(25) High-Tech Cheap Labor
Editorial by Norman Matloff 09/12/00
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High-Tech Cheap Labor (09/12/00 -- Norman Matloff in the Washington Post)

          "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."

          According to the Washington Post, Senate and House testimony by Dot.Com and high tech executives pleaded that there was a desperate shortage of qualified American high tech workers.  However, two separate Freedom of Information Act (FOIA) inquiries showed that the provided testimony selectively omitted one crucial point:  high tech firms who use imported non-citizens under H-1B are, in fact, paying their H-1B immigrant workers $10,000 less per year than comparable U.S. college graduates with similar qualifications.

          While there is a law requiring that foreign workers imported under H-1B be paid the "prevailing wage" in the U.S., the law is full of loopholes that allow high tech companies to realize enormous labor savings by hiring foreign non-citizens instead of U.S. citizens for high tech jobs.

          According to the Post, immigration attorney Joel Stewart stated "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.

          "Yet in spite of the fact that [U.S.] 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."  (Based on the Washington Post, 09/12/00, Page A35, by Norman Matloff, professor of computer science at the University of California, Davis).
[Link http://washingtonpost.com/wp-dyn/articles/A52767-2000Sep11.html ]

Additional Reading:
Immigration, Foreign Workers, H-1B

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