SENATOR ADVOCATES MICROSOFT FIRE FOREIGN NATIONALS FIRST

The news that Microsoft will be laying off 5,000 workers is certainly troubling since the company has traditionally been very reluctant to release folks and only a year ago was discussing how they had 5,000 openings they could not fill.

The anti-H-1B Senator Charles Grassley has now jumped in to the fray demanding that Microsoft start firing its H-1B workers before any "similarly qualified" workers lose their jobs. It's hard not to see the appeal of the argument - after all, shouldn't we look out for our own workers before protecting jobs for those who are just here temporarily?

One problem with this would be the potential violation of federal anti-discrimination laws. Another is assuming that workers are fungible and you can just swap in and swap out workers like light bulbs. Perhaps you have an H-1B worker with critical skills that has been working on a project for two years and has a unique knowledge that would take months for a new person to learn? Would it make economic sense to fire the person? Microsoft doesn't need Big Brother looking over its shoulder reviewing the extremely perilous process of coming up with the precise workforce that will allow it to steer through the treacherous economic storm we are all facing.

Of course, H-1B employees WILL be losing their jobs. Microsoft has already said so:

In response to a query about Grassley's letter, Microsoft said the initial layoffs include foreigners working here on visas.

"The initial reductions we announced affect employees in a number of business units, and a significant number of the affected employees are foreign citizens working in this country on a visa," said company spokesman Lou Gellos. " ... For many of the employees here on a visa, being laid off means that they have to leave the country on very short notice, in many cases uprooting families and children."

The marketplace will deal with Senator Grassley's concerns as it has in prior recessions. H-1Bs are expensive - often $6000 or more when you factor in legal fees and hefty government filing fees. That is money most companies would rather spend elsewhere. H-1B applications take time - often at least six months of waiting for a visa number to become available after filing an application. They're a pain in the neck from a bureaucratic standpoint - posting requirements, public access files, representations to the US government, etc. The typical communications issues one would expect with foreign workers often add additional challenges. And you have uncertainty regarding the long term prospects for retaining the employee since getting a green card is often an expensive proposition with no guarantees of success.

In past recessions - and this is my third since I began practicing nearly two decades ago -  we have seen a substantial drop in the number of H-1B petitions filed. The largest users of H-1B numbers - the IT consulting companies headquartered in India - are presumably going to be wise enough to save millions of dollars in filing fees and not bother petitioning for workers for which there are not likely to be assignments in the US.  In any case, I will be extremely surprised if we don't see a huge drop in filings on April 1st.

Comments

[George Chell]

"Why should we invite thousands of guest workers to our country when we lost millions of jobs this past year?"

If you want your job to go the way their jobs did, most likely to Vancouver, may be we should not and let you get laid off.

[George Chell]

"Any other questions smart guy? I know my business."

Yes. Would you rather have these jobs go abroad, particularly to Canada, chasing foreigners causing loss of revenue to the government? Any more questions smart guy?

[Legal and no longer waiting]

"Why should we invite thousands of guest workers to our country when we lost millions of jobs this past year?"

Becasue if it was not for H1Bs then you too would not have a job. In fact, in you truly believe that H1Bs are paid 30% lower, you should praise the day. Because of H1Bs your company is still in the business, you are paid well (by your own admission) because of H1Bs, and that's the way to "take care of your own", correct? If you want to hire a former mortgage broker who lost his job as an analyst, then good luck with that. I hire analysts for living, and I have yet to see a former mortgage broker who would qualify.

[Greg Siskind]

Tony - I was quite serious. If you know about fraud, have you reported it to the Department of Labor? And if you haven't and you're involved in recruiting H-1B workers, you're engaged in criminal behavior. Not being a smart guy, but when you start trying to establish your credentials here as you have, you're going to get flak.

Every so often an anti-immigrant like yourself parks here and decides he's going to argue with everyone on every post. If you play by the rules, that's fine. But if you want to get any respect here, you'll stick to making your case with facts rather than assertions and personal observations (which people will discount as uncredible if you have not built up your credibility with regular statements backed up by actual evidence).

[Tony]

Cmon man open your eyes there is so much fraud going on it is ridiculous. By the way I used the "H-1B" classification as an example. I don't believe you understand how much fraud is going on.
I know of people who entered the United States as F-1 students who were employed (illegally without permission) at a lower prevailing wage. It is very common. Almost every classification including:

T-6, F-1, F-4, J-1, H-1A, L-1 (huge fraud lately) etc

Any other questions smart guy? I know my business :)

[Greg Siskind]

Tony - Since you're in the business, it might help your credibility if you use the correct spelling of the term H-1B. As for the prevailing wage question, since you are bringing the workers over and you know they're not being paid the prevailing wage, that would make you a criminal guilty of aiding and abetting visa fraud. If you want to turn yourself in, I'm sure you'll find many people here who will support your difficult decision.

[Tony]

JoeF. You are wrong.......what do you think I do for a living? Guess what I am in the industry and get paid very well to bring H1B's over to my company. They get paid roughly 30 percent less then the prevailing wage. These terms are negotiated as terms of them being brought over to our country.

We need to take care of our own people first before we start worrying about people from other countries. Why should we invite thousands of guest workers to our country when we lost millions of jobs this past year?

[JoeF]

@Tony: "companies typically pay H1B workers 30 percent less than the average wage for a specific position."

That is of course completely wrong. People on H1 have to get paid at least the prevailing wage for the job.
May I suggest you actually learn about these things?

[Tony]

With regards to the cost of H1B's although the fees may cost a company around 6000 dollars, companies typically pay H1B workers 30 percent less than the average wage for a specific position.

They actually save money by outsourcing, and not paying an American worker.

[George Chell]

"What Grassley does not realize is that Microsoft has the ability to relocate it's H-1B workers to Vancouver and bring them back when their Green Cards are approved."

Or he may decide not to relocate them back in the US, especially if the foreigners dont want to come and are happy to apply for the Canadian Landed Immigrant Status. Forget Grassley..he is not even an economist..but a lawyer who believes that common law is superior to the law of economics...but then again economists such as George Borjas and Vernon Briggs do not understand this phenomenon or tend to ignore it completely...and this is precisely the reason why in a global economy job markets recover elsewhere before they recover in the US. This happened in the last two recessions and it will happen agains this time.

[Another Voice]

This sort of thing will just prompt firms to outsource the work to other countries and the jobs will be lost forever. Too bad that these people use immigrants for political convenience and as a poster child of the "jobs fighter".

[Sid]

Grassley has a fair point but specifically targeting H-1B workers will lead to other problems. The last recession was mostly a tech meltdown and American tech workers only remember that they got fired. What they don't know is that thousands of H-1B workers got fired as well and had to go back to India and China. Remember the offshoring boom? That coincided with the tech meltdown. A smart person can connect the dots and see what I'm getting at. A lot of misinformed people think that offshoring started only around 2000-2001. Completely untrue. It had started in the 80's. The offshoring boom happened after the tech meltdown because IT consulting companies suddenly had access to thousands of US educated and trained tech workers. That helped build up a critical mass in IT hubs like Bangalore, Noida, Gurgaon and Hyderabad that accelerated the process.

Citing what Microsoft was lobbying for a year back is irrelevant. The financial meltdown started around Sept/Oct last year and there has been a steep fall in consumer spending since then. The bottom line is that the state of the economy is different from what it was a year back. I doubt that Microsoft will go back to the Congress this year to raise the H-1B cap. What Grassley does not realize is that Microsoft has the ability to relocate it's H-1B workers to Vancouver and bring them back when their Green Cards are approved.