The only joy — and it is a minor one — in the ongoing immigration policy conflict in Congress is to watch two sets of worker-exploiters battle each other over H-1B slots.
The most recent round between the Indian out-placement firms (or body shops) and the IT giants (Microsoft, Intel, IBM, et al.), also called product companies, was won by the former. Had it been a football game, the score would have been:
Placement firms: 35
Product firms: 0
That encounter was played out in the House Judiciary Committee. More on that later.
It was the third game of the season, and several more are expected before the battle is over.
The product companies, all U.S.-owned, create computers and software products that are widely used and widely known; the out-placement firms, largely Indian-owned, rent their H-1Bs to other corporations, but produce nothing that is memorable in the minds of the public. The product companies have spent millions and millions on public relations and lobbying programs; more recently the Indian business interests have started to do the same, enlisting two former U.S. ambassadors to India and a former congressman in the effort.
Both kinds of firms underpay their workers through the H-1B program, but the product companies use fewer of them than the Indian firms, as the Wall Street Journal has reported; pay their H-1Bs a bit more; and are more likely to convert H-1B workers into green card holders.
As this bill-writing season started, the product companies wanted two things: 1) to put all the blame for the H-1B exploitation of workers on the out-placement firms, and 2) to reduce the number of H-1B slots going to the placement firms so that more could go to the big IT firms.
The first game in the series took place behind closed doors as the Senate's Gang of Eight produced the initial version of the sweeping immigration "reform" bill (S.744) that seeks to legalize up to 11 million illegal aliens and, as a secondary matter, give the product companies what they wanted in terms of new rules for the H-1B program.
Those new rules expanded the number of H-1B visas enormously and made it legal for the spouses of H-1Bs (H-4s) to work in the United States, at any kind of job for any employer. Both sets of firms wanted both changes. Granting the spouses the right to work was a stroke of IT industry brilliance because it would increase the family income in many if not most of the H-1B households without costing the H-1B employers a penny! The H-4s already in the nation are numbered in the hundreds of thousands and more would arrive should the new work rules go into effect.
While the extra visas were welcomed by both camps, the Gang of Eight's efforts to curb the activities of the Indian firms reflected the wishes of the product firms. There were provisions in that version of S.744 that seemed to doom all placement activities, and to run up the fees for the Indian firms. The score of the first game, again using the football metaphor, was something like:
Product firms: 35
Placement firms: 0
For more on this phase, see this blog.
The second game came during the mark-up of S.744 by the Senate Judiciary Committee. At the last minute, Senator Orrin Hatch (R-Utah) introduced a block of amendments that, among other things, either eliminated or watered down the anti-body-shop provisions that were in the original bill. Hatch's vote on the main bill was regarded as crucial to the Gang of Eight, so they accepted his terms and he, in turn, voted for the bill both in committee and later on the Senate Floor. For the play-by-play on this part of the struggle, see this blog.
Given that some restrictions on the so-called "H-1B dependent firms" (such as the Indian out-placement firms) remained in the bill, I would put the score for the second game at:
Product firms: 21
Placement firms: 20
The third game took place late in June in the House Judiciary Committee. It reported out a bill by Rep. Darrell Issa (R-Calif.), H.R.2131, that had absolutely none of the S.744 references to the placement firms and in committee saw the removal of a provision that would have made heavy users of H-1Bs pay higher wages. Thus a total victory for the body shops, with the third game score being:
Placement firms: 35
Product firms: 0
The best place to read about these battles is not in the American press, though Computerworld provides solid reporting, it is in the Subcontinent press, such as this article in the Oneindia News or the Times of India.
The fourth game will probably play out on the House floor, and my guess is that the committee-passed bill — and thus the placement firms — will prevail. That is if the bill does, in fact, reach the floor.
The fifth game will happen if the bill gets as far as the House-Senate conference committee — which I sincerely hope never takes place. At this point, the House and Senate conferees would seek to merge the Senate's S.744, and some immigration bill or bills that had passed the House and my crystal ball offers nothing on the outcome of such a session, except that it will be messy. The subsequent House and Senate vote on the conference committee report — should they occur — would also be of crucial significance, and would be games six and seven. The president is likely to sign anything that emerges, if anything, from those votes.
It is a complicated, long, drawn-out process and American workers are routinely being given the short end of the stick. Yes, the Senate bill, at this point, is somewhat better than the House bill regarding the H-1B program, but both are terrible.