Professor Norm Matloff Responds to Turnaround Exec’s Call for More H-1B Visas

Don Tennant

In my post on Monday,  “Corporate Turnaround Exec: Raising H-1B Visa Cap Just Makes Economic Sense,” I wrote about global leadership, business and strategy consultant Kathleen Brush’s view that the United States needs to increase the number of foreign workers on H-1B visas in this country. The post, which stemmed from an interview I conducted with her last week, also addressed Brush’s views on what motivates foreign workers who come to this country, compared to what motivates American workers.

I made reference to University of California at Davis Professor Norm Matloff during my interview with Brush, simply because Matloff is one of the most intelligent voices on the H-1B issue I know. Since Brush disagreed with his position, I sent Matloff a link to my post with a request for his response. Not only did Matloff respond, but he devoted the May 13 edition of his “H-1B/L-1/offshoring e-newsletter” to addressing Brush’s comments. You can read that edition in its entirety here.

For the purpose of this post, I’ll encapsulate Matloff’s responses to the key themes of Brush’s position, beginning with this one:

We need to raise the cap on the H-1B visas. I don’t think Americans are being robbed of jobs. I’ve spent a fair amount of time studying the graduation rates, and I have a lot of statistics on it. When you look at the people who are graduating with STEM degrees, in graduate school it’s something like 60 percent are foreign; most of them are Asian. When you look at the shortages of engineers in the United States, the shortage of IT workers, you can tie that back to which ethnicities study which types of subjects. … For some reason, we have made it more attractive for students to study political science or sociology or other non-STEM fields. And that’s a problem.

This was Matloff’s response:

It's debatable whether a graduate degree is that useful, say in the computer fields. But if Brush thinks it's necessary, then there is an easy answer to her question as to why "For some reason, we have made it more attractive for students to study political science or sociology or other non-STEM fields." Yes, indeed, "we" have done exactly that! … The large foreign influx has suppressed Ph.D. wage growth so much that it is a financial loser to study for a Ph.D., due to 5-6 years of lost industry-level earnings. …So, if the underrepresentation of Americans in STEM doctoral programs is considered bad, then H-1B is the CAUSE of the problem, not the SOLUTION. In other words, if Brush wants to see more Americans in grad school, "we" need to reduce H-1B, not expand it.

Next, Matloff cited the comment from Brush about the H-1B visa holders who worked for her being paid the same wage as her American employees:

I’ve had a lot of H-1B visa folks working for me. They made the same salaries as everyone else. We didn’t pay them any less.

Matloff didn’t buy it:

Really? A cursory look at the PERM (green card application) data for her most recent employer, Openwave Systems, strongly contradicts her claim.

In almost all cases, Openwave is paying their foreign workers right at the prevailing wage, the legal minimum. Recall that a KEY point in H-1B wage analysis is that the legally required wage is typically 20% or more below market level, because it does not take into account the "hot" skills that employers say they hire H-1Bs for, and for which they would have to pay a premium in the open market. I go into this in detail in my recent Migration Letters publication as well as my older University of Michigan Journal Law Reform paper. … In other words, Openwave is underpaying its foreign workers by 20% or more, relative to their actual market value.

Matloff went on to cite Brush’s comments about what motivates foreign workers:

I’m pretty sure I’m right here, that most Indian workers, and I believe Chinese workers as well, they’re motivated by their paychecks. Their paychecks can provide them with a lot of things they’ve never had before. In the United States, we sort of take for granted a car, and nice accommodations, etc. In developing countries like India, people are more motivated to get those things. If you look at [famous psychology theorist Abraham] Maslow, they’re more motivated towards those lower-order needs, whereas in the U.S. it’s the higher order.

In response, Matloff went so far as to claim that Brush’s comments show that she prefers to hire foreigners over Americans:

Some Asian-Americans would be deeply offended by the above language. Yes, most immigrants do come to the U.S. to improve their economic lot, as for instance my father did, but the language is a little edgy.

Let's put that aside, though, and look at what Brush is really saying, which is that SHE DOESN'T WANT TO HIRE AMERICANS. Whether you agree with her Maslovian premise or not, her own view is very clear. Americans, including the U.S. born children of those H-1Bs she has hired, are just too comfy for Brush. She wants the "lean and hungry" ones, from India and China. So forget all that talk of hers about a "shortage" of American engineers etc.; she doesn't want them, except maybe for the "talking" jobs, e.g. management, customer interface etc.

One final point: I've written a lot on the general level of talent of the H-1Bs, finding that on average, the foreign workers are of weaker talent, relative to the Americans. Some are extremely sharp and innovative, and their immigration should be facilitated, but most H-1Bs, INCLUDING most foreign graduate students, are not in that league.  …I've also written, elsewhere, what I believe are the reasons for the foreign students being less innovative and so on. One of those reasons is that the foreign students tend to come from educational systems that focus on rote memory. … But another reason I've cited is that the type of person Brush describes above, who comes here ONLY for the nice cars etc., rather than out of a passion for computers, is bringing down OUR country's innovative ability.

Add Comment      Leave a comment on this blog post
May 15, 2013 9:25 AM Dolores Dolores  says:
Bravo for having the courage to publish this, Don. There's always more than meets the eye when it comes to H-1B supporters. Reply
May 29, 2013 8:22 AM Concerned Concerned  says:
I think this article clearly summarizes the problem for the science/tech workers in the US. Clearly Congress listens to the rich, relentless and powerful tech heads and cares two hoots for us. The latest Senate bill is a BONANZA for them and essentially will hold down the wages for ever... Orrin Hatch was bought off by the tech lobby and he has no shame about it. Reply
Jun 18, 2013 5:31 AM Wakjob Wakjob  says:
Don, google "Asia's rampant cheating problem. Most Asians who come here are liars and cheats. They cheat their way through grad school which is why when they take jobs here our companies all collapse. These Asian conmen are out for one thing: to come here, GRAB our $, and then leave. H-1B is nothing but a veiled wealth redistributuin program. Reply
Jun 27, 2013 5:07 AM Dolores Dolores  says:
Here's an example of their shameless greed and opportunism. Is this what America needs now? Reply

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