http://www.washingtonpost.com/wp-dyn/articles/A52767-2000Sep11.html


High-Tech Cheap Labor

Washington Post


By Norman Matloff
Tuesday, September 12, 2000; Page A35

Computer industry CEOs, claiming a desperate labor shortage, are
pressuring Congress to raise the quota for the H-1B work visa, under
which tens of thousands of foreign-national computer professionals are
brought to work in the United States each year. While the industry
denies its motivation is the hiring of cheap foreign labor, the facts
say otherwise.

Last October Susan deFife, CEO of womenConnect.com, testified to the
Senate in support of raising the H-1B quota. She claimed that a
desperate shortage of American applicants had forced her to hire a
newly graduated H-1B. Yet a Freedom of Information Act (FOIA) inquiry
later showed that deFife was paying this person only $35,000 per
year--when the national average for new computer science graduates was
$45,000.

Ecutel CEO John Harrison testified on the House side last year,
claiming a lack of applicants for computer programmer jobs. Yet a FOIA
inquiry later showed that he too was paying many of his H-1Bs only
$35,000.

Several university studies have shown that the H-1Bs tend to earn less
than their U.S. citizen/permanent resident counterparts, with the gap
being 20 percent or worse. The law requiring that H-1Bs be paid
"prevailing wage" is riddled with loopholes.

As immigration attorney Joel Stewart notes, "Employers who favor
aliens have an arsenal of legal means to reject all U.S. workers who
apply." And though some employers do not cheat their H-1Bs relative to
American programmers of the same age and background, they still save
on salaries by hiring H-1Bs, whose median age is 28, instead of hiring
more expensive Americans over age 40.

Thomas J. Engibous and Edward B. Rust Jr. stated in a Sept. 7 op-ed
piece in The Post that the H-1Bs are needed to compensate for
declining university enrollments in electrical engineering. This was
an obfuscation, since the overwhelming majority of high-tech H-1Bs are
computer programmers, not electrical engineers. (H-1B computer science
graduates outnumber those in electrical engineering by 15 to 1.) Yet
in spite of the fact that university computer science enrollment has
doubled in the past few years, fewer than half of the computer science
graduates are being offered programming positions. Employers are
importing H-1Bs at low salaries to do the programming, while shunting
many Americans into lesser jobs such as customer support.

And it is worse for the older programmers. Surveys of high-tech hiring
managers have revealed that only 2 percent of them seek workers having
more than 10 years of experience, and only 13 percent of managers
under 30 had hired anyone over age 40 in the past year. Most of the
older ones leave the field when they cannot find programming jobs.
Industry lobbyists cite low unemployment rates for programmers, but
these ex-programmers do not show up in those statistics.

Contrary to the industry claims of a programmer shortage, employers
freely admit that they are inundated with resumes. These supposedly
"desperate" employers reject the vast majority of their applicants
without even interviewing them. Cisco receives 20,000 applications per
month but hires only 5 percent of the applicants. Inktomi hires only
one percent, Microsoft 2 percent, Qualcomm 5 percent, Red Hat Linux
one percent.

Other than studies funded by the industry and its allies, no study has
confirmed the industry's claim of a labor shortage. The Department of
Commerce, which the industry had railroaded into supporting its claim
of a shortage in 1997, now has recanted, stating there are not
sufficient data to assess the situation.

The Immigrants Support Network, a militant organization of H-1Bs from
India, notes that the most appealing feature of the H-1B program to
employers is that the visa holders are de facto indentured servants.
If an H-1B worker is being sponsored for a green card by the employer,
the worker is trapped during the five years or more that it now takes
to process the green card. Employers can underpay and overwork H-1Bs
at will, without fear of the workers' moving to another firm.

Politicians on Capitol Hill do not want to know any of this, as they
are anxious to curry favor with the industry. A major supporter of
pending legislation that would increase the H-1B quota, Rep. Tom Davis
(R-Va.), has openly said, "This is not a popular bill with the public.
It's popular with the CEOs. . . . This is a very important issue for
the high-tech executives who give the money."

These firms of the New Economy seem to be awfully fond of the Old
Economy--of 200 years ago, when indentured servitude was in vogue.

******


The writer is a professor of computer science at the University of
California, Davis.