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Immigrant tech geeks and U.S. jobs

By Suzy Khimm

Hello, all -- happy to be guest-blogging here again. I’m Suzy Khimm, and I cover national politics for the Washington bureau of Mother Jones. While Ezra's away this week, I’ll be mostly focusing on immigration policy issues, hoping to cut through the Sturm und Drang that has dominated the debate this summer. For shorter takes, I'm also on Twitter.

Without further ado:

The $600 million border security bill that President Obama signed into law this month hasn't drawn much attention amid the din about "anchor babies" who may become "terror babies" radicalized at Islamic centers near Ground Zero. That's partly because both parties have shifted to the right on immigration and embraced -- or at least acquiesced to -- the border-hawk measures in the new law, which include money for border guards, federal agents and surveillance drones. The lack of controversy is also likely due to the fact that the bill is self-funded: It's entirely paid for by a huge hike in visa fees on companies that hire large numbers of foreign workers who've immigrated to the United States.

The fee hike disproportionately affects highly skilled workers from Indian tech companies, which are up in arms about the measure. The law will raise fees for the H1B visa program from $320 per visa application to $2,000 for firms with more than 50 workers who employ more than 50 percent of their employees from overseas -- criteria that are much more likely to apply to foreign tech companies with U.S. outposts than, say, IBM or Apple. Needless to say, Indian officials also aren't too happy with Washington about the new law, alleging that the visa fee hike is discriminatory and could violate World Trade Organization rules.

So why are Indian tech firms being singled out?

There doesn't seem to be a very clear answer, other than the fact that the money needed to come from somewhere and that Sen. Chuck Schumer, a lead sponsor of the measure, saw these foreign firms as a prime scapegoat for crowding out jobs for U.S. citizens.

Taking a protectionist turn, the New York Democrat slammed Infosys, the Indian software giant, as a "chop shop" that exploits the United States by refusing to recruit enough Americans for high-paid tech jobs. Schumer's basic argument is that such jobs should go to U.S. citizens rather than temporary immigrant workers -- in other words, another iteration of the "immigrants take our jobs" line that's a perennial favorite with the anti-immigration camp.

But such thinking assumes that short-term immigrants are displacing a ready pool of American workers to fill these high-tech jobs. It also assumes that these new visa barriers won't dissuade foreign companies from setting up shop in the United States in the first place and that the economic contributions of short-term immigrants aren't really worth the costs they incur.

All that may well be the case, but coming to such a conclusion would demand a sober, comprehensive analysis of the U.S. labor market's needs that doesn't really seem to be getting much airtime in Congress or elsewhere. Given the abiding concerns about jobs amid a lingering recession, it may be the time to reform the country's visa and legal immigration system if it would help our economic recovery. This could entail bigger barriers to entry and smaller quotas for work visas. But it could also entail more readily available visas for highly skilled foreign entrepreneurs who want to bring their talents to the United States and for short-term foreign workers who can inject new life into certain sectors of the economy -- ultimately creating more jobs for U.S. citizens.

Basically, these are costs and benefits that need be weighed holistically, without arbitrarily picking off a particular industry because it fits into a readymade populist argument about jobs and immigration.

Suzy Khimm is a political reporter for the Washington bureau of Mother Jones.

By Suzy Khimm  |  August 23, 2010; 10:59 AM ET
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You're wrong because Journolist something something so SHUT UP THAT'S WHY!

And stop being shrill. Also. Too.

Posted by: lol-lol | August 23, 2010 11:46 AM | Report abuse

But such thinking assumes that short-term immigrants are displacing a ready pool of American workers to fill these high-tech jobs

This is indeed the case. It's called "outsourcing". Jeez, NBC will have a sitcom about it in the Fall. 70% of my IT department's staff will be let go at the end of November. It is VERY REAL. Over 400 jobs.

Maybe we should outsource punditry - maybe you would take it seriously then.

P.S. Is "Suzy Khimm" a pen-name for "Megan McArdle"? Lazy apologist for corporate masters? Check!

Posted by: ejcrotty | August 23, 2010 11:58 AM | Report abuse

How about copying the German model which is currently booming like crazy? Germany is a net exporter (unlike the U.S.) with a healthy manufacturing base (unlike the U.S) and one of the highest-paid employees in the world (unlike the U.S.) even though the employees get 6-weeks of vacation and universal insurance among other goodies (unlike the U.S.)

How do they do that? Severely restrict immigration, impose VAT for foreign outsourcing services that is performed outside of the European Union, and a focus on the education of their citizens including on-the-job training for their youngsters. Without the immigration of the so-called pseudo best-and-brightest, Germany still beats the U.S. in so many technical areas.

The same thing can be said about Japan with a similar policy. People loves to talk about how Japan is facing a crisis. Yes, that's true. But even in the worst economic crisis, Japan only has less than 5% of unemployment rate whereas in the best of times in the 1980s when they challenged U.S. supremacy, they only have 1% unemployment rate. Whereas in the U.S., even in the best of times of the late 1990s, the U.S. unemployment rate was still around 5%.

There is a lot to learn from Japan and Germany -- our economic competitors. They don't need hordes of cheap slave labor from 3rd world but they still beat the U.S. in so many high-tech areas. As a matter of fact, because they don't have the slave labor problems of educated-professionals, they actually fare much better than the U.S. because the natives know that they are valued and treated with respect. Whereas in the U.S., due to outsourcing and the H-1B, American professionals feel like they are being treated like thrown-away. American students look at their older professionals and they are horrified at what they see. They decide to stay away from the scientific and science careers in drove.

Posted by: AlmostJoinFaceBook | August 23, 2010 11:59 AM | Report abuse

As a long time IT consultant, I have learned to be OK with the H1-B tech immigrants. Some of them are exploited by their employers, but so are americans. lol.
But, like Dean Baker, I really feel that doctors, dentists, lawyers, accountants and media people should 'share' the pain. Let's set aside quotas of H1-Bs for each of these professions!

Posted by: bjones22 | August 23, 2010 12:18 PM | Report abuse

There are a couple of corrections that must be made to the article:

1. These are not immigrants. They are, technically, seasonal workers. Just like migrant workers hired to work in farms.

2. If there is a shortage in the labor pool and temporary help is needed, they should receive at least the median compensation (that means salary and benefits) as the permanent labor pool where the work is effectively delivered. (Personally I prefer the compensation to be in the upper quartile). After all, if there is a labor shortage, the compensation should be increased.

Posted by: AMviennaVA | August 23, 2010 12:26 PM | Report abuse

Now the Ezra Klein column takes aim at "ready made populism". So is that what it means to be a liberal nowadays?

What happened to basic liberal concern with the welfare of the American people?

This article is a travesty. You should bother to inform yourself. The most prevalent usage of H1-B is to bring Indians from India employed by Indian companies to America for a few years to work as consultants in American companies. There they learn the jobs, and when the visa expires the H1-B and the job go back to India.

The nonsense about independent foreign entrepreneurs doesn't apply here. Have you heard of a J1 visa? That is more likely.

You are a journalist. Inform yourself. Or are you corporate lackey?

Posted by: mminka | August 23, 2010 12:35 PM | Report abuse

As an IT worker who was unemployed for 11 months because of these workers, I am glad to see this. H1-B visa holders I have worked with are trapped by their companies. Many work 70+ hours and only report 40. This is because they will do anything to keep thier jobs.
But $2000 is not enough, the amount should be indexed to be the difference between what they would have paid for an American worker. i.e a qualified American worker gets paid $75,000 without benefits (none of us have any) and they pay the H1B worker $45,000, then the fee should be $30,000. THAT would help!

Posted by: EducatingTheFools | August 23, 2010 12:43 PM | Report abuse

The writer of this blog asked the question: Why were Indian firms singled out? The answer is that they have been abusing the system. The time has come as advocated above for this country to adopt policies that benefit hard working Americans and not mulit-national corporations and elites. We would do well to look to the Japanese and the Germans for how we should run our economy and country.

Posted by: jeffreed | August 23, 2010 1:27 PM | Report abuse

I have a very easy way to fix the domestic tech worker problem.

Without further ado here goes:

1) Stop issuing H1B & L1 visa’s

2) Salaries for current domestic tech talent starts going up drastically.

3) First year American college kids start to notice the high salaries and enroll in computer science & engineering programs in droves.

4) As the market gets flooded with all those new America graduates, salaries level off and start coming down.

5) The USA has all the domestic tech talent it needs for the next 30 years.

Posted by: technoabc | August 23, 2010 3:42 PM | Report abuse

Now I've seen everything. A writer for a "left-wing" magazine named for one of this country's most famous labor organizers is defending what are, essentially, international labor scabs. No doubt in the name of "tolerance" for "multiculturalism."

H1-B workers--and Mexican illegal immigrants--are essentially SCABS and the fact that they are of a different skin color from the majority of American citizens doesn't make them any less scab-like.

The globalist rot truly has gone all the way through our society.

I totally co-sign the remarks other commenters have made about Japan and Germany. Those are nations that actually CARE about their people, and as a result, their people are suffering a lot less than we are.

Disgusting post by a chirping, know-nothing, globalist-cheerleading moron.

Posted by: MaryJessel | August 23, 2010 3:49 PM | Report abuse

This writer cannot be serious!

So the IT Consulting firm asks me "why should we pay you $10,000 more than an H1-B worker from India?"

"In the year 2001, 9 out of every 10 new job openings for computer/IT were taken by H-1Bs, and despite record unemployment the INS issued 312,000 visas in 2002."

"By the year 2003 the total number of H-1B visas for high-tech workers issued was greater than the total number of high-tech jobs eliminated"

"Overseas companies are accused of underpaying foreigners on work visas—and hurting U.S. wages"

Do a little more research before you write for the Accenture, Infosys, Tata and Microsoft CEO audience.

Posted by: fair001 | August 23, 2010 9:24 PM | Report abuse

People should not simply take the employers' word that there is a "shortage." Do people buy at the duty free shop because their is a shortage of Scotch whiskey in this country or because the duty free prices are cheaper? Foreign workers are just cheaper, even when Americans are available.

Furthermore, a "shortage" is not a crisis. Shortages (demand is greater than supply) is the normal mechanism that causes prices to rise in a free market system. In the case of labor, shortages causes wages and salaries to increase. Surpluses (unemployment) cause prices and wages to fall. Without labor shortages, wages will never rise. Use immigration or temporary foreign wages to suppress labor shortages and employees will never get a raise.

Reporters should learn to think critically when employers with an ax to grind complain about labor shortages. The Chamber of Commerce HATES free markets when they raise the wages or salaries of their employees.

Posted by: kevin9 | August 23, 2010 9:38 PM | Report abuse

So you think H-1B and L1 visa cause a few geeks to lose their jobs... what is the big deal??

A few issues with that kind of thinking:
Exporting Jobs -
First, it is not bout geeks loosing their jobs, it is about good paying American jobs getting outsourced to India, millions of them... If you are for H-1B and L1 visa, than you are for exporting good paying American jobs...

Caste System -
Second, If you are for the indian cheap labor importing companies using the H-1B and L1 visas to import cheap labor, than you are for implementing the "Caste System" to the professions of Engineering and Information Technology... Yes, you are for the "caste system", otherwise what do you call over 90% Indian in an increasing number of IT departments of large banks, insurance companies,... . If you don't think there is something fishy with IT departments having 90% of one ethnic group than in my opinion you should not be in the business of writing articles and opinions...

Ethnic cleansing -
Third, If you are for the use of H-1B and L1 visas than you are for the "ethnic cleansing" of anybody not Indian from the IT department of major american companies. Yes, ethnic cleansing, otherwise what do you call the huge change in the ethnic makeup of very large number of IT departments, from less than 10% Indian as part of a multi-cultural, and multi-ethnic department, to over 70% Indian (at least)... . Did you stop and ask yourself how did that happen?

It is definitely not about a few geeks losing their jobs, although yes it is about a few Indian Billionaires like Azim Premji (arabic for "The Great Premji") making billions upon billions of dollars from cheap labor importation...

Posted by: UnemployedSeniorSoftwaredeveloper | August 23, 2010 11:55 PM | Report abuse

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