NFAP REPORT SHOWS HIRING H-1BS ASSOCIATED WITH INCREASES IN EMPLOYMENT OF AMERICANS

The protectionistas will no doubt come up with a million arguments why this is not true, but facts are facts. For every H-1B position requested, US companies hire five US workers. Protectionistas argue with anecdotes because they don't have the facts.

NFAP also released a second study showing that major US tech companies average 470 job openings each and defense employers average 1200 per employee openings.

Comments

Well, without any provision to address the EB green card backlog, I'd have to oppose this bill. The more the outsourcing companies use the H1B for temporary staffing, the fewer EB GC applications get filed. Which makes more unused GCs available to the EB GC backlog.

[Sid]

IMO any bill that boots out the pure body-shoppers and gives preference to students with advanced degrees in STEM is a step forward. I don't think this bill will stop the outsourcing companies though. Instead of sending their employees to work at the client site, they'll probably rent office space close to the client and get the work done there, which is not a bad thing. That'll create other jobs around them.

[R. Lawson]

Greg must be asleep. A bill was introduced to raise the H-1b cap to 130,000 with the elevator provision. Let's see if the outsourcing companies start crying or not over this provision:

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/14/AR2008031403028.html

"The bill would prohibit companies from hiring H-1B workers, then outsourcing them to other companies, he said. H-1B opponents have complained that outsourcing companies are among the top users of H-1B visas.

The legislation would also prohibit companies with more than 50 employees that have more than half of their staff as H-1B workers from hiring more H-1Bs, and it would prohibit employers from advertising jobs as available only to H-1B workers, Karamargin said. "The bill would put some teeth in the Department of Labor's oversight role" of the program, he said. "

This bill is still not good enough. Let's see what amendments get introduced. First, they need to toughen the prevailing wage standard. Second, they need to give H-1b holders the ability to change jobs without ANY impact on their GC process. Third, the cap is still arbitrary. Raising it without any measure of the labor market is absurd. They need to give preference to occupations (such as healthcare) that have the greatest demand. They have no cap on graduates of US universities - that won't fly. Instead of removing their cap, give these graduates preference under the newly raised cap.

My guess is that this bill won't go anywhere as is.

[Hispanic Caucus veto hurting legal workers and employers]

http://www.nytimes.com/2008/03/14/us/14visa.html?_r=1&oref=slogin

[Sid]

I think almost everyone is making the mistake of oversimplifying the explanations by blaming it on globalization or protectionism. It's not a single factor that causing all these changes. The number of wars/conflicts have gone down in most of the world. Poor countries are concentrating on education and their economies. It's not that the US has gone down a lot but that other countries are growing. A decade back very few countries had the intellectual capital of the same order of size as the US. Education in the European countries of very high quality but their populations are very small and due to their protectionist policies, they were never able to grow beyond a certain level. The US on the other hand had liberal trade policies and that helped US companies and the economy grow virtually unchallenged for several years. It had take a country of the size of China or India or a conglomerate like the EU to challenge the dominance of the US. The US still has a huge lead over these countries because of the amount of R & D spending. You'll see that most of the successful Indian IT companies have virtually no products. It's usually products that drive the services industry. I think Indian/Chinese companies should invest a significant part of their profits into product development and research even though it might take 5-10 years to see any benefit out of it. The day Asian companies realize that their future is in innovation and not services, the goose of the US economy will be cooked. Companies like Microsoft realize that, which is why most major tech companies are setting up research labs in India & China. They are essentially hedging their bets. No one wants to bet all their money on the US now. There was a time when it was the only player. Now there are multiple. Whoever executes better will win or at least get a major portion of the riches.

[George Chell]

"George, sounds like more threats. I seriously doubt you are correct, but if you are it has nothing to do with immigration and free trade. If anything, it is a result of massive trade deficits and our budget deficit, not to mention irrational panic over the subprime market (which really is a small percent of our GDP).

Countries won't "call in their chips" because if they do, it will hurt them also. It is mutually assured (economic) destruction.

And the reason we are in this mess has nothing to do with protectionism. We have EXTREMELY liberal trade policies currently. And we are on the losing end on just about every trade deal. Can you name a single country we have a surplus with?"

Oh really? Mutual destruction. One impact is already being felt here..the fall in the dollar..it has been falling since the Dubai Ports fiasco..and is the rest of the world too worried? I dont think so.

http://news.yahoo.com/s/ap/20080313/ap_on_bi_ge/diving_dollar

Dont worry. When the US dollar equals ten Indian ruppees as it did in 1979, we would run trade surpluses. Ditto regarding the Chinese currency.

[R. Lawson]

"The rest of the world would call in the chips leading to collapse of the economy. The US is no longer the center of the world. Get over that arrogance when we are nose deep in debt."

George, sounds like more threats. I seriously doubt you are correct, but if you are it has nothing to do with immigration and free trade. If anything, it is a result of massive trade deficits and our budget deficit, not to mention irrational panic over the subprime market (which really is a small percent of our GDP).

Countries won't "call in their chips" because if they do, it will hurt them also. It is mutually assured (economic) destruction.

And the reason we are in this mess has nothing to do with protectionism. We have EXTREMELY liberal trade policies currently. And we are on the losing end on just about every trade deal. Can you name a single country we have a surplus with?

[George Chell]

"Yes, and we as a nation believe there are limits to how we participate in that market - and what limits we set."

A country nose deep in debt does not have any sovereignty and its ability to set limits is pretty limited unless you want an economic catastrophe.

"It is a democracy, and as much as you would like to subscribe to the kool-aid of free trade, many of us subscribe to fair trade (I would venture MOST people). Voters have seen the flaw in your argument and the tide is turning."

The rest of the world would call in the chips leading to collapse of the economy. The US is no longer the center of the world. Get over that arrogance when we are nose deep in debt.

"The type of trade you are presenting to us is really strong arm trade. Meaning "Allow us to do this, or in retalation will will do something bad to you"."

Nobody would strong arm us if we are not nose deep in debt.

"The truth is that those are empty threats. The H-1b visa ENABLES offshoring AND depresses wages. You even seem to admit that it depresses wages. Anyone with any understanding of economics knows that depressing wages will not attract more people to an occupation."

They are not empty threats because you owe them money. If it does not attract people to the occupation well and good. It could be done cheaper elsewhere and perhaps Americans would be able to afford it at a time of high oil and commodity prices and nose-deep debt. The world does not revolve around us any more.

"Bill Gates says that our country is in trouble because not enough people are pursuing Computer Science. But he then says that the solution is to bring in cheap foreign labor. You admit that lowers wages. He also says that the solution is not to raise wages. His two "solutions" will actually make Computer Science LESS attractive."

The solution is to move the jobs abroad if there are no cheap foreign labor forthcoming. It is Gates's money he can do what he wants in response to what the government does. The one thing we can do is take away the tax breaks that we give him and other so-called American industries and perhaps give tax breaks to Toyota and Honda who want to set up plants in the country or buy up GM and Ford to keep the jobs in the country..but I am sure that Lou Dobbs would not like it.

IN SHORT, DELINQUENTS, HEAVILY LEVERAGED COUNTRIES AND BEGGARS CANNOT BE CHOOSERS!

"We have a free market, a free global market. "

Yes, and we as a nation believe there are limits to how we participate in that market - and what limits we set.

It is a democracy, and as much as you would like to subscribe to the kool-aid of free trade, many of us subscribe to fair trade (I would venture MOST people). Voters have seen the flaw in your argument and the tide is turning.

The type of trade you are presenting to us is really strong arm trade. Meaning "Allow us to do this, or in retalation will will do something bad to you".

The truth is that those are empty threats. The H-1b visa ENABLES offshoring AND depresses wages. You even seem to admit that it depresses wages. Anyone with any understanding of economics knows that depressing wages will not attract more people to an occupation.

Bill Gates says that our country is in trouble because not enough people are pursuing Computer Science. But he then says that the solution is to bring in cheap foreign labor. You admit that lowers wages. He also says that the solution is not to raise wages. His two "solutions" will actually make Computer Science LESS attractive.

[Sid]

"Heart surgery this year is probably going to be done damn near the same five years from now. New drugs may come on the market, but the surgeon won't change much about how he works. This surgeon will earn 7 figures."

I'm a software engineer as well and I fully well realize that a doctor's contribution to the society is much more valuable than mine. Also, the barrier to entry for the medical profession is very high (compared to s/w), specially in the US, where for some unknown reason you've to go to med school after completing undergrad. Actually, you gave an example that contradicts your argument that if you raise the wages, Americans will come. If a heart surgeon makes 7 figures as you claim, why aren't more Americans becoming heart surgeons? That would automatically increase the supply, lower wages and make heart surgery more affordable. No?

"Very few software engineers even dream of clearing six figures. Unless they are in NYC or San Jose, and those people pay $600,000 for a single family home."

You forgot to mention Seattle, Austin, NJ, Boston, Northern Virginia, MD, San Diego, Chicago, Miami/Tampa. You'll notice that all these places have very good universities, hence more supply of entry level engineers. It beats me why Pittsburgh could not become a major IT hub. If someone wants to live in the middle of nowhere in a palace that costs only $200K, that's fine. Just don't expect a lot of options w.r.t. jobs and if you lose your current job, good luck finding another one without moving. If you're an IT person, you've to live in an IT hub and pay that 1 million for a house in a good school district. The other option is to be a consultant and keep traveling every week.

I think the overall wages are lower because of the services industry, where unless you are an independent consultant, your employer will take a big cut of what they charge the client. The client actually pays much more for a consultant than what is paid to developers in a product development company. The internet has revolutionized many industries by cutting out the middle man. Maybe when that happens to the software services industry, the wages of consultants will go up. Maybe eLance is the way forward for the services industry.

[George Chell]

"So you advocating for cheap labor is going to destroy software engineering in this nation."

You keep talking about free markets. We have a free market, a free global market. If cheap labor does not do it, American unwillingness or inability to pay higher prices which will result from higher wages will lead to the destruction of software enginnering in this nation as it did in Japan and Germany. In Japan and Germany cheap labor did not do it. Due to zero immigration wages went sky high and SAP and other computer related firms moved operations to the US and Singapore where the wages are lower and there are not many software engineers in Germany and Japan. It is a skeleton of what it used to be in the 1970s.

As far as doctors being paid seven figure salaries, insurance no longer wants to pay high costs. Hence, more and more Americans are going to Asia for medical care: Singapore, Thailand and India to be precise. I for one refuse to do my checkup in the US. Every year I go to Singapore where the check up will cost me $400 US versus $1800 US in the US. Ticket costs me $1000 and residence costs me $300 for five days stay and the insurance reimburses me $300 US. I save $400 even after including air travel. Why? If I had check up every year in the US, the insurance wont pay a cent. I agree with you it is a free market, but unlike you I also know there is global market. Eventually global competition will destroy the US industry: (1) unless they innovate, invent and increase productivity; (2) unless they have competitive, ie., lower wages and salaries. Life is not fair. I went first into agricultural economics..not many job opportunities and too racist, then I went to health economics, too much back stabbing and then I went into finance..too complicated for my brains and then I went into Immigration Economics..let us see how long I last.

[Lou]

http://www.nytimes.com/2008/03/13/opinion/13thu1.html?ref=opinion

[USC]

Sid, thanks for posting the BG excerpts, I enjoyed reading the exchanges!

[R. Lawson]

"where would the salary increase will lead to? It will rob Peter to pay Paul because if the talent pool is limited only the big guys will get all the talented people. The companies with muscle will flourish and any weak or budding entrepreneurs will go down the drain."

That is absurd. This is a free market economy. There is no such thing as anyone getting robbed. Either they have a business model able to compete or they don't. The people who are "getting robbed" are actually not providing value.

Most Americans cannot compete on cost. We have to bring some other value to the table or our businesses will die. But it doesn't help to have other companies gaming the system. It harms our business when companies chasing the same clients gain a cost advantage because they are able to pay their workers much less.

Using the stra-man logic I have seen here, every last American job should be replaced with a foreign worker paid half the salary. If we don't allow that to occur, we would be robbing the consumer.

[R. Lawson]

"get us some good quality candidates at reasonable wages so that we can charge the consumers a reasonable price."

So George,

What do you think a person with a 4-6 year degree, $3-6,000 in vendor training each year, certifications that take months to study for and expire every 4 or so years, and who is forced to relearn his job every 5 years because technology changes so fast should earn?

Heart surgery this year is probably going to be done damn near the same five years from now. New drugs may come on the market, but the surgeon won't change much about how he works. This surgeon will earn 7 figures.

So why is it that you think the software engineer who has one of the most complicated jobs on this planet be paid peanuts? We aren't paid as much as you must think. The median is like $75k.

Some of us (like me for example) earn more than that. But we do so because we take more risks. We don't work for a single employer day in and day out. We travel constantly. We learn constantly. We interview for our jobs again every 6-18 months depending on contract length.

Very few software engineers even dream of clearing six figures. Unless they are in NYC or San Jose, and those people pay $600,000 for a single family home.

And if you want to talk about savings to the consumer - my job is to make an organization more efficient. I reduce their costs dramatically, even when you consider our salaries.

So you advocating for cheap labor is going to destroy software engineering in this nation.

[George Chell]

"So if the goal is to have a series of medals or awards that are just about the best in the U.S., yes, you know, shut down immigration. You know, you should have shut it down in 1900."

I believe they did that in 1924 or 1925 with the National Origins Act, which some academics think led to the housing market collapse which was geared to one million immigrants a year and suddenly were left empty. This eventually along with a number of other things most likely contributed to the Great Depression. If we throw 12 million people out of the country and shut the gates to legal immigrants as the antis want, housing will fall another 100% resulting in another Great Depression which Nouriel Roubini or NYU has been predicting since at least 2004. Perhaps this is what Tom Tancredo and Dana Rohrbacher want..and perhaps this is what most in the GOP want.

[George Chell]

If I were Gates this is what I would say:

MR. GATES: We're not kidding about it. These jobs are going begging, and the result is that in a competitive economy --

MR. ROHRABACHER: You'd have to raise wages.

MR. GATES: No, no if we raise wages, out competitors from abroad will destroy us. That is why we are planning on moving some operations to Canada.

MR. ROHRABACHER: -- if the job is going begging, you raise wages, now in --

MR. GATES: No. We are planning on moving operations to Vancouver Canada where we can get the Indians and Chinese we want. If you want to keep the jobs in the US, get us some good quality candidates at reasonable wages so that we can charge the consumers a reasonable price. We are not going to just raise wages and the prices increase and people wont pay for it and we end up like the Airline industry where the wages are extraordinarily high. So your argument does not hold water.

Although extremely bright, seems like Mr. Gates cannot think on his feet and nail Rohrbacher.

[George Chell]

"agreed that when you don't get an employee at a given salary one has to increase the salary."

Good idea to increase salary and wages above productivity..it will fan inflation, fed will increase rates and throw the economy into recession. This is an INTELLECTUALLY DISHONEST argument labor economists such as George Borjas make without consideration of monetary policy, ability or willingness of Americans to pay for the product and comptetition from global competitors who will be able to undercut prices here in the US (not possible now because of the falling dollar). Let us leave this dumb argument to dumb congressmen such as Rohrbacher, Tancredo or Hunter and not harp on it. The world does not work that way anymore. It is a GLOBAL ECONOMY. I think the business does not explain itself properly as well. They need to say "we cannot afford to pay high wages without increasing prices which is not possible with global competition from cheap products. With rise in oil and energy prices something has to give. Either we need tariffs on cheap products from abroad (violation of all treaties) or we need cheap labor (unless the American has something unique to offer which would increase productivity and merit high wages), which is the main reason we are outsourcing or moving production abroad to avoid higher labor costs, higher prices, decline in demand and subsequent losses." I am not surprised that Congressmen such as Rohrbacher and Lamar Smith are too dumb to grasp this argument. However, as Carl Icahn says most of these executives get jobs not on merit but on connections, and hence they may be too dumb to think along these lines and make such an argument. The Singapore government has been making this argument for a very long time to make a political case for foreign talent and no surprise that they have been one of the most successful economies in the world.

[args_never_end]

Mr. Lawson,

agreed that when you don't get an employee at a given salary one has to increase the salary. Now comes the question of pool of talent one is looking at; whether there is shortage or not. Assuming there is shortage (which you may not agree unless you are actively looking for an employee without success), where would the salary increase will lead to? It will rob Peter to pay Paul because if the talent pool is limited only the big guys will get all the talented people. The companies with muscle will flourish and any weak or budding entrepreneurs will go down the drain.

I guess it would be perfectly OK for a guy to get 400K an annum and go in a 200K car raking up dust and dirt at a worker paving that very road @$7/hour. You can't and shouldn't pay exorbitant salaries for some, the sense of morals, ethics and above all economics will decide the right compensation.

When there is a shortage of goods, no nation pays whatever it takes but would try to import.

Well, how about insulating the economy from rest of the world?

[R. Lawson]

Clearly Gates believes that raising wages in order to address any shortage that he claims is out of the question:

MR. GATES: We're not kidding about it. These jobs are going begging, and the result is that in a competitive economy --

MR. ROHRABACHER: You'd have to raise wages.

MR. GATES: No, no --

MR. ROHRABACHER: -- if the job is going begging, you raise wages, now in --

MR. GATES: No.

[Sid]

Would like to post another excerpt from the testimony. This is the first time that I've heard an anti-H1B person admit that the American techies who are getting affected do not fall in the top bracket. Sorry for the long post.

"MR. ROHRABACHER: All right. Well, thank you very much. And again, thank you for coming here to help us celebrate this 50th anniversary. I've been on this committee 20 years and I've been a very proud member of this committee -- this is the most bipartisan committee that you will find in the United States Congress, although I am not the most bipartisan guy that you'll find in the United States Congress.

A couple things that I have learned over these last 20 years is that when the fundamentals of the economics of the solution are wrong, sort of like programming a computer, if the fundamental programming is wrong, in the end there's going to be problems. You have to go to the fundamentals. And just to be frank, I think some of the things you're suggesting are not going to the fundamentals, but instead -- going way after the programming problems.

For example, in education let me note that the hearings that we had on education were very enlightening for me, but what I learned seemed to be different than what my other members learned, and that was that math and engineering and science teachers have no difference in pay in our public education schools than do basket-weaving and English literature teachers. And do you believe that we need to pay our science and mathematics teachers more money in order to attract higher-quality people to be science and mathematics teachers?

MR. GATES: I definitely think that you want to set high standards, and you want that those standards should be based on how well you do for the students, which we need to come up with ways of measuring that that people view as very, very reliable.

MR. ROHRABACHER: Because I've only got five minutes, maybe I should go directly to the issue. Should science and math teachers be paid more than other teachers in order to attract higher-quality people in public education to those parts of the education system?

MR. GATES: Yeah. If you're measuring these teachers' ability to really improve the students' capabilities, in selecting for those people to do it, you'll find that there's a supply shortage, and because of that supply shortage, you'll probably have to pay this group somewhat more.

And there are various experimental --

MR. ROHRABACHER: So you do believe that if you pay more money, you actually will attract more people to a profession and get more of it?

MR. GATES: If you tie it to an ability to really look at --

MR. ROHRABACHER: -- True --

MR. GATES: -- the improvement that they derive --

MR. ROHRABACHER: Right. Well, also if you improve the basket-weaver teachers, it's less important than if we improve the science and mathematics. Now let's relate that directly to the other issue that you brought up today, which was the immigration. And let me just note that if we bring in more people from the outside, realizing that we're bringing the most talented people from other countries, will it not hurt those countries, and will it also not depress the wages in our own country that people like yourself would have to pay your employees in order to get quality people or in order to train people within our own society?

MR. GATES: No.

MR. ROHRABACHER: It wouldn't? Okay.

MR. GATES: These top people are going to be hired. But just a question of what country they do their work in --

MR. ROHRABACHER: I'm really not talking about top people here. You know, the --

MR. GATES: -- These ---

MR. ROHRABACHER: There are a lot of other people in the society rather than just the top people.

MR. GATES: That's right.

MR. ROHRABACHER: It's the B and C students that fight for our country and kept it free so that people like yourself would have the opportunity that you've had. Those people, whether or not they get displaced by the top people from another country is not our goal. Our goal isn't to replace the job of the B student with A students from India.

MR. GATES: That's right. And --

MR. ROHRABACHER: And the B students deserve to have good jobs and high-paying jobs.

MR. GATES: That's right. And what I've said here is that when we bring in these world-class engineers, we create jobs around them.

MR. ROHRABACHER: Okay.

MR. GATES: And if we don't -- so the B and C students are the ones who get those jobs around these top engineers. And if these top engineers are forced to work, say in India, we will hire the B and C students from India to work around them.

MR. ROHRABACHER: Okay. But, according to “BusinessWeek”, there are almost 150,000 programmers have lost their job in this country since the year 2000. Now my reading of all of this is that there are plenty of people out there to hire, but people want to have the top-quality people from India and China and elsewhere, and they're willing to let these 150,000 American computer programmers just go unemployed.

MR. GATES: Actually, “BusinessWeek” doesn't do surveys. I think you're referring to a quote in “BusinessWeek” from an Urban Institute study --

MR. ROHRABACHER: That's what I said, according to “BusinessWeek”, yeah.

MR. GATES: Well, they quote -- it's not according to “Business Week”.

MR. ROHRABACHER: Okay.

MR. GATES: There was a study that a group at Urban Institute did that was deeply flawed in terms of how it defined what an engineer is. When we say that these jobs are going begging, we're in business every day.

MR. ROHRABACHER: Mm-hmm.

MR. GATES: We're not kidding about it. These jobs are going begging, and the result is that in a competitive economy --

MR. ROHRABACHER: You'd have to raise wages.

MR. GATES: No, no --

MR. ROHRABACHER: -- if the job is going begging, you raise wages, now in --

MR. GATES: No.

MR. ROHRABACHER: Okay.

MR. GATES: It's not an issue of raising wages. These jobs are very, very, very high-paying jobs.

MR. ROHRABACHER: Okay --

MR. GATES: And we are hiring as many of these people as we can.

MR. ROHRABACHER: Let me give you one example --

CHAIRMAN GORDON: Mr. Rohrabacher, if you don't mind, we'll finish this on the second round.

MR. ROHRABACHER: You know, I am one of the guys that helped Kosovo become independent, and I'm on the Foreign Relations -- hearing there. Maybe at the reception tonight, which you're going to be at, maybe we can continue this discussion. "

[Sid]

Here's what I've been looking for. The transcript of today's testimony. The pdf that came out earlier was the written testimony. This contains the actual exchanges, including the H-1B issues.

http://www.microsoft.com/Presspass/exec/billg/speeches/2008/congress.mspx

He says exactly what USC has been trying to say here -

"MR. GATES: Our youngsters are competing with these students even if we turn them away from this country. That is, no policy related to H1B will impact the percentage of foreign labor that works in computer science. All it will affect is what portion of that is done in the United States and where the surrounding jobs are created.

So if the goal is to have a series of medals or awards that are just about the best in the U.S., yes, you know, shut down immigration. You know, you should have shut it down in 1900. I mean, immigrant families have been achieving very well in this country for a long, long, long time, and that's always been a controversial thing. But H1B does not -- computer science is not a game played only in the United States. It's not like a local competition. It's more like the Olympics where you are, at the end of the day, you are going to compete with the best in the world. And the question is, you know, does that -- is that happening in the United States?"

[USC]

"No. I am trying to say that the offshoring of these jobs is really a red-herring when put in context with the H-1b. They are not related subjects - and that can be proven because those types of jobs don't qualify for an H-1b visa."

Here is why it is relevant to the H1b context.

Assuming but not admitting arguendo that Vista tech support personnel are not degree holders and thus ineligible for H1b visas you have a situation under your scenario that these folks are ineligible to come to the US under any visa, period.

Has this forced American corporations to up their wages to attract native workers to these professions? Of course not!!!!!! Instead they have responding by moving the entire operation to India.

PG advocates eliminating the H1b completely. Assume, that PG through Grassley is able to accomplish this. IOW, you have the same situation that you depict. Given MSFT's above history, what makes you think MSFT will respond to the elimination of the H1b by hiring native workers and not by moving that product team to India? Will such a move help or hurt the American techie?

"you didn't make that logical connection in you mind either."

Actually, I kind of suspected your argument but wanted to be sure before responding as above!

[AD]

Curious that Sen. Grassley does not provide any insights into his views on the merits of doing away with the per country limits and significantly increasing the number of permanent residency green cards. Is that oversight or intentional?

[R. Lawson]

Senator Grassley asks all the right questions:

http://www.iowapolitics.com/index.iml?Article=120787

March 12, 2008

Mr. Bill Gates
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399

Dear Mr. Gates:

I am writing to follow up on the testimony you provided to the House Committee on Science and Technology today with regard to the importance of innovation in the United States and the need to keep pace with the global competition for talent.

I am particularly interested in your statements and Microsoft’s position on our immigration policies, specifically on the H-1B visa program. You stated that our immigration rules need to be revamped “so that U.S. companies can attract and retain the world’s best scientific talent.” You expressed opposition to the arbitrary cap on H-1B visas and implied that an unlimited number of foreign workers would be beneficial to the economy. You also advocated for doing away with the per-country visa limits and significantly increasing the number of permanent residency green cards available every year.

While I commend you and your foundation for contributing to organizations around the world, I’m concerned that some companies are more concerned about their bottom line than about the dire need to better educate and train American students and workers. The solution is not, in my opinion, importing more foreign workers. Rather, we must strengthen educational opportunities for America’s students and workers, as you noted. Such an investment will help reduce the trend in which 60% of students in U.S. STEM doctoral programs are foreign born.

Compete America, the association representing Microsoft and other high tech companies, advocates for an unlimited supply of foreign workers. I should note that Compete America includes many of the foreign based companies that use the visa program. During the hearing, however, you stated that a limit may be necessary, contradicting your written testimony. Do you differ from the association in this regard? Should there be a limit to the number of foreign workers we import each year?

While Congress may set an arbitrary number on the visas allocated annually, I’m afraid that taking away this cap will simply benefit foreign based companies. According to an article in last week’s BusinessWeek, foreign outsourcers top the list of companies bringing foreign workers to the U.S. on the H-1B program. As noted in the piece, six of the top 10 visa recipients in 2007 are based in India.

Senator Durbin and I made the same point about visa approvals in 2006. We found that the top nine foreign-based companies* in 2006 used nearly 20,000 of the available H-1B visas.

The top 20 users in 2006 were:

*Infosys Technologies 4,908

*Wipro 4,002
Microsoft 3,117
*Tata Consulting Services 3,046
*Satyam Computer Services 2,880
Cognizant Tech Solutions 2,226
*Patni Computer Systems 1,391
IBM 1,130
Oracle 1,022

*Larsen and Toubro Infotech Ltd 947

HCL American Inc. 910
Deloitte & Touche LLP 890
Cisco Systems Inc. 828
Intel 828
*I-Flex Solutions Inc. 817
Ernst & Young LLP 774
*Tech Mahindra Americas 770
Motorola Inc. 760
*Mphasis Corporation 751
Deloitte Consulting 665

As you will see, Microsoft dropped in visa approvals in 2007 from 2006. In 2006, Microsoft was approved for 3,117 H-1B visas; in 2007, it dropped from third to fifth place and was only approved for 959 visas.

In your testimony, you stated that Microsoft was “unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that you wanted to hire.” Why did visa approvals decrease dramatically for Microsoft?

The statistics are clear. Thousands of visas are going to foreign based companies, leaving U.S. companies like Microsoft scrambling for qualified workers. How do you explain the fact that most H-1B visas are going to companies based outside the United States? Do you think that increasing the cap, under current law, would actually benefit Microsoft and other U.S. companies? Wouldn’t U.S. companies benefit more if the program was restructured?

Answering these questions should lead you to the conclusion that the H-1B visa program is not working as originally intended. We need reform – not just the so called “reform” of increasing the visa supply as proposed by Compete America. Reforms are needed so that U.S. businesses – both large and small -- can find, recruit and hire the workers they need. In addition to the questions I have already posed to you, I would like your insight on the following points:

• Do you believe that American workers both deserve and, under the law should have, the first chance at high skilled, high paying jobs in the United States?
• Do you oppose increased enforcement of the program, including random audits of those that use the H-1B visas?
• Do you see bad apples using the program? Do you acknowledge that there are companies who undermine the system and pay lower salaries and/or benefits to foreign workers?
• Do you support efforts to make it more transparent for the U.S. taxpayers to view job openings and job vacancies that are filled by H-1B visa workers?
• Do you oppose efforts to require employers to better advertise job openings so that American workers can have a chance at the jobs before they are taken by foreign workers?

If we do not make changes to the H-1B program, foreign outsourcers will continue to import thousands of foreign workers to the detriment of U.S. businesses and workers. I urge you to look at the reforms in the Durbin/Grassley bill, S. 1035. For example, we would require all H-1B employers to make a good-faith effort to recruit American workers before hiring an H-1B visa holder. Raising the H-1B cap without this and other reforms will only hurt American companies and workers.

Reforms, increased enforcement, and better transparency will help put integrity back into the program. I hope you will consider these views and share your thoughts with me so that our immigration laws can be reformed for the benefit of U.S. companies, workers, and taxpayers.

Sincerely,

Charles E. Grassley
United States Senator

[hmm]

I don't know much about IT, but I am familiar with use of H-1B in research universities. The truth is that most people in hiring commitees could not care less about applicant's immigration status: they just want quality people able to research and get Government funding (which is the main source of revenue at a research university and which is extremely competative). A considerable chunk of funding is available exclusively to US citizens or LPR, but after 3-4 years the applicant typically becomes a LPR and this problem dissappears. It is very hard to hire people able to get funding, and there are simply not enough qualified US citizens. While a typical university position could have 400+ applicants, an absolute majority (sometimes all) of them are not able to compete for federal grants. There are plenty of US citizens who can teach well, but research is another matter. It is not that US citizens cannot do research, they sure can, but to get top people one has to cherry pick around the world. Limiting the search to one country, even as large as US, won't do. If you look at the percentage of foreign born faculty at top fifty US universities (where many federal grants land) it becomes apparent that restricting hiring to US citizens or LPR will slowly but surely lower the quality of US science so that 20 years from now this country won't be a scientific leader anymore. I do not think this will be a tragedy for the american people but apparently this is not what the political establishment wants. As a result university H-1B's are quota exempt.

[R. Lawson]

"RL, I don't know why you are arguing as to what qualifications Vista support personnel have or are required to have. Are you trying to say that "degreed" Americans deserve protection but HS diploma Americans don't? I really don't know where you are going with your current argument."

No. I am trying to say that the offshoring of these jobs is really a red-herring when put in context with the H-1b. They are not related subjects - and that can be proven because those types of jobs don't qualify for an H-1b visa. A prior comment tried to make that connection.

The fact that you had no clue as to what I was talking about suggests that you didn't make that logical connection in you mind either.

[USC]

"USC, installing windows and doing basic troubleshooting over the phone doesn't require a degree. A HS diploma will suffice. As you move up into tech support, you need a two year degree and vendor certifications. The level I support (first person you speak with) probably doesn't have a degree."

RL, I don't know why you are arguing as to what qualifications Vista support personnel have or are required to have. Are you trying to say that "degreed" Americans deserve protection but HS diploma Americans don't? I really don't know where you are going with your current argument.

There are two arguments at work here. The market economy/free market argument and the protectionist argument. I am an advocate for the former. Grassley prefers the latter.

Given Grassley's position his policies have had the opposite effect (back in 2002 I also had occasion to call XP installation support I spoke to someone in Arizona or Washington, now these jobs are gone in their entirety to India) of keeping these jobs in the US. Obviously the restrictionist immigration policies supported by him have failed to accomplish his objectives. Now, if he had supported quota-less work/immigrant visas (as the UK does) those jobs might have been staffed by immigrants rather than nativists but they might still (incidentally, the MSFT techie I spoke to confirmed that they weren't handling worldwide Vista support, only the US and Canada) have been in the US.

MSFT still might have been renting space from an American landlord, buying utilities from American electric, phone, water companies etc etc. Instead, Grassley's policies have shaved off billions of dollars from the American GDP and added them to the Indian GDP. Henceforth, we should refer to Grassley as the Senator from Mysore. ;-).

Come to think of it this is all Al Gore's fault. If he hadn't invented the Internet we wouldn't have had IP Telephony, thus no call centers, thus no jobs moving to India.

[George Chell]

Mr. Lawson:

I will search for evidence. There was some testimony in congress soon after 9/11..May be I am not entirely correct..but there are severe restrictions on who could become Airline executive in this country. Foreign entities cannot own more than 49% of the share in US airline industry..this I know for a fact.

I have no argument with the rest of your argument. I strongly believe that skilled immigrant visas should be made available only for occupations that require a college degree including professors at universities.

[R. Lawson]

"but that is because only US citizens can becomes executives in the airline industry."

Let me stop you here. Put please show me where this is true. This doesn't seem legal.

USC, installing windows and doing basic troubleshooting over the phone doesn't require a degree. A HS diploma will suffice. As you move up into tech support, you need a two year degree and vendor certifications. The level I support (first person you speak with) probably doesn't have a degree. That may or may not be true in India - but it was true here.

I use to work in support years ago.

The only aspect of Vista that requires a Ph.D. seems to be their security model. I'm a software engineer and sometimes that baffles me. Security experts say it is better, but the average computer user will probably disable the features out of sheer frustration.

[George Chell]

"So, Grassley's railings against EB/H1b immigration have resulted in the total off-shoring of Vista support to India. MSFT's Vista tech support number is 866-234-6020 for those that want to call and verify."

Also loss of tax revenues which our government would have accrued by keeping jobs here. All Grassley/Durbin does is help increase the federal deficit, employees pay taxes in India and then we will be issuing T-bills and borrowing from India and other Asian countries to finance our deficit and debt. Perhaps this is what Grassley and Durbin want.

[George Chell]

"Let's at least inject some intellectual honesty into the debate."

Mr. Lawson:

I have been introducing honesty into the debate. But, seems like you dont want to debate me. That is ok. Neither does intellectually dishonest people like Norman Matloff and George Borjas. At least you bring honesty to the debate unlike these two individuals. The fact is: there are two issues here. The first issue is at what price would consumers whether here at home or abroad are willing to purchase services. Dishonest Americans of which there are many always say that they are willing to pay a higher price for product and services if the industry employs Americans. Why are they dishonest? Let us look at an industry which mostly employs Americans and pays them high wages..the airline industry and the employees being pilots who make about two times as much as the profitable Singapore Airline pilots. What do Americans do when airline prices go up? They stop purchasing tickets and start driving or stop going on vacations. As a result the industry suffers heavy losses. True, the exeuctives make a lot of money, but that is because only US citizens can becomes executives in the airline industry..as a result they make a lot more than executives in other industries despite poor performance. The executive salaries are also responsible for losses. So, let us not blame just the industry and its shareholders who want to make profits by paying lower wages. Let us also blame the consumer who does not want to pay higher prices or are so leveraged and nose deep in debt that they cannot afford to pay higher prices. So, as I have said the demand and supply of labor does not determine wages. Any economist who is not as intellectually dishonest as George Borjas will tell you that firms maximize profits and they have to charge a price to maximize profits. If they cannot charge a price because a consumer is not willing to pay, they either have to suffer a loss as the airline industry or relocate to areas where the wages are cheaper. This phenomenon is going to accelerate again due to high energy prices as well as a possible recession.

[USC]

"Do you think they might be putting call centers"

Call center? LOL! AFAIK, a call center employee is someone who helps you with your checkbook order or your MasterCard bill.

Vista is MSFT's most complex OS yet. Someone who provides tech support for it is hardly working in a call center.

[R. Lawson]

"So, Grassley's railings against EB/H1b immigration have resulted in the total off-shoring of Vista support to India. MSFT's Vista tech support number is 866-234-6020 for those that want to call and verify."

Very interesting leap of logic. Do you think they might be putting call centers offshore because those are low skilled jobs and the people work for pennies on the dollar? They had plenty of call center workers here. They fired most and moved them offshore. Had nothing to do with the H-1b (those workers don't qualify for call center jobs - they don't require a degree). It had everything to do with cost of labor.

Let's at least inject some intellectual honesty into the debate.

[USC]

"I think you've admitted several times on this blog that you don't have a problem with companies like Microsoft and Cisco hiring more H-1Bs"

Here is a real live example of what happens when you artificially, through quotas, restrict people from coming into the United States.

Over the weekend I purchased a MacBook Pro and decided to dual boot Leopard with Windows Vista Ultimate. I picked up the upgrade disk at Staples. I got stuck at the installation screen because no prior Windows OS was installed on the notebook and unlike previous versions Vista won't accept a CD to validate your prior license. I ended up having to call MSFT tech support to get a different product key.

In chatting with the techie I learnt that the ENTIRE Vista support team for the United States is located in Bangalore, India and that there are no longer ANY Vista support personnel in the US.

So, Grassley's railings against EB/H1b immigration have resulted in the total off-shoring of Vista support to India. MSFT's Vista tech support number is 866-234-6020 for those that want to call and verify.

BTW, I was successfully able to install Vista on the MacBook.

[George Chell]

"There is growing resentment of the offshoring firms - even by people who traditionally support the H-1b. I would say that most people in Congress would vote for some of the Durbin/Grassley provisions. And it has a good chance of becoming law."

In a global economy, it would not matter much if the corporations decide to expand operations abroad anyway. In the 1980s and early 1990s Japan tried to keep foreigners out. Eventually jobs moved out and we all know what happened to Japan.

[R. Lawson]

"I think you have the common sense to understand that Durbin-Grassley in it's present form has no chance of becoming a law "

There is growing resentment of the offshoring firms - even by people who traditionally support the H-1b. I would say that most people in Congress would vote for some of the Durbin/Grassley provisions. And it has a good chance of becoming law.

I doubt you will see a raise in the cap without some form of Durbin/Grassley being attached to the bill. And don't count on it being neutered down very much.

[R. Lawson]

"I think you should take a leadership role within PG and convince them to restrict the debate to the role of H-1B in outsourcing. "

I am no longer a board member of the PG.

"I think you've admitted several times on this blog that you don't have a problem with companies like Microsoft and Cisco hiring more H-1Bs, only with outsourcing companies. "

I am OK at reasonable levels. I think that Microsoft is pushing the definition of "reasonable" though. The same goes for Intel and a few universities. Most of the non-IT consulting companies seem to be at reasonable levels.

Most companies that sponsor H-1b visas only sponsor a handful. The majority just one. I believe that if the offshoring firms and IT body shops didn't play a role in this program, and the fraud/abuse issues were addressed, 99% of the objections would be resolved.

Pass Durbin/Grassley and I may become an active supporter of the program - even if the cap is raised. I'm not sure if Durbin/Grassley addresses one key problem, which is portability without resulting in the applicant going to the back of the GC line.

[Sid]

Roy,

I don't think Microsoft is claiming a shortage of applicants - only a shortage of applicants who are good enough to work there.

The percentage of people who are graduating in hordes with degrees in CS/IT and are actually employable is pretty low. That applies to millions of IT graduates in India and China and also the millions of Americans who ditched whatever they were doing and flocked to IT during the 90's before the bust. You've been in the industry long enough to know that.

I think you've admitted several times on this blog that you don't have a problem with companies like Microsoft and Cisco hiring more H-1Bs, only with outsourcing companies. I think you should take a leadership role within PG and convince them to restrict the debate to the role of H-1B in outsourcing. People are making statements like Google is hiring H-1Bs because they want cheap labor. To anyone who lives in the valley, that sort of statement is laughable. I think you have the common sense to understand that Durbin-Grassley in it's present form has no chance of becoming a law although there's a strong possibility of the H-1B quota going up for US degree holders this year or after the elections. Drill some sense into your PG friends so that they fight for the important issues like abuse by body shops.

[George Chell]

"In a free market, there cannot be a shortage. The market will naturally address shortages - as wages rise people will flock to that occupation."

More likely scenario. Shortages result in wages rising above productivity. Fed will raise the interest rates and by the time people flock to the market to take advantage of high wages (because of lags due to college education which takes four years), unemployment in the sector will be high, and the country may topple into a recession because of higher interest rates.

[Geroge Chell]

"Either something is causing wages not to rise, or there really isn't a shortage. Which is it?"

Outsourcing and Foreign Direct Investment moving jobs abroad. Actually Norman Matloff says wages are falling...and I believe that corporations will hire who they want to hire and will move jobs abroad if they dont like the US candidates and cannot bring in foreigners.

[James]

Oh Roy ... how I missed you ... I almost peed when I saw your post

[R. Lawson]

For the record, it is almost 4pm my time ;-) I hope you weren't waiting for my response ;-)

There will be plenty of "Roy Bait" over the next few weeks, I think. As competing articles come out of the media.

[R. Lawson]

Interesting how the top sponsors of the visas aren't in the NFAP study because they aren't in the S&P 500. Sounds highly scientific.

As to Gates, well his shortage shouting falls on its face in light of all the academic studies released in the last year.

In a free market, there cannot be a shortage. The market will naturally address shortages - as wages rise people will flock to that occupation. Curretnly, IT wages are on par with inflation - meaning neutral. Either something is causing wages not to rise, or there really isn't a shortage. Which is it?

Ironic how you free market people ignore so many rules of the free market.

Also less than 1% of people who apply at Microsoft are accepted. I don't think you can reject 99 out of 100 people who apply and still claim a shortage of applicants.

[Sid]

Thanks for the link James. It would be nice to get a transcript of the verbal exchanges. I'm sure that there were some exchanges regarding the abuse of H-1B visas by body-shops and outsourcing companies. It'll probably take a few days for that to be released.

It's great that he talked about not subjecting dependents from the GC quota and removal of the per country quota.

[James]

http://democrats.science.house.gov/Media/File/Commdocs/hearings/2008/Full/12mar/gates_testimony_12mar08.pdf

[Sid]

Sorry. That was an old testimony. Please disregard it.

[Sid]

Transcript of Bill Gates' testimony.

http://www.microsoft.com/Presspass/exec/billg/speeches/2007/03-07Senate.mspx

The news articles do him a great disservice by focusing on only the immigration aspects of his testimony. There are some very insightful observations about education.

[Greg Siskind]

This was Roy-bait, wasn't it?

[George Chell]

There is one main issue here: Does H1B keep jobs in the US and does the decline in H1Bs or skilled immigration lead to increased outsourcing and outflow of Foreign Direct Investment resulting in loss of jobs? I believe one of the research organizations I am familiar with may address this issue this year and publish the results early next year.

[Sid]

I'm predicting several posts from Roy on this starting 8-9 AM (EST) today.