In a message dated 2/12/08 11:37:50 P.M. Central Standard Time, matloff@cs.ucdavis.edu writes:

To: H-1B/L-1/offshoring e-newsletter 110

The average person who read the title of Liz Peek's column enclosed
below would have guessed that her answer was No, but it's actually Yes,
as you'll see halfway through the piece.

I have comments on a few points:

# American universities are the envy of the world, which is why the
# number of foreign students they attract is again increasing after a
# brief slowdown induced by the terrorist attacks of September 11, 2001.

The vast majority of foreign students in tech fields came here in masses
not because American universities are so good but because the schools
were steppingstones to immigration and a higher standard living.
There's nothing wrong with this, of course, but it is important to
understand what attracted them here, because the reason for the
post-2000 (not post-2001) slowdown was due to the slowdown in the U.S.
tech job market, not tightened visa requirements.  Foreign students in
tech are no different from the domestic ones--their enrollment rises and
falls with the economy.  Though overall international student enrollment
has risen in the last few years, this has been attained only by way of
extensive recruitment efforts and lowered admissions standards.

# That has changed. These days, many if not most foreign students are all too
# excited to return home and participate in their own local booming economies

True, but she is missing the point:  It's not just that they are
starting to go back, but more importantly, many are not coming here in
the first place.  While the economies back home are booming, tech
careers in the U.S. do not provide good long-term prospects.  So their
entire point of coming here in the first place is gone.

# Keep in mind that 26% of the tuition of these foreign students
# is paid by the schools they attend.

In the case of graduate students in tech fields, the percentage is even
higher.  At any big research university, most foreign students in tech
fields have their tuition paid by the federal government.  So, Peek's
questioning of why we are bringing foreign students here (at this point
she hasn't let the reader know yet that she actually supports it) is
quite on point.

But Peek eventually gets to the point:  She supports the H-1B visa
program and especially the proposed F-4 visa.  The latter would
basically give foreign students who study tech in the U.S. automatic
green cards.  To her (or to her husband, who according to Rob Sanchez's
newsletter is an employer of H-1Bs), H-1B is "obviously" good, with no
downside.  She dismisses critics out of hand:

# You may be wondering who in the world could be opposed to expanding the
# H1-B visas. There are some who argue that employers want to hire foreign
# nationals because they can pay them less, and others claim that the visa
# program reduces employees to indentured servant status.

# The numbers do not support these objections. The National Foundation for
# American Policy put out a study in December full of facts and figures that
# indicates the abuse of the program is minor. It also shows that thousands
# of job searches are under way at the tech companies. During the tech boom,
# as salaries for hard-to-find programmers and engineers went through the
# roof, it is likely that foreigners were hired at below prevailing rates.
# That is now illegal. Further, the founder of Immigration Voice, Aman
# Kapoor, says abuses could easily be cleared up by establishing protections
# for whistleblowers.

Ahh, I knew Stuart Anderson/NFAP would pop up in there somewhere.  What
Peek is not telling her readers is that Anderson is hardly some
objective researcher.  He has been making a living writing pro-H-1B
articles for years.

As to the underpayment of H-1Bs, Anderson is completely obfuscating the
issue.  He points to the fact that ILLEGAL underpayment is rare, which
is true, but draw people's attention to this in order to hide the fact
that LEGAL underpayment is widespread, due to huge loopholes. 

I've written at length on this before, but suffice it to recall that the
GAO found in their survey that employers were openly admitting to
"[hiring] H-1B workers in part because these workers would often accept
lower salaries than similarly qualified U.S. workers," but the employers
were quick to add that "they never paid H-1B workers less than the
required wage"--because the legally required wage is much lower than the
market wage.

This is what a good industry advocate does--divert attention from the
real issue by focusing on something minor.  But Peek's statement,

# During the tech boom, as salaries for hard-to-find programmers and
# engineers went through the roof, it is likely that foreigners were
# hired at below prevailing rates.

suggests that Anderson has now outfoxed himself.  Here's why:

Academic and government studies have shown repeatedly that H-1Bs are
paid less on average than Americans.  Assuming that Peek's statement
above came from Anderson, apparently this is what he's come up with to
"spin" those studies.  His new line seems to be, "Yeah, during the late
90s wages were going up so fast that the government's prevailing wage
figures lagged behind, and therefore the H-1Bs were paid less than market
wage."

Well, if this is indeed Anderson's new line, it makes no sense at all.
(Not that it has to, given our gullible journalists and even more
gullible Congress.)  After all, the U.S. citizens and permanent
residents were being paid market wage then (by definition of "market
wage"!), so if the H-1Bs were indeed being paid the out-of-date
government wage as Peek/Anderson say, then that jibes perfectly with the
GAO comment above ("these workers would often accept lower salaries than
similarly qualified U.S. workers").

Furthermore, if that line in Peek's column really did come from
Anderson, then he is blatantly contradicting his own mythology, which is
that the H-1Bs are savvy players who move freely in the open labor
market.  For instance, in his 1997 article in International Educator,
the house organ of the foreign-student adviser organization NAFSA,
ironically titled "They Don't Work Cheap," Anderson wrote:

% The issue of whether foreign-born professionals are paid less than
% American-born professionals is best summed up by Ehud Yuhjtman, an
% Israeli-born engineer at Chip Express who often interviews prospective
% hires. "You cannot pay foreign-born engineers less. These are smart
% people; if you try to fool with them, they will go someplace else."

As I've written elsewhere, H-1B is a major factor fueling the rampant
age discrimination in the tech labor market.  Younger is cheaper, and
cheap is what drives things.  When employers run out of young Americans
to hire, they turn to young H-1Bs rather than older (age 40+) Americans.
That's why F-4, the automatic-green card-for-foreign-students proposal,
is a bad idea.  Since the vast majority of foreign students are young,
this would exacerbate the already-egregious situation we have now,
especially given that there is no labor shortage (which even Peek seems
to accept).

And the whole idea of F-4, to keep the foreign students with us instead
of having them go back home and work for our competitors, doesn't make
sense either.  Research by UCB Professor Saxenian (who is quite
pro-industry and a favorite of the industry lobbyists) shows that many
former international students who get U.S. green cards end up helping
our competitors anyway, either by going back home permanently or by
providing consulting expertise and playing investor roles.

Now, what about MY answer to the question Peek's title poses, "Should we
educate our competitors?"  First, I'm happy to have competitors.  The
tech industry has helped a segment (albeit a very small one) of Indian
society prosper, and it is on its way to doing so in China.  Good for
them.  My only objection is that cheap labor programs are displacing
Americans in OUR tech industry, and for that matter in our graduate
schools too.  When the foreign students stop coming here, we'll be stuck
with an industry with no workers.

So, my answer to the foreign student issue is, as it has been, that we
take only "the best and the brightest," which is only a small percentage
of the current foreign student population.  For those top talents, we
should roll out the red carpet for them immigrationwise.  And we DO.  As
Anderson and Immigrant Voice failed to tell Peek, we have special
immigration categories for those of outstanding ability, which are fast
tracks to green cards.  The H-1Bs who've been waiting six years or more
for a green card are the ones in the lowest employment-related green
card category, for people of no special talent. 
  
Norm

http://www.nysun.com/article/70731?access=892598

February 5, 2008

Should the U.S. Be Training Its Competitors?

BY LIZ PEEK
February 5, 2008

Should America educate its competitors? At a time of economic worry, this
is a highly important question.

American universities are the envy of the world, which is why the number of
foreign students they attract is again increasing after a brief slowdown
induced by the terrorist attacks of September 11, 2001. Because even those
who pay full tuition do not actually cover the total cost of their
education, will Americans at some point cry foul?

This may seem an absurd notion, given the obvious good will generated when
America hosts international students. However, in an era where America is
increasingly counting on intellectual capital to compete in world markets,
the notion of exporting that capital -- at a discount, no less -- may
strike some as stupid.

The question is especially pertinent today. In the past, foreign students
attended American colleges and universities and then eagerly accepted jobs
in America. Few foreign countries offered equivalent opportunities to so
quickly benefit from higher learning, so students were easily tempted to
set down roots in the U.S., many eventually becoming American citizens.

That has changed. These days, many if not most foreign students are all too
excited to return home and participate in their own local booming economies
-- economies that are thriving mainly because of the outsourcing of
American jobs or because they are successfully undercutting American
manufacturers. Consider: The top three countries sending students to
America are India (no. 1, for the sixth year in a row), China, and South
Korea. What do they study? Business, engineering, and the sciences, in that
order.

There is nothing wrong with India and China employing their natural
advantages, which include large work forces, to compete on the basis of
lower production costs. But someone is bound to ask why America isn't using
its advantages, which include higher education, in the same way. Why not
restrict the number of foreign engineering and technology students flowing
through our campuses, and keep America's superior training ground its
students? Americans are the ones who have built the endowments of private
institutions that help pay for those degrees; Americans pay the taxes that
bridge the gap between tuition and the cost of educating all those fertile
young minds. Keep in mind that 26% of the tuition of these foreign students
is paid by the schools they attend.

Okay, so I don't really believe that America should chuck out foreign
students. I do think that exposing young people from around the world to
our great country is extremely positive for international relations. (Even
though the anti-U.S. mindset of many, many university professors does not
help the cause.) Think of King Abdullah II of Jordan, who attended
Deerfield Academy and was so taken with it that he is building a copycat
institution in Jordan. That has to be a good thing.

But, if you believe that these international students should of course be
granted access to America's schools, shouldn't we try to keep them in the
U.S.?

I'm referring to the controversy over H1-B visas, which allow highly
skilled workers to get jobs in America. The immigration debate simply
should not include highly educated workers. Congress has capped the number
of H1-B visas at 65,000, down from 115,000 during the technology boom, when
Silicon Valley was struggling to supply its ranks of software engineers.
There are additional 20,000 visas available to students graduating with
advanced degrees from American schools (compared to about 300,000
international graduate students). Last year, the visas were snapped up in
one day. The government received almost 124,000 petitions before it closed
the window.

Why is this so important? Because the alternative path to hiring skilled
workers, through regular immigration, can take many years. Few employers
are willing to wait around for that long. In 2006, the Senate passed a bill
that would increase the number of H1-B visas to 115,000, and would allow
for greater flexibility going forward. It would have increased the number
available for people with advanced degrees from American universities and
allocated more visas to citizens of countries with whom we establish trade
agreements.

You may be wondering who in the world could be opposed to expanding the
H1-B visas. There are some who argue that employers want to hire foreign
nationals because they can pay them less, and others claim that the visa
program reduces employees to indentured servant status.

The numbers do not support these objections. The National Foundation for
American Policy put out a study in December full of facts and figures that
indicates the abuse of the program is minor. It also shows that thousands
of job searches are under way at the tech companies. During the tech boom,
as salaries for hard-to-find programmers and engineers went through the
roof, it is likely that foreigners were hired at below prevailing rates.
That is now illegal. Further, the founder of Immigration Voice, Aman
Kapoor, says abuses could easily be cleared up by establishing protections
for whistleblowers.

There are, naturally, labor organizations opposing expansion of the H1-B
program. The Programmers Guild and the Institute of Electrical and
Electronics Engineers are two such groups claiming that foreigners drive
down wages for their members. A spokesman for the IEEE, Chris McManes,
argues that there are "no systemic shortages of electrical engineers"
though he acknowledges that "there are shortages in some geographic areas
and in some emerging industries."

In propping up wage scales that are likely a hangover from the tech boom of
the late 1990s, these organizations are of course pushing corporations to
outsource. As the head of the National Foundation for Public Policy, Stuart
Anderson, says, "It makes no sense to not view this as a global labor
market." He says that while America refuses to welcome highly skilled
workers, the European Parliament is currently at work on a provision that
aims to attract such laborers.

At the very least, we should be sure that foreigners who are educated in
our universities are allowed to stay and work in our country. As Tamar
Jacoby of the Manhattan Institute says, "Graduate students should have
green cards stapled to their diplomas." Amen to that.

peek10021@aol.com