‘US Govt. needs to define what jobs H4 visa holders be allowed to do.’
By Deepak Chitnis
WASHINGTON, DC: Dr. Ron Hira is one of the leading immigration experts in the US, and has been championing the crusade against passing the current version of comprehensive immigration reform because, as he believes, it would only augment the growing problem of the H-1B program being used a source of cheap labor for the IT industry.
Born and raised in the US, Hira earned his B.S. in electrical engineering from Carnegie-Mellon University, then came to northern Virginia’s George Mason University, earning his M.S. in electrical engineering and his Ph.D. in Public Policy. He is currently a professor at the Rochester Institute of Technology (RIT), where he teaches in the departments of science, technology and society/public policy.
In 2013, he testified before the Senate Judiciary Committee in an effort to urge them not to increase the H-1B visa cap in the Gang of Eight bill. He is also the co-author of the 2005 book “Outsourcing America: What’s Behind Our National Crisis and How we Can Reclaim American Jobs.” His research interests include: competitiveness and innovation policy; offshoring & globalization; high-skilled immigration; engineering labor markets; offshoring in the printing industry; the role of engineers in public policy.
In an exclusive interview with The American Bazaar, Hira talks about the pitfalls of increasing H-1B quotas without implementing other measures, how the economy and IT industry could be affected by an influx of legal immigration, and what the future of immigration reform and other visa programs could be.
Excerpts from the interview:
You’ve accused the H-1B program of simply being a source for cheap labor to IT companies, but even if immigration reform isn’t enacted, the problem will persist in its current form. What is the best way to solve this issue, in your eyes?
It’s true that there is exploitation and abuse within the H-1B program, and [the immigration reform bill] was actually watered down pretty significantly after the Senate version of it was passed last year, largely because of tech industry lobbying that was led by Sen. Orrin Hatch. But the question is if the bill was passed, would things be better off than they are currently, and I think the answer to that is “no.”
The main reason is because it would be increasing the H-1B cap significantly, and even though it would raise the wage floors a bit, it wouldn’t raise them enough to eliminate the cheap labor problem. It may stamp out a portion of the really egregious abuse, but it does not really reform the H-1B program in a way that eliminates, or largely eliminates, the cheap labor incentive.
Not to mention, by the way, that the bill does nothing to address L-1 visas at all, which are pretty extensively exploited and abused.
I’m all for immigration reform, but it’s important to look at what that really means. I really think that the current version of the bill would make things worse than what we have currently, and what we have currently is already pretty bad for American workers.
And additionally, the version that is currently in the House [of Representatives], which got through the Judiciary Committee, would also be worse than what is already in existence. What’s interesting about that version of the bill is that it actually does more to increase wage floors than the Senate bill does, but it does nothing in terms of recruitment, government oversight, and so on.
If the provisions that levy fees as high as $10,000 for H-1B and L-1 sponsorships are enacted, will that not decrease foreign hiring in favor of domestic workers?
Well, you’ve got to remember that there are plenty of ways to game the system. I don’t have the exact figures in front of me, but it’s something like foreign workers are paid about 25% less than workers hired domestically. So from a cost point-of-view, the fees really aren’t the way to solve the problem because the companies will still save more money hiring a worker from abroad.
Like I said earlier, you may end up eliminating a small portion of foreign hiring that lies on the margin, from some of the very exploitative employers, but not from the mainstream firms. The bigger companies – Cognizant, IBM, Infosys, and all of them – will be able to pay a higher fee because they’ll still end up saving on the salary they end up paying the worker. They’re not going to bat an eye at the fees. But on the plus side, H-1B-dependent firms would have to pay a higher wage, anyway.
I think the elegant solution would be to take what the House did, which is to increase the wage floors to the average wage, and add in some of the Senate provisions, specifically those that deal with the regulatory side of things, in terms of recruitment and oversight, so that they’re not relying entirely on whistleblowers.
What do you say to the argument that instituting reforms and restrictions on H-1B and L-1 visas is simply the government exercising too much control on the private sector, and that these companies should be allowed to hire who they want from wherever they want?
The private sector is always going to complain about that whenever they want to complain about that, but then if you look at the history of regulatory practices, industries always end up wanting that oversight because it helps them in the long run.
I think here, the industry is just crying wolf. Right now, there’s essentially no oversight, there’s no system in place for this, and the government itself has said this. For instance, the Department of Labor can’t even share information with US Citizenship and Immigration Services, so how are they going to exercise any oversight if they can’t even share information?
So it’s kind of a crazy system that’s been designed by the special interest groups, but the industry, and by the American Immigration Lawyers Association, which actually benefits from the higher caps. And there’s really no one on the other side saying “hey, there’s got to be some counter-balance here.”
You’ve proposed oversight measures for the H-1B and L-1 programs, but a lot of these practices are legal; you even say that hiring foreign workers for lower wages is legal. So how would oversight really help?
Well, oversight alone is not enough; it needs to be coupled with increasing the wage floors and instituting some provisions for domestic recruitment. So if wage floors come up the average levels, and there is oversight to ensure that the position a person is being hired for is clearly defined and laid out, that’s a big step forward.
The government sets the wage floor for each profession, based on where these jobs are located and the experience level at each job. If a company wants to hire an entry-level IT worker for a job in northern Virginia, they just look up what the minimum wage for that area and that industry is. But the problem is that these wage floors are so low, and they’ve stayed so low because of lobbying efforts by the industry.
The way it is right now, especially in India, is that companies like Infosys hire these fresh graduates for around $7,000 a year in India. So there’s always going to be pressure for companies here to exploit those wage differentials, which is how two specific ways of fighting that have come about.
One of those methods, which [The Institute of Electrical and Electronics Engineers (IEEE)] has pushed is to give these immigrant workers green cards, so that they have the flexibility to move around and bargain for the wages they deserve. But if you do that too much, you increase immigration significantly, and that will have its own chilling effect on the labor markets because there will be so much supply.
The other way is the guest worker method. These workers come to the US under visas that have been sponsored by their employer, so they don’t have leverage to try and get a higher wage. Back in the 1990s, people would come here and be underpaid a little bit while their employers kind of dragged their feet to get them a green card; but once they got the green card, they would either get significant raises or just leave the company.
Now, with this huge backlog, you have companies would really don’t sponsor anyone for a green cards, especially companies like Cognizant and Infosys, who only sponsor a very few. They’re really just exploiting the guest worker program, so that needs to be changed. I think it’s mendable, but there’s no easy answer.
There is a lot of anger against IT workers from India, with the grouse that they take away jobs, India is where jobs are outsourced. Would increase in visa quotas increase racial hatred in certain communities?
I think if there are increases [in H-1B] without any reform, you certainly risk that. I think what people are really responding to is the unfairness, the inequity, and you have to fix the system that’s unfair. Xerox is big here [in Rochester, New York], and I see American workers who are training their replacements from overseas, but any kind of anger there is not racial, it’s just aimed at the unfairness of the system.
There’s always going to be a portion or some element of that backlash. In fact, in Europe, there are some pretty strong anti-immigration factions over there. So you do have to be wary of that to some extent, but that’s no reason to just drop the idea of looking for a solution.
So if the visa quotas were increased, more IT personnel would come to the US. Would it really lower salaries for everybody in the industry?
That’s a hard one to argue because you don’t have the counter-factuals, you don’t know what would have happened otherwise. Engineers and IT workers run into the same kinds of supply and demand issues that workers in other industries face. What drives big increases in wages is technological disruption, and that happened a lot in the 1990s, especially in IT.
What’s interesting to me, and what nobody else seems to be paying attention to, is that the NASDAQ Index – which pretty much represents the tech industry, the IT industry – is back up over 4,000, which is pretty much where it was at the peak of the dot-com and telecom bubble in March of 2000. I think it was somewhere around 5,000 at its highest point back then.
So these companies are making money hand-over-fist; you have places like Apple, which has somewhere around $100 billion in cash on-hand, and they’re engaged in wage fixing – imagine that. But immigration and guest workers and offshoring has definitely played a role in the average salary question, in terms of bargaining power and so on.
The ire against legal immigration also seems to be because of illegal immigrants, who critics say suck up resources from communities. Are you in favor of granting amnesty to the 11 million illegal immigrants? What do you do with these immigrants who are already here?
You know, I don’t work in that realm, I really only handle the high-skilled immigration side of things. So when it comes to undocumented workers, I don’t like to comment on it – not because I don’t like talking about it, but because I just don’t have much experience with it.
My own moral view is that you’ve just got to regularize, and the best way to do that is to provide a pathway to citizenship. I don’t think having them in a large guest worker program makes much sense, I don’t think that keeping them in the shadows makes any sense, and I think deportation makes zero sense.
That’s just my own personal view, but I do respect the folks who are more hardline and say “these people broke the law in coming here.”
Where do you see the immigration reform bill going this year? Will it pass before the 2014 elections in November?
That kind of political prognostication is really tough, and I’ve already been proven wrong a few times. If you talked to anybody on the Hill back in 2012, before the [Presidential] elections, they would’ve said “no chance in hell” that the Senate would do anything in 2013, but then the bill moved through incredibly fast because of the momentum it had for a variety of reasons.
And then after that, there was expectation that the House would pass it very quickly, but obviously that didn’t end up happening, either. Now, it doesn’t look all that great, and people on the Hill generally seem to be pretty uncertain about where it will go.
The business community has always been pushing, and in the last few weeks, the tech industry and the Chamber of Commerce have made stronger pushes for high-skilled immigration reform separately, as its own thing. So clearly industry folks want it, but how much they want it is still unclear.
And in general, for the American people, immigration is not a huge priority for them. What they tend to care about the most is the economy and the unemployment rate, which are related to immigration reform but are still a higher priority to them. And there’s been cries of Republicans not getting the support they want if immigration reform isn’t passed, but I’m guessing that’s not going to amount to anything.
The Chamber of Commerce has tried to tie immigration reform into the jobs and unemployment realm by basically pitching it as “we need low-skilled immigration reform because they do all the jobs that Americans don’t want to do, and we need high-skilled immigration reform because those are for the jobs that Americans are too stupid to do.” So they’re basically saying that we need to bring in all these brilliant people to do these jobs, and no one is against bringing in brilliant people. But when you start only bringing people with ordinary skills, and you bring them in in large quantities, that’s when it becomes a problem.
The US government recently announced that select H4 holders will be given work authorizations – do you feel that this could be used as yet another cheap labor avenue, or are there legitimate merits to this?
That’s a good question, and frankly, it’s hard to really say at this point because they haven’t come out with what the regulations would be for that. Right now, it’s in the comments phase, where they collect comments about the proposal before formally going through with it.
They need to define who exactly will be getting these work permits, what kinds of jobs they’ll be allowed to do, what kind of age restrictions there may be, and how priority will be given – for example, do you give the work permits out based on what skill set an H4 holder has, or what kind of job they want to pursue, or will they be given out based on who’s been waiting the longest?
There needs to be some discussion and debate on that first; right now, I don’t have a knee-jerk reaction one way or the other.
What should the rule be for students who come here to study on F1 visas, and then are given optional practical training period of one year after they graduate? Do you recommend that they be allowed an opportunity to work in the US or not be allowed to stay on in the US after that period?
Well, they’re not sent home right away already, they’re given the option to find an employer to sponsor them for an H-1B, and that’s what a lot of them do. If they can’t find one, they enter into one of two practical work programs they can enter into.
One of them is OPT – Optional Practical Training – and the other is CPT, which is Curricular Practical Training. So using these, people can get college credit hours for working. And there are certain universities that clearly exploit both of these. Around 2007, the Bush Administration extended the number of months from 12 to 29, so people in these programs can stay here for close to three years. But the problem is that there’s really no regulation of these.
There’s no wage regulation at all. I have heard stories of students that have been offered OPTs, and they thought these were great jobs because they get a ton of experience in these, and the companies pay zero – and that’s within the rules. Sometimes there’s a quid pro quo, in that if they work then they get sponsored for an H-1B down the road. But these programs are full of problems that need to be addressed.
6 Comments
dont understand what this guy is talking…Let him not bring racist stuff in these issues.
We don’t hate them because they are brown. We hate the fake resumes, imaginary skill sets, the preferred vendor arrangements that ensure we never even see the job to apply to (much less have a chance to be interviewed), and how everyone in the upper crust looks the other way and wonders how come Americans are having trouble paying their bills and hanging onto their homes. We hate their overgrown egos, their contempt for us, and their blithering disregard of American labor laws and ethical standards. What’s racial about any of that?
I have worked in the I T Industry for 30 years. In all that time, I have worked extensively with Indian I T workers. Even some claiming to be Public Accountants. Not worked with one yet you could deliver half what he claimed. No idea of Quality, on time delivery or pricing. They continually try to get their relatives hired, look for easy billets and complain about others. Yet our I T Industry hire on price and network. They have a strong lobby, can buy support and our government is now afraid of them because of the voting blocks they have formed. Our grandchildren will curse us for what we have done. The Mexicans and the Europeans are not the immigration threat, they work hard, this Southern Asian movement will swamp us. If these people are so bright, so industrious that we need them, surely their own countries wouldn’t be such beggar communities on the world stage.
I agree with Ron. Hira. BTW, it is not Senator Warren Hatch, it is Sen. Orrin Hatch of Utah. The H-1B visa system has NOTHING to do with the “best and the brightest”… In fat, the people who come on this visa are anything but the best nd brightest and average at best in most cases.
Look around you. The H1B visa program has destroyed the American middle class.
It’s really a simple case of supply and demand.
CONSIDER AN ANALOGY
Consider an analogy. Consider, for example, what would happen if H1B were applied to plumbers instead of engineers.
Pick any city, let’s say, Denver, Colorado. Now, bring in 100 busloads of freshly graduated Indian or Chinese plumbers (4,000 new plumbers), who want to enter into the plumbing business in Denver, and make a living.
The result? Wage rates for plumbers will become depressed. The existing 960 American plumbers in Denver, once busy every day, and making a good living, will now have much less work, or no work at all.
All the Denver high school kids hear from their fathers and uncles that plumbing is no longer a good way to make a living. The plumber wages are going down, down, down. In droves, they choose some other path in life. Who can compete with impoverished hordes of plumbers from India who will work for any price? India has 1.17 BILLION people, and many of them are coming here, flooding our labor markets.
The H1B visa law was created, written and lobbied for by large American corporations as a means for decreasing their engineering labor costs. Indeed their corporate profits have zoomed up, up, up — while the wage rates paid to their American engineers have gone down, down, down.
This is what the H1B visa has done to the American engineering profession. H1B has already brought in millions of foreign engineers to America, thus driving down American wage rates, and discouraging American kids from majoring in engineering.
The best suggestion I’ve heard so far to stem the tide of the H-1Bs is to change the lottery to a sealed-bid auction:
After the initial 5 day acceptance period, grant visas only to the companies paying the highest wages. That way, American companies who really need H-1Bs will be able to get them, while the low-ballers and body shops will be out of luck.
In the next year, raise the low end minimum bid to the first quartile of acceptable bids, and keep raising it each year until the minimum matches or exceeds the median pay for American workers.
After a few years, the current limit on H-1Bs, will be more than enough to fill the need, and we can lower the limit.
The change would be gradual enough for the companies who do not really need foreign talent to ween themselves off the program and back on to American workers.