More Disagreement With Me Over "Intels vs. Infosysess" , November 16, 2015 matloff
I’ve been harping on the “Intels vs. Infosyses” issue for a long time. I maintain that the Intels, i.e. the mainstream U.S. firms, are just as culpable in abusing foreign tech worker program as are the Infosyses, the largely Indian and Indian-American rent-a-programmer firms. (IBM is an “Infosys” too.) I’ve also argued that the distinction between the two types of firms not only is inaccurate, but will lead to legislation that leaves American programmers and engineers in even worse circumstances than they are in presently.
Alas, this is a hard sell, partly because the Intels and their allies (e.g. universities who want lots of foreign students) are pushing the “Intels Good, Infosyses Bad” idea in expert PR actions. But the larger reason I’ve had trouble in getting this point across is that the abuses of the Infosyses are much more visible. Recently, these misdeeds have been highly visible, due to firms like Disney and SCE laying off American ITers and replacing them by foreign workers. Another way the Infosyses are so visible is that many U.S. programmers have had the bitter experience of walking into a job interview, finding that the interviewers are all Indian and getting the feeling that only Indian foreign nationals need apply. (Indian-American applicants have no chance either.)
Take this comment on my blog by Roy Lawson:
…there is evidence that foreign outplacement firms have been the most egregious of abusers. We have identified key harms as being underpayment, replacement of qualified Americans, and age/gender discrimination. American and Indian firms alike have done all of those things. The data indicates foreign staffing firms pay the least and discriminate the most against Americans.
But the problem is that there is NO such evidence, because the Intels’ actions are hidden. They don’t overtly use foreign workers to REPLACE Americans, but they hire foreign workers INSTEAD OF Americans. Even a 10-year-old could see that the net adverse impact is the same.
My research on the Intels does show underpayment of the foreign workers. Please read my papers.
As to age/gender discrimination, all the lawsuits I know of against tech companies have been against the Intels, not the Infosyses. Indeed, the book Inside Inteldocuments how a management consultant hired by Intel advised the firm to jettison its older workers and henceforth hire mainly young ones. Intel has formal job categories called New College Graduate and Recent College Graduate, and earmarks jobs accordingly. I’ve shown similar job ads from time to time here from other “Intels,” e.g. Facebook. HP even invented a bizarre new job title, Junior Software Engineer. And guess which new grads the employers prefer?
In terms of discrimination against Americans, I’ve explained that the Intels are actually worse than the Infosyses, because a major goal of the Intels in hiring H-1Bs is to obtain immobile labor through the green card process — a process that the Infosyses almost never participate in. And the result is that the Intels prefer foreign workers over equally-qualified Americans.
If you are not familiar with the case of David Huber, who naively applied for a job at Cisco that turned out to be reserved for foreign workers, or if you haven’t watchedthe “Tubegate” videos, or if you haven’t read the presentation by immigration lawyer David Swaim (who designed Texas Instruments’ immigration policy) urging employers to hire foreign students instead of Americans because of immoblity — all of which involve the Intels and not the Infosyses — then you don’t know anything about H-1B.
The only claim Roy makes above that’s correct is that the Infosyses tend to pay at Level I in the prevailing wage system, while the Intels tend to hire somewhat more sophisticated workers, paying at Level II. But they are both underpaying at their respective levels. And by that underpayment, an American of a given level will always be less attractive to employers than the equally-qualified foreign applicant. This is the bottom line, folks — the American loses the job to the foreign worker. The fact that it doesn’t happen via overt replacement is irrelevent. Again, even our hypothetical 10-year-old observer could see that.
And it matters — a LOT. I’ve been predicting that upshot of this Intels vs. Infosyses distraction is that a bill will be enacted that (at least cosmetically) punishes the Infosyses while rewarding the Intels, with the result that there are NO net job opportunity increases for U.S. citizens and permanent residents. Congress will then declare victory over H-1B abuse, and move on to other issues. If the new Durbin/Grassley bill passes, all those Republican presidential candidates clamoring for H-1B “reform” will suddenly clam up, problem solved.
Remember, the Intels include firms like SCE and Disney too. Even if Congress were to completely ban the Infosyses — it won’t happen, as they have political clout too — SCE for instance would have its pick of foreign students, in the numerous colleges right there in its back yard, Southern California — 10 CSU campuses, just to give a quick example. Google may not want to hire them but SCE will. And SCE will hire from the higher-level local schools too, such as hiring a foreign student majoring in Geography at UCLA who has had some IT classes. (I’ve seen this happen a lot.)