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California Legislature Discovers H-1B - July 3, 2015 Matloff

There is no state that is politically more pro-immigration than my state of California, especially as we grow more and more Latino demographically. And yet our Assembly has now passed a resolution calling for an investigation of the H-1B work visa. Indeed, even the list of sponsors of the bill is striking in terms of surnames:  Two of the authors are named Garcia and Hernandez, and the coauthors include many legislators from immigrant-dominated Latino, Asian and other communities, such as Chiu, Garcia, Gonzalez, Alejo, Bonilla, Bonta, Calderon, Campos, Chau, Chu, Gomez, Lopez, Medina, Nazarian, Rodriguez, Salas, Santiago and Ting.

Another interesting irony (though irony seems to be the norm in today’s world of politics): The companion bill, also authored by Hernandez, expresses concern that such a sensitive sector as an electric utility could rely so heavily on foreign workers for IT and engineering operations, potentially creating avenues for terrorists. Sounds like a classical conservative concern, yet these are liberal Democrats. To me, this sounds like a well-founded worry, one that people of whatever party should have. (I’m a Democrat, as some of you know.)

How on Earth could this happen? Well, these same staunchly pro-immigration legislators are also very pro-union, and the workers at SCE who were replaced by H-1Bs are unionized! Someone at SCE just didn’t think this through.

Resolutions are fine, especially as barometers of current politics, but they have no teeth. The companion bill aims to have bite; it would require that utilities use only “direct” employees, as opposed to the situation with SCE, Disney and so on, in which the employers fired their American workers and replaced them by “rented” workers supplied by IT services firms (colloquially, “bodyshops”) such as Infosys. And it is here that the bill fails, quite badly.

The bill, for example, would do nothing to prevent SCE from hiring its own H-1Bs. And as I’ve often warned before, most of the bills introduced in Congress in recent years on foreign tech workers have included provisions to grant fast track green cards to foreign students studying at U.S. universities. Companies like SCE would have no problem hiring them, and again these would be cheap hires, due to the youth of new/recent graduates, which is mainly the same reason firms like Infosys can provide their foreign workers so cheaply.

Moreover, if the legislature is that concerned about the “furriners” getting access to the power grid, they might consider the fact that most of the Chinese industrial espionage cases, including those in the defense industry, have involved former foreign students who studied at U.S. universities, such as this one involving former students at USC, a few miles away from SCE headquarters, or for that matter, even closer to the LA Dept. of Water and Power; with green cards, they’d be eligible to work at these utilities.

In other words, the Assembly’s bill’s emphasis on the word direct really misses the boat; it misses the entire harbor! But I can’t blame them, because for years the tech industry lobbyists, with the unwitting complicity of many prominent critics of H-1B, have sent the message that the main problems of H-1B have come from indirect hiring through the bodyshops. No wonder the bill’s author (and possibly even the union) got confused.

Not that Hernandez’s bill has a chance anyway. As pointed out in Pat Thibodeau’s article, New Jersey Governor Chris Christie vetoed a 2012 bill that would have banned the offshoring of IT call centers. There were a number of failed bills like this in the early 2000s, including a 2004 bill by Carol Liu, passed by the legislature but vetoed by Gov. Arnold Schwarzenegger on the grounds that it would be a “restriction of foreign trade.” Count on Democratic Governor Jerry Brown to veto Hernandez’s bill too, if it’s not quashed earlier in the legislative process.

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