Factory owners have been adding jobs slowly but steadily since the beginning of the year, giving a lift to the fragile economic recovery. And because they laid off so many workers — more than two million since the end of 2007 — manufacturers now have a vast pool of people to choose from.

Yet some of these employers complain that they cannot fill their openings.

Plenty of people are applying for the jobs. The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.

[snip]

As unlikely as it would seem against this backdrop, manufacturers who want to expand find that hiring is not always easy. During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.

Now they are looking to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math proficiency than was previously required of the typical assembly line worker.

Makers of innovative products like advanced medical devices and wind turbines are among those growing quickly and looking to hire, and they too need higher skills.

“That’s where you’re seeing the pain point,” said Baiju R. Shah, chief executive of BioEnterprise, a nonprofit group in Cleveland trying to turn the region into a center for medical innovation. “The people that are out of work just don’t match the types of jobs that are here, open and growing.”

The increasing emphasis on more advanced skills raises policy questions about how to help low-skilled job seekers who are being turned away at the factory door and increasingly becoming the long-term unemployed. This week, the Senate reconsidered but declined to extend unemployment benefits, after earlier extensions raised the maximum to 99 weeks.

The Obama administration has advocated further stimulus measures, which the Senate rejected, and has allocated more money for training. Still, officials say more robust job creation is the real solution.

But a number of manufacturers say that even if demand surges, they will never bring back many of the lower-skilled jobs, and that training is not yet delivering the skilled employees they need.

[snip]

All candidates at Ben Venue must pass a basic skills test showing they can read and understand math at a ninth-grade level. A significant portion of recent applicants failed, and the company has been disappointed by the quality of graduates from local training programs. It is now struggling to fill 100 positions.

Labels: employment, skills shortage

But I have to remind myself there are still engineers (or CS types) that just want a job. These are people paid not in founder’s shares, or qualified options, but in salary. The problem is that (as with nurses and teachers), the economy needs a lot of engineers, so raising salaries across the board is a lot more expensive than paying high wages to a handful of NYSE traders or MLB players.

Labels: employment, skills shortage

Every year, American businesses tell us how they are unable to retain the qualified people that they want to retain because of the artificially low H-1B visa caps and related regulations that do not reflect market realities. This situation is ironic, since most of the unemployable people were educated in the United States. [Note from Carrie - Hmmh, are they talking about Americans or foreign students?] As a country, we are effectively handling these highly-educated, extremely desirable individuals a diploma and a plane ticket. The message we are sending is "You can learn here, but you have to work in another country."

Amends the Immigration and Nationality Act to exempt from the annual H-1B(specialty occupation) visa cap an alien who has: (1) earned a master's or higher degree from an accredited U.S. university; or (2) been awarded a medical specialty certification based on post-doctoral training and experience in the United States.

Increases the annual H-1B cap, with a 20% increase for the following year if the previous year's quota is reached.

Exempts from worldwide immigration caps an alien who: (1) has earned a master's or higher degree from an accredited U.S. university; (2) has been awarded medical specialty certification based on postdoctoral training and experience in the United States; (3) will work in shortage occupations; (4) has earned a master's degree or higher in science, technology, engineering, or math and has been working in a related field in the United States during the three-year period preceding his or her immigrant visa application; (5) has extraordinary ability or received a national interest waiver; or (6) is the spouse or minor child of an employment-based immigrant.

Labels: H-1Bs, SKIL Bill, skills shortage

• For each of the last five fiscal years, how many employees have you terminated outside of the United States?
  
• For each of the last five fiscal years, how many employees have you terminated inside of the United States?
  
• How many of these employees were U.S. citizens?
  
• Did H-1B visa holders replace or take over the job responsibilities of any of these terminated employees?
  
• Would you support legislation prohibiting all employers from displacing an American worker with a H-1B visa holder? Please explain.

Why would Senators Durbin and Grassley feel the need to send out these letters?

I'll break my timeline a bit and mention the April 4, 2008 article written by intrepid reporter Jennifer Bjorhus from the TwinCities Pioneer Press. (As of today, I could find the article by typing in "H-1B" in the online paper's internal search engine, but I couldn't find a permanent link. Norman Matloff reprinted the entire article in his H-1B/L-1 Offshoring e-Newsletter #113.) Bjorhus, one of the few newspaper reporters I'm aware of that is doing any real digging into this topic, has been following H-1B/L-1 visa issues since her days at the San Jose Mercury News (the official mouthpiece for Corporate Silicon Valley).

Outside of Ron Hira's 2005 book, Outsourcing America, this is one of the better write-ups I've seen on the difficulties of obtaining the necessary facts, figures and statistics in order to get a true picture of what is going on with the H-1B/L-1 visa programs.

Industry has long argued that the temporary work visas are necessary to stay competitive by attracting the world's best and brightest workers. Many employers, most recently Bill Gates, argue there's a critical shortage of skilled U.S. workers.

snip

Critics charge there's no shortage but too many over-specific job descriptions and overly picky employers. The guest worker program cheats U.S. workers by importing younger workers who are often less well paid, they charge. Laid-off U.S. tech workers have testified on Capitol Hill of being forced to train their H-1B replacements. What's missing from the decade-old debate is solid information about how the program actually functions. Exactly which white-collar jobs go begging for lack of qualified U.S. workers? What are specific workers being paid? How are specific employers in various parts of the country using the program? Are there patterns to their particular hiring?

snip

Companies won't discuss specifics. [Note from Carrie. Vague notices like the recent Chrysler announcement to outsource their Information Technology functions to Indian bodyshop Tata Consulting Services are the norm.] U.S. Citizenship and Immigration Services will not release detailed information it keeps on the thousands of worker-specific visas it approves each year to be issued by the State Department.

"It's a huge hole," said Ron Hira, assistant professor of public policy at the Rochester Institute of Technology and co-author of "Outsourcing America." "Why would you expand a program without knowing what its impacts are? [Emphasis mine.] It's very bizarre to me."

Hira has company. Sens. Dick Durbin, D-Ill., and Chuck Grassley, R-Iowa, on Tuesday [April 1, 2008] mailed 25 letters to the country's top H-1B employers asking for detailed information on how they use the program.

The Pioneer Press in 2004 filed a Freedom of Information Act request to immigration services for basic information on each H-1B and related L-1 visa it approved for employers since 2000. L-1 visas, which have no cap, are increasingly used by employers to bring their own foreign employees to the U.S. to work.

The newspaper's request remains unfilled. In January, immigration officials mailed a disk that doesn't contain records of any H-1B visas, and with tens of thousands of blank fields where job codes should be, and more than 400,000 blank fields where the worker's education level should be recorded. [Emphasis mine.]

The Pioneer Press filed an appeal with immigration services, which recently informed the newspaper that the appeal is No. 2,771 in a backlog of 2,845 appeals. Chris Rhatigan, an immigration services spokeswoman, said her agency considers the newspaper's request filled, noting the "appeal is still pending a final decision."

snip

As for immigration services, it does publish a yearly report,"Characteristics of Specialty Occupation Workers," showing aggregate totals at the national level — such as that 50 percent of the H-1B visas in fiscal year 2005 were for people from India, half were issued to people in their 20s, 5 percent of the workers held doctorate degrees and about half the jobs were computer-related.The report doesn't provide employer-specific or job-specific information.The agency is also two years behind on its reports.

On April 2, 2008, Michael Chertoff from the Department of Homeland Security signed an interim final rule with a request for comments (that was nice of him) to extend the Optional Practical Training program for F-1 STEM visa holders from 12 months to 29 months. Chertoff's document claims that:

The inability of U.S. employers, in particular in the fields of science, technology, engineering and mathematics, to obtain H-1B status for highly skilled foreign students and foreign nonimmigrant workers has adversely affected the ability of U.S. employers to remit and retain skilled workers and creates a competitive disadvantage for U.S. companies.

Again, this was shamefully unpublicized in an obvious ploy to sneak through a de facto increase in the number of foreign worker visa holders without input from the American public.

The rule further stipulates that students must be enrolled in Optional Practical Training programs that relate to their college majors, and that employers must be enrolled in the USCIS E-Verify Employment Verification Progam.

How does the Department of Homeland Security feel they are able to shove through a ruling without prior public comment? Per page 23 of the .pdf file:

To avoid a loss of skilled students through the next round of H-1B filings in April 2008, DHS is implementing this initiative as an interim final rule without first providing notice and the opportunity for public comment under the "good cause" exception found under the Administrative Procedure Act (APA) at 5 U.S.C. 553(b)). The APA provides that an agency may dispense with notice and comment rulemaking procedures when an agency, for "good cause," finds that those procedures are "impracticable, unnecessary, or contrary to the public interest." See 5 U.S.C. 553(b)(B). The exception excuses notice and comment, however, in emergency situations, or where "the delay created by the notice and comment requirements would result in serious damage to important interests. [Emphasis mine.]

In other words, if Bill Gates says this is a national emergency, then this is a national emergency!

One thing that held me up on this blog post was the fact that I really had no idea what was meant by "Optional Practical Training." I had read discussions that the training could occur while the student was in school, after graduation, or a combination of the two. It wasn't until I heard Rob Sanchez' podcast on the George Putnam show that I found out what was really going on.

DOH! (Carrie slaps hand to forehead.)

The Optional Practical Training program means internships! Unlimited numbers of foreign STEM graduates can now take up internships and effectively shut out American-born STEM graduates from future technical careers! Despite the rhetoric from the likes of Microsoft and Oracle, competition for job openings in the tech industry is fierce. Having a high quality internship on your resume is crucial to landing that important first real job. The ability to land an internship means the difference between either starting a career in your chosen technical field or ending up in law school after spending two years of sending out resumes while working at Burger King.

I wrote a post last month about how graduates of the University of Michigan School of Engineering are having a difficult time landing jobs within their career fields, both inside and outside of the state of Michigan. As Bob Oak points out in his No Slaves blog, "Students graduating in Science, Technology, Engineering and Mathematics majors are about three times the total number of new jobs created in the United States for these majors." Studies by Vivek Wadhwa et al from Harvard University, the RAND Corporation, Michael Teitelbaum on behalf of the Sloan Corporation (per his testimony before the House of Representatives Subcommittee on Technology and Innovation on November 6, 2007), the Urban Institute, and Norman Matloff from UC-Davis, all confirm in varying degrees the myth of the high tech skills shortage.

On April 4, 2008, the world finally found out about the extension of the Optional Practical Training program from 12 months to 29 months from this announcement from the Department of Homeland Security. The interim final rule was entered into the Federal Register on April 8, 2008, which marked the start of the 60-day limit for public comments on this policy.

The No Slaves blog lists a few ways you can officially voice your outrage at this stealth change in policy. Pages 2 and 3 of the DHS interim rules .pdf file also gives details on how you can submit public comments.

Also, on April 4, 2008, Arlen Specter (R-Pennsylvania) and the Republican High Tech Task Force (HTTF) finally admitted that they were the force behind the Department of Homeland Security's decision to extend the Optional Practical Training (OPT) program for F-1 non-immigrant students.

On April 8, 2008, the U.S. Citizenship and Immigration Services (USCIS) announced ".... that it has received enough H-1B petitions to meet the congressionally mandated cap for fiscal year 2009. "

On April 9, 2008, the Daily Princetonian reported that some foreign students are not happy that the Department of Homeland Security's ruling for the expanded OPT program does not apply to non-STEM majors.

Many current international students are upset with the academic restrictions.

“I don’t think it’s fair that not everyone is eligible for the extension, because we all face the same problems in obtaining work visas upon graduation,” Megan Chiao ’09, former president of the International Students Association, said in an e-mail. Chiao, an ORFE [Operations Research and Financial Engineering] concentrator, is from Singapore.

snip

[Assistant Dean of Undergraduate Students Rachel] Baldwin fears that the selectively granted extension — instituted because of the demand for foreign students in technical fields — will drive international students away from non-STEM majors because of the relative post-graduation disadvantage.

“Some international students may stray away from the Woodrow Wilson School, Romance Languages and other fields that do not qualify for the extension,” Baldwin explained.

“I think it will be frustrating for non-STEM majors, and it is unfair that the decision was not made to support all F-1 students, despite their chosen major,” Baldwin said.

Economics major Cee-Kay Ying ’08, who is from Australia, disagreed with the STEM requirement, noting that humanities concentrators are no less skilled than students in other majors.

“Some majors between engineering and humanities have lots of overlap, such as ORFE and Econ,” she said in an e-mail. ORFE but not economics concentrators qualify for extension.

“Depending on what track you take, you could pretty much have the same coursework [except for] the independent work,” Ying explained. “Does this mean ORFE [concentrators are] more qualified to work in the US than econ majors? This perhaps could be a deciding factor among internationals wanting to maximize their opportunities to work in the US after graduation.”

Earth to Ying! Do you really believe that our economists are going to allow an unlimited number of foreign students to take away their jobs?

Americans are told every day by economists, business leaders and politicians that we need to lose our sense of entitlement to education, health care, job security, Social Security and old age pensions. I would find it quite refreshing if someone would stand up and tell these foreign students that they need to give up their sense of entitlement to college educations funded by American taxpayers and guaranteed job offers from American companies upon graduation!

On April 10, 2008, per an update to an April 8, 2008 article written by Patrick Thibodeau at ComputerWorld, the USCIS announced they received 163,000 requests for H-1B visas, along with 31,200 applications for foreign nationals holding advanced degrees.

Also on April 10, 2008, Senator John Cornyn (R-Texas) introduced the "Global Competitiveness Act of 2008". Among other things, the bill (S. 2839) would:

• Recapture 150,000 supposedly unused visas and dole them out over a 3-year period.
• Raise the main numerical cap on visas from 65,000 to 115,000 per fiscal year
• Raise the numerical cap on advanced degree holders (masters degrees and above) from 20,000 to 30,000 per fiscal year.

Rob Sanchez noted in his Job Destruction Newsletter:

Have any of you noticed that so many of the proposed visa increases lately are now being called national emergencies? First, we had the massive defacto H-1B increase that the DHS approved to extend the Optional Practical Training time period. Now we have a bill introduced by Sen. Cornyn that he says is "emergency relief" for employers. Why doesn't Cornyn feel that his constituents need emergency job creation?

As of this writing, the complete text of the bill has yet to be released. However, according to the outline in the press release, the wording includes the obligatory "we'll outlaw all visa abuses" language. Rob Sanchez further pointed out:

The Cornyn bill contains what may appear to be a restriction on how bodyshops use H-1B visas. Don't be fooled -- bodyshops aren't the most important issue -- the number of visas available is far more important. Cornyn was very clever to insert this provision into the bill in order to split the opposition. It won't stop bodyshops from operating in the U.S. but it might inconvenience them a little since they will have to change how they bill their work.

Cornyn's bill also has some verbiage to enforce the law against fraud. As I have explained before, fraud isn't a major problem in the H-1B visa program, so the provisions he is offering will do nothing to help American workers against the huge onslaught of foreigners he wants to import.

USCIS conducted their random selection process on April 14, 2008 for their H-1B lottery, per this update.

April 15, 2008. I'm sure I've missed something. Please feel free to comment if you noticed any glaring omissions.

April 16, 2008. [Fill in the blank. I'm sure something momentous will happen that will make my article obsolete as soon as I hit the "Publish Post" button.]

Anyone can tell that the High and the Mighty are hell-bent on getting their visa limit increases. There seems to be growing consensus that at least one of these measures will be passed this year despite the fact unemployment rates are so high even the figures provided by the Bush administration are showing that the jobless rate is increasing.

I've been learning about these issues for a little over a year now. I've seen the same unoriginal arguments over and over and over again that we need a limitless supply of foreign tech workers because we are not producing enough of the best and brightest to fill all of these mysterious job openings that are supposedly open to everyone. Every once in a while the high tech lobby does something that jolts me awake again. This year, so far, it's the possibly unconstitutional fiat from the Department of Homeland Security to deal with this "national crisis" by increasing the Optional Practical Training program time limit for F-1 STEM student visa holders.

I wonder what the next surprise will be?

(Cross-posted at Carrie's Nation.)

Labels: education, employment, F-1's, H-1Bs, L-1s, skills shortage