Cringley: How Silicon Valley Can Sidestep Trump H-1B Visa Restrictions

Silicon Valley is getting more than a little nervous that one of its favorite mechanisms for keeping wages low, H-1B vias, is likely to be severely curtailed by the Trump Administration. Industry stalwarts are raising false alarms that tightening requirements would deprive tech players of “talent” and “specialized skills” that they allegedly cannot obtain elsewhere. However, as Robert Cringley points out in a new story, they look to be able to maintain virtually all of the benefits of the status quo by using a not-as-well-known visa, the L-1B visa.

The reality is quite different. H-1B visas overwhelmingly fill lower-level jobs that would normally serve as yeoman positions for young computer sciences graduates. The US is thus throwing away what it touts as a strategic asset by failing to train its next generation of computer professionals. And that’s before getting to the significant level of H-1B visa fraud. One type is where tech workers are brought to the US with no work lined up. Those workers are treated as near slaves, held hostage in “guest houses” until they find work. And the clients aren’t marginal players; major tech firms use these illegal operators. A second type of fraud is wage theft.

Moreover, it’s false that H-1B visa holders are providing needed and scarce skills. The press has been full of stories of employees being required to train H-1B visa replacements. Disney was challenged by worked who were forced to train H-1B replacements; they lost their challenge on what most people would see at technical grounds, that the H-1B visa holders who took their jobs were employed by contractors, not Disney. That followed ComputerWorld exposing a similar program abuse at Southern California Edison:

Information technology workers at Southern California Edison (SCE) are being laid off and replaced by workers from India. Some employees are training their H-1B visa holding replacements, and many have already lost their jobs…

The H-1B program “was supposed to be for projects and jobs that American workers could not fill,” this worker said. “But we’re doing our job. It’s not like they are bringing in these guys for new positions that nobody can fill.

“Not one of these jobs being filled by India was a job that an Edison employee wasn’t already performing,” he said…

The SCE outsourcing “is one more case, in a long line of them, of injustice where American workers are being replaced by H-1Bs,” said Ron Hira, a public policy professor at Howard University, and a researcher on offshore outsourcing. “Adding to the injustice, American workers are being forced to do ‘knowledge transfer,’ an ugly euphemism for being forced to train their foreign replacements. Americans should be outraged that most of our politicians have sat idly by while outsourcing firms have hijacked the guest worker programs.”

“The majority of the H-1B program is now being used to replace Americans and facilitate the offshoring of high wage jobs,” Hira said.

In 2016, ComputerWorld described Clinton crying crocodile tears over the issue when her dependence on tech titans as donors meant she was guaranteed to do nothing.

Robert Cringley is a fierce critic of outsourcing, and he attributes it to CEOs keen to push up stock prices at the cost of the long-term health of their enterprises. As he wrote in 2015:

Now let’s look at what this has meant for the U.S. computer industry.

First is the lemming effect where several businesses in an industry all follow the same bad management plan and collectively kill themselves…

The IT services lemming effect has companies promising things that can not be done and still make a profit. It is more important to book business at any price than it is to deliver what they promise. In their rush to sign more business the industry is collectively jumping off a cliff.

This mad rush to send more work offshore (to get costs better aligned) is an act of desperation. Everyone knows it isn’t working well. Everyone knows doing it is just going to make the service quality a lot worse. If you annoy your customer enough they will decide to leave.

The second issue is you can’t fix a problem by throwing more bodies at it. USA IT workers make about 10 times the pay and benefits that their counterparts make in India. I won’t suggest USA workers are 10 times better than anyone, they aren’t. However they are generally much more experienced and can often do important work much better and faster (and in the same time zone). The most effective organizations have a diverse workforce with a mix of people, skills, experience, etc. By working side by side these people learn from each other. They develop team building skills. In time the less experienced workers become highly effective experienced workers. The more layoffs, the more jobs sent off shore, the more these companies erode the effectiveness of their service. An IT services business is worthless if it does not have the skills and experience to do the job.

The third problem is how you treat people does matter. In high performing firms the work force is vested in the success of the business. They are prepared to put in the extra effort and extra hours needed to help the business — and they are compensated for the results. They produce value for the business. When you treat and pay people poorly you lose their ambition and desire to excel, you lose the performance of your work force. It can now be argued many workers in IT services are no longer providing any value to the business. This is not because they are bad workers. It is because they are being treated poorly. Firms like IBM and HP are treating both their customers and employees poorly. Their management decisions have consequences and are destroying their businesses.

Cringley weighed in yesterday on Trump’s executive order. He pointed out that, in keeping with Trump’s propensity to use executive orders as press releases, that it didn’t mention the H-1B program. It instead called for a review of all visa programs, with an eye to improving US employment and economic productivity. Cringley notes those aren’t necessarily the same thing; indeed, short term, they are often in direct conflict.

His key observation:

Channeling President Trump, I think Trump IS going to wack the H-1B program, which will affect mainly Indian IT consultancies, but he’ll leave unchanged the L-1B visa program that allows American companies to shift their employees to America from abroad.

Think about it, in this case with IBM as an example. IBM Global Services sees itself as competing with big H-1B users like Tata and Infosys and an H-1B ban or severe limitation would give IBM — or any similar U.S.-based multinational — an advantage, especially if the L-1B visa program is left untouched. With L-1B, IBM can use its own Indian employees MAKING INDIAN PAY AND BENEFITS to do the work here in the USA. No need to pretend you can’t find an American worker as presently required by H-1B. No need to advertise. No need to pretend you are paying a locally competitive wage.

L-1B visas are hardly ever mentioned in the press yet they are even bigger than H-1B already. It’s worse for American workers than H-1B, too. So what if Trump cuts back or freezes H-1B numbers without touching the (presently unlimited) L-1B program? He’ll still be keeping a campaign promise, yet also working to enrich Big Business at the expense of the very people who voted for him.

a 2014 article by Daniel Costa of the Economic Policy Institute in The Hill has one of the rare discussions of the L-1B program:

At least 650,000 college-educated temporary foreign workers are employed in the United States through the H-1B visa program, mostly in the high-tech industry. The H-1B is a well-known guestworker program that is inadequately — but at least minimally — regulated, with an annual limit and a requirement that employers pay a “prevailing” wage. Other visa programs, like the L-1 and the F-1 Optional Practical Training (OPT) program, have almost no rules and receive little scrutiny, but are used to employ hundreds of thousands of foreign tech workers…

Multinational companies use the L-1 visa to transfer employees from their foreign offices to offices in the United States. Over the past five years, an average of 68,000 L-1 visas have been issued per year, but there is no annual limit. There are two types: the L-1A for managers or executives (valid for seven years), and the L-1B for employees that have qualifying “specialized knowledge” (valid for five years). According to government audits, the majority of L-1 workers are in occupations related to computers and information technology (IT), and the biggest users of the L-1 are also the biggest users of the H-1B — outsourcing tech firms like Tata, Cognizant and Infosys — firms whose business model focuses on sending jobs overseas…

The media have reported on major companies laying off U.S. tech workers and replacing them with L-1s (legally), after first forcing the U.S. workers to train their own replacements. And there is no requirement that employers pay L-1s the prevailing wage for the specific job they will fill, which allows employers to pay far below the market rate. This practice takes advantage of the foreign worker and hurts U.S. workers by pushing down wages for everyone employed in similar occupations.

A recent Labor Department investigation revealed that Electronics for Imaging (EFI) in Fremont, Calif. — which earned $200 million in revenues last quarter — required L-1s to work 120 hours a week installing computers, while paying them $1.21 an hour. EFI got into trouble, but only because it wasn’t paying them the California minimum wage of $8.00 an hour. Had EFI paid the minimum wage, it would have been compliant with immigration and labor laws, even though the average hourly wage in Fremont for a worker who installs or repairs computers is $19. If that worker is configuring the network as well, it’s $45.

Keep your eye on this ball. Even an H-1B win may not mean much if tech players simply bring in even cheaper L-1B substitutes.

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  1. paul

    1.21 USD per hour? Now that’s what I call disruptive, wait until uber hears about this.
    Nice to see them hammered with a 3,500 USD fine, though.

    1. Altandmain

      3500 US is business as usual for these jokers.

      Considering the costs of living in the Bay Area, that would not even cover a month’s rent.

  2. YankeeFrank

    One issue with replacing H-1 with L-1 workers is culture. A firm that brings in 100’s, or even 10’s (if they are smaller) L-1 workers who are paid slave wages and kept as indentured servants, having those workers work alongside American workers, is going to find a huge rift between the two types of workers. H-1 workers come here largely to immigrate and obtain green cards. That path is not available to L-1’s, so the rift between American and L-1 workers will be vast and will create a lot of static (especially as the American workers learn how little the L-1’s are actually paid and the conditions they live under).

    You’d think a company might not care about something like this, and perhaps for certain types of firm it doesn’t matter (like a power company for example). But for highly visible firms like Facebook and many others that rely heavily on the H-1 program to keep wages down, the image they try to project and the internal culture they try to foster (largely in order to attract the best American workers) will fall apart. Think about it — since the L-1 program is unlimited and unregulated, why wouldn’t firms like Facebook and Google just use workers brought in under that program rather than having to jump through the hurdles of the H-1 program where they not only have to meet all sorts of regulations but also pay a minimum wage of $60k/ year. The answer is appearances: to the public but more to the American workers that work alongside these immigrant workers. “The best and brightest” American workers do not want to work with slaves next to them, but they will work with aspirational immigrants trying to chase the American dream, who may be paid roughly half the wage but with the goal of parity in a few years once the green card comes in.

    No, losing the low-wage H-1B program, or having it seriously curtailed in various ways, will be very damaging to some of our most visible flagship firms. From top investment banks to Silicon Valley’s high flyers, replacement via the L-1 program will simply not do.

    1. Marco

      Your description of the “aspirational” H1-B does not gel with my experience. At the IT shops I worked they had the same “slave” quality status you attribute to the L1. That didn’t keep management from hiring more nor did it keep us from working with them. They are often given the sh*t programming tasks your typical self-identified “rock star” dev would shun. But they churned away nonetheless. Much IT work is soul-grinding drudgery part of it the result of outsourcing and contracting churn. Another self-inflicted wound OR self-licking ice cream cone…depending on your perspective.

      1. YankeeFrank

        Just the fact that h-1b can lead to a green card chamges the nature of the engagement. It also depends a lot on the firm. Companies that are not “prestige” type firms won’t care. But a lot of the most visible co’s and prestige outfits like top tier investment banks will. There is a reason they dont use the L-1 program now, and wont likely in future. At least, as Yves says, I hope. ;)

    2. flora

      There’s talk now about moving US tech H-1B visa holders to Vancouver, B.C. under the umbrella of US tech firm ‘satellite offices’. US tech firms could move H-1B workers across the boarder and Canada appears ready to welcome them. Also, Canada sees an opportunity to directly skim IT tech talent from the US for its own tech sector. Lots of ways this can be played.

      “President Trump’s imminent executive order that would place restrictions on the H-1B visa program is Silicon Valley’s loss, but could be Canada’s gain.
      Sunil Sharma is convinced so.
      His company, Extreme Venture Partners, next week plans to announce a new fund that will help up to five start-up founders and their families move to Toronto and Waterloo, Canada, and invest $100,000 in each if they are accepted to the VC’s accelerator.”

      1. YankeeFrank

        F’in Canada. First they steal our film and tv production and now this. Its time for war on Canada ;).

        1. Elrond Hubbard

          Well, we are already stealing your refugees… It seems there’s a bit of a rush on now, since the executive order signalled the Trump administration’s intentions:

          22 refugees entered Manitoba near Emerson border over the weekend

          Sadly, some are paying a higher price than others to come here. As in so many other things, sharing a border with the world’s superpower enables us to practice a politer, less in-your-face form of economic exploitation. :-)

    3. ChrisPacific

      Why is the path to immigration more available for H1s than L1s? Technically H1 isn’t a path to immigration either – it’s explicitly a nonimmigrant visa which cannot be renewed beyond 3 years (might be 6 with an extension). It’s viewed as a path to immigration by skilled workers, who hope to make themselves sufficiently valuable to their employer that they will undertake the expensive and time-consuming process of sponsoring them for a green card, rather than lose them when it expires. Anyone can apply for an employer-sponsored green card – it has nothing to do with being a current H1 holder. The main hurdle is convincing an employer to sponsor you, and by far the most reliable way to do that is to have worked for them already and proven your value.

      It sounds like L1s are even more restrictive than H1s, since you can’t move at all (you’d need an H1 to move to another employer) so that may be an excuse for employers to avoid sponsoring workers for green cards, especially if L1s aren’t time limited. But employers who are seeking indentured servitude from their employees usually find a way to get it with H1s as well.

      1. MyLessThanPrimeBeef

        How can American workers compete with that kind of incentive/motivation?

        Pay an American worker $X/yr.

        Pay someone $X/2 or $X/3 per year PLUS a chance at a Green Card which can be worth, I don’t know, $1,000,000?

        Fortunately, Uncle Sam is subsidizing the purchase of that Green Card.

        One more case of externalizing cost.

        And, by the way, I think the foreign worker is actually getting more when all is said and done, if his/her career-bet pays off and we include the Green Card compensation. Being more subservient never hurts.

        1. ChrisPacific

          The concept of temporary workers is the real issue, and it’s what creates power imbalances of the type you describe. This is not a temporary problem. Tech companies in the US have been complaining about skills shortages for as long as I can remember. So why not simply open up a fast track immigration category for workers with the right skills, make them residents or citizens, and give everyone a level playing field? Because the power imbalance from temporary workers serves the interest of employers. It’s a feature, not a bug.

          Green cards are not worth $1 million, although you can buy them for that amount (excuse me, apply for them under the ‘investor’ category). They are pretty much identical to citizenship except for the right to vote, and if citizenship was worth $1 million then there would be no poverty in the US.

          1. Tkp123

            The real value of h1b to companies lies in holding the wages down for American workers and being able to hold foreign workers as hostages without pay raises.

            1. AmyInNH

              – federal employer tax cuts
              – stringing F1, OPT, H1Bs, visa indentured can run 17 years or longer
              – “official policy” for many years, can pay an H1B 95% of prevailing wage (which they use low numbers for “prevailing”)
              – OPT – no employer taxes, no prevailing wage and in some cases, no income tax

      2. AmyInNH

        “Expensive”? Green card is not “expensive”, particularly when you roll in the indentured until aspect.
        “We’re green card sponsors!” and then string them along for 10 years or more.
        As near as I can see, green card application is $700.

  3. Pavel

    For those interested in this topic: someone posted a link on Hacker News to the NY Times article (“Not Everyone in Tech Cheers the H-1B Visa Program”) on this the other day and it received 300+ comments, many of them of course full of expert opinions and useful anecdotes:

    –Hacker News: Not Everyone in Tech Cheers the H-1B Visa Program

    As this is the Hacker News community, these people are on the front lines of the H-1B “battle”.

    1. jrs

      Not everyone in tech, mostly not the employees, but for some reason the owners in tech do, hard to explain the divergence. /s

  4. Paul Greenwood

    H1-B carries a lifetime cap. It is being systematically abused. It is time to impose national quotas on Visas as a bilateral arrangement, say with EU or with individual states. The Green Card Lottery should be abolished too. Having experienced the mess of Labour Certification in the US and the total farce it is time the system was re-jigged from the ground upwards. Pre-1964 Europe had preference but never filled its quotas. Now the whole system is skewed towards Asia….it is still a 16 year waiting list for Filippinos to come legally to the US unless on family reunite programs ?

  5. dk

    U.S. Citizenship and Immigration Services (USCIS) top-level page for all visa types:
    Working in the US:
    click headings in the left sidebar for links to details on all visa types (F-1 is under Student and Exchange Visas).

    Also this from last year, from, “the world’s most popular immigration advice site,” based in London UK:
    Trump says he will add further restrictions to H1B and L1 visa schemes

    It’s well documented that Trump recruits thousands of foreign workers on H-2B visas at his Mar-a-Lago club, Trump Tower facilities and numerous other businesses that he owns. In an interview with the Hindustan Times in October, Trump said that he ‘understands the need for skilled workers and has utilised visa programmes himself.’

    However, Trump went onto say: “At the same time we have to take care of American jobs and I have always said America first at all levels.”

    And check out their homepage, too:

  6. Robert S.

    It is important to be aware that it isn’t just Silicon Valley using and abusing H1-Bs but it is also the lifeblood of Big Insurance and extremely vital to Banking & Brokerage. I can’t really comment on L1s because I’ve never come across it in my years at big Insurance-Pharma-Brokerage. They have no infrastructure for L1s, so far as I’m aware, not in the places I’ve worked.

    I first had to train 3rd world replacements for me and my team at a major Reinsurer way back in 2000, (after having gone back to school in my 30s to get a ‘secure’ and high paying job in IT as a programmer).

    Since then it’s been a recurring theme as almost every job I’ve had in Corporate America eventually went through this sham exercise. I say sham for the following reasons:

    1) Existing US workers have been put out if work, it isn’t a question of shortage of qualified help. As with the Disney example, internal depts. look ripe for the knife when profits flag and become disposable under the rubric of sticking to core competencies.

    2) The company I worked for could always find more resources to hire, it just requires a little legwork and elbow grease. And most importantly, they offered *training*! 30 hours worth, and they were/are willing to take on those with no experience for entry level positions. This has mostly disappeared from the American labor landscape.

    3) There is no monetary savings achieved, it’s just swept under the rug. The old rule of thumb 17 years ago was that it took 4 offshore resource to replace one American IT worker, at least for things like programming, QA, etc. It’s gotten better in that the metric now is down to 3. This is definitive because when I’ve been in a position to hire it basically sums out to 1 worker in NYC will give me two in Toronto, or offshore it to Mumbai and get 3 people in India. And people filling the job in Canada are coming from India or China so it’s not as if Canadians are getting the work. And the equation doesn’t represent an equivalency of like for like. It will literally take 3 offshore hires to equal the productivity of one onshore.

    If you stayed with me this far, you can see it’s a bit of a sore point, and I know I took a bit of a turn from the original post but it seems relevant. I still work in IT. I work for a major financial company. I’ve worked with, and hired, some really great people located offshore, as well as H1-B holders. But my use was forced, I had no discretion on where I could source talent and it is only accelerating. I’ve lost good employee’s and co-workers because of the constant need to maintain profits and shareholder value, so-called.

    I wish for Trump to turn his Sauronic gaze at the big banks and brokerages and say, you can’t have Dodd-Frank until you bring those jobs back onshore.

    1. RUKidding

      Thank you for your personal stories. I’ve heard numerous similar examples, plus we’ve seen examples like the Disney situation written up in our “nooz.”

      My own personal experience is a bit more anecdotal. I came up through the IT ranks way back when there weren’t degree programs, yet, at colleges and universities for general IT management type of work. Back then, it was all about gaining on the ground personal experience. I managed to cobble together an advanced certificate with courses that provided me with some training in the types of work that I was doing at the time. And I had quite a few years of experience of providing IT work for a variety of work places.

      That said, during the boom days I constantly heard how I should be able to get a job in no time because of my educational training (which was unique back then) and the depth and breadth of my work experience. Well guess what? Not so much. I was just barely over 40. Back then the H1B system wasn’t quite as ramped up as it is now, but it was already happening. And the various companies out there wanted ever more younger workers, who, they alleged, had all this fantastic experience and expertise that us OLD people simply couldn’t comprehend.

      Needless to say it was only about money. I don’t have links anymore, but I read a number of articles (back then mainly in print) about workers, like me, who were over the advanced age of 40 who had great experience, expertise and educational backgrounds but could get work.

      Even during those days, people like Bill Gates, were whining to Congress about how there simply weren’t enough “qualified” US workers, and they desparately needed the H1B visas for what was and still cheap slave labor from third world countries, mainly India.

      I have many friends from India, and I know well that these jobs have been life saving for them and their families. That said, we’ve simply reached a point where – as our allegedly conservative citizens at least say – we need to serve the needs of US citizens first.

      There’s plenty of qualified STEM grads these days. The only reason for H1b visas is to keep US citizens out of jobs in order to downgrade the pay and benefits. Meanwhile the fat cats at the top are raking in million$.

        1. paul

          Which is why 61% of facebook users are 30+ (uk figures), though I suppose over the hill dimwits are more attractive to marketers

  7. The Beeman

    I am a US citizen. I took an engineering degree in CS/EE from a top notch engineering school graduating in 1982. I turned 56 last November and I work with Enterprise Data Management tools and our clients are buy side asset managers – Hedge funds, pension plans, insurance companies, money managers etc….

    I see no reason at all to bring in foreign workers. There is nothing we Americans cannot do.

    You have to be bright and motivated to be in this field (of course) but there is no talent shortage.

    1. lyle

      There might be a talent shortage at the price the companies want to pay, but since they clearly don’t believe in the market they are not following the market signal to raise wages which would attract more us folks. Once in the past when there was a hearing I was disappointed no member of congress asked the obvious question when shortage was discussed why not raise wages. It is because corporate leaders don;t like it when the market says your costs will go up for labor.

      1. Vatch

        they clearly don’t believe in the market they are not following the market signal to raise wages

        +++1729 !

          1. Vatch

            It’s Ramanujan’s number. After i posted my brief comment, I realized there was some irony in posting a number that is named after someone from India in this particular thread, but he was genuine genius, unlike most of the ordinary people who get special visas.


            It’s the smallest number that can be represented as the sum of two cubes in two different ways. 1729 = 1^3 + 12^3 = 9^3 + 10^3.

            The number has appeared in several episodes of the cartoon show Futurama:


      2. Procopius

        This is what we see everywhere, isn’t it? Six or seven years ago the inflation hawks at the Fed were already putting anecdotes into the meeting minutes about “business friends” of theirs who simply could not find qualified workers, so the labor market was really, really tight and we must start raising interest rates to prevent “wage inflation.” Whenever an enterprising reporter tracked down a “businessman” who had such a complaint it turned out he refused to hire anybody who had ever belonged to a union, refused to hire anybody who asked for a higher wage than he was offering (insubordinate socialist), and wanted a skilled master craftsman with thirty-five years experience who was under 30 and would work for minimum wage with no benefits. I think this is one of the reasons people voted for Trump.

    2. JohnnySacks

      The real contract IT money is in the difference between the negotiated hourly rate and the hourly rate paid to the employee. The typical scenario I’ve lived through is a tech contracting firm will negotiate hourly rates for it’s contractors at different levels of expertise. At the forefront of getting the client’s door open, a few star employees, the rainmakers, will enter and present as the admins, team leaders, etc. Followed by the H1-B’s in the trenches being paid a lot less than the negotiated rate, and as contractors, very limited benefits. A small firm who can’t do the paperwork to get H1-Bs for themselves can grab them from contracting companies who can pool them in large numbers and farm them out at lower margins.

  8. reslez

    Trump is going to destroy himself with this garbage, following neoliberal Republican ideas when he was voted in to tear it all down. Like Obama, who was elected to enact what were understood to be orthodox Democrat ideas but when push came to shove enacted failed Republican ones instead.

    What is so damn attractive about selling out to donors who didn’t support you and gave nothing to your campaign? Does Trump just have zero ideas and zero idea people within earshot? He doesn’t have a helluva lot of time to figure this out before 2020. So Trump was just a con man? Well, fine, that’s not a surprise, but talk about a wasted opportunity. Issue a press release about H1-Bs while handing out even worse L1s. He’s morphing into a degenerated GWB before our eyes like a Shrinky Dink in the oven.

    If you can’t get change from the left and can’t get change from the right, even from crazy people on the right, what does that leave? Some not very attractive options.

    1. RUKidding

      IMO, that’s why Trump runs around like a maniac (and on Twitter) with a constant stream of abuse about how all the resistance to the worst of what he’s doing is UnAmerican or whatever other pandering he does. He’s reaching out to his base to make it seem like he’s leading some heroic charge to make good on all of his promises made during his campaign. Unfortunately, most of his base are not well informed, so they clap and cheer and believe he’s doing “good stuff for them.”

      I doubt that most of his base will ever really get it that Trump is doing next to nothing that will truly inure to their own personal benefit.

      Yes, Trump is a con-man. Some of us who didn’t vote for him hoped that he would be able to do some good for the country, but right now I’m mighty skeptical. Hope I’m wrong.

    2. jrs

      Imagine could get good policy (and not necessarily from Trump but bear with me). H1Bs are not enough *maybe* because they get L1-Bs, BUT IF NOT THAT, because they can always resort to 100 other schemes to make things worse for workers – like hiring contract work instead of full time employees (60% of the want ads in I.T. seem to be for contract work already, it’s not like H1Bs are the only problem, although they likely don’t help).

      It’s like imagine we could stop illegal immigration? Ok but we still have prison labor in the U.S. etc. etc..

      None of this is ever going to be solved without a comprehensive LABOR PROGRAM explicitly designed to improve conditions for those who work for a living. But of course none of our politicians are likely to offer us one.

  9. Skip Intro

    This may be a good place to post this related story of tech. sector greed:

    The Artists Win! Disney, Pixar, and Lucasfilm To Pay $100 Million in Wage-Theft Lawsuit

    Those involved in the scheme included some of the biggest names in the tech and entertainment industries, including computer animation pioneer and Disney and Pixar president Ed Catmull, Apple legend Steve Jobs, DreamWorks Animation founder Jeffrey Katzenberg, and Star Wars creator George Lucas.

    The settlement amount is tacit recognition that the artists might otherwise have been able to earn many more millions of dollars for their talents and skills.

    The suit originally grew out of a U.S. Justice Department investigation into similar illegal business practices in the high tech industry, involving such behemoths as Google, Apple, Intel, and Adobe. That suit resulted in a settlement of $415 million. It was the deposition Ed Catmull during that case, as well as the revelation of certain e-mails that alerted plaintiffs Robert Nitsch, David Wentworth, and Georgia Cano that they, too, may have been the victim of corporate malfeasance.

    1. Howard Beale IV

      There was a joke running around when I was at Sears decades ago, where some snarky person commented about outsourcing executive management to India….Now with Fast Eddie strip-mining Sears Holdings and running it into the ground, there’s no need to…..

  10. John Wright

    One other factor with importing a lot of temporary workers is the resulting knowledge transfer might be of knowledge the hosting company wants to keep private for its own use.

    This knowledge might be trade secrets or algorithms that will have a shorter lifetime of profit harvesting as the corporations’ proprietary information is widely dispersed around the world and used by their competitors.

    A loyal workforce can preserve this information.

    A highly transient workforce can function as an effective way to “train your competition.”

  11. flora

    “The reality is quite different. H-1B visas overwhelmingly fill lower-level jobs that would normally serve as yeoman positions for young computer sciences graduates. The US is thus throwing away what it touts as a strategic asset by failing to train its next generation of computer professionals.”

    Yes. This also ties in indirectly with the increasing money-backed push in higher-ed to focus on STEM educations – to the detriment of funding for the Humanities and the Arts. So, push a larger proportion than the historical average of college undergrads/grads into STEM fields on the theory that that is where the well paid jobs are. So far, so good. But, at the same time, replace as many US citizens as possible, who are holding those well paid US jobs, with H1-B foreign talent, eliminating jobs for US citizens and suppressing wages in these jobs. Now a US college grad can graduate with a mountain of student debt, have a degree in a STEM field, and either have difficulty finding work that pays well, or can find work for a while and then be laid off in favor of a cheaper H1-B visa holder. Not so good for the US grad. Considering student debt can’t be discharged in bankrupcy, it’s actually very bad.

    Thanks for this post.

    1. RUKidding

      Yes. It’s a big problem for STEM grads, many of whom cannot find good paying jobs. And we constantly hear how there’s simply not enough “talent” in the USA, so these highly over-compensated executives simply must hire H1b visa workers. In most, if not all, cases it’s simply not true.

      Another issue is that Silicon Valley and IT work generally is a white/Asian male dominated field. There’s definitely a chauvanistic attitude towards women and other minorities (male or female) who attempt to break into the field. So that’s another side of the coin in this issue. Many IT/tech companies/departments are mainly only interested in hiring caucasian/asian males. Women and other minorities are often given short shrift. But again, we hear how there’s not enough qualified USA STEM grads. It’s baloney.

      1. yamahog

        It’s been my experience that companies leap at the chance to hire women and “under-represented” minorities. And there’s a clear preference for women in tech interviews, esp. when men pretend to be women (coding remotely).

      2. AmyInNH

        Google is the only company I know of that looked at it. On CBS This Morning, 5/2015, they said their interviewers have “inherent bias”, “qualified” STARTS with white or asian, male, and young. Which we call race, age and gender discrimination.

    2. petal

      There’s been a huge increase in applicants to biology PhD programs this year. Huge increase. I am unable to get into grad school because of the new flood of applicants-so no house, no savings, no retirement, no kids, no real future to look forward to. I haven’t yet figured out if the surge is finally the result of pushing STEM STEM STEM, or they can’t find entry level jobs, or are putting off starting to pay off the initial degree debt. There is no lack of American STEM workers. None. There never was. The grad programs are also still importing students, especially from China, at the expense of American kids. Tuition and stipend are covered so they don’t have to pay. I have seen immunology R&D gigs filled by H1B’s, and I saw one of them game the O-1 system with the support of her bosses so she could stay in the US. The folks from the two companies I am aware of didn’t even try to find similarly qualified American workers to fill the spots. It was rigged from the start. Also a lot of foreign post docs being brought in on J1’s. That’s another issue. The whole thing is a farce. It’s hard to choke down the anger and bitterness these days.

        1. petal

          I have been as well, to anyone that will listen. However it is easier for them to not believe it and just go along with what they are spoon-fed. It’s easier to believe and feel good about than pulling back the curtain and seeing the ugly mess that is the truth. “La La La La La I can’t hear you!”

        2. flora

          Yes. From 2014:
          “The real concern should be about the dim employment prospects for our best STEM graduates: The National Institutes of Health, for example, has developed a program to help new biomedical Ph.D.s find alternative careers in the face of “unattractive” job prospects in the field. ”

          Colleges and universities, desperate for tuition monies and per-student state aid, expand graduate programs in fields that are poor employment prospects.

          1. petal

            flora, for biomed PhD programs in the US, traditionally the students receive both a stipend to live on and their tuition is covered by the university/NIH training grant. Also, due to a decrease in NIH funding to investigators, the number of PI’s taking students has dropped, and so the students that are accepted to biomed graduate programs are having more difficulty finding a thesis lab. There are too many students graduating with undergraduate STEM degrees.

          2. AmyInNH

            1) We’ve a labor glut AND we’ve never had a shortage of Masters/PhDs, foreign students are filling their classrooms and I believe F1 visas are restricted to working on university campus (cheap captive labor, no requirement to pay prevailing wage) – killing adjunct professors – now paid so little they’re on food stamps. F1 onsite labor for research paid little, billed out for big bucks for “university research”, also used as teacher aids.
            2) As OPT visa’d, new grad in training – they are the cheapest of the cheap. No federal employer taxes (like unemployment insurance), no prevailing wage, and in some cases, no income taxes. No citizen labor can compete with employer tax free for hiring immigrant on OPT.

      1. jrs

        I’ve worked at (tech) companies that have posted fake job offers on their webpage on the internet, that is for the whole world to see. Then if you inquire about the job with a hope of switching positions, it turns out it doesn’t exists and you literally get told “that wasn’t a real job posting, no one is even receiving the replies sent through it” (that is they don’t go to anyone’s email). Things that make you go hmm.

  12. oho

    Should be interesting when Tech-Land pivots to defend H1B via lobbying, adverts, astroturfing news via sympathetic journalists and support for pro-H1b organizations.

    Prepare for the union, pro-worker professional Left to be cleaved from the identity politics/open borders professional Left.

  13. Sluggeaux

    It’s no wonder young people stayed away from the polls in droves last November.

    It’s important to emphasize the role of government corruption in visa-slavery. A couple of years ago I was at an event and chatting with the then-Chief of Police of San Jose (principal city of Silicon Valley). He was complaining bitterly that then-President Obama was regularly (3-5 times a year) staying at the Fairmont Hotel in San Jose. He never made a public appearance, but would limo to Los Altos Hills/Portola Valley and other tech titan enclaves to collect checks at dinner parties. All his cops had to come off their under-staffed beats to surround the hotel.

    Obama then would regularly certify the “need” for tens of thousands of H1-B’s for the same tech firms. This has risen to the point that there are nearly 250,000 Indians on H1-B’s in a county of 1.9 million people — about 12 percent of the residents. There, they are creating gross distortions in infrastructure utilization, housing costs, and health care costs.

    Obama was comprehensively corrupt, but I doubt that Trump, chanting the “productivity” mantra of more work for third-world wages, will do any better. Meanwhile, the BLS hints that 50 percent of U.S. STEM grads fail to find work in their fields within three years of graduating. Good luck paying off those loans!

    1. flora

      but, but, see, getting replaced by an H1-B is an “opportunity”, or so says Steve Ballmer.

      “a group whose co-chairs include Disney CEO and President Bob Iger and former Microsoft CEO Steve Ballmer, presented a contrary view. “Immigrants and native-born Americans do not directly compete with each other for jobs in the same way that a lot of people might imagine, and … when foreign-born STEM workers enter the U.S. labor force, it creates an opportunity for native-born Americans to respond by doing other types of work, including managerial occupations, that often, though not always, pay higher wages,” he stated.

      ” an opportunity”. riiight…

      1. jrs

        If they wanted to do other types of work (not everyone wants to manage) for higher wages and such was readily available, then presumably they wouldn’t need to lose their jobs to do it.

      2. aab

        That statement is so twisted and dishonest that I’m actually angrier about it than anything Trump is doing.

        I’m not saying that’s an appropriate response. But the tech oligarchs will be here after Trump is gone (unless we have a real revolution), so their beliefs — and the corporate media’s willingness to promulgate them usually without pushback — seems to me to be far more dangerous than Trump’s executive orders, noxious as some of them are.

        “Only get a STEM degree! Education is only job training, and all good jobs require education! If you train in anything other than STEM, you deserve to starve under a bridge.”

        “The only way to get a good job is to take out student loans that are non-dischargeable, unless you are already in the 10%. Therefore, you must only study STEM, which guarantees you a good job. Forget about learning about critical thinking, textual analysis, the tide of history, how economics works in the real world, etc. You must only study STEM, so you can pay back your non-dischargeable student loans. There is no alternative.”

        “Bringing in non-citizens with severely reduced rights and reduced ability to negotiate for fair wages to do STEM jobs is a wonderful way for American citizens who trained in STEM in order to get a good job which would pay off their non-dischargeable student loans to instead look for some other job, which may or may not pay off their non-dischargeable student loans. Or they can join all the English majors starving under bridges, at which point the English majors get to gloat that they at least got to enjoy their education before starving.”

    2. beth

      And here is this from Wolf Street:

      Why Corporate America Has Conniptions about Trump’s H-1B Visa Reform

      …here’s a stunning forecast by the Bureau of Labor Statistics:
      Employment of computer and information technology occupations is projected to grow 12% from 2014 to 2024, faster than the average for all occupations. These occupations are expected to add about 488,500 new jobs, from about 3.9 million jobs to about 4.4 million jobs from 2014 to 2024, in part due to a greater emphasis on cloud computing, the collection and storage of big data, more everyday items becoming connected to the Internet in what is commonly referred to as the “Internet of things,” and the continued demand for mobile computing.
      That’s exciting news. So 488,500 IT jobs are to be created over ten years, so about 44,850 a year on average, which means more jobs in good years and net job reductions in bad years. But over the same decade, 850,000 H-1B visa holders would come to the US to fill these 488,500 IT jobs…. You get the idea many of them are going to be filled by the 85,000 foreign workers brought in every year with H-1B visas.

      Slightly different numbers, same trend: Goldman Sachs estimated in a report cited by the New York Times that 900,000 to 1,000,000 H-1B visa holders are now working in the US, accounting for 13% of US tech jobs, based on Goldman’s numbers; or up to 25%, based on the estimates of IT jobs by the BLS.

      1. Lambert Strether

        That’s a great link. Yikes. The powers that be have this all gamed out, don’t they? No wonder Silicon Valley hired all those nice lawyers to stand on principle for them.

        On another topic, the link goes inside the strong a la:

        <a href=”….”> …

        I fixed it.

      2. Pavel

        I read the Wolf Street piece the other day and as always (as with NC) the comments are often as fascinating as the post.

        One of the commentators merely wrote “an oldie but goodie” and linked to a Youtube video from 2007. It is a short piece from immigration lawyers detailing how they get around the requirement to “hire Americans first if they are qualified”.

        PERM Fake Job Ads defraud Americans to secure green cards for H1B workers

        From the description:

        Immigration attorneys from Cohen & Grigsby explains how they assist employers in running classified ads with the goal of NOT finding any qualified applicants, and the steps they go through to disqualify even the most qualified Americans in order to secure green cards for H-1b workers. See what Bush and Congress really mean by a “shortage of skilled U.S. workers.” Microsoft, Oracle, Hewlett-Packard, and thousands of other companies are running fake ads in Sunday newspapers across the country each week.

        4:50 minutes. Pretty shocking stuff.

      3. AmyInNH

        The federal databases for visa certification are online. I downloaded them. Over 800,000 H1B/EB visas certified for 2015 alone, and Obama gave spouses permission to work in the past year also, so I don’t think the number here on H1Bs for all years (they’re good for 3 years, before renewal needed) is what Goldman Sachs says.
        As for the 85,000, that doesn’t include exemptions from the 85K cap.

  14. LarryB

    There’s a couple of other malevolent effects of H1B’s. One, it discourages Americans from studying in technical fields, who wants to graduate from school, likely with a lot of debt, and then have to compete against third-worlders for a job? Better to study something that’s harder to outsource or for immigrants to fill. Of course, employers then point to declining rates of graduates to justify more immigrants.

    The other thing, and one that affects me the most, is that it provides the manpower for employers to impose all kinds of bullshit job duties that really have nothing to do with productivity or the requirements of the job, but provide justification for management jobs. Just about any (capital M) Methodology or (capital P) Process falls under this category. After all, you need to hire people to manage the process, and then software to track it, and then more people to manage the software. Empire builders could hardly ask for me.

  15. L

    If H1Bs are removed but L1’s are kept in place the front line for pain would be American Universities. Many of the MSc’s are students are paying to come here with the goal of becoming an H1b. But if the only path is to actually be hired in a foreign country then they would see no reason to come here. And if companies simply let the L1 flow as you say they may then you would see a substantial loss at the university level as they would lose many of the paying foreign students but they would see no uptick in domestic students because the jobs would not be there.

    That would be fine for the firms but hellish for the economy as a whole.

    Unfortunately given Trump’s effusive sucking up to Jamie Dimon and his eagerness to rollback fiduciary responsibility (first one to go in fact). It is not clear that he sees the difference.

    1. aab

      Maybe I’m too naive or not yet well-informed on this aspect of the political economy, but it seems to me choking off foreign students that are helping fund the obscene corporatized higher education system is an innate good. Without that money, maybe they’ll have to cut some of their administrative costs and serve American students. I’m not saying it would be automatic, but isn’t blocking wealthy kids from other countries from taking up spaces and facilitating tuition increases a necessary (but not sufficient) condition to grappling with our higher ed problem?

      Why would it be hellish for the economy?

  16. scraping_by

    It’s also a social goal for middle management operators. I remember a phrase about IT workers from a management magazine back in the 80’s, “at the mercy of mere technicians.” Keeping IT departments full of powerless foreigners makes the accountants in middle management more secure, at least in their minds.

    Most middle management functions in decision support and process maintenance can be automated or pushed down to front line workers. There should be a healthy stable of future decision level workers, but the same logic that throws off wage roll, clerical, and IT could apply to them and they’re not without vision, at least in their own cases. So further grinding down productive/necessary functionaries in IT is bound to continue.

  17. ChrisPacific

    The US is thus throwing away what it touts as a strategic asset by failing to train its next generation of computer professionals.

    I agree 100% with this. The problem is finding anyone that (a) cares and (b) is in a position to do anything about it. Both major parties are neoliberal and so taking a strategic approach in a non-military area is outside their world view. They’d rather just sit back and let the market ‘solve’ the problem. Big companies want skilled and experienced professionals but aren’t picky about where they get them. If they are no longer available in the USA, they’ll just import them. Voters could make a difference in sufficient numbers but they are working against the duopoly and the associated neoliberal propaganda, and are also vulnerable to divide and conquer politics. For example, Midwestern farmers probably won’t be all that interested in voting in support of US IT workers, unless they perceive a common cause.

    Voter education seems like the best approach – a political solution would be possible (Sanders would likely have been receptive to the argument) but needs voters to make it happen. There seems to be some airtime around the concept of a STEM shortage, so it may be worthwhile pointing out that more STEM graduates won’t do any good if companies are systematically shutting down their options for career advancement via abuse of H-1Bs.

    1. AmyInNH

      Two new bills in congress, but not tough enough.
      Grassley’s prohibits having citizens train H1Bs. Defective, H1B dependent based on % of employees – we know that’s not realistic, because 100% H1B engineering , deceptive when remaining staff are retail. Dependent, yes, via %, no. He also moves enforcement of new law from AG to DHS – Obama did some of this, I take it AG is more stringent.
      Loftgren’s, I haven’t read it yet.
      Trump is supposed to release another EO on immigration early next week, but I have no idea what the content is.

    1. AmyInNH

      I believe the 85,000 annual cap is incorrect.
      65K are for bachelors degrees.
      20K are for Masters and Bachelors.
      Unlimited – for research, education, medical, government and existing visa renewals.
      Over 800,000 total for 2015 alone. And I think that year or 2016, Obama gave all spouses permission to work also.

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