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

Fri Apr 25 20:24:57 PDT 2014


Before getting into today's topic, I wish to note an e-mail issue.  My
"official" address is matloff@cs.ucdavis.edu  However, that is
essentially an "alias."  A couple of years ago, our university
outsourced its e-mail to Gmail, and although technically Gmail allows us
to retain our old addresses, for various reasons there are sometimes
glitches, some due to the alias, some due to Gmail's spam filter, and so
on.  Bottom line:  Please continue to send to me at
matloff@cs.ucdavis.edu but if you get no reply, please resend to my
personal Gmail account, normmatloff@gmail.com

Now, what about the title of this message, "sob stories on both sides"?
It refers to these two recent articles:

Computerworld, "An IT worker writes: 'Emotionally, we are broken'":

http://blogs.computerworld.com/it-outsourcing/23833/it-worker-writes-emotionally-we-are-broken      

Palo Alto Online, "Foreign entrepreneurs try to gain foothold in U.S.":

http://www.paloaltoonline.com/news/2014/04/25/foreign-entrepreneurs-try-to-gain-foothold-in-us   

The first item profiles an American worker who is training his H-1B (or
L-1 etc.) replacement, in preparation for the job being shipped
overseas.  The second article claims there are lots of Steve Jobs-class
would-be entrepreneurs out there who are frustrated at not being able to
get a visa under which to work their startup magic.

I must say that I am irked by both articles (irked by the articles, not
by the people profiled in them).  It's clear why I don't like the second
article--it's built on false premises, and ignores the plight of
Americans harmed by the foreign worker programs--but some readers will
be surprised at my dislike of that first piece.

Other readers of this will get my point about the first article
immediately, though:  This focus on the Indian offshoring firms is
factually unwarranted and actually harmful.  Yeah, "There he goes
again," I admit it.  But it's true.

Pat Thibodeau, the Computerworld reporter, correctly describes the
despair felt by the profiled worker, not just because he is losing his
job but because that loss has been faciliated by U.S. government policy
(the policies on H-1B, L-1 etc.).  A fair point, of course, but there
are just as many such stories involving the big mainstream U.S. firms.

Recall for example the case of Cisco, the networking infrastructure
giant.  (See the items in http://heather.cs.ucdavis.edu/Archive with
file names beginning with "Fragomen.")  Independent consultant David
Huber, with a long record of success with big-name clients, applied for
a job with Cisco, based on a newspaper ad he'd seen.  More or less by
accident but with some detective work on his part, David found that the
contact person in the ad, M.E. Clarke, was not a Cisco HR person.  Nor
was she a recruiter contracted by Cisco.  No, she was a staffer with
Fragomen, the largest immigration law firm in the nation.

After seeing the infamous Cohen & Grigsby law firm video, in which one
of the partners said, "Remember, we're trying to NOT find an American
worker for the job" when sponsoring a foreign worker for a green card,
David put two and two together and realized he had been set up.
Fragomen was simply trying to "NOT find an American worker for the job,"
and David was one of the workers they were trying to not find.  This led
to an investigation by the Dept. of Justice, which for the most part
found that Cisco was acting in compliance with the law here (which I
predicted at the time).

I'm making two points:

1.  It's not just the Indian offshoring firms who abuse H-1B, but also
the big mainstream American firms such as Cisco.  (See my Migration
Letters paper for some data.)

2.  Just like the poor guy in Pat's article, David TOO was a victim of
his own government's policy, both statutory and regulatory.  Fragomen
was making use of loopholes deliberately placed in the policy.  (The
industry lobbyists have occasionally admitted publicly to writing H-1B 
legislation.)

I've made the point all along that the big mainstream U.S. firms are
just as culpable as the Indian offshoring firms, but that the former are
much more subtle about it, not overt like in the latter case.  The
worker in Pat's article knows exactly why he is being laid off and its
connection to H-1B, whereas David Huber only discovered the shenanigans
with Cisco by accident.  The fact that Cisco covered its tracks better
than, say, Wipro does, doesn't make Cisco's actiona any more acceptable.
Indeed, many might say that Cisco was worse, as the ad carried a highly
misleading statement along the lines of "U.S. citizens and permanent
residents only."

I know a lot of people don't like to hear this.  Some are tired of
hearing it, but a few readers -- you know who you are :-) -- strongly
take the position that the main abusers of H-1B are those Indian firms,
not the Ciscos, Intels, Googles and so on.  These people trust the big
American firms, in spite of numerous reasons they shouldn't do so.

The latest such reason, of course, is the revelation of e-mail messages
in which CEOs of the household name firms apparently conspired to
violate the Sherman Antitrust Act by agreeing not to hire each other's
workers:

http://www.reuters.com/article/2014/04/24/us-apple-google-lawsuit-exclusive-idUSBREA3N28Z20140424

And as one of my readers put it today regarding the settlement of the
case, "It's a slap on the wrist. Some of these companies are sitting on
tens of billions in cash reserves.  There will be no executives in
orange jumpsuits as long as companies like Google outspend Lockheed
Martin on the beltway."  No, no one in the government--or for that
matter, in the press--will notice that, hey, maybe criminal charges
ought to be brought here.

By the way, I don't think the main motivator was savings on salaries
here.  It was undoubtedly one factor, but the bigger one, I believe, was
that they wanted to prevent key engineers from leaving in the midst of
an urgent project.  I've often mentioned that to many employers,
especially the big U.S. firms, this is also the biggest attraction of
hiring a foreign worker:  If you sponsor them for a green card (and to
some extent, even if not), they are yours, almost no risk of losing
them.

In the Computerworld piece, the mention of the offshoring aspect muddies
the waters.  Rather than it being the central issue involving the role
of U.S. government in faciliating offshoring, the salient point is that
policy does not require priority in hiring (and in this case retention)
for American workers.  That is the key problem with the worker in the
Computerworld piece, and likewise is the core issue with David Huber's
Cisco fiasco.  The main H-1B law doesn't require such priority at all,
and even the laws that do require it are riddled with loopholes, again
shown in the Cisco example.  Even the provision in the recent Senate
bill that would have (somewhat) strengthened H-1B law in this regard was
removed, under heavy pressure from the industry.

The Palo Alto Online article, in spite of its one-sidedness, is actually
quite good--well researched, with few if any factual errors, and with
interesting (if not compelling) examples.  Some of you may be awestruck
at just how many ways there are to stay in the U.S. (something I've
known for many years, ever since a distant relative of mine, an
immigrant, remarked, "If you want to stay here, there is always a way").

A rather ironic example of that occurred just last week.  A reporter for
a fairly prominent newspaper interviewed me on H-1B, and mentioned a
piece he'd written on the subject in 2008.  In that piece, he'd profiled
a foreign student at a top-10 engineering school who had failed to get a
job in the U.S., due to a shortage of H-1B visas, and thus had been
forced to return home to India.  

Or not!  After the interview, I went to the LinkedIn site, and looked up
that hapless foreign student.  Turns out that he hadn't gone home after
all.  He had gone to work as a quant for a U.S. prominent investment
firm, which had been his expressed goal in the article, and has been in
the U.S. ever since.

By the way, one of the foreign entrepreneurs quoted in the Palo Alto
Online article admits to paying less than prevailing wage--regarding his
own salary.  But it doesn't take too much guesswork to see that he
probably is doing the same for his other workers.  And remember, the
legal prevailing wage is less than market wage to begin with.

Norm


Archived at
http://heather.cs.ucdavis.edu/Archive/SobStoriesBothSides.txt