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NEWS YOU CAN USE: Don’t Bother Learning to Code: Ruthless outsourcing will be the death of the American Dream. “The Nobel Prize-winning economist Milton Friedman characterized the H-1B visa as a government subsidy program. . . . Socialism for the rich.”

IF SOME PEOPLE HAVE THEIR WAY, YES: Joel Kotkin: Will Race Issues Destroy America?

Kumbaya is not a country

The ugliness of nativist rhetoric has also reinforced the self-righteousness with which the progressive left, and their media allies, address immigration and diversity. Yet like their Trumpian foes they have created their own mythology which skips over reality and ignores basic facts.

This particularly applies to the notion that all immigration is essentially good. Some California secessionists even suggest it’s a good thing to export our native middle class in order to make room for more energetic immigrants.

Many immigration advocates particularly ignore the economic realities of low-skilled immigration. In California nearly three quarters of non-citizen Latinos live in poverty, this in a state determined to welcome more undocumented, often poor, immigrants. Rarely considered is the impact on wages at the lower end of the job spectrum, something that the late Rep. Barbara Jordan, D-Texas, suggested as early as 1997 and has been demonstrated recently in the leftist American Prospect. Many of the progressive policies in the state, notably those exacerbating high energy and housing costs, have made the lives of the immigrant population even worse. A poorly performing school system is not much of a help either.

Lax immigration laws even impact some high end workers. The H-1B visa program essentially replaces American workers with indentured servants, mostly from developing countries. Silicon Valley hires almost half of all these bound workers.

As a great man said, when your heart is full of patriotism, there’s no room for bigotry. But not enough hearts are so filled.

JOEL KOTKIN: Robert Iger For President? To Many Democrats, The Mouse May Look Like A Louse.

Few global companies enjoy as much public good will as the Walt Disney Company. The entertainment giant regularly ranks highly on lists of the most admired or trusted companies, including ones from Forbes and Fortune.

CEO Robert Iger, who reportedly is being encouraged to run for president in 2020, would be able to use the company’s image to his advantage on the campaign trail, according to The New York Times. Of course, Disney representatives say he’s not running; if so, one has to wonder why Iger is hinting at it so often, as reported in such other mainstream publications as the Guardian and The Hollywood Reporter.

Iger’s progressive positions on gun control, immigration and the Paris Accords certainly are in harmony with the Democratic base. But Iger may have a more difficult time explaining away his company’s treatment of his theme park workforce on his watch, and some of the communities where they live. . . .

Workers at its theme parks in Orlando and Anaheim complain of low wages and exploitative management practices that belie the company’s squishy clean image and could pose a threat to any attempt by Iger to campaign as a progressive Democrat.

Out of the 36,000 unionized Disney workers in the Orlando area, 23,000 make less than $12 an hour and only 3,000 make over $15 an hour, according to labor union officials. To afford a one-bedroom apartment in the Orlando area, a worker would need to be paid $15.87 an hour, according to the National Low Income Housing Coalition. Workers complain that management is miserly with raises even for longtime employees.

Earlier this year Disney was forced by the U.S. Labor Department to pay $3.8 million in back wages to over 16,000 employees in Florida because it had deducted a uniform fee that had caused workers’ compensation to fall below the minimum wage, as well as failed to pay them for work performed before and after their shifts. . . .

The logic used to defend Disney may be persuasive to friendly political operatives, business groups and, no doubt, Iger’s own shareholders, to whom the company returned $2.3 billion in dividends last year. Iger, who took in $44 million in compensation last year, will have a tougher time explaining the labor issues to the Bernie Bros.

Last year during a presidential campaign rally in Anaheim, Sen. Sanders lashed out at Iger for pocketing such a massive paycheck while paying poverty wages to so many. He particularly attacked the company for laying off 250 of its Orlando tech employees, replacing them with foreign H-1B visa holders from an Indian outsourcing firm. Some of the cashiered workers were asked to train their replacements before hitting the streets.

Sounds like the perfect Gentry Liberal.

MICHELLE MALKIN WANTS TO KNOW: How Did the Dems’ IT Scandal Suspects Get Here?

My question to the House Democrats was simple: Were the Awans and their family and friends H-1B tech workers — like so many of the 650,000 “temporary” foreign guest workers imported into America under that program over the past quarter-century and predominantly working in IT?

And if they’re not H-1Bs, how exactly did Awan and company get here, when did they get here, and who brought them over here and why?

These are simple questions. Given that these foreign IT workers now under investigation were paid for with our tax dollars, Americans deserve to know their path to the public trough. This is especially true when so many members of Congress in both parties continue to clamor for expanding foreign guest-worker programs like H-1B and refuse to enact freezes on corrupted visa programs exploited by foreign tourists (B visas), students (F-1 visas) and workers (H visas) acting in bad faith.

Moreover, U.S. tech workers have grown increasingly vocal about being forced to train underqualified, shoddily vetted foreign replacements before getting pink-slipped — and increasingly alarmed at their access to sensitive personal, financial and health data.

Hey, they’re only doing the jobs Americans want desperately to do.

BAD NEWS FOR TECH OVERLORDS, GOOD NEWS FOR TECH WORKERS: Computer programmers may no longer be eligible for H-1B visas. “This aligns with the administration’s focus on reserving the temporary visas for very high-skilled (and higher-paid) professionals while encouraging low- and mid-level jobs to go to American workers instead.”

THE IEEE ON H1B VISA SCAMS: “This is the real story of the H-1B visa. It is a tool used by companies to avoid hiring American workers, and avoid paying American wages. For every visa used by Google to hire a talented non-American for $126,000, ten Americans are replaced by outsourcing companies paying their H-1B workers $65,000.”

SILICON VALLEY WON’T LIKE THIS: US will suspend fast processing for H-1B visas. “The most recent data shows that nine out of the top 10 companies receiving the most H-1B visas are now foreign outsourcing firms rather than US tech companies. (The 10th is Microsoft.)”


Changes in social policy do not make everyone better off, and immigration policy is no exception. I am a refugee, having fled Cuba as a child in 1962. Not only do I have great sympathy for the immigrant’s desire to build a better life, I am also living proof that immigration policy can benefit some people enormously.

But I am also an economist, and am very much aware of the many trade-offs involved. Inevitably, immigration does not improve everyone’s well-being. There are winners and losers, and we will need to choose among difficult options. The improved lives of the immigrants come at a price. How much of a price are the American people willing to pay, and exactly who will pay it?

This tension permeates the debate over immigration’s effect on the labor market. Those who want more immigration claim that immigrants do jobs that native-born Americans do not want to do. But we all know that the price of gas goes down when the supply of oil goes up. The laws of supply and demand do not evaporate when we talk about the price of labor rather than the price of gas. By now, the well-documented abuses of the H-1B program, such as the Disney workers who had to train their foreign-born replacements, should have obliterated the notion that immigration does not harm competing native workers.

Over the past 30 years, a large fraction of immigrants, nearly a third, were high school dropouts, so the incumbent low-skill work force formed the core group of Americans who paid the price for the influx of millions of workers. Their wages fell as much as 6 percent. Those low-skill Americans included many native-born blacks and Hispanics, as well as earlier waves of immigrants.

Expect Trump to stress that. A friend posted this story on Facebook and lamented that since Trump, the immigration debate has turned into one giant virtue-signal. But I think the virtue-signaling brought us Trump, not the other way around.

HUFFINGTON POST: Trump Is Right: Silicon Valley Is Using H-1B Visas To Pay Low Wages To Immigrants.

Wait, first strange new Trump-respect in the Guardian, and now the HuffPo? What gives?

UPDATE: From the comments:

The Guardian and the HuffPo are frantically waiving their arms at their rabid anti-Trump readership telling them to stop opposing him in Pavlovian fashion every time he opens his mouth or posts a tweet, because Trump’s about to push for something that Bernie Sanders vocally supported during last year’s Democratic primary.

Having the foaming-at-the-mouth coalition of angry progs joining the Wall Street Journal’s editorial board in attacking Trump over trying to limit H-1B visa will be hilarious to watch, and would show that for a large number of Trump’s most irate opponents, they don’t really care anything about what he’s proposing, only that they oppose whatever he’s proposing. The calmer progs are trying to stop that scenario from playing out, but they’re going up against their own base that’s already been protesting outside Chuck Schumer’s house with F-bomb signs threatening his political position if he cooperates with Trump in any way.

Yeah, pretty much.

THE JOKE WILL BE ON THEM WHEN STUDENTS START SIGNING UP FOR ONLINE COURSES BASED IN INDIA: The University of California is laying off a group of IT workers at its San Francisco campus as part of a plan to move work offshore. “The layoffs will happen at the end of February, but before the final day arrives the IT employees expect to train foreign replacements from India-based IT services firm HCL. The firm is working under a university contract valued at $50 million over five years.”

Plus: “UCSF employees say the training of the HCL staff has not begun, so they don’t know yet if they will be training visa-holding replacements. But HCL, along with many other offshore firms, is considered H-1B dependent under law, meaning 15% or more of their U.S. workers are here on an H-1B visa. HCL and Cognizant were sued earlier this year by laid-off Disney IT employees, who allege the law was broken when they were replaced by visa workers.”

It’s just the beginning.


The H-1B is a bad deal all around. American workers get laid off, while the immigrants who take their jobs are bound to their employers in unique and unhealthy ways: if they quit, under the terms of the visa they have to return to their home countries. In practice, this means they put up with lower wages and worse treatment—as we have written, indenturement for the 21st Century. The country is thereby deprived of the dynamism and creativity of the newcomers that usually is one of the major benefits of immigration. And eventually, the H-1B-ification of jobs usually paves the way for outsourcing the positions entirely, harming the local community. The only party that benefits is the employer. . . .

These abuses of the H-1B—or really, the negative consequences of its use exactly as intended—have caught the eyes of lawmakers including not just not just immigration hawks like Jeff Sessions (R-Al.), but also Democrats Dick Durbin of Illinois and Richard Blumenthal of Connecticut.

So far, the H-1B has survived, despite a growing cascade of bad press, because to the Democrats it’s an immigration issue (and thus sacrosanct), and to Republicans, it’s a big-business issue (ditto.) If and when the Republicans start to see it primarily as an abuse of the immigration system, and Democrats start to see it as an abuse of workers by big business—then reform or repeal will follow.

The GOP should be making a stink about this, and pledging an end to the “carried interest’ loophole. But it won’t.

FRIEND OF THE WORKING MAN: Clinton Foundation Hires H-1B Guest Workers in Place of American Graduates.

ANOTHER CRONY-CAPITALIST DODGE: John Hinderaker: The Facts On H1-b Visas.

IT’S CERTAINLY TRUE THAT THE IMMIGRATION ISSUE CROSSES PARTY LINES, AND UNITES TRUMP AND SANDERS: Floodgates Open: Top Democrat Professor Says ‘I’ve Never Seen any Politician’ with Better Immigration Plan than Trump.

Demonstrating the broad appeal of his in-depth immigration plan released Sunday, Trump’s proposal has won the accolades of one of the nation’s leading experts on the H-1B visas program. The H-1B is a visa designed to provided corporations with cheaper and less experienced guest workers to fill technology jobs.

Norm Matloff, a professor at UC Davis, has written extensively about H-1B visa abuses, and his work is widely cited in the H-1B reform community.

Matloff, a self-described Democrat and “longtime admirer of Sen. Bernie Sanders (I-VT),” gave Donald Trump’s H-1B policy “an A+” and was pleased that the Republican frontrunner was willing to take aim at the Republican establishment’s preferred candidate, Sen. Marco Rubio (R-FL). Rubio is pushing a plan to triple H-1B visas so that corporations can more easily import substitute guest workers.

Other politicians take note.

HENCE, THE RISE OF TRUMP AND SANDERS: Qualcomm Lays Off 4,500 Workers While Demanding More H-1bs.

BYRON YORK: Silenced workers who lost jobs to H-1B visa abuse (quietly) speak out.

The Senate Judiciary Committee recently held a hearing into abuses of the H-1B skilled guest worker visa program. Lawmakers heard experts describe how the use of foreign workers has come to dominate the IT industry, with many tech giants using the program to fire well-paid current workers and replace them with workers from abroad at significantly lower pay.

“The current system to bring in high-skill guest workers … has become primarily a process for supplying lower-cost labor to the IT industry,” two experts who testified at the hearing, Howard University’s Ron Hira and Rutgers’ Hal Salzman, wrote recently. “Although a small number of workers and students are brought in as the ‘best and brightest,’ most high-skill guest workers are here to fill ordinary tech jobs at lower wages.” . . .

It’s certainly true that other workers in other industries have lost jobs because companies wanted to cut costs. Highly-paid middle-aged workers have been replaced by younger employees working for less. That can be an unhappy fact of life in today’s economy. But in the case of H-1Bs, the federal government is expressly giving a special permit to foreign workers — actually, to large outsourcing firms that use H-1Bs to bring those workers to the U.S. — in order to displace American workers. And now many lawmakers in both parties — their task made simpler by the enforced silence of fired and angry workers — want even more H-1Bs. Is that something the government should do?

If borders don’t mean anything anymore, then I will pay Cayman Islands income taxes.

BYRON YORK: As tech giant calls for more foreign workers, Senate hears of displaced Americans.

The Eric Schmidt pleading for more foreign workers is the same Eric Schmidt who boasts of turning away thousands upon thousands of job seekers who apply for a few prized positions at Google. For example, at an appearance in Cleveland last October to promote his book, How Google Works, Schmidt explained that his company receives at least 1,000 applications for every job opening. “The good news is that we have computers to do the initial vetting,” Schmidt explained, according to an account in the Cleveland Plain Dealer.

Other tech leaders join Schmidt in calling for more foreign workers. Some companies are actually lobbying for more H-1Bs and laying off American staff at the same time. For example, last year Microsoft announced the layoff of 18,000 people at the very moment it was pushing Congress for more guest worker visas.

Given all that, there’s not quite the unanimous agreement on the need for more foreign workers that Schmidt claims. At a hearing this week before the Senate Judiciary Committee, a number of experts testified that the H-1B program, so sought-after by CEOs, is being abused to harm American workers.

Ron Hira, a Howard University professor and author of the book Outsourcing America, told the story of Southern California Edison, which recently got rid of 500 IT employees and replaced them with a smaller force of lower-paid workers brought in from overseas through the H-1B program. The original employees were making an average of about $110,000 a year, Hira testified; the replacements were brought to Southern California Edison by outsourcing firms that pay an average of between $65,000 and $75,000.

“To add insult to injury,” Hira said, “SCE forced its American workers to train their H-1B replacements as a condition of receiving their severance packages.”

There’s a big campaign issue here, if the GOP can bring itself to say something bad about big corporations.

NEW FRONTIERS IN H1-B VISAS: Edison’s plans to cut jobs, hire foreign workers is assailed.

Southern California Edison’s plans to lay off hundreds of employees and hire foreign workers instead is coming under attack from lawmakers in Congress and local unions.

On Tuesday, more than 300 members of the International Brotherhood of Electrical Workers rallied in Irvine in support of their fellow Edison employees and protested what they say are unfair labor practices.

Meanwhile, members of Congress are upset about reports that Edison is laying off workers in favor of bringing in cheaper labor from overseas under the controversial H-1B visa program. The visas are intended to bring in skilled and educated foreign workers.

Limiting H1B visas would make a good issue for the GOP, and split the Dems.

VIA JOHN DVORAK ON TWITTER: Court case offers a peek at how H-1B-fueled discrimination works: One-third of Infosys worksites have 100% Asian workers, lawsuit alleges. “The lawsuit contends Bolten was harassed because she was not Indian and excluded from work conversations by supervisors who spoke Hindi. People with less experience were promoted over her, and she eventually quit.”

BYRON YORK: Democrats squawk as cracks form in immigration coalition. “For a long time, opponents of comprehensive immigration reform have thought: Why shouldn’t the Republican-controlled House pass an H-1B expansion as a stand-alone bill? If the tech people got what they wanted, would they — and their millions of dollars — really stick around to fight hard for the rest of comprehensive reform? Passing an H-1B bill would be an excellent way to split the fragile pro-reform coalition. Now, it looks as if that could be happening.”

THE HILL: Senate Judiciary Committee advances immigration reform bill. “The Senate Judiciary Committee voted with a strong bipartisan majority Tuesday evening to advance comprehensive immigration legislation that would put 11 million illegal immigrants on a path to citizenship. The legislation also lifts caps on high-skilled workers and creates a new visa program for low-skilled workers.”

Related: Leahy withdraws LGBT measure from Senate immigration bill. Sorry, gays. Obama prefers Latinos to you. But thanks for all the contributions!

Also: Unions rip Schumer’s deal on H-1B visas. “The deal was a coup for the tech industry, which had been lobbying aggressively behind the scenes to build support for Hatch’s proposals on H-1B visas. It was also a step forward for members of the Gang of Eight, who see Hatch’s support as key to securing votes from other on-the-fence Republican senators. . . . But the effort has angered the nation’s largest labor federation, which was deeply involved in the negotiations over the original bill and is a key supporter. AFL-CIO President Richard Trumka issued a blistering statement on Hatch’s amendments Tuesday afternoon, calling them ‘unambiguous attacks on American workers,’ as the federation vowed to fight them on the Senate floor.”


HOW MUCH is a spare bedroom worth?

MY TECHCENTRALSTATION COLUMN on outsourcing in the Information Technology area is getting a lot of feedback. There’s an interesting debate going on in the comments. There’s also this email:

A certain large laser printer company started outsourcing to India not because of costs, but because, when they started this project, it was IMPOSSIBLE to hire engineers here. Intel was leasing cars for college hires as an incentive to get them to come to work; trying to hire anyone in a place where you can buy houses for $100,000 was nearly impossible.

The savings from outsourcing turn out to be smaller than you might expect considering wage rates in India). The net effect will probably not be dramatic losses of jobs, but reducing upward pressure on salaries of engineers.

I have great sympathy for the engineers out of work, but this was mostly the collapse of the 1990s bubble, and foreign outsourcing is probably not a significant part of it. It does mean that some of these jobs may not come back after the economy recovers, and when they do come back, the wages won’t be quite so spectacular for recent college grads.

At least my employer is still doing H1B visas–because they claim that they can’t find people willing to work for $65-75K–and they probably can’t. Lots of engineers won’t leave California to work in Idaho. The H1B visas need to stop, however, to encourage employers to raise pay scales enough to get people to move.

I don’t know much about the H1B program, but I keep hearing that it’s being abused. Reader Yann A. Le Gouellec says it’s not true:

Re: your TCS column about immigration and outsourcing … While I agree with you about outsourcing, I would like, however, to debunk the fallacy (as reported by the Boston Globe) about H1-B holders taking jobs from “good americans”.

Having been one H1-B holder (now with a green card) and having recently hired one, I can tell you that the minimum requirements include: high degree (usually Ph.D.), publications, and agreement from the Labor Commission that this job could not be filled by a US Citizen, and salary in the level prescribed by the State. So enough with whinings that US citizen can’t compete …

Jayakrishnan Nair, meanwhile, notes that it’s not just tech jobs, but cartoons that are moving to India. And reader Daryl Biberdorf sends this:

Speaking as as a worker in the technical trenches, though, the REAL impact of the continued flood of H1B/L-1 visa workers coupled with the mass exodus of information technology (IT) jobs to India and other places, is that I expect a strong trend to unionization in these fields within the next five years. Every day, the American IT worker sees entire organizations moved to India, thousands of jobs at a time. The logical arguments lose their attraction when you’re the guy wondering how the mortgage is going to get paid. The unionizers are going to appeal to this. Then, the question is, how does the AFL-CIO vote?

Yes, I suppose it’s possible that the AFL-CIO will (on issues outside its core) move right in response to a different crop of union members.

UPDATE: Many, many readers wrote to say that Le Gouellec is overstating the requirements for an H1B visa. and they appear to be right — as reader Kevin McKinley notes, this site says a 4-year degree is all that is required, and missing years of college can be replaced by work experience. One reader wrote:

Your reader Yann A. Le Gouellec is, I think, incorrect.

My last experience dealing with the H-1B visa bureaucracy was 1986, when I hired a software engineer from South Africa. I tried, very hard, to find an American, but several weeks of advertising gave us about 40 nominally qualified applicants–of whom more than half were fresh graduates, who needed H-1B visas to start work. This guy was the only of the 40 applicants who actually had work experience, along with two bachelor’s degrees (electrical engineering and computer sciences). No publication history, and only about three years of work experience.

The Dept. of Labor made it a laborious process, and seemed to be making a serious effort to make sure that we hired an American if at all possible–but it was longer on process than intelligence, and I suspect it would have been possible to work around their process, if we had been so inclined.

The current situation is quite different. On the bulletin board here at work are three H-1B visa applications, one for a software engineer (salary described as $55,000 to $65,000, so apparently someone with 2-3 years experience and a CS degree), and two for electrical engineers, one at $80,000 a year, and another at $100,000 a year, so these are probably people with at least five and ten years experience, respecitvely. (These are good salaries, in southwestern Idaho.) None of these positions should be hard to fill, since so many engineers in this field are out of work.

Reader Davis King writes:

The big abuse behind H1B’s and L-1’s, though, is not whether they take away “American” jobs, but that people who are brought here on H1B’s and 1L’s face legal restrictions on their ability to switch employers. If they could compete in the job market on equal terms, their wages would quickly rise to match the wages of US citizens, and any economic incentive to replace existing workers with new visa holders would disappear.

In other words, this is one of those cases where the press blames free-market competition, greedy corporations, and globalization, while the real culprit is a government regulation that restricts labor market competition. A simple, libertarian solution — granting every H1B holder a green card and the right to compete freely for any job he/she chooses — would be much more effective than a union-led effort to cut visa numbers and expel immigrant engineers from
the country.

I will never understand why the people who created the H1B program thought it was a good idea for us to single out the highest-educated, most tech-savvy, hardest-working immigrants for a “temporary” worker program that can force them to leave the United States if they lose their jobs.


ONE FINAL UPDATE, to this too-long post: Reader Scott Wood sends this:

I have worked in the IT department of a very large manufacturing company for most of the last 7 years, and I can’t remember a single (technical) meeting in which American’s weren’t greatly outnumbered by Indians, Mexicans and Filipinos. (In other departments China is the country du jour.) And everyone in my department (I am a short term interloper, so the skin in the game is a little different for me) is due to be replaced by an Indian contingent by September. So here are my somewhat knowledgeable but not at all unbiased observations:

1) I’m skeptical about it being cheaper. Our experience is that for all the talk about their vaunted education, the Indian replacements are, by and large, just not very qualified. Managers who say otherwise are, well, managers, and probably have bonuses linked to short term budgetary savings, and want to curry favor which higher level managers. However.

2) They are probably not very qualified as much for lack of experience as anything else. I wonder if the outsourcing firms aren’t going to create a bad reputation for themselves by growing more quickly then they can handle. This is complicated by sheer distance and the nature of the outsourcing contract itself making seriously judging individual qualifications before hiring pretty much impossible. Lots of people have paper qualifications that were probably acquired through book cramming. Finally,

3) Here, anyway, the daily work environment is so poisoned that coming to work is drudgery for me for pretty much the first time in my life. This is exceptionally ironic since I am working with pretty much my entire corps of best friends that I have made since moving to this area. I can’t help but assume that the large contingent of on-site Indians, including some personal friends, feel the hostility. I’ve never experienced anything like it, and hope, after I leave in September, never to experience it again.


ps-For the record, I agree with your correspondent who criticizes the H1B program for making the most qualified people leave the country. After years of arguing that the political clout of auto and textile workers shouldn’t be able to everyone else poorer, I can’t very easily carve out an exception for myself. It’s hard to maintain that position in the face of my (local) friends who have always been much more protectionist, trade-unionist types.

Well, I don’t know where I come down on this exactly — I’m generally pro-immigration and pro-free trade, but H1B isn’t exactly either, though outsourcing more or less is — but it seems that this is a hot-button issue that’s likely to generate some heat unless the economy recovers sufficiently to take the pressure off here.

Interestingly, another (Indian) reader emailed that Indian companies are starting to outsource low-cost work to China. Sooner or later, I suppose, they’ll run out of low-cost places. . . .