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H1-B Visa Program Creates Caste System for Silicon Valley 

Wednesday, Jun 22 2011
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After years in the economic wilderness following the 2001 dot-com crash, designers, artists, webmasters, and all sorts of multimedia, networking, and software experts are finding jobs in San Francisco again. Thank the boom in social media, mobile apps, and digital advertising.

But thousands of those jobs will be unavailable to San Franciscans.

The posts are slated for foreigners participating in the H1-B nonimmigrant visa program, meant for companies needing highly skilled workers who can't be found here.

Last year, San Francisco companies filed 1,827 such applications. This year they filed 2,243, according to the website MyVisaJobs, which aggregates federal data. This is part of a nationwide trend in which firms have rushed to fill jobs with H1-Bs, named for the portion of the immigration code that gives special three-year visas for skilled workers.

Bay Area CEOs say imported experts are key to Silicon Valley success. In the program, foreign workers are employed by the sponsoring company for up to six years. During that time, the H1-B holders may start the long process of applying for permanent-resident green cards.

Critics say the program is a mild form of indentured servitude. They insist that what employers really seek are compliant workers who won't complain about unfair treatment for fear of being deported.

The fact is both groups are right: The H1-B program depresses wages for certain U.S. workers. It's rife with fraud and abuse. H1-B workers are vulnerable to discrimination, isolation, and exploitation. But the program is a necessary evil because skilled and enterprising new immigrants are exactly what the Bay Area economy needs.

The dirty truth is that H1-B is a twisted way to achieve that goal. It exists in its current form solely to cater to the emotional needs of America's dysfunctional immigration debate.


Kathy Mount, human resources director for the city of South San Francisco, is in a position typical of some H1-B employers. A few years ago, when the job market was tighter, the city hired a talented senior planner who happened to have been born overseas. To retain his skills and institutional memory, the city has re-upped as an H1-B visa sponsor.

"This particular planner took the eligibility test, came out number one, and was hired as a result of that," she says.

And why not?

Indeed, during a few hours poring over U.S. Citizenship and Immigration Services records showing San Francisco H1-B applications, I found plenty of perfectly legitimate scenarios for importing foreign workers. A local company called Crunchyroll specializes in streaming Japanese anime videos. It seeks a graphic designer and artist — presumably one conversant in the idiosyncratic form of Japanese cartooning.

Still, some participating companies seem touchy about HI-B's public perception. AKQA is a multinational interactive marketing firm with offices in Singapore, clients in Germany, and subcontractors in Australia. It is looking to fill 18 positions in its San Francisco and New York offices, including art director and creative developer.

But when asked about this presumably felicitous expansion, PR director Stephanie Young said via e-mail: "AKQA is going to bow out of this story participation, if that's alright."

A marketing firm bowing out of free publicity? Why so shy?

A possible clue: The H1-B program's deservedly bad reputation.

A 2008 Department of Homeland Security audit determined that one in five H1-B visas were obtained through fraud or as a result of technical violations. A 2003 University of Michigan Journal of Law Reform study declared that U.S. CEOs' claim of a tech labor shortage was bogus. H1-Bs were merely a cheap labor pool, and many companies exploited the program as a way to replace older and thus less desirable U.S. employees. Another study showed that H1-B workers weren't even particularly highly skilled; they were merely compliant and cheap. "This is all about whether Microsoft can hire an engineer for $30,000 per year instead of $80,000 per year," says David Bacon, author of the book Illegal People: How Globalization Creates Migration and Criminalizes Immigrants. "H1-B status is just a way of getting a cheap worker."

The program distorts the labor market in other pernicious ways. It's cumbersome for H1-B workers to change employers without being deported. So we have a Silicon Valley caste system where H1-Bs have a reputation for working hard and keeping their mouths shut. Some support families back home. Many go into debt to pay immigration brokers in hopes of one day getting green cards and reuniting their families here. Some employers know they won't sacrifice all that by declining to work unpaid weekends. Even elite H1-Bs are at a disadvantage: The most talented ones can't easily move to better jobs, because their visas are linked to particular employers. That is a boon for companies not wanting to reward performance.

Eventually, these miserly standards trickle down to the rest of us.

There happens to be a cure-all: Give green cards to any skilled foreigners who ask for them. They could then demand fair treatment without fear of deportation. Employers would be compelled to provide market-rate wages and equal-rights treatment to immigrants. This freedom of speech, movement, and bargaining power would raise standards for everyone. Everyone would win, except for exploitative bosses.

But in America's fantasy-world immigration debate, the AFL-CIO and Tea Party activists join in the bogus refrain that it's immigration itself that costs Americans' jobs.

Let's compare the economic prospects of a stolid Midwestern town like Flint, Mich., with those of the polyglot San Francisco Bay Area. Here, local champions such as Google, Intel, Sun, eBay, and Yahoo! were cofounded by foreign-born tech heads — as were half of Silicon Valley's technology companies. In some fields, more than half of newly minted Ph.Ds are immigrants. And this year UCSF has petitioned to fill 96 positions via H1-B visas, just as San Francisco city leaders are banking on the idea that a new university-based biotech hub will bring years more job growth.

The Bureau of Labor Statistics says the region encompassing San Francisco, San Mateo, and Redwood City has gained 50,000 jobs since a low in 2006. Flint, meanwhile, has lost 5 percent of its workforce yearly for the past decade.

Go, home team!

Notwithstanding, there's little to be gained in this country's nativist-tinged political arena by calling for the floodgates to open, even though this actually helps create jobs for nonimmigrant and immigrant workers alike.

And in San Francisco, H1-B — rather than immigration itself — has created a perverse situation where local companies are hiring, but locals can't compete on a level playing field for the jobs.

About The Author

Matt Smith

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