Program Bugbear
Program Bugbear
Date: Sunday, October 06, 2002 3:36 PM
************ H-1B NEWSLETTER *************
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Except for the portrayal of Guy Santiglia as a gloomy engineer "gripped by a
surging anger", this is a very good article. What's more surprising is that
it was written by an Indian reporter for the 2nd largest tech magazine in
India. I contaced Guy and he said he was pleasantly surprised that he was
quoted much more accurately by Srinivas than many American reporters.
The site allows people to post feedback replies, and so far all the comments
are by US workers.
Here are some interesting tidbits from the article:
* The article mentioned the case of Jenlih Hsieh, a 50-year-old US citizen
from Taiwan, who was fired by SwitchOn Networks and replaced with an H-1B
worker.
* The reporter caught Arjun Malhotra, chairman of TechSpan, a Sunnyvale,
California in a bit of hypocritical posturing. His company employs close to
a hundred H-1Bs. Malhortra seemed to have sympathy for American workers but
admits to employing close to a hundred H-1Bs. He then dismisses the
allegation that H-1B workers are being favoured.
* The Immigrants Support Network's president Shailesh Gala was sobbing that
H-1Bs don't get unemployment or training facilities (huh?) and yet have to
pay Social Security. Of course that's because ISN is lobbying for a
Totalization agreement with India.
* A study that reveals that the top 10 tech companies in Silicon Valley
sacked 41,000 employees last year but still hired 2,000 H-1Bs.
* no one can deny that foreigners are more docile.
* For Indian software companies though, it could be a boon in disguise as US
companies farm out more projects back home.
* And here is the real zinger: "H-1Bs are cheaper and, probably, more
pliable." Another INS study concluded that a fifth of H-1Bs are not even
paid the salaries mentioned by the firms in their visa application forms.
Here are a couple of links to articles by Srinivas that are very worthwhile
reading:
http://www.firstandsecond.com/bw/mag6_page1.html
The H-1b Visa Scam
http://www.y-axis.com/bench/hardknocks.shtml
Software Hard Knocks
http://www.businessworldindia.com/archive/010101/mktg5.htm
China Scare: The Real Story
http://www.outlookindia.com/full.asp?fodname=20021014&fname=software+engineers+(F)&sid=1
Program Bugbear
As jobs shrink in the tech sector, American workers say imported labour is
at fault
Alam Srinivas
Guy Santiglia has been without a job for 12 months. But instead of just
being gloomy, this 36-year-old American software engineer is gripped by a
surging anger. This fury is against his former employer, Sun Microsystems,
who he thinks prefers foreign (read mostly Indian) workers to locals.
Santiglia thinks that while Sun sacked Americans, it hired techies with H-1B
visas. (The visa allows foreigners to work in the US for six years and
Indians account for half the H-1Bs issued by US Immigration each year.) "It
is a common practice among US companies," he complains.
Incensed with Sun's behaviour, Santiglia and other former Sun employees
approached the US Department of Justice (DoJ), which is currently
investigating the cases. The DoJ is also looking into the accusation of
Jenlih Hsieh, a 50-year-old US citizen from Taiwan, that he was fired by the
Milpitas, California-based SwitchOn Networks, and replaced with an H-1B
worker. Allan Masri, a 52-year-old engineer from San Jose, is peeved that
while he was sacked by Netscape, his colleague, an H-1B visa holder with the
same designation, was retained.
"It's true firms like Netscape seem to have a policy to hire more H-1Bs,"
says an enraged Masri. Adds another New Jersey-based US software engineer:
"We're not xenophobes, racists or socialists but we're concerned about the
future of our jobs." Like it or not, the opposition against the influx of
Indian (and other foreign) software engineers is growing by the day. The
decibel levels are reaching fever-pitch as a new wave of nationalistic
paranoia sweeps across America.
The H-1B visa programme was started in the early '90s to relieve the
then-perceived shortage of software engineers by allowing skilled labour
from countries like India, China and Pakistan. Over the years, visa limits
for entry of such workers were raised by US Congress; since 1998, it has
gone up threefold to 1,95,000 per year.
But as the tech slowdown refuses to ebb, and thousands of workers continue
to lose jobs each month, the H-1Bs, who are still trooping in, are under
attack. "It's going to be the next big battle," warns John Miano, the
founding member of The Programmers Guild, which has filed 20 cases with the
DoJ on behalf of laid-off US engineers.
"I can understand what's happening out there. The Indian H-1Bs who lose
their jobs can return home. But what can an average American do?" explains
Arjun Malhotra, chairman of TechSpan, a Sunnyvale, California-based software
firm that employs close to a hundred H-1Bs. But in the same breath, he
dismisses the allegation that H-1B workers are being favoured.
Well, so do the other US companies. Netscape's spokesperson, Derick Mains,
dismissed Masri's imputation as "baseless" and told Outlook that "every job
action in the company is based on either the employee's performance or on
what happens to the division they worked for. The employee status has
nothing to do with it". Sun's Diane Carlini also felt that Santiglia's
complaint "was without merit" and added that her firm was "confident that
the matter will be resolved in Sun's favour".
Her confidence stems from the fact that the number of H-1B entrants has
declined in recent times. According to figures doled out by the US'
Immigration and Naturalization Service (INS), only 60,500 H-1B visas were
issued between October 2001 and June 2002, a 54 per cent drop compared to
the same period in 2000-01. That is an indicator that US firms are applying
for visas only when they need skills not available at home. In addition,
like their US colleagues, thousands of H-1Bs have lost their jobs and were
forced to leave the US.
Shailesh Gala, president of the Immigrants Support Network, a non-profit
organisation dedicated to equitable treatment of all legal immigrants in the
US, says that H-1B visa-holders have been the worst affected."They don't get
unemployment benefits, nor do they get training facilities even though they
have been paying taxes and social security all these years," he points out.
Such logic is little consolation to US workers. They feel US firms are
hiding the truth that Americans are being replaced by foreigners. Otherwise,
asks Santaglia, why would Sun lay off 3,900 engineers (mostly Americans) in
October 2001, even while hiring 5,000 H-1Bs in the preceding 12 months?
Another study reveals that the top 10 tech companies in Silicon Valley
sacked 41,000 employees last year but still hired 2,000 H-1Bs.
In the recent past, both companies and recruiters have asked only H-1B
visa-holders to apply for new openings. A few think that foreigners may be
better than locals. The Texas-based Adea group admitted it was keen to hire
H-1Bs (as opposed to US citizens) "because they (H-1Bs) most likely have the
experience we need and a sense of urgency in securing new employment if they
have been recently laid off".
What Adea didn't confess was that H-1Bs are cheaper and, probably, more
pliable. In 2000, the US Department of Labor estimated that the average
annual salary earned by H-1Bs ($47,000) was lower than the median salary of
US engineers ($58,000). Another ins study concluded that a fifth of H-1Bs
are not even paid the salaries mentioned by the firms in their visa
application forms. "It's hard to compete with Indians who get paid less, at
least initially," agrees Masri.
However, as per US laws, companies have to pay H-1Bs a minimum wage to
prevent discrimination against US workers. That's why corporates deny that
foreigners are underpaid. Netscape's Mains feels that it may actually be
more expensive to hire H-1Bs because of the additional costs like visa fees
and travel expenses that have to be borne by the employers. But no one can
deny that foreigners are more docile.
An H-1B worker has inherent disadvantages. For instance, he has to leave the
country in case he is unable to find a new job within 10 days of getting
fired. During the boom days, such limitations didn't matter because they
were in demand and many of them arrived in the US armed with two or three
H-1Bs from different employers. But as the job market got crunched, the
H-1Bs find themselves in a difficult situation.
Norman Matloff, professor of computer science, University of California
(Davis), sums up their position perfectly: "Most H-1Bs are de facto
indentured servants, unable to switch jobs. Thus, they cannot leave for a
higher-paying job elsewhere, nor can they negotiate higher wages with their
present employer by threatening to leave." Therefore, the higher-paid US
workers are more likely to get pink slips today as firms desperately try to
cut costs.
Industry associations claim this is exactly what's happening. The Institute
of Electrical and Electronics Engineers (ieee), with 235,000 engineers as
members, estimates that the unemployment figure for scientists and engineers
has gone up to 4 per cent in the second quarter of 2002, compared to 3.6 per
cent in Q1. This is happening while the overall unemployment rate has fallen
from 5.9 per cent to 5.4 per cent during the same period.
In a letter sent to all US Congress members this July, the ieee has stated
that this trend "is not a short-term...phenomenon but represents a more
fundamental shift in engineering utilisation that has potentially negative
impacts for our nation". Adds Vin O'Neill, senior legislative representative
at ieee: "We don't think the H-1Bs are causing the unemployment, rather the
significant increase in the caps leads to a situation where they complicate
the unemployment situation."
To correct this wrong, LeEarl Bryant, ieee's president, has urged US
Congress to investigate "the impacts of increased hiring of non-US guest
workers and the outsourcing of engineering work overseas as causes of the
unemployment problem".So, will the H-1B scheme be scrapped? Or will the Bush
administration lower the visa cap, as being demanded by certain sections, to
65,000 per year?
People who understand the policy-making process in the US feel there may be
moves soon to curtail the entry of foreign labour. According to TechSpan's
Malhotra, "the mood is such that the US administration will listen" to some
of the demands made by US workers. Clearly, the life of an H-1B holder,
already hit by the slowdown, is bound to change for the worse. For Indian
software companies though, it could be a boon in disguise as US companies
farm out more projects back home.
Alam Srinivas with A.K. Sen in Washington
Grouse In The US
As jobs shrink in the tech sector, American workers say imported labour is
at fault
American software engineers have filed numerous cases alleging that
companies are favouring foreigners
US Department of Justice is currently investigating charges against leading
firms like Sun Microsystems
IEEE claims the number of unemployed US engineers is on the rise, even as
the influx of foreigners continues
Senators and workers lobbies want the US to clamp down on visas issued to
mostly Indian professionals
Firms favour Indians and Chinese as they are cheaper and, probably, pliable
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