Biased CNN Article Quotes Industry Shill

Date: Thursday, September 11, 2003 1:46 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Just when I thought I have heard it all, now CNN quotes an economist
that says that H-1B "was actually putting upward pressure on wages."
Zavodny goes on to say that there is very little evidence that H-1B has
a negative effect on wages while at the same time saying that H-1B is
causing unemployment of high tech workers to rise. Zavodny must be the
first economist in history to come up with the theory that rising
unemployment can exist with upward pressure on wages.

She further claims that H-1B has almost no effect on the economy
because the number of H-1Bs let into the USA is just a mere 0.13
percent of the total U.S. labor force - then destroys her theory by
admitting that H-1B has the "greatest impact on high-tech jobs, which
are among the best-paying in the economy." Since Zavodny admits to
understanding the fact that H-1B affects technical workers, why didn't
she measure the effect on them instead of averaging them with janitors
and agricultural workers?

Typically only industry shills would manufacture propaganda like this,
so I decided use the internet to see if I could find out who bought off
Madeline Zavodny.

Here's her bio:

Madeline Zavodny is an associate professor of economics at Occidental
College. Her web page and contact information can be viewed at:
http://faculty.oxy.edu/mzavodny/mz.htm

Here is a link to her study "The H-1B Program and Its Effects on
Information Technology Workers"
http://www.frbatlanta.org/whatsnew.cfm

Zavodny's study is funded by the Federal Reserve Bank of Atlanta, so it
becomes obvious that her bias will support the H-1B views of the
corporate banks who routinely abuse H-1B and L-1 visas. Remember the
Flanagan suicide at Bank of America?

These are examples of her sloppy work:

* Zavodny made the outlandish statement that areas with more LCA
applications have lower unemployment rates. Sheesh, has she ever
crawled out of her ivory tower and visited Silicon Valley?

* She was surprised that the "unemployment rate is positively
associated with the fraction of IT workers who have at least a master's
degree." For about 13 years Dr. Matloff has described how companies use
H-1B to displace higher paid techies so she is about the only one
surprised by this correlation. Zavodny would know about Matloff if she
actually did some research.

* Zavodny did a cut and paste of boilerplate from the DOL and INS
websites that explains how prevailing wages protect Americans, etc.
etc. etc. I don't have to waste space explaining how these loopholes
are exploited by companies like the bank that funded her study.
7
* Zavodny uses the average wages of IT workers to show that H-1Bs
haven't depressed wages. Her flawed rationale is that the average
salary has gone up, so therefore H-1B hasn't effected wages. She
conveniently forgot to factor in inflation. A study done by the AEA has
shown that average salaries for IT workers has remained flat for the
last 13 years when adjusted for inflation. Since H-1B started in 1990
the logical conclusion would be that H-1B has had a major affect on
salaries - of course Zavodny's sponsor isn't interested in logic.
To view a good illustrative graph, go to:
http://www.aea.org/News/AEA_NRC_Testimony.pdf

Zavodny's study is obviously biased, but that doesn't explain why CNN
would quote her as an expert without seeking opposing opinions. This is
either an because the reporter is lazy or incompetent, or another
example of our corporate owned media at work. You can expect the news
media to use Zavodny's odious study to support their pro-industry
agenda - and to ignore all evidence to the contrary. (This newsletter
has been emailed to both the reporter and the "economist".

http://money.cnn.com/2003/09/11/news/economy/visa_impact/index.htm

Visas vs. jobs

Many U.S. tech workers hate the H-1B program, but studies suggest its
impact is limited.
September 11, 2003: 2:31 PM EDT

By Mark Gongloff, CNN/Money Staff Writer
mark.gongloff@turner.com

NEW YORK (CNN/Money) - A U.S. visa program that allows foreigners to
temporarily work in technology and other high-paying industries is
often blamed for taking American jobs and pushing wages lower. But two
recent studies suggest this program might not be as awful as some
critics think.

The H-1B visa program allows U.S. employers to hire non-citizens for up
to six years, as long as those workers have the appropriate experience
and training, and are paid the same wages U.S. workers get.

Though the number of H-1B visas is limited by law to 195,000 per year
-- a number that will drop to 65,000 in 2004 -- amounting to just 0.13
percent of the total U.S. labor force, the programs have their greatest
impact on high-tech jobs, which are among the best-paying in the
economy.

Labor groups, lobbyists and legions of unemployed tech workers have
taken to the Internet and the airwaves to protest what they see as
employer abuse of the visa system. They say the program keeps a lid on
wage growth, subjects non-citizen workers to substandard working
conditions and keeps U.S. citizens unemployed.

"At a time of high unemployment, the high-tech industry is flooding the
labor market by importing workers who are willing to work more cheaply
than American high-tech workers," the Federation for American
Immigration Reform, a Washington lobbying group, wrote in an August
report called "Deleting American Workers."

In response to the pressure, and in light of a lack of job growth in
the broader economy, Democrats and Republicans have proposed a bill in
the House of Representatives to repeal the H-1B program.

But a study published this week by Atlanta Federal Reserve Bank
economist Madeline Zavodny said the effect of the H-1B visa program on
wages was difficult to measure.

In fact, Zavodny said that in 2001, the latest data available, H-1B
workers with bachelor's degrees were paid more, on average, than U.S.
citizens with bachelor's degrees. It would seem, then, that H-1B
competition was actually putting upward pressure on wages.

"Study results provide little support for claims that the H-1B program
has a negative impact on wages," Zavodny wrote.

Zavodny also said, however, that there was an apparent connection
between the number of applications for visas and unemployment in the
information technology industry a year later.

A separate report released this week by the American Immigration Law
Foundation, a Washington think tank and lobbying group, pointed out
that H-1B visa issuance has fallen as the economy has weakened -- just
79,100 visas were issued in 2002, compared with 164,000 in 2001. The
group also said visa processing fees have raised $692 million in the
past five years, which has been used to train and educate thousands of
U.S. workers.

"Curtailing legal immigration to the United States or further impeding
the flow of skilled foreign professionals to America will hurt the
nation's competitiveness and its leadership in the world," the AILF
said in a statement. "Such actions would slow U.S. labor-force growth,
inhibit innovation inside the United States, reduce job growth, and
encourage increased efforts to outsource and place overseas
high-technology jobs and centers for research and development."

In her study, however, Fed economist Zavodny pointed out that a growing
number of employers are turning to the L-1 visa program, which allows
companies to rotate overseas employees into U.S. positions for up to a
year, and the visas are renewable for up to seven years for high-level
executives.

The L-1 program has no mandated limit, and employers aren't required to
pay "prevailing" wages to L-1 workers. The State Department will likely
issue about 60,000 L-1 visas in 2003, according to an August study by
the Information Technology Association of America, a worker lobbying
group.

Zavodny said the impact of the L-1 program on wages was still unknown
and could "possibly merit analysis."

Legislation that would limit the number of L-1 visas issued every year
to 35,000 and place other restrictions on the program is pending in a
House subcommittee.

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