For Stamford resident Matt Olson, a career in IT was the pathway to the American dream. A New Mexico native, who experienced hard times as a kid when his mother became ill and drowned in medical expenses, he graduated with a computer science degree in 1997 and went to work for Sandia National Labs. There, he was paid to go into an accelerated Masters program. By 2001, on his first consulting project, he was making $150 an hour. As Olson observes, “Now that was a labor shortage.”
Fifteen years later, Olson says it’s hard for even experienced IT consultants to get that kind of money. “I’m even seeing really senior financial system developers, who are really skilled, the kind of guys who design trading systems at firms like Goldman Sachs … those guys are making 75% of what they were before the financial crisis.”
The reason? “Companies hate paying for IT. They’ve been trying to beat us up on rates and cost,” Olson says.
John Miano, fellow at the Center for Immigration Studies and co-author with Michelle Malkin of the book Sold Out, agrees things have changed for the worse.
“When I started in the industry, a computer consultant was someone of some expertise, who would go from company to company working on projects,” Miano said. This was typically during the development phase of a project, when such special expertise was needed, and then the consultant would move on.
According to Miano, “That’s basically been destroyed by the tax laws and by H1B visas. Tax laws cracking down on independent contractors hurt that industry and then with the H1B thing it’s a body is a body is a body. You’re just trying to hire someone at the lowest rate you can and who cares about the quality?”
As recently as last January, U.S. Sen. Richard Blumenthal was a co-sponsor of the Immigration and Innovation Act (known as I-Squared), which would have increased the base cap on H1Bs from 65,000 to 115,000 visas per year and eliminated the cap for visas allocated for foreign graduates of U.S. universities with advanced degrees. It would also establish a market-based “escalator” that would allow the supply of H1B visas to fluctuate based on demand. The list of lobbyists on the I-Squared bill reads like a Who’s Who of Silicon Valley and the financial sector.
One of the rationales for a higher cap is that the current one is hit within days, forcing applications into a lottery. But here’s the thing: the U.S. government offers a premium processing service for a $1,000 fee plus an additional $1,225 if the application is accepted into premium processing. But if the application isn’t accepted for premium processing, the fee is refunded.
So of course, employers, particularly those with outsourcing firms, have every incentive to flood the system with applications. What have they got to lose?
My previous piece on this issue turned out to be fortuitously timed, because when I asked the Connecticut delegation for comment, I got a press release that Sen. Blumenthal was co-sponsoring the Grassley-Durbin bill (S.2266).
Although on its face the bill addresses many concerns, Miano is still concerned by its complexity.
“The problem you face is that when it’s so complicated, is this enough Band-Aids to it . . . There’s nothing in there that you say, ‘No it shouldn’t be there,’ but the H1B program needs to be stripped down.”
The reason it’s so long, Miano contends, is that it was written by lobbyists, who deliberately write the legislation in a convoluted way so people don’t know what it’s doing. “For example, if you read the statute, it says right at the top, ‘All H1B workers should be paid the prevailing wage,’ so if you speak to an industry lobbyist, they say ‘this can’t be used for cheap labor, it says so right there at the top, they have to be paid the prevailing wage!’ But then when you scroll down, you find further down that they have a special prevailing wage system that allows them to pay H1B workers at the 17th percentile, so yes, they can be underpaid. The whole statute is written so that it looks like it’s doing one thing but then contains other provisions that undermine what it said before.”
Olson, a lifelong Democrat, is discouraged by the party’s inaction while the industry that was a road to the middle class for so many people is being decimated. Before anyone pipes up to say he should vote Republican, that party’s proposed contender for U.S Senate, Larry Kudlow, has said we should have “virtually unlimited” H1B visas.
What’s a thinking middle class voter to do?
Perhaps the most disturbing part of this is that if you look at the tech firms lobbying to raise the H1B caps, a lot the biggest names are the same ones who engaged in a wage-fixing cartel to suppress IT worker salaries. These companies were the subject of both a U.S. Department of Justice anti-trust action, settled in 2010, and a class action lawsuit, which settled last year for $415 million.
So much for “Don’t Be Evil.”
I didn’t remember reading anything about this “Techtopus,” as Pando’s Mark Ames termed it, in Walter Isaacson’s biography of Steve Jobs, even though Jobs was one of the main actors in this. True, the unbelievably callous smiley face email Jobs sent upon receiving news from Eric Schmidt that an recruiter who contacted an Apple employee was going to be terminated within the hour hadn’t been unsealed at that point, but the DOJ investigation was settled in 2010, prior to publication of the book. I went back and checked the index for every mention of the companies and CEOs involved and . . . zippo. Spectacular whitewash, don’t you think?
I asked Sen. Blumenthal’s office three questions for this piece:
• Was there a seeming contradiction between the co-sponsorship of the I-Squared bill and the Grassley Durbin?
• Does he believe that there is a genuine STEM shortage that needs to be filled by foreign labor, given lack of wage growth in the sector (which as any student of economics knows, would contradict the laws of supply and demand), and further;
• Given the evidence of wage suppression collusion by Silicon Valley, couldn’t their lobbying for raising the H1B cap just be a method of suppression labor costs by another means?
This was the response:
“Temporary worker visas should not be available for businesses that do not need them, and employers that abuse the worker visa program must face stiff penalties. That is why I helped lead the Grassley-Durbin bill to crack down on abuses of the H1B and L-1 programs and why I have consistently fought to hold abusers accountable. If a company needs a worker with a particular skillset — a skillset unavailable in the U.S. workforce — in order to grow and create jobs in Connecticut, we need to make it possible to find that worker. Consistent with these principles, I would support legislation like the I-Squared Act, which lets the market set the number of H-1B visas, up to a cap, but only if it is part of comprehensive immigration reform, and only if accompanied by measures to prevent and punish abuses such as those included in the Grassley-Durbin bill.”
Last week, President Obama announced his $4 billion Computer Science for All initiative. Read the list of companies helping to fund it and compare that to the lobbyists for raising the H1B cap, and it’s the same companies involved in the Tectopus salary suppression agreement.
Then weep for middle class Americans who continue to be sold out to the highest bidder by the U.S. government and elected representatives of both parties.
Sarah Darer Littman is an award-winning columnist and novelist of books for teens. A former securities analyst, she’s now an adjunct in the MFA program at WCSU, and enjoys helping young people discover the power of finding their voice as an instructor at the Writopia Lab.
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