFIELD: Some of the companies are companies, yes, that are providing services that bring greater efficiencies to businesses. But what’s wrong with that?

KASTE: Garfield rejects the notion that Cognizant is using foreign tech workers to undercut Americans. He points out that H-1B workers are supposed to be paid prevailing wages. In practice, though, that rule is rarely enforced. In a 2011 report, the U.S. Government Accountability Office said worker protections are, quote, “weakened by several factors” and that oversight is, quote, “cursory.” Garfield acknowledges the system is not perfect.

GARFIELD: The main, legitimate criticism right now - which is one we would level as well - is that the accountability mechanisms are not fully integrated and not seamless. It’s more a check the box.

KASTE: But he also takes exception to criticism that lumps the consulting firms together, something he calls offensive.

GARFIELD: There is a lot of anti-India sentiment in many of the criticisms and articles around this that I think are completely unfounded and unnecessary.

KASTE: But it’s not offensive to Neeraj Gupta.

NEERAJ GUPTA: I’m a U.S. citizen. I came to the country on a student visa for my master’s in electrical engineering.

KASTE: Gupta spent part of his career working for an Indian consulting firm Patni. And he says, it was obvious they were using H-1B workers to replace Americans.

GUPTA: Oh, almost every one of our projects was like that.

KASTE: On some of those projects, he says, even the clients had misgivings.

GUPTA: I had people come to me and tell me that the number one issue that they faced - and even as they were offering this work - was the fact that they had longstanding employees and the implications of them losing their jobs.

KASTE: He now runs what he calls a domestic outsourcing company. It’s also a consulting firm, but his workers are American. So he does have an incentive to criticize the H-1B system. At the same time, he doesn’t want to eliminate it. He believes American tech companies are in dire need of highly skilled foreign workers. The problem, he says, is that so many of the visas are gobbled up for middle-of-the-road tech jobs already being done by Americans.

SOURCE

Posted by Elvis on 03/01/13 •
Section Dealing with Layoff • Section Dying America
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