Norm Matloff's H-1B Web Page: cheap labor, age discrimation, offshoring

Professor Norm Matloff's H-1B Web Page

Contents:

The H-1B work visa is fundamentally about cheap, de facto indentured labor.

The tech industry lobbyists portray H-1B as a remedy for labor shortages and as a means of hiring "the best and the brightest" from around the world. Though I strongly support that latter goal, the lobbyists' "best and brightest" claims are not valid.

The vast majority of H-1Bs, including those hired from U.S. universities, are ordinary people doing ordinary work, not the best and the brightest. On the contrary, the average quality of the H-1Bs is LOWER than that of the Americans.

Furthermore, vast majority of H-1Bs, again including those hired from U.S. universities, are not doing work for which qualifed Americans are unavailable.

Instead of being about talent, H-1B is about cheap, immobile labor:

Employers accrue Type I wage savings by paying H-1Bs less than comparable Americans (U.S. citizens and permanent residents).

wage savings by paying H-1Bs less than comparable Americans (U.S. citizens and permanent residents). Employers accrue Type II wage savings by hiring younger, thus cheaper, H-1Bs in lieu of older, thus more expensive (age 35+) Americans.

wage savings by hiring younger, thus cheaper, H-1Bs in lieu of older, thus more expensive (age 35+) Americans. Both types of wage savings are fully LEGAL, due to loopholes in the law and regulations. The problem is NOT one of lack of enforcement.

For many tech employers, having immobile workers is even more important than having cheap labor. If an engineer leaves an employer in the midst of an urgent project, this can be a major problem for the employer. The H-1B and green card programs give the employer heavy leverage to force workers to stay.

Abuse of H-1B extends across the industry, including the large U.S. mainstream firms., facilitated by the nation's top immigration law firms. It does NOT occur primarily in the Indian "body shops," and it DOES occur in the hiring of international students from U.S. university campuses.

The underpayment of H-1Bs is well-established fact, not rumor, anecdote or ideology. It has been confirmed by two congressionally-commissioned reports, and a number of academic studies, in both statistical and qualitative analyses.

Even former software industry entrepreneur CEO Vivek Wadhwa, now a defender of foreign worker programs who is quoted often in the press and who has testified to Congress in favor of expansion of the programs, has confessed,

I know from my experience as a tech CEO that H-1Bs are cheaper than domestic hires. Technically, these workers are supposed to be paid a "prevailing wage," but this mechanism is riddled with loopholes.

Wadhwa has also stated

I was one of the first [CEOs] to use H-1B visas to bring workers to the U.S.A. Why did I do that? Because it was cheaper.

Even Rep. Zoe Lofgren, the most strident advocate of the H-1B program Congress has ever had, now realizes that H-1B is used for cheap labor, in full compliance with the law. She concedes that the program is undercutting American workers:

U.S. Rep. Zoe Lofgren, a Democrat whose Congressional district includes Silicon Valley, framed the wage issue at the hearing, sharing the response to her request for some wage numbers from the U.S. Department of Labor. Lofgren said that the average wage for computer systems analysts in her district is $92,000, but the U.S. government prevailing wage rate for H-1B workers in the same job currently stands at $52,000, or $40,000 less. "Small wonder there's a problem here," said Lofgren. "We can't have people coming in and undercutting the American educated workforce."

(Lofgren's 2011 reform bill, however, would not have fixed the situation, and would add an equally-harmful automatic green card program. In addition, Lofgren's bill implicitly singles out the Indian IT services as the main offender, disgraceful and absolutely inaccurate scapegoating.)