One of the disparities that is not being addressed is the inability of people to freely move to low cost of living countries to buy property and live there. If retirees could purchase homes in low cost of living countries, continue to draw their social security checks and pension checks from their former American jobs, that would partially offset the effect of people coming here for better paying jobs. A similar dynamic already occurs within the US, with retirees moving to other states where the cost of property and cost of living are lower.

The "migration" of people within the US looking for better jobs or lower living costs has been accepted for many years. I have to wonder if a similar "migration" between nations would be the best approach to our undocumented worker "problem" here. One thing I feel certain about is that continuing as we are, with minor tweaks to the system, is not going to solve that problem. And, a "guest worker" program, which sets up a dual standard for wages, workplace protections, unionization, and rights of workers is not a solution to anything other than bigger corporate profits.

Hoppy in Sacramento

In addition to somewhat agreeing with the previous comments, I'll point out that "brain-draining" other countries isn't exactly a good thing for any attempts by those other countries to build their economies. And, enabling large numbers of "imports" from one country provides a profit incentive to those countries to keep sending us people because of the money that their "exports" send home. That encourages corruption both here and there. And, if things like computer programming move offshore, teaching and studying computer programming will eventually move offshore as well, leaving us dependent on India or other countries for computer programming. Not exactly a good thing.

Hoppy, the "disparity" you mentioned is being addressed - largely by the governments of poor countries as well as developers.  I think most of Latin America's commercial class is salivating over the pending retirement of baby-boomers.  Costa Rica may be the only country that has reduced its incentives to expats because it has become a seller's market - a very popular place to retire.  Recently, in Mexico, 20 year mortgages have surfaced, and a US citizen can own property in fee simple anywhere in Mexico outside the restricted zone (31 miles from the sea coast, and 63 miles from the international borders.)  This is the age of the pensioner's visa - if you can document a 500USD monthly income, you qualify. There's a lot of competition going on right now for the expat dollar.  Panama is hot right now, with Honduras and Nicaragua right behind.

But, if you want to die Marlin fishing, the trust deed deal on the Mexican coast is a good way to go.  The deed is solid, and your children can inherit it.  But you can't restrict rank and file Mexicans from your beach front property - that was the point of Cardenas' ejido policy - the coast was considered a national asset and access to the coast was guaranteed to all.  It's comparable to the California Coastal Commission, in fact (which has also caused a lot of coastal property owners severe headaches.)

<>Neoboho

I think that it is important to distinguish here between undocumented low-wage workers and skilled outsourcing or importing of skilled labor. They really are two separate issues with vastly different implications which Chris Robertson aptly points out in this his entry.

I am curious to hear how the system of skilled labor exchange leads to corruption. While, I can imagine that entering into immigration bureaucracy can be scurrilous, I am unaware of the corruption you mention.

Also, I know that the vast majority of computer programmers from India working for US companies are already trained in India. India has very fine educational facilities already training its own workforce. I do not think this has led MIT or Berkeley to close its doors yet. As to the protection of domestic workers, it is my experience that this is already happening. Anyone who has been through the experience of trying to get a VISA knows that unless you have a specific specialty or a very advanced degree, you are unlikely to be able to get an HB1. I would love to hear proposals that would make this more strict without cutting off, as I mention, the important contributions that skilled foreign labor has always made to this country.

You're completely uninformed about the H1-B issue with respect to computer programmers. Until you get some experience in the field I suggest you defer to those of us who are living the reality of the situation. Whether MIT or Berkeley have closed their doors is irrelevant. It's a matter of rigging the labor market against qualified American workers. Only an academic with no real-world knowledge of the situation could think that such an absurd metric would be a cogent argument.

FYI, the bulk of H1-B programmers being imported into the US do not have unique specialties, and in fact, the Indian-owned IT outsourcing firms that are among the largest users of the H1-B program are known to have inflated the resumes of their workers. Wake up - these programs are being exploited in a manner that is contrary to their original intent for the express purpose of boosting profits by undercutting qualified American labor through the practice of exploiting foreign guest workers.

Mercedes - the problem with your advocating for H1-B is that the program is a scam and it reduces your crediblity to close to zero to support it. Basically - as is well documented - it is used to support the offshore outsourcing of jobs held by Americans. The large majority of H1-B visas go to INDIAN software companies, who bring employees here to learn the jobs of American workers, then they are shipped back to India with the job. There is no intention in these cases of going for a green card.

Here is an excerpt from an epi report, link
http://www.sharedprosperity.org/bp187.html,

(When you respond I hope you use DATA and SPECIFICS, I am really tired of generalities when finally the data and studies are out there and available. There is really no excuse for not dealing with the truth. Note that this information has been suppressed and/or uncollected, because the govt is in the business of making it easier for business interests to make their otherwise unsupportable case.)

From the EPI report:

Supporters of an expansion of the H-1B program argue that the work visas serve a critical role in the economy, particularly in the high-technology sector. Supporters typically make two claims. First, they claim that there is a systemic shortage of U.S. scientists and engineers, and the only way to fill the gap between domestic demand and supply of high-skill workers is by importing guest-workers through the H-1B program. They argue that, without a large increase in the H-1B program, they will be forced to outsource the jobs by hiring foreign scientists and engineers in their home countries. Second, they claim that the H-1B program serves as the gateway to immigration for the "best and brightest" foreigners, arguing that capturing the best and brightest is contingent on an expansion of the H-1B program.

But neither claim is supported by analysis of actual program operation. Rather than preventing the outsourcing of jobs, the H-1B program acts in just the opposite way, by accelerating the outsourcing of high-wage, high-skill jobs to low-cost countries. The largest users of the H-1B program are offshore outsourcing firms, whose business model depends on moving as much work overseas as possible. And these firms do not use the program as a bridge to immigration, for they sponsor very few of their workers for green cards. For example, in 2006, Wipro Technologies applied for 19,450 H-1B positions but only for 69 green cards, a 0.004 green card to H-1B application ratio. H-1B program links to immigration are increasingly tenuous, and more importantly, the H-1B proponents are providing policy makers a false choice: increase the H-1B program or risk losing the best and brightest foreign workers. There are many much better and more effective policy mechanisms to encourage the best and brightest to immigrate to the United States. The H-1B program does not have to be the gateway to immigration for the best and brightest.

What causes the gap between the promise and reality? The H-1B program does not live up to the promises of its supporters because of fundamental flaws in program design in three key areas (outlined below).
Three fundamental design flaws

1. No labor market test
The most significant design flaw is the absence of a labor market test. The U.S. Department of Labor recently expressed the practical implications of this fact in a straightforward manner when it stated that "H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of the foreign worker."2 Simply put, an employer does not have to test the labor market before hiring a foreign worker on an H-1B.3

What is most remarkable about the H-1B policy discussion is how many journalists and politicians believe such a labor market test exists. For example, news stories over the past year in the Los Angeles Times, San Diego Union Tribune, Wall Street Journal (in a front page story at the height of last year's immigration debate) have all mistakenly claimed the program has a labor market test. Prominent political leaders have also promulgated this fallacy. For example, a San Francisco Chronicle story highlighted the political battle over the H-1B program last year. Senators John McCain and Edward Kennedy, co-sponsors of the immigration bill that passed the U.S. Senate, reportedly countered criticism of the H-1B program by saying their bill included requirements that employers search for U.S. workers first.4 But their bill included no such provisions. The misconceptions seem to be widespread within Congress. Below are excerpts from two recent letters sent by U.S. Senators, one a republican and one a democrat, in response to constituents who wrote, expressing concerns about the H-1B program's effects on the U.S. workforce:5

Sen. Norm Coleman:

While the continued viability of the H-1B visa program is vital, I fully support the important rules governing the issuance of H-1B visas to protect U.S. workers. An employer wishing to hire an H-1B nonimmigrant must demonstrate that there is an insufficient number of U.S. workers qualified for the position and must show that the business has not laid off a U.S. worker 90 days prior to or after hiring any H-1B worker. Employers must also show they have attempted to recruit U.S. workers and that the admission of foreign workers will not adversely affect the job opportunities, wages, and working conditions of U.S. workers.

Sen. Barak Obama:

The intent is that H1-B visas only be issued if qualified American workers are unable to take the jobs in question….I fully agree that H1-B hires should be a last recourse as a matter of labor policy.

The rules referenced in Coleman's letter simply don't exist for the vast majority of H-1B employers. And the intent that Obama's letter asserts is not met in practice.

The absence of a labor market test has been identified as a critical weakness by numerous government reviews of the program. For example, in assessing the H-1B program's effectiveness, the Bush administration's Office of Management and Budget found that it contributed to the program's serious vulnerability to fraud and abuse.6

Coupled with other program design flaws, the labor market test flaw creates incentives for employers to prefer foreign workers to American ones, and in some cases to actively displace American workers with H-1Bs.

2. Prevailing wage is not market wage
The H-1B program's primary safeguard for U.S. as well as H-1B workers is the requirement that an H-1B worker be paid the prevailing wage. The prevailing wage guidelines are set by Congress and employer compliance is administered by the U.S. Department of Labor (DOL) through its foreign labor certification office. The purpose of the prevailing wage is to ensure that H-1B workers are not being paid below-market wages. The reservation wages for many foreign workers are lower than those for U.S. workers, so absent such a requirement, employers could have a significant financial incentive to hire a foreign worker over an American one. And U.S. workers employed in similar occupations could have their wages depressed and working conditions worsened as they compete with workers willing to take lower wages and work in sub-standard conditions. The essence of the regulation is to ensure that the H-1B is not used as a "cheap labor" program.

While the regulations governing the prevailing wage appear to be reasonable on paper, in practice they are ineffective. The implementation of the prevailing wage regulations is riddled with loopholes, enabling firms to pay below-market wages. How do we know this? Employers say so. The Government Accountability Office (GAO) conducted interviews of H-1B employers and reported that, "Some employers said that they hired H-1B workers in part because these workers would often accept lower salaries than similarly qualified U.S. workers; however, these employers said they never paid H-1B workers less than the required wage."7

Another case highlights the attractiveness of using the H-1B and L-1 programs for labor arbitrage. Tata Consultancy Services (TCS), the leading India-based offshore outsourcing firm, has the vast majority of its personnel in the U.S. on either H-1B or L-1 visas.8 TCS Vice President Phiroz Vandrevala described, in an interview with and India-based Businessworld magazine, how his company derives competitive advantages by paying its visa holders below-market wages:

"Our wage per employee is 20-25 percent lesser than U.S. wage for a simlar employee," Vandrevala said. "Typically, for a TCS employee with five years experience, the annual cost to the company is $60,000-70,000, while a local American employee might cost $80,000-100,000. This (labour arbitrage) is a fact of doing work onsite. It's a fact that Indian IT companies have an advantage here and there's nothing wrong in that….The issue is that of getting workers in the U.S. on wages far lower than local wage rate."9

And one need only scan a few H-1B applications that have been "certified" by the U.S. DOL as meeting the prevailing wage to understand the massive gap between the legally constructed "prevailing" and a "market-based" wage. TCS was certified by the DOL to hire 10 computer programmers at $8.22 an hour, and Infosys was certified to hire 100 programmers at $9.15 per hour. It is impossible to believe that the market wage for the "best and brightest" computer programmers is $8.22 per hour. It is important to note that the issue in these cases is not one of enforcement or abuse. These applications comply with the law, illustrating that the prevailing wage regulations can be easily met without paying market wages. But are these simply exceptional cases?

The aggregate data for computing professionals lend support to the argument that the practice of paying H-1Bs below-market wages is quite common. According to the U.S. Citizenship & Immigration Service's (USCIS) most recent annual report10 to Congress, the median wage in FY2005 for new H-1B computing professionals was $50,000, far below the median for U.S. computing professionals. The median wage for new H-1Bs is even lower than the salary an entry-level bachelor's degree graduate would command. So, half of the 52,352 H-1B computing professionals admitted in FY2005 earned less than entry-level wages. And even at the 75th percentile, new H-1B computing professionals earned just $60,000, a far cry from the impression left by Microsoft's Bill Gates that most H-1B workers are paid $100,000 or more.11

Some of the problems with implementing the prevailing wage surface because of the limited oversight that Congress has granted to the U.S. DOL, something that has been noted in numerous government reports. For example, the DOL's own Office of Inspector General has described the labor certification process, the primary means of safeguarding the labor market, as simply a "rubber stamp" of the employer's application. The review process is completely automated, with no person reviewing applications, and the employer is not required to submit any supporting documentation. Based on the process, the GAO concluded that, "…as the [H-1B] program currently operates, the goals of preventing abuse of the program and providing efficient services to employers and workers are not being achieved. Limited by the law, Labor's review of the [labor certification process] is perfunctory and adds little assurance that labor conditions employers attest to actually exist."12

3. Deficient oversight
Deficient oversight permeates nearly all aspects of the H-1B program, not just the front-end of the process described above. This leads to a program with pages of regulations that are essentially ineffective and toothless.

Oversight is particularly lacking once an H-1B is issued. H-1B employers are never scrutinized except in the rare case that an investigation is triggered by an H-1B worker whistleblower.13 When investigated, violations of the H-1B program are found in more than 80% of the cases, a much higher percentage than other programs. The most common violations found were instances where employers did not pay H-1B workers what they were legally required. So, even when employers attest to pay a particular wage, they have little worry that anyone might audit them to ensure that actual wages match the wages on the applications.

It is also important to note that H-1B employees have particularly strong disincentives to blow the whistle on their employer. Because the employer holds the visa, an H-1B worker who gets terminated is out of status (they would have to leave the country) in the eyes of the USCIS. With cases against employers often taking five or more years to adjudicate, it is no wonder that few violations are ever brought to the attention of the DOL.

Another area with little oversight is controls on H-1B-dependent firms. H-1B-dependent employers are generally defined as firms with more than 15% of their U.S. workforce on H-1B visas. Congress was concerned about reports that some employers were almost exclusively hiring H-1B workers, so they attempted to rein in this practice by requiring H-1B dependent firms to attest to three additional things:

* Recruitment & hiring: the employer made a good faith effort to recruit and hire U.S. workers for the position;
* Displacement: the employer will not displace and did not displace any similarly employed U.S. workers within 90 days prior to or after the date of filing any H-1B visa petition; and,
* Secondary displacement: before placing the H-1B employee with another employer, the current employer will inquire whether or not the other employer has displaced or intends to displace a similarly employed U.S. worker within 90 days before or after the new placement of the H-1B worker.

But these additional attestations are irrelevant if firms are never investigated or audited, and few, if any, are.

Based on their public statements, many of the leading offshore outsourcing firms fit into the H-1B-dependent category. With even a cursory inquiry it should be obvious to the DOL that some of these firms could be in violation of these regulations. For instance, in many cases these firms' business models are designed specifically to cause secondary displacement. Many offshore outsourcing firms are taking over existing jobs and processes. And it seems that many of them are not making a good faith effort to recruit U.S. workers. Searches of the "job opening" sections of their Web sites yield few, if any, openings in the United States. This is in spite of their rapid H-1B workforce growth.

Where are you getting the salary figures (or the implication thereof) for US IT workers? Entry level workers in IT most definitely will not make 50K+ in most jobs, assuming we are talking about BS degreed entrants, not PhDs. It's been my experience that most entry level (American citizen) IT personnel should expect a salary somewhere in the 35K-45K range. Maybe in a few high cost of living areas like CA or NYC it will be substantially more, but out in the hinterlands it won't be.

Your post is way, way, way too long. Ridiculously long. Just might want to edit it down next time.

Mercedes,

Immigration to the US is part of a strategy that helps developing countries "become more stable and able to provide for their citizens." Other countries have labor surpluses, we have labor shortages (arguably), and so the movement of people can help both countries.

What do you mean when you say that the solution needs to come from a "global vantage point." I seriously doubt we'll see a new global institution designed to manage the international movement of people, especially one that substitutes a "global" point of view for that of the nation state.

What we need is for states to realize that it is in their best (national) interest to manage migration in conjunction with each other. The difference may seem subtle, but I think it makes the case.

If you haven't read it, you might check out the 2005 report of the Global Commission on International Migration. You can find it here:

http://www.gcim.org/en/finalreport.html

The source of the salary information was specified:

According to the U.S. Citizenship & Immigration Service's (USCIS) most recent annual report to Congress, the median wage in FY2005 for new H-1B computing professionals was $50,000

By the way, the author of the text included in the long post above is Ron Hira, assistant professor of public policy at the Rochester Institute of Technology. The article was published by the Economic Policy Institute.

Here's the link

OK, I assume "new" means new to the US, but presumably with some years experience in their own country. I thought you were saying that American college graduates (with just a BS) were making those salaries right out of college, which I found very dubious except maybe in a very high cost of living areas. And if all we're talking about here are fairly low level "code monkeys" not high level analysts and designers then that 50K at least compares pretty well with American IT salaries.

An alternate solution

One uses one's freedom of choice and stops reading when one feels like it.   Or skims.  Or whatever.  Or one responds to the parts of essay one thinks are irrelevant.  Or not. 

Basically what I'm saying is that while authors may want to take the attention span of readers into account, that responsibility is theirs, and given the choice between truncated writings which take the choice out of the readers' hands and essays which express the range of a writer's thoughts, I prefer the latter.  The Reader's Digest was never my favorite publication.

aMike

As for doctors and nurses, if there is a shortage, one would think a program to provide incentive for American doctors and nurses to move to these areas would at least help.

Quasi off post, but maybe not.  The population of the United States in the last 50 years has about doubled.  I've been trying to find information about the growth (or lack thereof) of both institutions for training doctors and nurses (how many new medical schools or nursing schools) and growth in the size of student bodies in medicine and nursing.  I suspect these haven't grown proportionately.  Does anyone have any information about this?  I seem to remember reading that the population of nursing students actually shrunk in the 1980s as more well paying positions opened to women.

In other words, is there a possibility that the "shortage" in medical personnel is at least partly contrived, and that a cartel situation exists which keeps the available supply of doctors and nurses artificially low to keep salaries artificially high?  (I'll take off my conspiracy hat now).  :-)

aMike

Corvid

Not a bad start, but wouldn't it be a better idea to let unskilled American workers' wages continue to rise by continuing to bar unskilled immigrants? Why open the gates just as hard-working Americans at lower end of the scale are beginning to catch up?

That's kind of what I thought.  I remember that Ronald Reagan's argument for overthrowing the government of Grenada was that there were some American medical students studying there (students who couldn't find a spot in an American Medical School).    It would be a great if TPM could recruit an expert on medical education to write occasionally. 

I also remember there was a bit of a ruckus when Brown University investigated offering a MD in 1972.  I'm not sure how many more medical schools have been started in the interim.

aMike

I assume these involve higher level degrees, otherwise the figures are simply wrong, possibly skewed by only querying major corporations in expsense areas.