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Dr. Norm Matloff On The Bright Future Report
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July 10, 2012, 03:48 PM
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Dr. Norm Matloff writes to his email list:

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

A number of people have mentioned to me Bright Future Jobs` new report. See Hundreds of job listings discriminate against U.S. workers, report says, By Grant Gross, IDG News Service, July 06, 2012

The Report | Bright Future Jobs

It`s an excellent piece of research, very nicely done. I must warn, however, that many people are misinterpreting it, as I will explain shortly.

The BFJ report analyzes ads on Dice.com in the IT area, finding that many of them call for foreign workers to apply. Technically that by itself doesn`t necessarily mean that Americans (U.S. citizens and permanent residents) won`t be hired, but the wording seems to convey that message, and in some cases the message is explicit. At the very least, BFJ notes,

This signals to both foreign nationals and Americans the company will give preference to foreign nationals in the hiring process.

(Please note the phrasing above. It is quite accurate, and I will return to it several times below.)

As the report points out, questionable ads like this have been running for years, and on occasion the Programmers Guild has filed formal complaints with the government. The new wrinkle is that many ads now are directed not only to H-1Bs but also OPTs, i.e. newly graduated foreign students.

In fact, I`ve seen this right in my own professional back yard. In the hallway bulletin board outside my department`s main office, there is a flyer calling for OPTs to apply for software development work. It even features tear-off strips with the phone number to call.

So BFJ is right on point, and it`s done quite a service by quantifying the phenomenon, presented in a cogent, informative report.

However, the misinterpretation that some readers of the report seem to be making is that this abuse of foreign worker programs occurs mainly with the "bodyshops," i.e. the mainly ethnic-Indian owned rent-a-programmer firms. As I`ve noted before, the bodyshops have become convenient scapegoats for those who want to project some criticism of H-1B while still supporting the Intels, Microsofts, etc. on the H-1B issue. As my use of the word "scapegoat" would apply, this is unfair, absolutely inaccurate and disgraceful singling out of a certain group of people.

The fact is that it is not just the bodyshops who, in BFJ`s words, "give preference to foreign nationals in the hiring process." The big mainstream do exactly the same thing, though of course in a more subtle manner. They too "give preference to foreign nationals in the hiring process."

Why would the employers give the foreign workers hiring preference? The obvious answer is to save in labor costs, as is often discussed and has been shown statistically in various ways. But the less obvious, but more important, answer in our context here involves the de facto indentured servitude of the H-1Bs, especially those whom the employer is sponsoring for a green card.

The de facto indentured servitude of the H-1Bs is of tremendous value to many employers, especially in places like Silicon Valley. If a worker leaves his employer is in the middle of a big, urgent project, the employer loses plenty. It takes time to find a replacement, and then even more time for the replacement worker to learn the intricacies of the project. In a project with a pressing deadline, these considerations can be crucial. And of course, one always runs the risk that the former worker then either consciously or unconciously uses the ideas developed in former project in that of a competitor.

So, if you are an employer, you`d love to have a way to FORCE your worker to stay with you. There`s no good way to do that with American workers, but luckily for you, the U.S. government provides you with a excellent method to force a foreign worker to stay loyal: Green card sponsorship.

A foreign worker in the midst of the green card process is essentially trapped. Technically he could leave his current employer, but that would mean starting the green card process all over again, from the beginning, with some other employer. Since that process can take six years or more, jumping ship is unthinkable.

I discussed this problem in detail in my Michigan Journal of Law Reform article.  In it I quote many immigration lawyers who point out that the "trapped" nature of the H-1Bs is a major attraction to employers. Here`s one not in this article,  written by immigration lawyer David Swaim:

...the employee is almost always interested in getting the green card and needs a sponsoring employer to do so. This typically is also an advantage to the employer since in addition to getting a desired skill set, the green card process takes so long that it plays a major role in employee retention.

Swaim and his firm expand on that point in their publication, "An Employer`s Guide to the Immigration Process," [PDF]

Wouldn’t it be nice to recruit and retain talented, dedicated recent graduates who have a vested interest in their continued employment by your company? This is the reality of the employment based immigration system. Many companies have utilized this fact for years to secure a stable and highly motivated work force...

[the disadvantage of OPT is that the] foreign student is allowed to use OPT with any employer without any prior approval. Therefore, this student is free to change employers at will.

...[green card sponsorship] green card process). This forces the recent graduate to commit to a company for at least five years in order to complete the green card process...By far the most important advantage of this process is the fact that the employee is tied to a particular position with one company and must remain with the company in most cases for more than four years...

Note the repeated emphasis on putting handcuffs on the foreign worker.

I must strongly emphasize here that this includes MAJOR, MAINSTREAM American employers. For example, in my Michigan law article I quoted Robert Smith, a former manager at Sun Microsystems (then a high-flying firm and in the vanguard of lobbying Congress for expanding the H-1B program):

 

Sun used to cover costs, as well as the administration, of the conversion of H-1B visa holders to green card holders in exchange for an approximate 4-5 year commitment from the H-1B visa holder...For that period of time, Sun has an employee who will not, and in some cases cannot, jump to another company..

FACEIntel, an organization of former Intel employees, has quoted Intel`s HR manager making similar comments, Ironically, Intel was afraid of losing workers to Sun:

 

Donna Hasbrouck, an Intel HR representative, claims that foreign born Intel employees obtain their green cards and then leave Intel because other companies pay more...

Ms. Hasbrouck recently discussed the topic of hiring foreign born candidates with the staff of the Microprocessor Technology (MT) group in Santa Clara, present were J.C. Cornet (VP of MT) and Joseph Krauskoph (Director of Test). Ms. Hasbrouck told the MT group, "...after hiring the foreign student, delay the immigration paper work process, because once they get their green cards we lose them to companies like Sun Microsystems and Silicon Graphics, they pay them about 30% more." This ploy is nothing short of servitude.

Both of the above incident occurred back in the 1990s, but they are just as common today. The David Swaim comment above is from 2009 (per Web page source code). His bio says,

 

He developed many of the most innovative techniques for H-1 and labor certification cases and created the immigration procedures at dozens of companies such as Texas Instruments, i2 Technologies, Microtune and PDX. He is one of only three attorneys in Texas authorized to represent both the University of Texas System and the Texas A & M System, and represents many other colleges and universities such as Baylor University and Texas Christian University.

So, again, we`re talking about mainstream firms, not bodyshops.

Some of you will recall the Cisco fiasco of 2008, involving David Huber. The job ad said "U.S. citizens and permanent residents only," which sounded legitimate—until Huber found that the mailing address was for the Fragomen immigration law firm, not Cisco! Fragomen was apparently just collecting American applicants in support of Cisco`s sponsoring a foreign worker for a green card, to demonstrate that they had tried but "failed" to find a qualified U.S. applicant. (See the various files beginning with "Fragomen" in this archive. ). Again, this is Cisco, not a bodyshop. Indeed the PERM data show that the Fragomen firm (the largest in the U.S.) has represented IBM, Siebel, National Semiconductor, 3Com, Price Waterhouse, Credit Suisse, Sybase, Texas Instruments and a ton of other famous mainstream companies.

The BFJ report briefly mentions the infamous Cohen & Grigsby immigration law firm videos, in which statemens are made like "Remember, our goal is NOT find an American to fill the job."

As I`ve shown, C&G is a very prominent law firm with many prominent mainstream clients; see here.

So, green card sponsorship enables employers to hire foreign workers and lock them into the job, something the employers can`t do with American workers. In other words, using BFJ`s quite apt phrasing, these employers "will give preference to foreign nationals in the hiring process." In choosing between two comparable workers, one American and one foreign, there is a tremendous incentive for Cisco, Intel etc. to hire the foreigner. It`s not just the Indian bodyshops, folks; it`s basically all firms.

Norm