Barron's Melting Pot

Date: Wednesday, September 04, 2002 11:33 AM

*** H-1B NEWSLETTER ***

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Barron's magazine just printed a pro-immigration article on their 9/2 issue.
It is very blunt in it's encouragement to seek cheap labor whenever
possible.

Since the article is for subcribers only, I will reproduce a few of the
interesting excerpts.

Monday, September 2, 2002
New Melting Pot
How immigration helps keep the U.S. competitive and financially strong
By GENE EPSTEIN

As noted, over the past year there has been a decline in the volume of
applications for H-1B visas. But otherwise, the remarkable fact is that in
the weaker labor markets of 2002, the share of foreign-born workers rose.

In February 2000, the unemployment rate was running 4.1%, which was near
its 30-year low. By February '02, the rate of joblessness had risen to
5.5%. But while the total number of employed declined by 700,000 from
February '00 to February '02, the number of employed foreign-born increased
by 1.3 million

The share of working immigrants rose in both skilled and unskilled work,
and in most job categories -- from engineers to scientists to construction
laborers. One interpretation: Business chose to sacrifice its more
expensive employees for the ones that are cheaper.

In 1970, about 5% of the labor force was foreign-born. By 1990, their share
had risen to 10%, and last year it reached 13%. This immigrant labor force
now numbers 18.4 million, of which nearly eight million are in skilled
professions of one kind or another.

Over the next 30 years, immigrants are bound to claim an even bigger share
of the labor force. For one thing, the mix will shift in favor of skilled
jobs that the foreign-born have already been filling in large numbers

Business will also lobby government more aggressively than ever to open the
door to foreign labor.

As noted, the labor mix is also likely to shift in favor of the skilled
trades that the foreign-born are already beginning to fill in large
numbers: engineering, science, math, medicine and virtually all aspects of
computer-systems work.

Foreign-born workers have been gaining ground for two timeworn reasons, the
second one with a modern twist. First, immigrant workers are cheaper than
natives. And second, immigrants are willing to do jobs the natives spurn.
What's different now is that so many of these jobs bring high status and
good pay.

For employer Robert Pollack, the main issue is money. "The country can't
afford not to have immigration," he remarks. And neither can Pollack
Realtors.

-- this New York City-based builder manages to stay below
the radar of the unions. Most of the people he hires are paid as
day-laborers and receive no benefits, especially not workmen's
compensation, which is ruinously expensive.

The movement of foreign-born workers into academia has virtually nothing to
do with underselling the natives; it's all about taking jobs the natives
spurn.

in 1996 nonresident aliens received 23.8% of the doctorates in
the social sciences, 26.9% in the life sciences, 35% in the physical
sciences and 48.9% in engineering. Today those shares are probably even
higher.

One way to alleviate the serious shortage of nurses over the long run is to
pay nurses more. At some higher wage level, supply would eventually meet
demand. But what hospitals are doing instead of raising wages is recruiting
women from abroad who are willing to do the job at the existing wage-rates.

The Philippines, which educates thousands more nurses each year than the
country employs, is already a major exporter of these workers. You can even
imagine the U.S. government eventually offering to underwrite nursing
schools abroad.

A manager at a staffing firm who hires H-1B workers remarks, "The H-1B guy
is ready to put in a lot of hours, up to 14 hours a day, and they don't
charge for the extra work." That's one way to define experience and
qualifications.

Another approach to hiring systems workers on the cheap is to employ them
as telecommuters -- from their home countries. The city of Bangalore,
India, is where most of this work takes place.

For work for which an American-based systems person might receive $10,000 a
month, a Pakistani worker earns $300-$400 a month, with a bonus of up to
20% if the job is done to the client's liking. In India, the wages are
30%-40% higher.

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