    [Senate Hearing 114-831]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-831

                     IMMIGRATION REFORMS NEEDED TO PROTECT
                            SKILLED AMERICAN WORKERS

    =======================================================================

                                    HEARING

                                   before the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   ----------

                                 MARCH 17, 2015

                                   ----------

                               Serial No. J-114-7

                                   ----------

             Printed for the use of the Committee on the Judiciary

                                                            S. Hrg. 114-831

                     IMMIGRATION REFORMS NEEDED TO PROTECT
                            SKILLED AMERICAN WORKERS

    =======================================================================

                                    HEARING

                                   before the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 17, 2015

                                   __________

                               Serial No. J-114-7

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                     U.S. GOVERNMENT PUBLISHING OFFICE

    47-421 PDF               WASHINGTON : 2023

                           COMMITTEE ON THE JUDICIARY

                      CHARLES E. GRASSLEY, Iowa, Chairman
    ORRIN G. HATCH, Utah                 PATRICK J. LEAHY, Vermont,
    JEFF SESSIONS, Alabama                   Ranking Member
    LINDSEY O. GRAHAM, South Carolina    DIANNE FEINSTEIN, California
    JOHN CORNYN, Texas                   CHARLES E. SCHUMER, New York
    MICHAEL S. LEE, Utah                 RICHARD J. DURBIN, Illinois
    TED CRUZ, Texas                      SHELDON WHITEHOUSE, Rhode Island
    JEFF FLAKE, Arizona                  AMY KLOBUCHAR, Minnesota
    DAVID VITTER, Louisiana              AL FRANKEN, Minnesota
    DAVID PERDUE, Georgia                CHRISTOPHER A. COONS, Delaware
    THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut
                Kolan L. Davis, Chief Counsel and Staff Director
          Kristine Lucius, Democratic Chief Counsel and Staff Director

                                C O N T E N T S

                                  ----------

                            MARCH 17, 2015, 10 A.M.

                        STATEMENTS OF COMMITTEE MEMBERS

                                                                       Page

    Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa.     1
        prepared statement...........................................    56
    Cornyn, Hon. John, a U.S. Senator from the State of Texas........     4
    Schumer, Hon. Charles E., a U.S. Senator from the State of New
      York...........................................................     6
    Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....     8
    Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont,
        prepared statement...........................................    64
    Vitter, Hon. David, a U.S. Senator from the State of Louisiana,
        prepared statement...........................................    66

                                   WITNESSES

    Witness List.....................................................    55
    Billhardt, Bjorn, Founder and President, Enspire, Austin, Texas..    12
        prepared statement...........................................    68
    Hira, Ronil, Ph.D., P.E., Associate Professor, Public Policy,
      Howard University, Washington, DC..............................    11
        prepared statement...........................................    71
    Johnson, Benjamin E., Executive Director, American Immigration
      Council, Washington, DC........................................    15
        prepared statement...........................................    90
    Miano, John M., J.D., Attorney, Washington Alliance of Technology
      Workers, Bellevue, Washington..................................    17
        prepared statement...........................................   105
    Palmer, Jack B., Jr., an American worker, Montgomery, Alabama....    14
        prepared statement...........................................   126
    Salzman, Hal, Ph.D., Professor, E.J. Bloustein School of Planning
      and Public Policy and J.J. Heldrich Center for Workforce
      Development, Rutgers
      University, New Brunswick, New Jersey..........................    18
        prepared statement...........................................   143
    Trumka, Richard L., President, American Federation of Labor and
      Congress of Industrial Organizations, Washington, DC...........     9
        prepared statement...........................................   177

                                   QUESTIONS

    Questions submitted to Bjorn Billhardt by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Vitter...............................................   197
    Questions submitted to Prof. Ronil Hira by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Sessions.............................................   194
    Questions submitted to Benjamin E. Johnson by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Vitter...............................................   197
    Questions submitted to John M. Miano by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Sessions.............................................   195
    Questions submitted to Jay Palmer by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Sessions.............................................   196
    Questions submitted to Prof. Hal Salzman by:
        Senator Blumenthal...........................................   188
        Senator Grassley.............................................   190
        Senator Sessions.............................................   194
    Questions submitted to Richard L. Trumka by Senator Blumenthal...   188

                                    ANSWERS

    Responses of Bjorn Billhardt to questions submitted by:
        Senator Blumenthal...........................................   199
        Senator Grassley.............................................   201
        Senator Vitter...............................................   205
    Responses of Prof. Ronil Hira to questions submitted by:
        Senator Blumenthal...........................................   208
        Senator Grassley.............................................   210
        Senator Sessions.............................................   220
    Responses of Benjamin E. Johnson to questions submitted by:
        Senator Blumenthal...........................................   228
        Senator Grassley.............................................   226
        Senator Vitter...............................................   227
    Responses of John M. Miano to questions submitted by:
        Senator Blumenthal...........................................   230
        Senator Grassley.............................................   243
        Senator Sessions.............................................   231
    Responses of Jay Palmer to questions submitted by:
        Senator Blumenthal...........................................   251
        Senator Grassley.............................................   255
        Senator Sessions.............................................   257
    Responses of Prof. Hal Salzman to questions submitted by:
        Senator Blumenthal...........................................   258
        Senator Grassley.............................................   262
        Senator Sessions.............................................   283
    Responses of Richard L. Trumka to questions submitted by Senator
      Blumenthal.....................................................   287

                    MISCELLANEOUS SUBMISSIONS FOR THE RECORD

    Submitted by Senator Grassley:

        American Federation of State, County and Municipal Employees
          (AFSCME), Washington, DC, statement........................   289
        American Federation of Teachers (AFT), Washington, DC, March
          16, 2015, letter...........................................   292
        American Immigration Lawyers Association (AILA), Washington,
          DC, et al., March 16, 2015, letter.........................   297
          Attachment: "Debunking the Myth That Immigration Harms
          America," factsheet........................................   298
        American Jewish Committee (AJC), Washington, DC, statement...   304
        Bright Future Jobs, Donna Conroy, Director, Chicago,
          Illinois, statement........................................   307
        Council for Global Immigration (CFGI) and Society for Human
          Resource Management (SHRM), Alexandria, Virginia, March 16,
          2015, letter...............................................   318
        Department for Professional Employees, AFL-CIO (DPE),
          Washington, DC, March 16, 2015, letter.....................   322
        Economic Policy Institute (EPI), Washington, DC, statement...   326
        Hill, Edwin D., President, International Brotherhood of
          Electrical Workers (IBEW), Washington, DC, statement.......   330
        Institute of Electrical and Electronics Engineers-United
          States of America (IEEE-USA), James Jefferies, President,
          Washington, DC, statement..................................   331
        International Federation of Professional and Technical
          Engineers (IFPTE), Washington, DC, statement...............   334
        Jobs With Justice, Sarita Gupta, Executive Director,
          Washington, DC, March 19, 2015, letter.....................   337
          Attachment: Michael Wasser, ``Unchecked expansion of the H-
          1B program won't build better economy,'' The Hill, March
          16, 2015, op-ed article....................................   339
        Leach, David F., President, The Partnership Machine, Inc.,
          Des Moines, Iowa, statement................................   341
        Matloff, Norman, Professor, Computer Science, University of
          California, Davis, California, statement...................   346
        Panetta, Karen, Ph.D., Vice President, Communications and
          Public Awareness, Institute of Electrical and Electronics
          Engineers-United States of America (IEEE-USA), Washington,
          DC, statement..............................................   351
        Sorscher, Stan, Labor Representative, Society of Professional
          Engineering Employees in Aerospace (SPEEA), Seattle,
          Washington, statement......................................   354
        Tierney, Thomas, Ph.D., Vice President, Government Relations,
          Institute of Electrical and Electronics Engineers-United
          States of America (IEEE-USA), Washington, DC, statement....   357
        United States Chamber of Commerce, Washington, DC, statement.   360

    Submitted by Senator Sessions:

        International Brotherhood of Electrical Workers (IBEW),
          Washington, DC, statement..................................   374

    Submitted by Senator Flake:

        Partnership for a New American Economy (PNAE), New York, New
          York, statement............................................   376

                           IMMIGRATION REFORMS NEEDED
                               TO PROTECT SKILLED
                                AMERICAN WORKERS

                                  ----------

                            TUESDAY, MARCH 17, 2015

                                  United States Senate,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10 a.m., in Room
    226, Dirksen Senate Office Building, Hon. Charles E. Grassley,
    Chairman of the Committee, presiding.
        Present: Senators Grassley, Hatch, Sessions, Cornyn, Flake,
    Vitter, Perdue, Tillis, Schumer, Durbin, Klobuchar, and
    Blumenthal.

             OPENING STATEMENT OF HON. CHARLES E. GRASSLEY,
                 A U.S. SENATOR FROM THE STATE OF IOWA

        Chairman Grassley. I will call the hearing to order.
        Usually, I wait for the Ranking Minority Member, but
    Senator Leahy said that we could proceed. And when he comes or
    if there is anybody that is speaking for the Democrats that
    wants to speak, I will call on them after I am done speaking. I
    am going to call on Senator Cornyn also to make a statement.
        My opening statement is about 8 minutes long. So, I hope
    that you will bear with me.
        A woman contacted me last week to share her story about
    being laid off from a company after 20 years and replaced by a
    foreign worker. She said her young son already knows two
    computer programming languages, but she is having second
    thoughts about steering him into the field of computers and
    information technology.
        Today's hearing will focus on our immigration policies and
    the need for reforms to better protect American workers. We
    will hear from witnesses about the H-1B visa program. Most
    people believe that employers are supposed to recruit Americans
    before they petition for an H-1B worker or that they are
    supposed to hire a U.S. worker if that person is equally or
    better qualified, and, of course, we found out that is just not
    true.
        Over the years, the program has become a Government-
    assisted way for employers to bring in cheaper foreign labor.
    It has gotten away from its intended purpose of complementing
    the U.S. workforce. And I believe, when it comes to
    complementing the U.S. workforce, after Americans are given
    first choice, that we would all agree that if we need workers,
    we need workers, but only under those circumstances.
        Moreover, the program is highly susceptible to fraud and
    abuse. A Government report has shown a 20 percent violation
    rate in a random sample of these petitions. Another Government
    report said that program oversight was fragmented and
    restricted.
        The Center for Investigative Reporting describes how some
    employers exploit foreign workers and withhold wages. Then,
    there are stories about how U.S. workers are treated. Time and
    again we hear about how U.S. workers are being laid off, forced
    to train their replacements, many of whom are not truly
    skilled.
        This is the case with Southern California Edison, which
    started laying off 500 American workers from its IT department
    last August. The company replaced them with foreign H-1B
    workers.
        A number of laid-off employees have come forward to share
    their stories with me. I have been told how the U.S. workers
    had to train their replacements, knowing all along that they
    were going to lose their jobs to individuals who did not
    possess the skills that the present employee had. They said to
    me, and we can understand it, that that is humiliating.
        I invited Southern California Edison to join us today. I
    thought they would want to defend their actions and explain why
    U.S. workers have been left high and dry. Unfortunately, they
    declined any invitation.
        Despite legal loopholes and inadequate oversight, some
    employers do not like the red tape associated with the H-1B
    visa program. That is why they are finding alternative routes
    to import foreign workers. For example, some are using the B-1
    visa. Infosys, the number 1 user of the H-1B visas, entered
    into a $34 million settlement with the DOJ for allegations of
    systematic visa fraud and abuse of immigration processes.
        The company allegedly coached employees applying for B-1
    visas, providing them with specific instructions on how to
    deceive U.S. consular officials with their visa interviews.
    They enter and work for little or no money.
        Today we will hear from a man who blew the whistle on this
    company for visa fraud. We will also hear about the Optional
    Practical Training program. That program goes by the initials,
    OPT. OPT provides foreign students the opportunity to work for
    a U.S. employer, but there is no numerical cap. There are no
    wage requirements. There is no rule that the student have an
    offer of employment before being granted a work permit.
        This OPT program also lacks adequate oversight. Foreign
    students, sometimes aided by school officials, are currently
    abusing the OPT program to acquire unauthorized employment in
    the United States, and the Federal Government does not know
    where tens of thousands of foreign workers on OPT are located,
    who they are working for, or what they are doing while staying
    in the United States.
        Aside from the national security risks, there is concern
    that these foreign students are taking jobs from qualified
    American students. It is no secret that foreign students are
    being targeted.
        In 2013, IBM placed ads on their website with the following
    mandatory job requirement: quote, ``Should have a valid OPT
    work permit for legal work authorization in the United
    States,'' end of quote. The job, however, was located in Idaho.
    The Department of Justice reached a settlement agreement where
    the company agreed to pay $44,400 in civil penalties for
    discriminating against Americans.
        I would also like to have you pay some attention to this
    poster. It is a brazen ``Help Wanted'' ad. In this ad, the
    employer is looking for candidates with valid H-1B visas to
    work in the United States and the skill set needed is, quote,
    ``any technical skill is fine,'' end of quote.
        All this raises the question as to why we in Congress would
    simply increase the supply of foreign workers without adding
    more protections for American workers. Claims that there just
    are not enough U.S. workers willing and able to take these
    skilled jobs fall flat when we read stories about big layoffs
    in the tech industry.
        Bills have been introduced that would increase the annual
    caps from 65,000 to 115,000, some as high as 195,000, but this
    only makes the problem worse. It does not close the loopholes
    or prevent abuse. It does not make sure that American workers
    are put before foreign workers. It only increases the supply of
    cheaper foreign labor.
        Increasing the supply of H-1B visas alone also will not
    help smaller U.S. companies who are already shut out of the
    program because the big corporations take thousands of visas
    each year. The number 1 user of the program is bringing in more
    than 6,000 new workers each year.
        The top 10 companies that use H-1B programs swallow up over
    50 percent of the supply of available visas.
        Instead of simply increasing the supply of visas or even
    including that, real reforms are needed.
        Senator Durbin and I introduced legislation in the past to
    get at the problem. Our bill would increase worker protections.
    It would require all employers seeking to hire H-1B workers to
    first make a good faith effort to recruit Americans.
        Our bill would revise H-1B prevailing wage determination
    requirements. It would lengthen the period surrounding the
    hiring of H-1B workers during which U.S. workers may not be
    laid off, and it would prohibit employers from advertising for
    only H-1B workers, like the ad I referenced a while ago.
        Finally, it would give the executive branch enhanced
    authority to investigate employer compliance and it would set a
    random audit scheme to keep employers honest.
        Some say that Congress should pass the 2013 immigration
    bill as if it would make the problem go away, but it does not
    solve the problems facing American workers.
        During the debate on that bill, I offered pro-American
    worker amendments. They were all defeated.
        I am glad that we have AFL-CIO President Trumka here today
    to shed light on how S. 744 missed the boat. Other professional
    trade unions weighed in against S. 744, and I will put their
    recent statements in the record.
        [The information appears as submissions for the record.]
        Chairman Grassley. Today we are telling the story. The
    voices of American workers ought to be heard. The livelihood of
    U.S. workers and families are on the line. Will we do
    everything we can to protect future generations who desperately
    want to work in the high-skilled sectors, or will we simply
    ignore the plight of those who have lost their jobs and had to
    train their foreign replacements?
        We cannot fail the American worker. Reforms are needed to
    put integrity back into our immigration system and to ensure
    that American workers and students are given every chance to
    fill vacant jobs in this country.
        [The prepared statement of Chairman Grassley appears as a
    submission for the record.]
        Chairman Grassley. Because Senator Cornyn has to go to the
    floor, I am going to call on him now and he will not ask
    questions, but he will make a statement and then put questions
    in the record.

                 OPENING STATEMENT OF HON. JOHN CORNYN,
                 A U.S. SENATOR FROM THE STATE OF TEXAS

        Senator Cornyn. Thank you, Mr. Chairman. As you know, we
    have a bill on the floor that I will be going down to speak and
    be filling the Chair on the Chairman's behalf.
        But I appreciate very much the Chairman holding this
    hearing because I think there are a lot of misconceptions about
    H-1B visas and high-skilled worker visas. We have had a lot of
    debate since I have been in the Senate about immigration
    reform, but the one thing I thought we agreed upon was America
    would be a better place, a more productive place if we were
    able to continue to attract the best and brightest minds from
    around the world. In fact, we do and we educate them at our
    colleges and universities. And sending them home after we have
    subsidized their education and helped them get a Ph.D. or a
    master's degree in a STEM field strikes me as foolish.
        But I share your concern about abuses in the actual
    application of the law and if we find people cutting shortcuts,
    shortchanging American workers or violating the law, I think we
    ought to go after them with every tool at our disposal.
        But it is hard to ignore the benefits of attracting high-
    skilled foreign talent and entrepreneurs. I know that there is
    a lot of controversy about immigration in the country, but I
    thought that we agreed that legal immigration was a good thing.
    It is, I guess, not true. There are actually some people who
    think we ought to reduce legal immigration, as well.
        But it is hard for me to ignore the benefits of attracting
    high-skilled foreign talent and entrepreneurs. We all know the
    stories of Intel, eBay, Yahoo and Google, companies founded, in
    part or in whole, by immigrants that employ thousands of
    American workers.
        In Texas, immigrants and their children have helped found
    numerous Fortune 500 companies, like AT&T, Texas Instruments,
    Fluor Corporation, National Oilwell Varco, and Marathon Oil,
    and we will hear from Mr. Billhardt here during the question,
    from Austin, Texas.
        Immigrant-owned companies employ hundreds of thousands of
    Americans and help fuel the economy by bringing in more than
    $775 billion in revenue each year. In the words of Dallas
    Federal Reserve researchers, immigrants help power and grease
    the economy's engines. That is because new talent and ideas
    help American businesses lead the pack and compete against
    foreign competition and create jobs right here in America.
        America's lack of a sensible and coherent high-skilled and
    employment-based immigration policy has caused our Nation to
    lose too many entrepreneurs and job-creators to our competitors
    abroad, who are all too happy to take advantage of our failure
    to effectively compete for talent.
        In order to remain competitive in today's global
    marketplace, U.S. companies must have access to a high-skilled
    temporary labor pool from abroad. The H-1B visa program, I
    agree with you, Mr. Chairman, should be a supplement to hiring
    American workers if we can find the talent here.
        But it is a shining example of what we could accomplish
    with an immigration system that focuses on securing talent and
    fostering economic growth, an immigration system that advances
    the American dream while improving the lives of U.S. foreign
    workers.
        According to the American Enterprise Institute, each
    approved H-1B worker is associated with an additional 1.83 jobs
    among U.S.-born workers. Over the years I have put forward a
    number of proposals to ensure that our immigration system is
    designed to meet the needs of our dynamic economy, including
    the STAR Act, the SKILLS Act, and the global competitiveness.
        I am also encouraged by the work of Senator Hatch on the I-
    Squared Act and Representative Issa on the SKILLS Visa Act. All
    of these bills would focus on much needed increases to the H-1B
    temporary worker visa. It would recapture unused temporary and
    permanent visas and increase access to green cards for high-
    skilled immigrants, reforming our immigration system in a way
    that helps the American worker and future generations to
    compete on the world stage, while growing our economy,
    benefiting all Americans.
        Unfortunately, President Obama has failed to work with
    Congress to achieve common sense reform of our high-skilled and
    employment-based immigration system. Instead the President has
    used immigration reform as a cynical talking point and trying
    to drive a wedge between Americans on something we should all
    be able to achieve consensus on, which is how do we improve our
    legal immigration system in a way that reflects our values and
    reflects our economic interests.
        I hope we will use this hearing to discuss ways Congress
    can work together and get serious about reforming our
    immigration system in a way that respects legal immigrants and
    fundamentally protects the interests of American workers and
    the American economy.
        High-skilled and employment-based immigration reform is one
    of the most important and bipartisan areas in the broader
    debate, and I believe that Congress has an opportunity to
    address this issue in a way that respects the needs of American
    businesses and workers.
        Mr. Chairman, let me close just by saying one of the really
    important reasons why this hearing is so necessary is because
    there are so many anecdotes and misconceptions about the H-1B
    visa system.
        For example, the idea that you can legally hire a cheaper
    foreign worker and replace an American worker for a lower wage
    is illegal. It is illegal. And if it is happening, it ought to
    be prosecuted. It ought to be enforced.
        But the idea that somehow H-1B is a way to bring in cheap
    foreign labor and fire Americans is false or, at least, that is
    not what Congress has intended and that is not what the law
    says.
        So, if those sorts of things are happening, we need to go
    after it with everything we have got.
        And thank you very much for giving me a chance to say a few
    words.
        Chairman Grassley. There will be two things before we call
    on the panel. Since Senator Leahy could not come, I said I
    would give any Democrat that showed up an opportunity to say
    something, and then we will call on the Chairman of the
    Subcommittee for a short statement, and then we will go to the
    witnesses.

             OPENING STATEMENT OF HON. CHARLES E. SCHUMER,
               A U.S. SENATOR FROM THE STATE OF NEW YORK

        Senator Schumer. Thank you, Mr. Chairman. I will be any old
    Democrat today.
        [Laughter.]
        Senator Schumer. First, I appreciate the opportunity to
    briefly speak about the high-skilled visa program, how
    immigrants contribute to our economy, what Congress should be
    doing to ensure that our immigration system helps rather than
    hurts American workers.
        First, fortuitous scheduling, St. Patrick's Day. It is a
    day when all across America we commemorate the diverse
    contributions of Irish immigrants and their descendants and
    that they have made and continue to make.
        In fact, in immigration reform, the bill that passed the
    Senate, we had some provisions to help Irish immigrants and
    people from Ireland come to America. It is very difficult for
    them. It is one of the reasons I am so passionate about passing
    the comprehensive bill.
        Now, today we are here to discuss a group of immigrants
    that are mischaracterized, in my judgment, as harming
    Americans, taking their jobs, even some would say distorting
    our culture. But high-skilled immigration has helped fuel
    economic growth in America for the past several decades.
    Programs like H-1B, L-1, and J-1, bring very talented people to
    America. They want to be here. It is great that they want to be
    here. The most talented, innovative people in the world want to
    come to America, and here, they work as innovators and they
    create jobs.
        Our booming tech sector relies on foreign skilled workers.
    Our university and medical research facilities benefit from
    their breakthroughs, and so does our workforce. For every 100
    H-1B workers, an additional 183 jobs are created for American-
    born workers.
        Plain and simple, it is a myth that the H-1B visa program
    takes jobs away from Americans. Let me talk about my State of
    New York. One-third of all New York businesses are owned by
    immigrants. Many of them are just little mom-and-pop shops,
    people struggling to climb that American ladder of success and
    they work so hard.
        This idea that our immigrants do not work hard, when I look
    around New York, I see the opposite. They work real hard.
        Between 2006 and 2010 in New York, immigrant-owned
    businesses generated $12.6 billion in business income.
        So, Congress has an important ongoing role to play in
    keeping the H-1B program flexible and suited to the current
    labor market. It just does not make sense to have an
    immigrants-need-not-apply policy when we have so many help
    wanted signs at high-tech companies and research universities
    here in the U.S.
        We know our businesses need and deserve to attract the best
    talent to keep America number 1, and that has been a hallmark
    of America, since in my day, the new immigrants in my State,
    the new immigrants were English. They were trying to come in
    when the Dutch had established New York.
        So, this is an age old issue and there are always tensions
    and it always works out.
        Of course, at the same time, we have to do a lot more to
    inspire, educate and train our own young people to thrive in
    STEM programs, and we can do both by striking the right balance
    with the H-1B visa program. I have got about a dozen ideas that
    have already passed the Senate. What about improving the
    Department of Labor certification process to revise wage
    requirements for workers and require employers to post jobs on
    a DOL site? How about using thousands, maybe millions of
    dollars in new application fees paid by employers to fund STEM
    grants, scholarships and training for America workers?
        How about new procedures for investigating worker
    complaints, new rules designed to reduce employees' dependence
    on H-1B and new restrictions on hiring foreign workers to
    displace U.S. workers?
        In our bill, we worked long and hard, some of the people at
    this table know, to get business and labor to support an H-1B
    program and I think we found a pretty good balance. It can
    always be made better.
        So, Mr. Chairman, it was supported by the U.S. Chamber of
    Commerce and the AFL-CIO. So, I think this is a great
    opportunity.
        I just want to say one more thing. We have to do this in a
    comprehensive way. I know some people have ideas, let us just
    do this piece, let us just do that piece. That will not work,
    never has, will not again. You cannot leave large numbers of
    people behind as you try to make our immigration system fair
    and comprehensive.
        And I would hope and pray that our House colleagues would
    see the light and put together some kind of program similar to
    the one that passed with bipartisan support, strong bipartisan
    support last Congress.
        Thank you, Mr. Chairman.
        Chairman Grassley. Some of the reforms you mentioned should
    be done are in legislation that I have introduced and I thank
    you for mentioning that.
        Senator Sessions.

                OPENING STATEMENT OF HON. JEFF SESSIONS,
                A U.S. SENATOR FROM THE STATE OF ALABAMA

        Senator Sessions. Thank you, Chairman Grassley, and thank
    you for your long-term interest in this issue and your
    leadership today.
        Let me just say that I am perfectly willing to discuss
    converting our immigration system to a more high-tech-oriented
    system, more skill, more language skills, more science and
    engineering skills, and any of those other skills. That is a
    very important thing. We admit 1 million a year. We ought to
    dedicate that more, like Canada or Australia, to higher skilled
    persons.
        But this H-1B program is a jobs program. It is a temporary
    job process by which a corporation says they cannot fill a job
    and they need a temporary worker. It is not an immigration
    program.
        They are not intended to come here and start a business
    that is going to hire lots of people. And it is being abused by
    a huge degree.
        It absolutely is replacing, firing causing workers today to
    be fired from their job and required to train people who take
    those jobs, and it is not acceptable. This is not what the
    program is about.
        So, dedicated workers at Southern California Edison were
    laid off and forced to train guest workers to replace them, and
    it has happened in other places. The same companies lobbying
    Congress for more foreign workers are laying off workers.
        Bill Gates wrote an op-ed demanding more foreign workers
    the same week Microsoft laid off 18,000. Today we are going to
    examine two vital questions. Will bringing in more guest
    workers help or hurt the wages and employment prospects of
    American workers? A fair question, I think. And do we have a
    shortage of STEM workers? And the truth is, colleagues, we do
    not have shortage; 75 percent of the people who graduate with
    STEM degrees are not working in STEM fields. That is just a
    fact.
        So, we are going to listen to, I guess, the arguments that
    go forth, but I will just note this. We are going to have two
    experts, Professor Salzman and Professor Hira, and I can name a
    group of others that have joined with them, and I am not aware
    that their data and their facts have ever been disputed and it
    is the truth. And the myth out here needs confronted. That is
    where we are heading.
        So, Mr. Chairman, thank you. I do not want to take too much
    time. But I used to believe we had a shortage of IT workers
    more than any other area in the country. When we debated this
    in 2007, I accepted that fact. Now, I realize that the facts
    are not that and, in fact, we do not have a shortage.
        Chairman Grassley. I will introduce our panel and then the
    panel will speak, and then we will have questions.
        We have Richard Trumka, President, AFL-CIO, a position he
    has held, I believe, since September 2009. Mr. Trumka has
    devoted his career to advocating for American workers. He is
    the son of a coal miner who also worked the mines himself.
    Today he is here on behalf of the 12.5 million working men and
    women who belong to the Federation.
        Ron Hira is a faculty member at Howard University, a
    Professor of Public Policy. Professor Hira has done research
    into the implications of offshoring high-skilled jobs and has
    previously served as vice president for the IEEE-USA, the
    largest engineering professional society in America. As a
    licensed engineer, he has firsthand knowledge of the STEM
    industry and job market.
        Bjorn Billhardt, the founder and Chairman of the Board of
    Enspire Learning. Mr. Billhardt is recognized as an authority
    in the field of e-learning and simulation design.
        We also have Jay Palmer. He represents the voice of
    American workers. Mr. Palmer was employed at Infosys until he
    blew the whistle on the company's fraudulent immigration and
    visa practices.
        Benjamin Johnson, executive director of the American
    Immigration Council. Mr. Johnson has been in the immigration
    field for over 20 years and has written extensively on
    immigration.
        John Miano, an attorney who works with and represents the
    Washington Alliance of Technology Workers. He is well known for
    his defense of American workers who are displaced by foreign
    workers.
        Hal Salzman, professor at Rutgers, where he focuses on STEM
    education and workforce supply. Professor Salzman has conducted
    numerous studies and published several articles on the IT
    industry, including software design work practices and on
    science and engineering workforce issues.
        I would also like to note that I invited representatives of
    three executive branch agencies to testify today. I had hoped
    the Departments of State, Labor, and Homeland Security would
    share their insight on some of the issues. However, the three
    Departments declined.
        I thank all of our witnesses for coming, and we will start
    with President Trumka.

    STATEMENT OF RICHARD L. TRUMKA, PRESIDENT, AMERICAN FEDERATION
    OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, WASHINGTON,
                                   DC

        Mr. Trumka. Thank you, Chairman Grassley and Members of the
    Committee. Thanks for the opportunity to testify.
        I do not have to tell you that working people are
    struggling in this economy. Wages for the bottom 70 percent
    have been flat since the late 1970s, while gains from increased
    productivity of our workforce have flowed almost exclusively to
    the top 10 percent. That kind of wage stagnation and wealth
    concentration is not due to immutable economic forces. It is
    the result of corporate interests that insist upon low wages so
    that profits can grow higher.
        The rules are currently rigged against working families and
    our unjust immigration system is one of the many forces making
    it harder for them to get ahead. Real immigration reform is an
    important part of the large structural change that needs to
    happen to create an economy where wages grow, wealth is fairly
    shared, workers are protected, and democracy is restored in the
    workplace.
        While far from perfect, S. 744 created a broad and
    inclusive pathway to citizenship and demonstrated that a
    comprehensive approach to fixing our system is possible when we
    all work together.
        The labor movement was proud to play a role in negotiating
    with the business community to create a new type of employment-
    based visa system that was based on real market needs, not the
    whims of employers. That included key worker protections. the W
    visa should serve as a model for future reforms.
        But, while we supported S. 744 as a whole, we do not
    support the high-skilled provisions as stand-alone legislation.
    We are particularly disturbed to see the requirements to hire
    U.S. workers removed and protections against displacement
    gutted by the Hatch amendment during mark-up.
        When employers can hire undocumented workers with a wink
    and a nod and then fire them when they seek to organize a union
    or complain about unpaid wages or unsafe working conditions, it
    is not just undocumented workers who are hurt, but all workers.
    And when employers like Southern California Edison can replace
    hundreds of steady middle class jobs with captive guest workers
    who earn a fraction of the wage for the same work, then we know
    our broken immigration system is facilitating a race to the
    bottom.
        Eighty-three percent of the H-1 visas are in the one or two
    level, which means the 33 percentile were less, with 50
    percentile recognizing the local prevailing wage in those
    areas.
        Overhauling our immigration system is a core priority to
    the labor movement and we remain steadfast in that goal.
        I want to be clear about this. Expanding captive guest
    worker programs is not the way to do it. As we have said
    repeatedly, Congress must reform guest worker programs rather
    than expand it, and the law should unambiguously state that it
    is illegal to replace a U.S. worker with an H-1B worker under
    any circumstances.
        In addition, we have the following recommendations. One,
    employers should be required to fill jobs with the most
    qualified American applicant and should be able to recruit from
    abroad only when a real need exists and can be proven.
        Two, employers should be required to pay H-1B workers the
    same rate that they would pay an American worker. In fact, we
    think they should be required to pay the 75 percentile wage so
    that we can end the perverse incentive to prefer to hire guest
    workers.
        Three, workers in the H-1B program should have increased
    job mobility and the right to self-petition for permanent
    residence.
        Yet, instead of enacting commonsense reforms such as these,
    the I-Squared bill would more than triple the number of H-1B
    visas at a time when three out of four American STEM degree
    holders cannot find work in their field.
        This is particularly problematic because access to a large
    pool of guest workers makes it easier for employers to exclude
    traditionally under-represented classes of workers such as
    women and communities of color. And evidence of abuse and wage
    suppression continues to mount.
        I urge this Committee to call for a comprehensive review of
    wage rates and hiring practice across our entire employment-
    based system and that should include the L-1, J-1, and OPT
    programs, who should no longer be allowed to masquerade as
    exchanges, internships, and student programs.
        Mr. Chairman, my time is up, and I look forward to working
    with this Committee and the Members of it to reform the program
    and make it work for all American workers.
        [The prepared statement of Mr. Trumka appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Trumka.
        Professor Hira.

      STATEMENT OF RONIL HIRA, PH.D., P.E., ASSOCIATE PROFES-SOR,
            PUBLIC POLICY, HOWARD UNIVERSITY, WASHINGTON, DC

        Professor Hira. Thank you, Chairman Grassley and Ranking
    Member Leahy, and the Members of the Committee for inviting me
    to testify today.
        I also want to acknowledge Chairman Grassley, Senators
    Durbin and Session's efforts and leadership in pushing for
    reforms to protect both American workers, as well as foreign
    guest workers and, maybe even more importantly, in shedding
    light on how the H-1B program actually works in practice.
        Even this morning we have heard many of the myths about the
    H-1B program espoused not only by policymakers, but we hear it
    often by journalists who get basic facts about the program
    wrong. I will hit some of those myths shortly.
        Congress and multiple administrations have inadvertently
    created a highly profitable business model of bringing in
    cheaper H-1B workers to replace American workers and to
    substitute for American workers. In explaining the H-1B program
    rules, the U.S. Department of Labor clearly states, ``The
    Immigration and Nationality Act requires that the hiring of a
    foreign worker will not adversely affect the wages and working
    conditions of U.S. workers comparably employed.'' That is a
    direct quote from the website that describes the H-1B program
    to employers.
        Th reality is that, in fact, the intent of the law is not
    being met. The recent replacement of 500 American IT workers at
    Southern California Edison shows that this intent is clearly
    not being met and that U.S. workers are clearly getting adverse
    effects in terms of their wages and their working conditions.
        Myth number 1 is, employers must prove that there are no
    qualified workers before hiring an H-1B. We heard this this
    morning. In fact, there are no requirements to demonstrate that
    there is any shortage of American workers before hiring an H-1B
    worker.
        The Southern California Edison story tells you that
    straight up. Not only are they not recruiting American workers,
    they are directly replacing American workers. They are taking
    their jobs directly. Even sitting in their cubicles, they are
    replacing those folks.
        So, there is no recruiting requirement and H-1B workers are
    replacing Americans. They are substituting for Americans. And
    oftentimes employers are earmarking jobs directly for H-1B
    workers.
        Another major myth is that--and we heard this, again, this
    morning--is that H-1B workers cannot be cheaper than Americans
    because employers must pay, quote-unquote, ``the prevailing
    wage.''
        Congress' intent in requiring a legally defined prevailing
    wage is to ensure that H-1B workers are paid what American
    workers are paid and that they are not pushing down those
    wages.
        The reality, of course, though, is that they can legally do
    this because of the way that the prevailing wage rules are
    written and the law is written, and we see this, again, in the
    Southern California Edison case. This is a perfect definitive
    case study of H-1B workers being paid below what American
    workers were being paid.
        The Southern California Edison IT workers, American workers
    were being paid $110,000 a year. Their H-1B replacements are
    being paid $70,000 a year. That is more than $40,000 in cost
    wage savings right there, a $20 million windfall for Southern
    California Edison in reducing wages.
        There cannot be a clearer case of the H-1B program being
    used for cheaper labor. And Southern California Edison is not
    alone. It is not an isolated case. It is Disney, it is Harley-
    Davidson, it is Northeast Utilities, it is Xerox up in
    Rochester, New York.
        Tata and Infosys, the two outsourcers in the case of
    Southern California Edison, brought in 12,000 workers in Fiscal
    Year 2013--12,000 H-1B workers. That is 12,000 jobs that should
    have gone to Americans--or should have stayed with Americans.
        And just to put some scale on this, Facebook, one of our
    high-flying tech companies, hired 2,000 workers during that
    same year. So, you have got 12,000 H-1B workers coming in.
    Facebook hired all--2,000 H-1Bs, Americans, everybody, it only
    grew by 2,000. So, this is a very widespread and massive
    problem.
        In fact, the Indian government dubs the H-1B program the
    outsourcing visa.
        I will just close with saying this. There are no villains
    in this story. If you create a profitable business model where
    you can substitute cheaper guest workers for Americans, many
    businesses will take advantage of that. Their primary interest
    and duty is to try to maximize shareholder value and they will
    find ways to do that regardless of what we might think in terms
    of whether that is a good or bad thing for America. It is the
    responsibility of the Government to ensure that it is a good
    thing for America.
        Thank you.
        [The prepared statement of Prof. Hira appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Professor Hira.
        Mr. Billhardt.

                 STATEMENT OF BJORN BILLHARDT, FOUNDER
                 AND PRESIDENT, ENSPIRE, AUSTIN, TEXAS

        Mr. Billhardt. Good morning, Chairman Grassley, Ranking
    Member Leahy, and Members of the Committee. My name is Bjorn
    Billhardt and I am an immigrant from Germany. I live in Austin,
    Texas with my wonderful wife and three beautiful children.
        In 2012, I had the incredible privilege of becoming an
    American citizen. I am grateful to share my story here today
    because I believe it demonstrates the significant contributions
    that immigrants can make to our country every day, as well as
    the shortcomings of our current immigration system.
        I came to Pflugerville, Texas as an exchange student in
    high school and I instantly fell in love with the United
    States. When I arrived in the 1990s, America allowed me to
    dream big. My parents never went to college and I did not see
    many opportunities for me to become who I wanted to be and
    utilize my talents in Germany.
        Studying in the United States allowed me to gain the skills
    to become an entrepreneur and at the age of 26, while getting
    my business school degree in the United States, I started my
    own company, Enspire, without outside funding or family help.
        After 14 years in business, Enspire now has over $5 million
    in revenue. We employ 30 American workers and we sell our
    leadership development programs and e-learning courses to
    dozens of Fortune 500 companies. Last year, our educational
    software was used in over 20 countries.
        In many ways, my journey mirrors that of many high-skilled
    immigrants. I studied on an F-1 visa, was able to stay here on
    a study extension visa, the OPT, applied for an H-1B visa to
    grow my company, and in 2006 I was able to apply for a green
    card and eventually citizenship.
        It was a long, hard road, but I count myself lucky that I
    came to the United States when I did, because today my story
    would have been impossible and American jobs would have not
    been created because of the current cap and restrictions placed
    on the H-1B work visa.
        The global competition for talent is real. I feel it every
    day trying to grow my business. And our broken immigration
    system stands in the way of allowing us to be competitive with
    other nations.
        For example, just last week, I spoke with a brilliant
    recent Ph.D. in chemistry from Notre Dame University who was
    hired as a management consultant by a consulting firm in
    Houston to help U.S. energy companies compete in the global
    marketplace.
        He said that after a few years of consulting, he wants to
    become an entrepreneur, and I am sure he will. Yet, despite his
    brilliance, his Ph.D. and a strong desire to stay in the United
    States, he is uncertain if he can stay. If he has to leave, he
    says he will move to London, Shanghai, or somewhere else and we
    will lose out not just on his skills, but on the possibility of
    another great American company being created and the jobs that
    it will bring.
        This does not make sense to me. The reality is immigrants
    like me boost our economy by creating jobs for Americans and
    studies show that for every 100 H-1B workers, an additional 183
    jobs are created for workers born in the United States.
        I can also tell you as an entrepreneur that the world is
    not standing still. When I left Germany in the 1990s, there was
    only one country that allowed people like me to dream big as
    entrepreneurs and that was the United States. But my younger
    cousins in Germany point out that there are vibrant startup
    communities in cities like Berlin and London and Singapore and
    Dubai.
        It makes no sense to me for this great country that I love
    to turn away talented, hungry and hardworking individuals who
    want to put their passions to work here. Immigrants are what
    has made this country exceptional since our founding days. We
    need to expand opportunities for immigrants to contribute to
    this great country so that we can continue to be that
    exceptional country that attracted me to come here when I was
    young.
        Thanks for allowing me to share my story. I hope Congress
    can step aside from partisan politics and find a compromise
    that will take steps to modernize our immigration system.
        I am honored to have the opportunity to testify today.
        [The prepared statement of Mr. Billhardt appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Billhardt.
        Now, Mr. Palmer.

         STATEMENT OF JACK B. PALMER, JR., AN AMERICAN WORKER,
                          MONTGOMERY, ALABAMA

        Mr. Palmer. Good morning, Chairman Grassley, Members of the
    Committee. I am Jay Palmer from Montgomery, Alabama. A special
    ``hello'' to Senator Sessions, as well.
        I am the whistleblower in the Infosys case. I lived it. I
    saw it. I saw Americans being replaced. I saw--we brought in H-
    1B workers. It did not matter if you had skills or not. We
    brought them in, I set them in cubicles and watched the
    Americans train them only in the name of the dollar.
        I am here today to talk a little bit about who cannot be
    here today and talk. I am the displaced American worker that
    cannot speak out due to being harassed, blackballed, or
    possibly sued; the one who was forced to sign a non-disparaging
    remarks agreement in order to get a severance package; the
    employee that my company chose not to invest in in order to
    replace me with cheaper labor, cheaper labor that I had to
    train, train to do my job that I learned over the past 15 or 20
    years.
        They call it knowledge transfer, but we all know that is an
    illusion. It is all about cheaper labor. I am the employee who
    pays their taxes, mortgages, and takes their kids to the park,
    the one who helps his co-worker, his neighbor, and shops
    locally; the one who now has nothing, has lost their job and
    will possibly lose their home.
        I am the middle-class worker that has been displaced by
    greed and illegal business schemes or fraud. The American
    worker who sent you to Washington can also send you home. I am
    an Edison employee. I am a Harley-Davidson employee--yes,
    Harley-Davidson, the staple of American pride. I am displaced.
        I am now the American--now, I am the future American
    worker. I am in college with no hope of the IT world because of
    cheap labor being brought in. I can learn. I have student
    loans, maybe the first one in my family to ever go to college.
    I am the student who works and goes to college in order to
    become better.
        Maybe I work 25 hours a week at a Subway or a Walmart and
    spend countless hours studying trying to learn a trade and
    become better in the IT world; the one who has ideas and has
    dreams. Maybe I am your son, maybe I am your daughter chasing
    that American dream or what is left of it.
        I am the student whose parent was displaced by the H-1B
    worker. I am the University of Alabama graduate or the RIT
    graduate that cannot get a job or has been hired and then
    replaced again after several years in the workplace.
        Let me tell you who we are not. I am not Mr. Murthy or Mr.
    Shibulal of Infosys who refused to hire American workers, who
    looks every way possible not to hire an American worker; also,
    thumbs their noses at U.S. law and refuses to honor the laws of
    the Texas court to appear.
        We are not the one--we are not the one that said law will
    follow business, business will not follow the law in the United
    States. That was Infosys' Nandita Gurjar talking about politics
    in the United States.
        We are not the ones that even mistreat the Indian workers
    that come over by saying we are paying them a prevailing wage,
    which we all know that is not true.
        The Indian workers work with fear and overlooking the
    intimidation when a worker has to give their managers in India
    kickbacks and do not receive their entire prevailing wage,
    which is absolutely too low.
        How about paying the H-1B worker the same salary that the
    displaced American worker is making? At that point in time, we
    will see really how specialized this talent is.
        We are not high-powered lawyers or former Secretary of DHS
    that was hired to contradict his own policy, that has no
    conscience and cripples the American worker, not only their
    jobs, but their dignity.
        We are not the ones that worked against the AUSAs to
    enforce the law or prosecute the law, intentionally try to
    deceive DHS and State Department agents, this only in the name
    of money. May God help their souls.
        The Edison worker, their names were anonymous because they
    are not allowed to be here today. The DHS and State Department
    employees or the agents are not allowed to be here today
    because they will speak the truth and the agencies do not want
    Congress to know the truth.
        I ask this Committee to be their voice, to be their hope,
    raise the wage floor to equal displaced American salaries,
    tighten the law, bring back the American dream. I also ask
    supporters of the I-Squared Act--I read a statement that
    companies had come to certain Senators and said, ``We do not
    have enough skilled workers.'' Send me the companies, I will
    send you workers.
        In closing, I watched this on a daily basis of Americans
    being displaced. I sat in the offices in meetings with
    companies that displaced American workers only because the
    Americans that had been there 15 or 20 years were being paid to
    much money. I stayed at night and helped these people that came
    over on H-1Bs learn skills. They are not skilled workers. These
    companies bombard our system with H-1B applications and whoever
    gets them, they are sent over no matter their skill level. I
    know. I watched it. It continues to happen today.
        I thank you for your time. I hope you will listen to me.
        [The prepared statement of Mr. Palmer appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Palmer.
        Now, Mr. Johnson.

    STATEMENT OF BENJAMIN E. JOHNSON, EXECUTIVE DIRECTOR, AMERICAN
                  IMMIGRATION COUNCIL, WASHINGTON, DC

        Mr. Johnson. Mr. Chairman, Members of the Committee, thank
    you for the opportunity to appear before you today on behalf of
    the American Immigration Council.
        For more than 25 years, the American Immigration Council
    has been dedicated to providing policymakers and the public
    with research and analysis on the critical issues shaping
    immigration policy and law.
        Although the title of today's hearing suggests that some
    minds have already been made up on this issue, my hope, however
    naive, is that this hearing will allow us an opportunity to
    engage in a thoughtful conversation about the role that
    immigration can and should play in building a prosperous,
    growing 21st century America. today foreign workers fill a
    critical need, particularly in STEM fields. Now more than ever,
    we need an honest conversation about reforms that can improve
    and strengthen the admission of these immigrants into our labor
    force. But to do that, we must move beyond the myths,
    stereotypes and hyperbole that distract from that conversation
    and that seek to pit native-born workers against their foreign-
    born colleagues.
        The undeniable fact is that the U.S. job market is not a
    zero sum game in which workers must fight each other for a
    fixed number of jobs. The United States has the most dynamic,
    most powerful economy the world has ever known, and immigrants
    of all types and skills from every corner of the globe have
    worked shoulder to shoulder with native-born workers to build
    it.
        The overwhelming weight of research shows that in our
    dynamic labor market, skilled immigrants complement their U.S.-
    born counterparts. Skilled immigrants help create new jobs and
    new opportunities for economic expansion. Indeed, foreign
    workers positively impact the wages and employment
    opportunities of native-born workers across our economy.
        The important role that skilled immigrants play in our
    economy extends far beyond the worlds of computer and high
    tech, and skilled immigrants are helping to shape communities
    far beyond Silicon Valley. They are making enormous
    contributions in almost every corner of our economy, including
    manufacturing, medical research, health care delivery and
    agriculture.
        Their contributions have helped rebuild economies in places
    like Des Moines, Iowa, Tuscaloosa, Alabama, Raleigh, North
    Carolina, Atlanta, Georgia, Phoenix, Arizona.
        For me, the bottom line is this. In today's global economy,
    where other countries are spending billions of dollars to
    compete with America's ability to attract immigrants, we cannot
    take this issue for granted. If we continue to ignore the need
    for immigration reform or adopt policies that discourage
    skilled immigrants from helping America to innovate, lead and
    create more high paying jobs, we run the enormous risk that
    America will be left behind without a robust innovation and
    entrepreneurial sector. Innovation is the key to growing the
    U.S. economy and creating jobs. In turn, the key to innovation
    is attracting, growing and retaining a skilled workforce.
    Foreign-born workers, especially STEM workers, have been and
    will continue to be a critical part of this equation.
        The question this Committee must be asking is what policies
    would help us fulfill the promise of an immigration system that
    serves a 21st century global economy while protecting the
    rights and promoting the opportunities for all workers.
        Research supports the creation of a revamped and
    revitalized immigration system with updated visa caps and the
    elimination of per country quotas; a system that retains
    talented individuals who are educated here in the United
    States; a system that supports STEM education right here at
    home; a system that encourages compliance with rules and
    safeguards against exploitation and abuse and that allows for
    more flexibility, predictability and consistency.
        The good news is that these reforms are achievable and that
    lasting immigration reform is within our reach. The key to
    success is not to pursue these issues in isolation. Maximizing
    the economic contributions of skilled immigrants is important
    work, but it is only one component of the broad-based reforms
    that our system desperately needs.
        We must realize that immigrant job creators, entrepreneurs
    and innovators come in all stripes and all sizes. They come to
    our shores not only through employment-based channels, but
    through family reunification, as refugees and asylees. They can
    also be found in the population of unauthorized workers here
    today.
        The importance of reforming our system, all aspects of it,
    to further our prosperity cannot be overstated. We owe it to
    ourselves and to our future to once again support and pass
    bipartisan, comprehensive immigration reform that is good for
    business, good for workers, and good for families.
        Thank you. I look forward to the conversation.
        [The prepared statement of Mr. Johnson appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Johnson.
        Now, Mr. Miano.

        STATEMENT OF JOHN M. MIANO, J.D., ATTORNEY, WASHING-TON
               ALLIANCE OF TECHNOLOGY WORKERS, BELLEVUE,
                               WASHINGTON

        Mr. Miano. Mr. Chairman and Members of the Committee, I
    thank you for allowing me to speak with you today. I have been
    told that the Congress is not fully aware of the post-
    completion Optional Practical Training program program, better
    known as OPT.
        My client, Wash Tech, is the plaintiff in a lawsuit against
    the Department of Homeland Security over its OPT regulations
    and this lawsuit has drawn attention to this largely unknown
    guest worker program.
        OPT is different from most other guest worker programs
    because it was created entirely by regulation, not by Congress.
    OPT is one of several work authorizations operating under F-1
    student visas. There is no statutory authorization whatsoever
    for aliens to work on student visas. However, over the years,
    the INS and DHS have allowed such work through regulation.
        These regulations started off innocently, but grew
    incrementally. In the 1950s, aliens could work on student visas
    only if the school certified that the work was required or
    recommended by their school and it was part of their
    curriculum.
        In 1992, the INS created the OPT program that allowed
    aliens to work for up to a year after graduation when they were
    no longer students.
        Finally, in 2008, industry groups came up with a scam to
    use OPT as a means to circumvent the H-1B quotas and DHS
    responded by promulgating regulations that allowed aliens who
    were not able to get an H-1B visa to work for up to 35 months
    on a student visa, and these regulations are at issue in Wash
    Tech's lawsuit.
        After the 2008 regulations, the number of aliens approved
    for OPT has grown from 28,000 to 123,000 in 2013. So, given
    those trends, it is likely that America's largest tech guest
    worker program is now student visas.
        OPT workers are not students, by any definition of the
    word, statutory or plain English, but they are working on
    student visas. DHS simply turns these aliens loose on the job
    market without any supervision, even allowing them to be
    unemployed to look for work.
        There are no labor protections whatsoever under OPT and,
    worse yet, employers do not have to pay aliens on student visas
    Social Security and Medicare tax. So, this makes OPT workers
    inherently much less expensive to hire than Americans.
        So, when you are considering the effect that foreign labor
    is having on American technology workers, you need to take into
    account that the H-1B program has doubled in size since 1998,
    OPT is adding 100,000 more workers, and there is an alphabet
    soup of other programs adding even more foreign labor.
        The only pending bill I have talked about is the I-Squared
    bill and I just have to say that I find this bill extremely
    disturbing because it demonstrates a very warped sense of
    priorities. The highest priority in the bill is more foreign
    labor.
        Someone has gone through the immigration and identified any
    place where an increase could be created and has collected them
    together into one incoherent bill.
        The second priority of the I-Squared bill is to benefit
    foreign workers. For example, it allows H-1B aliens to remain
    in the U.S. for up to 60 days for job changes. However, the
    interests of American workers, the voters, are simply ignored
    in the I-Squared Act.
        We have Americans at Southern California Edison, Northeast
    Utilities in Connecticut, Cargill in Minnesota, Walt Disney
    World in Florida, being replaced by cheap foreign workers and
    the response of I-Squared is to supply industry with more
    foreign replacements to put even more Americans out of work.
        When I read the I-Squared Act, I have to ask where is the
    outrage in Congress over American citizens legally being
    bypassed and displaced for jobs in their own country.
        American citizens should be coming first and they should be
    the first priority in our immigration bills.
        I thank you.
        [The prepared statement of Mr. Miano appears as a
    submission for the record.]
        Chairman Grassley. Thank you, Mr. Miano.
        Now, Professor Salzman.

      STATEMENT OF HAL SALZMAN, PH.D., PROFESSOR, E.J. BLOU-STEIN
                SCHOOL OF PLANNING AND PUBLIC POLICY AND
        J.J. HELDRICH CENTER FOR WORKFORCE DEVELOPMENT, RUTGERS
                 UNIVERSITY, NEW BRUNSWICK, NEW JERSEY

        Professor Salzman. Mr. Chairman, Members of the Committee,
    thank you for inviting me to speak today.
        My colleagues and I have examined the impact of guest
    workers in the high-skilled labor market using multiple
    methods, data indicators, from field work and interviews of
    technology firms coast to coast, around the globe, to an
    analysis of large national data sets.
        So, in considering whether there is a shortage, we want to
    examine evidence about the supply of U.S. STEM graduates and
    workers, the size of current and proposed guest worker flows,
    and the impact on the U.S. workforce and, importantly,
    innovation.
        Based on our analyses, we find the preponderance of
    evidence is fairly clear that, A, the U.S. supply of top
    performing graduates is large and far exceeds the hiring needs
    of the STEM industries, with only one of every two new STEM
    graduates finding a STEM job.
        Future demand for computer science graduates can be met by
    just half to two-thirds of the current annual supply of U.S.
    computer science graduates.
        The guest worker supply, however, is very large and it is
    highly concentrated in the IT industry, leading to both
    stagnant wages and job insecurity. Moreover, the primary
    function of IT guest worker programs is to facilitate the
    offshoring of work, though a growing function of these programs
    is now to replace American workers on U.S.-based projects.
        The number of guest workers under the current policies is
    equal to two-thirds of the current entry level and early career
    hiring in industry. Moreover, current guest worker policies for
    students and new graduates provide incentives for universities
    to establish master's programs that, as their business model,
    almost exclusively recruit foreign students into lower quality
    programs that provide easy entry into the U.S. labor market,
    fueling the oversupply of entry level STEM workers.
        Proposed legislation, such as I-Squared, the SKILLS Act,
    and S. 744, would expand the supply of guest workers to levels
    greater than the total number of new technology jobs. That is,
    these changes in immigration policy provide enough guest
    workers to fill every new job opening in the IT workforce with
    a reserve large enough to allow firms to legally substitute
    young guest workers for their incumbent workforces.
        Now, one of the overlooked provisions or, at least, less
    discussed is, the green cards for grads provisions in the I-
    Squared, S. 744, and other bills which provide incentives for
    universities to establish master's programs that function as a
    global services business, offering a green card for the price
    of a graduate degree, primarily or even exclusively enrolling
    foreign students and excluding U.S. students.
        The I-Squared green card provision is just a means, by
    another name, to create a glut of STEM workers who will flood
    the labor market with the predictable consequences of any
    market glut and along the way, it will erode the Nation's
    innovation foundation that is anchored in American universities
    as they close their doors to U.S. students, just as the
    California State University system did when it declared its
    graduate programs were closed to State residents and, in order
    to increase revenues, favored admissions to foreign students,
    who now comprise over 90 percent of some STEM master's
    programs.
        In sum, the current immigration policies and the proposed
    changes that increase the supply of STEM guest workers will
    accelerate the already deteriorating career prospects for STEM
    graduates and workers.
        Considering the evidence, it would be wise for us to be
    concerned about the state of technology careers when making
    Government policies that will fundamentally distort the market.
        We cannot expect to build a strong American STEM workforce
    and encourage innovation by developing policies that undermine
    the quality of STEM jobs here.
        Thank you.
        [The prepared statement of Prof. Salzman appears as a
    submission for the record.]
        Chairman Grassley. Thank you very much. I wish I knew
    whether the vote was going to start right at 11.
        Assuming a vote, Senator Sessions and I will take turns
    chairing. The vote is starting right now. I will go vote.
        Senator Sessions, you ask questions first and then it will
    be Senator Klobuchar and then it would be Senator Flake and
    then it would be Senator Blumenthal and then it would be
    Senator Tillis and then Senator Durbin, in that order.
        So, I will go vote. You ask questions.
        Senator Sessions [presiding]. Well, thank you. This is a
    very good panel and we are discussing, I think, a very
    important subject.
        Our colleagues, on some of the opening statements, seemed
    to indicate that they do not favor what has happened. Well, we
    are Congress. We are supposed to stop it and not facilitate it,
    and the I-Squared bill seems to me to not only maybe triple the
    number of H-1B workers at a time I do not think that that is
    justified, it also does not improve the controls over the
    program.
        So, Professor Salzman, in an article that appeared in U.S.
    News and World Report, you wrote, quote, ``Guest workers
    currently make up two-thirds of all IT hires.'' That is two-
    thirds of all information technology hiring in America that is
    done by the guest workers.
        What would happen if the guest worker green card provisions
    in the Gang of Eight bill or the SKILLS Act or I-Squared became
    law? How would it change things?
        Professor Salzman. Well, it would dramatically increase the
    number, because we find, based on those estimates, it would
    provide enough guest workers to fill 100 percent of the jobs
    with perhaps 50 percent left in reserve that could then be used
    to backfill and replace current workers.
        So, the current bills supply more than even what the
    industry says it needs to fill every new job.
        Senator Sessions. And you have written that universities
    graduate twice as many people with STEM degrees--science,
    technology, engineering, mathematics degrees--each year as
    there are job openings in this field
        Would you comment on that?
        Professor Salzman. Yes. Overall, our universities are very
    good at providing the workforce that is needed. Current numbers
    suggest half to--only about half to two-thirds of graduates
    find a job in a STEM field. And what is important to also note
    is when we do observe a shortage, as has happened in the
    petroleum industry, you see wages go up and when wages have
    gone up, student enrollments increase dramatically.
        In other words, students are very sensitive to the market
    signals about where there is demand, where wages go up, and
    they respond. So, it raises the curious question, which is if
    there is demand out there, why we have not seen wages increase.
        Senator Sessions. I could not agree more. I tell my
    business friends, well, free markets, you believe in those, do
    you not? Why are not wages going up if we have a shortage?
        What can you tell us about the trends? Maybe, Professor
    Hira, what can you tell us about the wage trends over the last
    decade or so for IT workers?
        Professor Hira. Well, the wage trends, as Professor Salzman
    and others have looked at, I mean, obviously, if you have got a
    shortage, what you would see, we have a market economy, you
    would see wages go up, and they have not. They have been flat
    for 15 years, which was not true in the 1990s when wages went
    up very significantly in computer science and IT occupations,
    in the 1990s during the dot-com run-up, and that is important.
        Wages going up is important because it induces people to go
    into those fields. So, incumbent workers will switch into IT
    and you saw a very large increase there, but it also sends a
    signal to our education market that students should study this,
    and we saw a doubling of the number of computer science
    graduates during that timeframe.
        What you see here is now really a flat labor market and it
    is mostly caused by the guest worker programs.
        Senator Sessions. Can you explain whether an H-1B employer
    has to recruit American workers before hiring foreign workers?
        Professor Hira. The impression one gets from listening to
    the press, as well as many policymakers, is that--and certainly
    the industry itself--is that they search low and high and they
    just cannot find Americans, and only then, after they cannot
    find an American, do they turn to an H-1B worker.
        That is absolutely not true. It is not required by the law
    or the regulations and it is not true in practice. We see this
    over and over again. The Southern California Edison case is
    just the most flagrant example of that, but Disney and many
    others, as well as companies like DeLoitte, which is now hiring
    only H-1B workers to service the State of California
    unemployment insurance IT system.
        Senator Sessions. State employees basically affirm that
    serving the State of California----
        Professor Hira. State of California to do the unemployment
    insurance IT system. Instead of hiring Americans, they are
    bringing in H-1B guest workers because they never had to
    recruit H-1Bs, and there are huge numbers of layoffs in the
    tech industry. HP is laying of 55,000 and IBM has shrunk by
    55,000 over the last few years.
        Senator Sessions. Well, you two professors, I think it is
    important, colleagues, to know that you have been joined by--in
    effect, I think it is fair to say--I will ask you, Professor
    Salzman, if this is correct.
        That, a Mr. Teitelbaum has just written a book and an
    article in The Atlantic, ``The Myth of the Science and
    Engineering Shortage.'' He agrees with you and signed an op-ed
    with you.
        Also, Professor Paula Stephan and Norm Matloff, the Federal
    Reserve of Atlanta staff, did a study that proved wages fall
    with excessive immigration.
        Lindsay Lowell at Georgetown University Public Policy
    Institute, the Economic Policy Institute, these are respected,
    independent voices that are expressing concern, are they not,
    and really, in essence, agree with your fundamental statements?
        Professor Salzman. Absolutely. It even goes further than
    that, which is even some of the researchers who have been
    pushing for expansion also, when they look at the wage data,
    come to the same conclusion. We are all looking at the same
    data and it is very clear that flat wages have been the
    dominant trend.
        In fact, Tony Carnevale, also at Georgetown, who usually
    supports expanded guest worker programs, said if you are a
    bright American in math, you would be crazy to go into a STEM
    field because other fields pay more. So, even there is
    acknowledgment.
        Senator Sessions. Thank you.
        Senator Klobuchar, I am sorry. You are recognized.
        Senator Klobuchar. I just wanted to get it in before the
    vote here.
        Thank you all for coming. I did want to just step back one
    minute and talk about the importance of getting a comprehensive
    bill done. I know we are focused on this one issue and I wanted
    to thank especially Mr. Trumka for his incredible work on that
    Senate bill and how difficult that was in negotiating it.
        As you all know, a version of the I-Squared bill was in
    there and I know certainly it was not your favorite thing that
    it was in there, Mr. Trumka, but I did want to say thank you
    for the comprehensive bill and stress how important that is; if
    we are really going to move forward on any of this, that we try
    again to get a comprehensive bill that was incredibly
    bipartisan in the Senate, every one worked it out.
        I just wondered if you would, Mr. Trumka, talk about the
    importance of seeing a comprehensive bill like that again.
        Mr. Trumka. Absolutely. The current system is broken and it
    is being used to drive down the wages of every worker out
    there, whether you are an undocumented worker or your family
    came on the Mayflower.
        It is necessary that we fix that program in the long run
    and the only way to do that is to bring it all together,
    because we surely would not have supported the H-1B provisions,
    and that is particularly true after the Hatch amendments gutted
    the protections that you did not have to really search for
    Americans and hire them first.
        So, without comprehensive immigration reform, it will be
    difficult to get things done.
        Senator Klobuchar. Thank you very much. I appreciate that.
        Mr. Billhardt, thank you for your story. I think you know
    you are part of the story in America where 90 of our Fortune
    500 companies were actually founded by immigrants; 200 of our
    Fortune 500 companies founded by immigrants or kids of
    immigrants; 30 percent of our U.S. Nobel laureates were
    actually immigrants.
        Certainly, in my State, I have seen firsthand, small
    businesses, big, in our workforce, the difference immigrants
    have made.
        Could you talk about why now we are seeing some people
    wanting to start businesses in places like Canada or London or
    Shanghai instead of here because of some of these limitations?
        Mr. Billhardt. Absolutely. The challenges--so for us, for
    me, as an entrepreneur, it is about staying competitive. That
    is--my number 1 job in creating jobs here in America is to
    figure out what I can do to be competitive in the global
    marketplace. And it is not about salary or paying less salary.
    We pay competitive wages here in the United States to everyone
    that has the right job and that has the right skills.
        What is happening, though, is that because of a lot of the
    restrictions that are being placed on the H-1B and the cap,
    there are some people that we educate here in the United States
    that get taxpayer money to get their Ph.D. that could put their
    skills to work here in the U.S. and help grow American jobs,
    and instead what is happening is they have to go back to their
    home country or go somewhere else and compete with the American
    companies that are trying to create jobs. That is at the heart
    of, I think, the problem. And I am here not to testify for the
    H-1B high-skilled immigrants. I think we can--we can take care
    of ourselves. I am here to testify on behalf of my country. We
    need these people to help our economy grow, and they are going
    elsewhere. The world is not standing still and if we do not
    find ways to keep them here after we have educated them, I
    believe a lot of success stories, entrepreneurial success
    stories will be created not here in the United States, but will
    be created elsewhere.
        Senator Klobuchar. Mr. Johnson, following up on that. I
    think it gets lost that part of this bill also makes it easier
    for students who--you have discussed this in your testimony--
    obtain advanced degrees in the U.S. can stay and work so that
    we are not training our competition to simply go back to their
    home country and start the businesses in their home country.
        And one important part of this is increasing the
    availability of green cards.
        The I-Squared legislation has provisions to make it easier
    for U.S. STEM advanced degree holders, as has been discussed,
    to obtain employment-based green cards. It also addresses
    recapturing some of the green cards that we have not used in
    the past and taking a closer look at some of the per country
    limits.
        Could you talk about the impact of some of those
    provisions?
        Mr. Trumka. Absolutely. Thank you. I mean, in fact, we
    spend a lot of time talking about the dysfunctions in the
    temporary system and we may have differing views about what
    those dysfunctions are, but the reality is it really is about
    both the temporary system and the permanent green card system.
    I mean, those two things have been--they need to work hand-in-
    hand and right now they do not.
        We do have limits on the green cards that really cause
    enormous backlogs. Those backlogs then spill over and create
    all kinds of tensions and dysfunctions within the temporary
    visa system as people who are looking to put down permanent
    roots in the United States are prevented from doing so, needing
    to stay in an H-1B or a temporary visa because of the green
    card backlog.
        So, those dysfunctions feed off of each other in a way that
    cause real problems for us and, again, not only the overall
    numbers, but I think we also have to look at the fact that
    spouses and children are included in these--in our numerical
    limits for workers.
        So, we are giving away employment-based visas to spouses
    and children.
        Senator Klobuchar. Right. And we have had that with the
    Mayo Clinic, with doctors and their spouse then cannot come in
    or cannot get a job.
        I know my colleagues have to go vote, too, so I am going to
    stop there. I do have some questions that I will put on the
    record about the current system, some improvements that we
    could make about enforcing the laws on the books, going after
    violations. And I know, also, Mr. Trumka had some good ideas
    about the job mobility.
        But I have run out of time here, so I will put those on the
    record. Thank you, everyone.
        Chairman Grassley [presiding]. Senator Flake, would you
    like to ask questions before you go vote?
        Senator Flake. Yes. I will do it quickly. I will not take
    the full 5 minutes.
        Mr. Salzman, I was interested in your testimony. You are
    saying that there are far more graduate students in STEM--I am
    sorry--graduates for the field than we need, than the economy
    needs.
        Would it be your position, then, that we not have any
    influx of migration for STEM, in the STEM field, for graduates
    in the STEM field?
        Professor Salzman. No, not at all, because a large number
    of those are, in fact, foreign students. The issue is twofold.
    One, that the H-1B is highly concentrated in one industry and
    its primary function is to use for offshoring of IT. So, that
    is the primary function of the H-1B.
        In terms of the universities, no. We should have a good
    flow, but a diverse flow. So, when a program--and we have
    looked at that and it is in my written testimony--70, 80, 90
    percent of a program are exclusively foreign students, that is
    not an international education. That is not trying to bring in
    the best and the brightest.
        That is a business model that provides entry into the labor
    force and the incentives in I-Squared are distorting the
    incentives on this in the universities because we make a lot of
    money in master's programs. So, that will encourage the wrong
    flow and, in fact, paradoxically undermine the very strength of
    the universities.
        Senator Flake. I just have to say that testimony that we
    hear here directly contradicts what we hear, obviously, and you
    would concede that, from the industry. They will say, in very
    compelling testimony, that they have jobs that they advertise
    for that simply go unfilled and are required--need for the
    economy to bring people in.
        Mr. Billhardt, can you comment on that?
        Mr. Billhardt. There are help wanted signs in every single
    tech company that I know in Austin right now, and I am happy to
    make introductions.
        Professor Salzman. I would be very happy to accept.
        Senator Flake. Mr. Johnson, would you agree that the
    predominant purpose of the H-1B program is for offshoring?
        Mr. Johnson. No, I would disagree with that. The H-1B
    program has brought enormous value. It gives us an opportunity
    to fill gaps in our labor market where they exist and do so in
    a way that is nimble and responsive and operates in real time.
        But I just want to point out, it is included in my
    testimony, you look at the unemployment rates, U.S. citizen
    unemployment rates in the fields, computer network architects,
    1.6 unemployment rate, these are effectively full employment in
    the majority of the categories that we are talking about that
    have H-1B usage.
        Overall in STEM categories, you are talking about a 2.5
    percent unemployment rate. So, the idea that somehow folks are
    not being able to get jobs or that employers are not going
    after every worker that they can possibly find, I think, is
    belied by the evidence.
        Senator Flake. Well, thank you. I have got to go vote, but
    let me just say my supposition is that if we looked over the
    past 30 years and looked in the tech field, we would see the
    same statistics--you would find the same if you were to study
    previous decades.
        Yet, had we taken the policy suggestions that have been
    made today and not had a robust H-1B program or not had a
    robust program to allow those who graduate at our universities
    to stay--and, frankly, in my view, it ought to be more robust--
    what would our economy look like today? What would we look like
    if you took--basically, if you look at Silicon Valley, a third
    or half of the companies have been formed, the big ones, by
    foreign-born students who have come here and were allowed to
    stay.
        So, I hope that we can continue on. I was a proud sponsor
    of the so-called Gang of Eight bill and also the I-Squared
    bill. I have sponsored the STAPLE Act for years to allow those
    who graduate from our universities to stay here.
        But before I run and vote, Mr. Chairman, I ask unanimous
    consent that statements provided for today's hearing from the
    U.S. Chamber of Commerce, Partnership for a New American
    Economy and the Council for Global Immigration, the Society for
    Human Resources Management be included in the record.
        Senator Grassley. Of course, they will be included, without
    objection. And there is no objection.
        [The information appears as submissions for the record.]
        Chairman Grassley. I will ask questions. We may have a
    second vote. I think somebody will be back here before I have
    to go, so we will not have to recess the hearing.
        I have got three short questions. I am going to put them up
    on a chart. I would like to have you say whether you agree or
    disagree, but if somebody wants to say maybe or offer a
    rationale for disagreeing, you would have the opportunity,
    maybe in 15 seconds. But I would like to hurry through these so
    I can get to other questions.
        I am going to ask each one of you to say whether you agree
    or disagree.
        All employers should make a good faith effort to recruit
    U.S. workers before hiring a H-1B visa holder. Mr. Trumka?
        Mr. Trumka. Agree, absolutely.
        Chairman Grassley. Mr. Hira?
        Professor Hira. Agree.
        Chairman Grassley. Mr. Billhardt?
        Mr. Billhardt. When I hire people, I do not hire people
    based on their resume. I hire individuals and I need to find
    the exact right individual for a particular job. That will
    create more American jobs.
        Chairman Grassley. So, I can put you down for disagreeing
    then, or maybe.
        Mr. Billhardt. I did not say that.
        [Laughter.]
        Mr. Billhardt. But I need to have the right person in the
    right job and it is false to assume that every job, every H-1--
    that I just hire because someone has a skill on their resume. I
    need to hire the right person.
        Chairman Grassley. Mr. Palmer?
        Mr. Palmer. I 100 percent agree.
        Chairman Grassley. Mr. Johnson?
        Mr. Johnson. I am sorry. The lawyer in me gets stuck on
    what do we mean by good faith effort. I think employers are
    trying to do everything they can to fill positions. So, I think
    that this is already happening. If what we are talking about is
    micro managing it or putting added bureaucracies on top of--top
    of what I believe is already happening, then, I think, the
    answer to that is, ``no.''
        Chairman Grassley. Mr. Miano?
        Mr. Miano. I will go back to my computer days, not my
    lawyer days, and say yes.
        Chairman Grassley. Mr. Salzman?
        Professor Salzman. Yes, absolutely.
        Chairman Grassley. The next question: All employers should
    be required to attest that they did not or will not displace a
    U.S. worker before bringing an H-1 visa holder in.
        Mr. Trumka?
        Mr. Trumka. Absolutely agree.
        Chairman Grassley. Mr. Hira?
        Professor Hira. Agree.
        Chairman Grassley. Mr. Billhardt?
        Mr. Billhardt. If that had happened when I was starting
    Enspire, there would not be 30 American jobs today.
        Chairman Grassley. Mr. Palmer?
        Mr. Palmer. Agree.
        Chairman Grassley. Mr. Johnson?
        Mr. Johnson. Attest to who? Who is going to oversee it? I
    mean, again, I would resist the temptation to search for--this
    is sort of a problem in search of a solution--or a solution in
    search of a problem. This is happening and unemployment rates
    indicate that displacement is not a widespread problem.
        This ought to be targeted where there is evidence of fraud
    and where there are legitimate concerns about the hiring
    practices of employers.
        Where there are those concerns, then, I am all in favor of
    overseeing those kinds of activities.
        Chairman Grassley. Mr. Miano?
        Mr. Miano. Yes.
        Chairman Grassley. Mr. Salzman?
        Professor Salzman. Agree.
        Chairman Grassley. The third chart: All employers should
    offer a job to any U.S. worker who applies and is equally or
    better qualified for a job before hiring an H-1B visa holder.
        Do you agree or disagree, Mr. Trumka?
        Mr. Trumka. Absolutely agree.
        Chairman Grassley. Mr. Hira?
        Professor Hira. Agree.
        Chairman Grassley. Mr. Billhardt?
        Mr. Billhardt. I need to stay competitive as an
    entrepreneur. I need to find the very best person that I can
    find for a job.
        Chairman Grassley. Mr. Palmer?
        Mr. Palmer. Absolutely agree.
        Chairman Grassley. Mr. Johnson?
        Mr. Johnson. I think I have been clear about the need to
    resist micro management.
        Chairman Grassley. Very clear.
        Mr. Johnson. Yes, sir.
        [Laughter.]
        Chairman Grassley. Mr. Miano?
        Mr. Miano. Yes.
        Chairman Grassley. And, Mr. Salzman?
        Professor Salzman. Yes.
        Chairman Grassley. Now, I go to questions for Mr. Palmer. I
    appreciate your testimony about your experience and about what
    you have heard about employees at other companies.
        Based on your experience and what you have heard, are the
    foreign workers being brought over to replace Americans better
    qualified and are they truly what we refer to as the best and
    the brightest?
        Mr. Palmer. Absolutely not. Sir, I have been a part of
    companies bringing over only--bringing over H-1Bs only because
    of the lower wages and salary. These people work 9 and 10 hours
    a day trying to learn the job of an American and then they
    spend 9 or 10 hours a night online back to India trying to
    learn the software.
        It is not competitive hiring. It is competitive firing.
    This is all about money. It is all it is about. I lived it and
    I have to totally disagree with some of the statements. I mean,
    I sat there and watched skilled Americans being replaced for a
    dollar and I sat there and we train these people 50, 60, 70
    hours week and their skills were just not there.
        They bombard the consulate with H-1B applications. Whoever
    gets one, no matter what your skill set is, you are coming to
    the United States and you have got to learn it when you get
    there. That is not specialized talent. That is not the spirit
    of the H-1B program.
        Chairman Grassley. Mr. Hira, I have a question for you.
    Southern California Edison did not bring in H-1B visa holders.
    Rather, they contracted with big out-placement firms to bring
    in foreign workers. Thus, California Edison is one step
    removed. The company said that they were cutting costs and
    making their business more efficient.
        With respect to what Southern California Edison and other
    companies have done, what do you say to those who say that
    cutting labor costs in this manner increases corporate
    efficiency and, in the long run, is good for American
    consumers?
        Professor Hira. Well, it definitely does cut wages and
    saves money, and certainly every executive is being pressured
    by shareholders to do so.
        Whether some of that money that is saved gets pocketed by
    Infosys and Tata, some of that money gets pocketed by Southern
    California Edison, some of it gets pocketed by shareholders,
    and a little bit goes to perhaps the customers, we will see.
        Of course, Southern California Edison is quite profitable.
    But it is a lose-lose situation for American workers. It is a
    lose-lose situation for the American economy.
        You are basically trading jobs away to bring a little bit
    of extra profit to Southern California Edison.
        Chairman Grassley. More of a legal question, Mr. Hira. Do
    you believe that what Southern California Edison did is allowed
    under the H-1B laws; and, if so, do you believe it should
    continue to be legal?
        Professor Hira. I believe that the Secretary of Labor has a
    statutory authority to investigate Southern California Edison,
    as well as many other cases. And until and unless he does so,
    we will not know whether there were willful violations, whether
    there were illegal acts that took place there.
        Certainly this is not an isolated case. This is a very
    widespread phenomena. This is how most of the H-1B program is
    being used. We are talking about 40,000-50,000 a year going to
    these offshoring firms that have exactly the same business
    model.
        Chairman Grassley. Then, also for you, does the Senate-
    passed bill from 2013 solve the problems associated with H-1B
    and L-1 programs?
        Professor Hira. No. Unfortunately, S. 744 would actually
    make the problem worse and I say that for American workers
    knowing that the status quo is so terrible that you have to
    your foreign replacements.
        Southern California Edison would be happening whether S.
    744 was law and that is--not only would it be happening, it
    would be happening in lots more places because it would have
    increased the cap of the H-1B. It would have increased and
    multiplied what has happened at Southern California Edison many
    times over.
        The players might be different. You might not have Tata or
    Infosys bringing in the cheaper H-1B and L-1 workers. You might
    have IBM or Accenture doing that, but the same business
    practice would be happening and the same effects on the
    American workers getting their jobs destroyed.
        Chairman Grassley. Mr. Johnson and Mr. Billhardt, as I said
    previously, the top 10 companies that use the H-1B program
    swallow up over 50 percent of the supply of available visas.
    The big corporations take thousands of visas while many small
    businesses struggle to get one or two.
        I would like to know your thoughts about changing the way
    we distribute visas and prioritizing them to help U.S.
    companies that need them most.
        Two questions. When distributing H-1B visas, should the law
    give priority to certain employers or categories of H-1B
    workers and should we give priority to employers who are based
    in the United States?
        Start with Mr. Johnson and then Mr. Billhardt. Then I will
    call on Senator Vitter.
        Mr. Johnson. Well, I will say that what we have now, which,
    I think, is the worst of all possible situations, that we issue
    visas based on a random lottery because our quota is
    essentially met on a single day does not give us any
    opportunity to be able to evaluate the merits and compare the
    relative values of one application versus another.
        The other thing I would point out is that we have to--if
    you look over time, the demand for H-1B visas has been
    completely consistent with economic trends. We have to remember
    that in the 1990s or around 2000 when we had much higher
    numbers, 100,000-plus visas available. In years where the
    economy was down, we did not meet that quota.
        So, the rise and fall of H-1B demand mirrors the economy,
    the performance of the economy in a way that suggests that it
    is responsive to the economy and that freeing up the cap and
    allowing--moving away from this sort of ridiculous lottery
    system that we have now is really the answer to be able to sort
    out what is the best way to use this program for its intended
    purpose, which is to fill critical gaps in our labor market.
        Chairman Grassley. Before I go to Mr. Billhardt, the second
    question I asked. Should we give priority to employers who are
    based in the United States?
        Mr. Johnson. I have not given that much thought. I mean, I
    think, as a general rule, that would sound----
        Chairman Grassley. Then let us move on to Mr. Billhardt.
    Answer both questions.
        Mr. Billhardt. Thank you, Chairman. I think the lottery is
    at the heart of the problem. If there was a lottery when I
    graduated from business school, the uncertainty it would have
    created for me would have made it very hard to start my
    business in Austin versus back in Berlin.
        So, at the heart of it is at the lottery and at the heart
    of the lottery is the number. And so the easy solution is to
    increase the number, and I am somewhat shocked to hear the
    numbers that were thrown out here.
        I do not see that happening in the real world. I do not
    see, in the real world, that two-thirds of all IT jobs are
    going to H-1B workers. There are very few H-1B jobs right now
    that are given out and I know a lot of people that are
    currently in the system that are wavering, do I stay here or do
    I go and start a company in Dubai.
        So, it is the numbers that need to increase and the lottery
    needs to be replaced with if you have the merits and there is a
    company that is willing to hire you for the wages that are
    fair. No one is arguing, I think, here against trying to find
    ways to limit the abuses of the system. I think we are all on
    one page. There are abuses and those can be limited and should
    be limited and there are some heartbreaking stories that I
    think can be--we can figure out a way to make those abuses go
    away.
        But as a whole, we are going to fall behind as a country if
    we make it a lottery system and limit the number of H-1Bs to
    such a degree that people right now are much more inclined to
    start their businesses and hire workers overseas instead of
    starting businesses here.
        I have many stories of entrepreneurs in Austin that are in
    this particular situation right now.
        Chairman Grassley. What about hiring--American-based
    company?
        Mr. Billhardt. I do not have too much--I have not put much
    thought to that either.
        Mr. Miano. Can I get a 20-second opportunity to answer
    that?
        Chairman Grassley. Yes.
        Mr. Miano. In which to say that I understand and respect
    the sentiment, but I would say that in today's globalized
    economy, that is tough. I mean, what about Toyota, what about
    Hyundai, what about Mercedes? There are lots of communities
    that are spending a lot of resources to attract these very
    important companies into their communities and I think we need
    to be careful about just sort of blanket easy rules about
    favoring one over the other if they are creating jobs and
    really helping to build the American economy.
        Mr. Billhardt. I would agree with that. And if I can add
    one more thing. There was a discussion here around the OPT, the
    optional practical training, and placing restrictions on that.
        I just want to put on the record here that Enspire would
    not exist today and 30 American jobs would not be here if there
    were any restrictions on the OPT.
        When I was a student and I was in grad school, I had
    $25,000 in student debt. That is all I had. I had nothing else.
    I would have been hard-pressed to find anything in that first
    year that I could have proven to a government bureaucracy to
    give me a visa.
        So, that OPT and the nonrestrictive nature of that was
    actually quite critical for the success of my business. And I
    do not know of any company that is hiring workers just for 1
    year. That is not a lot of value in that.
        Chairman Grassley. Senator Vitter.
        Senator Vitter. Thank you very much, Mr. Chair. And thanks
    to all of our witnesses. This is a really important topic. I
    just have a few questions.
        Mr. Trumka, do you think the hiring of illegal aliens
    undercuts the wages of some American workers?
        Mr. Trumka. I think the current broken system undermines
    the wages of all Americans because they are allowed to be
    cheated out of the wages that they earn, misclassified. If they
    report unsafe conditions or unhealthy conditions, they get
    fired. And so everybody works under unsafe conditions.
        Senator Vitter. Specifically, do you think when American
    businesses hire illegal aliens, specifically, do you think that
    undercuts the wages of some American workers?
        Mr. Trumka. Under the current system, it does because they
    have no rights and they are allowed to misclassify them,
    utilize them in ways that are they are not intended to.
        Senator Vitter. Okay. Let me ask about part of the new
    system. Do you think legalizing illegal aliens, giving them a
    legal status and giving them work authorization undercuts the
    wages of some American workers?
        Mr. Trumka. I do not think it would do that. I think it
    would have the opposite effect. If you fix the system----
        Senator Vitter. You think increasing the supply of labor--
    --
        Mr. Trumka. These workers could come out of the shadows--
    I'm trying to answer your question, Senator. These workers
    could come out of the shadows. They would have the rights to
    have a voice on the job, the right to have right wages, not be
    misclassified, not be able to fired for reporting unfair and
    unsafe conditions, and, as a result, it would be better.
        They are currently here working. They work with no rights
    and because they have no rights, they are used to drive down
    the wages of every American.
        Senator Vitter. That goes, I guess, to my first point.
        Professor Hira, do you think the hiring of illegal aliens
    negatively affects the wages and employment opportunities
    specifically of some African-American workers?
        Professor Hira. My area of expertise is on the high skill
    immigration side, but I think it is pretty obvious that it does
    have that kind of effect in the current system.
        Senator Vitter. Great. And for all the panel members, if
    you can just give a quick answer and quick explanation.
        To each of you, do you believe there is a significant
    shortage of STEM workers in the U.S. now?
        Mr. Trumka. I do not believe there is a specific shortage.
    When one out of four STEM workers can only find employment in
    their field, I do not believe there is a shortage.
        When wages are not increasing that field, but are actually
    decreasing and are now at 1998 levels, I do not think there is
    a shortage.
        Senator Vitter. Professor?
        Professor Hira. I would say that there is no shortage. The
    evidence shows that whether you look at the employment figures,
    whether you look at the wages, whether you look at the
    unemployment rates. All of those indicate that there is no
    shortage whatsoever.
        Senator Vitter. Mr. Billhardt?
        Mr. Billhardt. In Austin, Texas where I live, there are far
    more tech companies looking for qualified workers in all areas
    than they can currently find.
        Senator Vitter. That is fine. My question was national. Do
    you have an opinion about whether there is a significant
    shortage of STEM workers in the United States?
        Mr. Billhardt. I am in the technology industry, so I can
    speak for all the cities that I know that hire technology
    workers and I can say absolutely, yes.
        Senator Vitter. Mr. Palmer?
        Mr. Palmer. I can only speak to technology and there is
    absolutely no shortage.
        Senator Vitter. Mr. Johnson?
        Mr. Johnson. I believe that there is a shortage and I think
    the only way that you can sort of torture the evidence to tell
    you otherwise I think is to confuse what it is that we are
    talking about when it comes to STEM.
        I think the various definitions of what constitutes STEM
    and when a job is in STEM or when a worker is coming from STEM,
    that gets all very confused.
        Biology positions, they are not part of STEM, which sort of
    distorts our view of how is it that we are studying this thing.
        I will say that employers and the labor market do not
    really care what folks with green eye shades think about where
    people are coming from, whether their degree is part of this
    demographic calculation or not.
        What they need is workers in jobs when they need them where
    they need them.
        Senator Vitter. So, just to be clear, what are the workers
    that you think should be taken out of the analysis, that you
    think are in the analysis that lead some of your panelists
    colleagues to an opposite conclusion?
        Mr. Johnson. I think that is actually a really complicated
    question. I think what I would argue for is that there be
    consistency and that the usage of STEM match its broader
    application in the labor force.
        Senator Vitter. So, what workers do you think should be
    taken out of that category?
        Mr. Johnson. To try to do an exhaustive list of that, I
    mean, in the----
        Senator Vitter. Do not worry about being exhaustive. Give
    me the top three.
        Mr. Johnson. I think biology workers, I think physicians. I
    think certain folks need to be taken out of that STEM category,
    to not have physicians in there and to have people who get a
    degree in medieval literature is odd.
        So, I just think a complete reassessment and agreed
    terminology is important.
        Senator Vitter. Are you saying that medieval history majors
    are currently classified as STEM workers? I missed the point.
        Mr. Johnson. Yes. Social science degrees can be a very
    broad category that includes an odd array of agrees.
        Senator Vitter. Mr. Miano, let me go back to my basic
    question. Is there a significant STEM worker shortage in the
    United States?
        Mr. Miano. No. And, may I give you a roundabout answer? I
    want to give the up-front answer first to you. Believe it or
    not, I am actually in the young lawyer's division. It may not
    appear that way. And if you had said to me 15 years ago that
    you are going to be a lawyer now, I would have said you are
    crazy, because I was happy as a computer programmer, I loved
    what I was doing.
        But what happened was, I was working as a consultant and
    the companies were firing Americans, replacing them--bringing
    in foreign workers. The foreign workers were largely
    incompetent, but they are cheap.
        The technology managers are tearing their hair out because
    their choice, being given by the accounting departments, is
    either take these foreign workers or nothing--and the
    accounting departments are celebrating, oh, you see, I got
    these guys for $10 an hour less.
        Watching that and then seeing a scholarship to law school,
    I took the message that Congress was sending me and went to law
    school.
        Senator Vitter. It even drove you to law, which is really
    underscoring the point.
        Mr. Johnson. Yes.
        [Laughter.]
        Senator Vitter. Mr. Salzman?
        Professor Salzman. A couple points of clarification, since
    I do actually study the STEM workforce and its definitions. And
    I will say that my colleagues in the biology department will be
    very upset to know they are no longer considered a science.
    That is the S in STEM. History is not considered part of STEM.
    There is some confusion about the definitions, but those are
    not confused by anybody that I know.
        But there is an interesting confusion about shortage and I
    would have thought our lawyer friends would have talked about
    that, which is distinguishing between a complaint about hiring
    and what is a real shortage, you are unable to find people.
        I have a shortage in finding terrific, top graduate
    students who will work for minimum wage and if you ask me, I
    would call that a shortage. But I have great graduate students
    and I pay them a little bit more.
        And this is real, I do not want to minimize it, there is a
    hiring problem out there. Anybody who hires, who is a real
    manager, knows it is tough to find people and you have to be
    competitive, and that is what is called the market. And a lot
    of the complaint we hear are from companies that cannot compete
    in the labor market. A small, 30-person entrepreneurial firm
    will not be able to compete with a Google for top talent. That
    is the market.
        I am not sure it is the business of Congress to go change
    the market because people cannot find what they want at the
    price that they want. That is not a shortage anymore----
        Senator Vitter. I wish we lived by your rule. We would stop
    doing three-quarters of what we can do here in Congress.
        Professor Salzman. We are just trying to get you to stop
    this one. That will be a----
        Senator Vitter. I understand. Thank you. I did not mean to
    cut you off. Thank you.
        Mr. Billhardt. Can I add just a little bit to whether
    biology is a STEM or not? But I actually think that whole
    question kind of defeats it. I was a philosophy undergraduate
    and a business major. I would have not fallen into the STEM
    category, and yet I am creating American jobs here in America.
        So, I think that I was missing the point in this debate
    about whether it is, what is a STEM job and what specific
    fields are in that, is truly the point that I tried to make
    earlier. When I hire as an entrepreneur, I am not hiring based
    on a skill set that is listed on a resume. I am hiring an
    individual and I need to hire that individual with their unique
    aspects and skills to fulfill a specific job that allows me to
    create the most competitive product in a global marketplace.
        If I do not find that person, if I cannot hire that person,
    then my competitor--our biggest competitor is located in
    Sweden--they will be the happy. They will be the one benefiting
    if I cannot hire that specific individual with those individual
    skills.
        So, trying to classify what is STEM and what is not STEM, I
    think, misses the point of the fact that in order to grow our
    economy and be competitive in the market, we need to find the
    very best people specific to a job. And you bet there are
    American jobs on the line if I do not find that one engineer,
    because I cannot find the next engineer that is American-born,
    I cannot the support engineer, I cannot find the salesperson
    that supports that product because that salesperson will be
    hired in Sweden.
        Senator Vitter. Thank you, Mr. Chairman.
        Senator Sessions [presiding]. Thank you, Senator Vitter.
        Well, there are a number of things that I think are
    indisputable. I will ask Professor Hira. This is a U.S. Census
    Bureau statement, their official statement.
        The U.S. Census Bureau reported today that ``74 percent of
    those who have a bachelor's degree in science, technology,
    engineering and math, commonly referred to as STEM, are not
    employed in STEM occupations,'' closed quote.
        Do you think that is an accurate statement and what does it
    mean to Americans who are graduating from colleges today
    looking to have a career in STEM?
        Professor Hira. Well, I would say two things. I think it is
    an accurate statement and we believe the Census Bureau.
        Second, if there really was a dire shortage, as is being
    claimed by industry and some folks on the panel here, you would
    see those Southern California Edison workers not training their
    foreign replacements, not taking on that kind of indignity.
        They would instead be quitting because there would be all
    these great IT jobs that they could go to. The reality is those
    500 people have lost their jobs, and I have spoken to a number
    of them. Some of them have no prospects for a job. Others are
    taking wage cuts and the like.
        So, that is the reality of what that data point shows, of
    what the Census shows.
        Also, I would point out that engineering technology, IT has
    traditionally been the ladder up from the working class to the
    middle class. I am an engineer, I am a second generation
    engineer, but the engineers I work with, many of them come from
    working class backgrounds. That is being shut off by the H-1B
    program. You are not bringing in the specialized, unique folks
    that Mr. Billhardt is talking about. You are bringing in
    ordinary IT workers. They are not filling the skills gap. The
    skills gap is that the foreign worker does not have the skills,
    as Jay Palmer has talked about, as the Southern California
    Edison story shows us. It is the American workers who are
    training their replacements.
        Senator Sessions. Thank you.
        Mr. Palmer, you worked some in India and you went there.
        Mr. Palmer. Yes, sir. I was actually in India when--it is
    in my written statements or my written testimony--when they
    devised--the Infosys devised a plan on how to cheat the
    American Government.
        Senator Sessions. All right. Go ahead.
        Mr. Palmer. Sir, if they could not get H-1Bs, they started
    sending over people on B-1s and B-1s is the business visa and
    that is really where the $34 million settlement came from.
        Senator Sessions. Let me just ask you this. See if you can
    be succinct about this answer. It seems to me that Infosys and
    other companies identify graduates from engineering, STEM
    programs in India and they gather them and almost like a temp
    service, because these are not really immigrants. They are not
    coming to America to live here permanently. They are coming
    here only to work at a certain job.
        And that you put those together and with regard to the
    classic case of California Edison, what they did was the
    contract was with Infosys, was it not?
        Mr. Palmer. Absolutely.
        Senator Sessions. And they did not really have a contact
    and they laid off--400 or so IT workers at California Edison
    were laid off.
        Mr. Palmer. Yes, sir.
        Senator Sessions. They then contracted with this
    subcontractor who brought in these workers and paid them
    $40,000 a year. I believe, Mr. Trumka, you said less. Is that
    the way it works?
        Mr. Palmer. Yes, sir. That is the way it works, absolutely.
    And if they get the $40,000, if the worker really gets the
    prevailing wage, which many times they do not, they are having
    to give kickbacks to their company and et cetera, et cetera,
    but that is exactly what happens.
        Senator Sessions. Now, Mr. Hira, is that essentially your
    analysis of it as a professor?
        Professor Hira. Yes. I have been studying this for a very
    long time and Southern California Edison is just the most
    visible case. You have got to understand that my cousins--and I
    have cousins in India who graduate from good IT colleges. The
    starting salary or the average wage for an IT worker there is
    about $6,000 a year.
        I have seen the Infosys contracts and we have had family
    come over with some of these companies and to get even the
    prevailing--the minimum wage here, which would be $60,000, they
    are very happy to do that.
        They are coming in at below market wages and what Congress
    is basically saying is any American professional who makes more
    than $60,000, your job is up for grabs. you must train your
    foreign replacement.
        Mr. Palmer. And, sir, just to add one more thing. I was
    asked to change contracts to try to hide it from the American
    Government. And additionally, they bring people over and they
    pay them in India, meaning that they are not paying taxes, they
    are increasing their profits.
        So, for example, as Dr. Hira said, the $6,000 a year, that
    is what they are getting. They are not getting the prevailing
    wage. It is ridiculous.
        Senator Sessions. But it is good experience and a net
    increase over the salary in India.
        Mr. Palmer. Sir?
        Senator Sessions. They have good experience and they have a
    net increase in income over what they might have in India.
        Mr. Palmer. Well, their experience is not good at all. I
    mean, they are coming over here, they are unskilled. It is just
    a potpourri of people coming over, as Dr. Hira can attest, and
    we are training them and we are laying off Americans and the
    Americans are training them. And to get the benefits, they are
    having to sign these basically non-disparaging remarks where
    they cannot even talk about it.
        That is why they are not here today, sir.
        Senator Sessions. I have some confidential statements and
    it is disappointing and I would like to talk about that more.
        Senator Durbin.
        Senator Durbin. Thank you, Senator Sessions. And thanks to
    the panel for being here.
        I was one of the Gang of Eight--Group of Eight, that worked
    on the comprehensive immigration reform bill. It reached a
    point in the deliberations that went on for months--months--
    where I said this is no longer the comprehensive immigration
    reform bill. This is the H-1B reform bill and other provisions.
        We spent more time talking about H-1B than anything else,
    anything. And I think there was obvious reason for that. There
    is a lot of money to be made in this pursuit and there are a
    lot of companies that really look at this in an honest way,
    wanting to have access to talent that they believe they cannot
    find in order to keep the company's doors open.
        President Trumka, I do not know if you stole my speech or I
    stole yours, but the three points that you made are the three
    key points, as far as I am concerned. You have spelled it out
    here in terms of first responsibility, hire Americans. And I do
    not know how many times I said that in the closed door
    sessions. I said we cannot walk out this door if we do not
    establish that our first responsibility is to hire unemployed
    Americans. How in the world can we rationalize anything else?
        What we tried to do--and you were involved in it on a day-
    to-day, week-to-week, month-to-month basis, the conversation
    about what are we going to pay these folks. Is this going to be
    such a low wage that it disadvantages American workers? That,
    to me, was key to it.
        The second, and it goes right to your second point, that
    the pay be in an equal situation.
        The other thing, too, you talk about the rights of workers
    in H-1Bs. There is a form of servitude here where they are
    stuck and they can be mistreated, abused at the expense of the
    American workforce, and I think what Mr. Palmer and others have
    said, with virtually no resource.
        Professor Hira, you have been very helpful to us as we have
    developed this.
        There was one provision in the bill which Senator Grassley
    and I introduced which lit up the scoreboard in India when we
    started talking about Tata and Infosys, who are the leaders in
    this whole effort year in, year out, where we tried to draw a
    line about H-1B visas. If your company has more than 50
    employees and 50 percent or more of those employees are H-1B
    visas, then you are out of the competition.
        Mr. Johnson, does that sound unreasonable?
        Mr. Johnson. The way you have said it, it certainly does
    not sound unreasonable.
        Senator Durbin. Good. I was hoping for your endorsement.
        [Laughter.]
        Mr. Johnson. Again, I think the axioms you are talking
    about are important, hiring U.S. workers, I get that. But if I
    can hire a worker, whether it is a foreign worker or a U.S.
    worker, if I can hire a worker that can help me create five
    more jobs that will employ that many more Americans, then that
    has to be prioritized first. We need to figure out how to grow
    ourselves out of this unemployment problem, not try to fight
    for scraps off the table.
        Senator Durbin. Would you agree that the starting point,
    though, is hire an American first?
        Mr. Johnson. Again, Senator, with all due respect, I
    understand the axiom and, in many respects, I agree with it.
    But, again, if we are just focused on hiring Americans first
    and we are not focused on how do we grow ourselves out of the
    unemployment situation that we are in, then ultimately we are
    all going to lose. We have to figure out how do we grow
    ourselves out of this.
        Senator Durbin. Well, we hope with the wage conversation,
    that offering comparable wages paid to Americans, paid to H-
    1Bs, that we are going to avoid some of the worst abuses.
        And let me concede the obvious. I have visited Illinois
    Institute of Technology. They brought in a Chinese student who
    was working on his Ph.D., who was just absolutely phenomenal.
    And he wanted to stay in the United States. And I thought to
    myself, why would we let him go? We brought him over here, we
    educated him. He has all the promise in the world to not only
    be a good employee, but a good employer at some point, and, why
    would we not want that to happen right here in the United
    States?
        So, one of the things we put in the comprehensive
    immigration bill, which was not favored by many people on the
    other side of the aisle, only 14, but one thing we said was in
    that circumstance, if you graduate with an advanced degree in
    the STEM subjects, I think this is how it read, and you have a
    job offer in the United States, we will offer you a green card.
        So, it gave them a chance to stay at the highest levels of
    academic achievement and performance. Does that address what
    you were trying to create as a finite exception to hire an
    American?
        Mr. Johnson. Absolutely. I agree with those principles, as
    well. Those are practices that I think we employ and ought to
    enshrine in law. But, again, I go back to the trouble with a
    more simplified axiom of just you have to hire the American
    first.
        Again, totally agree with the sentiment. I think we have to
    figure out how to balance that with the overarching need for
    all of us to figure out how do we grow ourselves out of the
    doldrums.
        Senator Durbin. Well, I want to put the H-1B factories out
    of business. I think anyone who comes before us will never ever
    be able to justify that, in my mind. I think there is
    exploitation going on there at the expense of the American
    economy in the short and the long run.
        I also want to make sure that we are rewarding and
    encouraging talent to come to the United States. You only have
    to look at the Fortune 500 and see how many of them were
    immigrants to this country to realize--as the son of an
    immigrant, I can say this--immigrants can do something good for
    this country. They have over and over again.
        Mr. Billhardt, you have an interesting story that really
    uses that talent from overseas to create American jobs; do you
    not?
        Mr. Billhardt. I do. I do. And I want to respond to your
    question from earlier on whether it is the right thing to put
    the H-1B factories with 50 percent or more H-1B workers out of
    business. I actually think that is a reasonable provision and I
    think that could actually help quite a bit how it may solve
    some of the problems that we heard on the panel here, because I
    think that is somewhat at the heart of what the current problem
    is.
        But at the same time, I think we still need to increase the
    cap so that there is not a lottery system that will prevent
    some of the people that you met and that I know from staying
    here and starting businesses here.
        There is one more point that I think is important, because
    you asked about hire American first. I think, in principle, all
    of us agree that that is a good idea, too, but there is a
    problem for me as an entrepreneur and that is the bureaucracy
    that will be created if I have to figure out--if I have to
    justify every single time that I am trying to hire the person
    with the right skills, why someone else that on paper has the
    same skill, but is not maybe necessarily the right fit for that
    particular job.
        If I have to justify that, that is putting bureaucracy
    between me and my ability to grow the business.
        Senator Durbin. But you see, that is the tricky part. That
    is the tricky part. If you are dealing with two engineers with
    similar backgrounds and similar experience and one that clicks
    with you and you think this person will fit right in my
    organization----
        Mr. Billhardt. Exactly.
        Senator Durbin [continuing]. But he happens to be the H-1B.
        Mr. Billhardt. Exactly, because it is not the skills on
    paper that matter. It is finding the right fit, because if I do
    not find that right fit, my company will not grow and I cannot
    grow American jobs that go with it.
        So, it is not, I think, that anyone does not want to hire
    Americans first, I think that is a good sentiment, but if we
    put restrictions on entrepreneurs that are unreasonable, where
    we have to prove something that we cannot prove, because on
    paper it is the same skill, then we are hurting our
    competitiveness.
        Senator Sessions. Thank you.
        Senator Durbin. Could I ask for 30 additional seconds?
        Senator Sessions. Yes. Make it 10 minutes.
        [Laughter.]
        Senator Durbin. I know it is so good you want it to go
    longer.
        Senator Sessions. Well, it is not all bad. You make some
    good points.
        Senator Durbin. That is the most complimentary thing the
    Senator from Alabama has ever said about me.
        Senator Sessions. No, it is not.
        Senator Durbin. ``Not all bad.''
        [Laughter.]
        Senator Sessions. I have great admiration for you.
        Senator Durbin. Thank you.
        Senator Sessions. Go ahead, Senator.
        Senator Durbin. I am going to give 30 seconds to my friend,
    Mr. Trumka. You were asking--seeking recognition?
        Mr. Trumka. Yes. I just wanted to say, if these programs
    are so good, only less than 10 percent of them--of the people
    coming in under H-1B visas, ever become permanent here--less
    than 10 percent. So, if they are so good, if they are not used
    to drive down wages, why is it 10 percent? And why is it that 9
    out of 10 H-1B users are body shops? Between the years of 2010
    and 2012, 9 out of 10 H-1B users were body shops or out-
    placement firms that are used to drive down wages.
        Senator Durbin. It is clearly abusive and Senator Grassley
    and I have a bill, which I would even ask Senator Hatch to take
    a look at. You might find it appealing.
        Thank you, Senator Sessions.
        Mr. Palmer. Senator, I want to add one more thing. While
    with Infosys--and Dr. Hira can attest--we were not allowed to
    hire Americans. And he has done some research on it and he has
    got stories, as I do.
        I, as a hiring manager, was not allowed to hire an
    American. Thank you.
        Senator Durbin. That stinks.
        Senator Sessions. Senator Hatch.
        Senator Hatch. I am happy to welcome all of you here today.
    Rich, it is good to see you again.
        Mr. Trumka. Good to see you, Senator.
        Senator Hatch. We have a lot of respect for the tough job
    that you have and we will talk a little bit today----
        Mr. Trumka. I cannot hear you, Senator.
        Senator Hatch. I have got to get this microphone to work.
        Well, let me just begin by saying this about today's
    hearing. I would be surprised that there is anyone here that
    thinks we do not need to reform our immigration laws. I find it
    ironic, though, that the same folks who fought the immigration
    reform last Congress are now arguing that our immigration laws,
    particularly as they relate to high-skilled workers, are broken
    and encourage abuse.
        Now, you cannot have it both ways. America and American
    companies need more high-skilled workers. This is an undeniable
    fact. America's high-skilled worker shortage has become a
    crisis. Last year, American companies were unable to hire
    nearly 90,000 high-skilled workers that they need to grow their
    businesses.
        They need them to develop innovative technologies and to
    compete with the international competitors that are many, now.
    And I agree that we need to make overdue changes to our high-
    skilled visa categories, but proposals that impose hefty fees,
    higher fines, exhaustive Labor Department scrutiny, or
    requirements to pay H-1B workers artificially high entry-level
    wages discourage--rather than encourage--the world's best and
    brightest to come to the United States.
        Now, many other countries have policies in place to attract
    highly educated individuals from around the globe in order to
    boost their economies, policies that try to grab our own
    American-educated Ph.D.s. I find it extremely problematic that
    we educate these folks and then we push them out of the
    country.
        Canada comes down and advertises in America to get our
    Ph.D.s, our master's degrees, and engineers to go to Canada.
    After all, high-skilled workers are essential to boost
    productivity and grow our economy. And as the American
    Enterprise Institute has confirmed, each foreign-born worker
    with a STEM degree who remains in the United State creates an
    average of more than 2.5 American jobs.
        These are jobs that could be unionized and I think that
    needs to be pointed out. In today's global and technology-
    driven economy, businesses will go wherever human capital can
    be found, be that Canada, Chile, China or India.
        Now, to strengthen America's economy, we have to ensure
    that human capital can come here and can stay here. That is why
    I introduced the I-Squared Act, which has bipartisan support in
    the Senate, including from Senators Klobuchar, Flake, Coons and
    Blumenthal on this Committee, as well as broad support from
    technology companies and from businesses in other sectors that
    hire high-skilled professionals.
        The I-Squared Act takes a coherent and constructive
    approach to high-skilled immigration by addressing the
    immediate need to provide American employers with greater
    access to high-skilled workers, while also addressing the long-
    term need to invest in America's STEM education.
        If, however, we render the H-1B program unworkable, high-
    skilled workers have another option or should I say options,
    and that is to go north of the 49th parallel or to go to these
    other countries that are starting to be able to compete very,
    very well with our country.
        Failure to reform our high-skilled immigration system is
    forcing American companies to outsource their innovation
    centers to countries like Canada. I love our folks up in
    Canada, but there is no reason for us to be stupid here.
        Such isolationist policies will never succeed in today's
    global economy. Now, I might want to remind my friend, Mr.
    Trumka, that the high-skilled amendment to S. 744 was a
    bipartisan compromise with Senator Schumer. I am trying to do
    things in a bipartisan way that will create jobs in our country
    and benefit our people and keep those people that we spend a
    lot of money educating here in America where they can help
    American jobs and create American industries, and, frankly, it
    makes a lot of sense to me to do that.
        How much time do I have here? I have got 15 seconds.
        Senator Sessions. You have got longer than that.
        [Laughter.]
        Senator Sessions. As long as I am Chair, you can have some
    more time.
        Senator Hatch. Well, thank you. He is a formidable
    opponent, I have got to admit. But I love him, he's just a
    great buy, I will tell you.
        Now, Mr. Johnson, let me ask you this. Do you agree that
    the hiring abuses many of today's witnesses have referenced
    could be resolved by making a few relatively minor changes to
    existing law? I would like to have an answer on that from you.
        Mr. Johnson. Yes, sir, I do. I think it is possible to make
    some targeted reforms, not over-complicate this, and make
    significant progress in not only improving the return on our
    investment in the H-1B and other high-skilled programs, but
    limiting instances of fraud and abuse.
        Senator Hatch. In particular, I am referring to the 1998
    law which requires H-1B-dependent businesses to provide
    recruitment attestations and prohibit secondary layoffs for H-
    1B employees who are paid less than $60,000 per year. You are
    aware of that.
        Mr. Johnson. Yes, sir.
        Senator Hatch. Is the current $60,000 salary exemption
    adjusted for inflation?
        Mr. Johnson. No, sir. Much like the cap itself, that number
    is frozen in time back in 1998.
        Senator Hatch. What would happen if we raised the exemption
    to $95,000 a year?
        Mr. Johnson. Then H-1B-dependent employers would either
    have to pay that wage or be subject to the additional
    attestation requirements.
        Senator Hatch. Well, it seems that the right answer to U.S.
    worker displacement is to update the 1998 law for H-1B-
    dependent companies. Would that be a solution?
        Mr. Johnson. That would certainly help. Again, just as a
    general principle, I think it makes no sense to ignore aspects
    of our immigration law and allow them to be frozen in time,
    particularly when we are talking about a time when our economy
    was dramatically different than it is today, not just in terms
    of wages, but in terms of production and job creation and all
    those kinds of things.
        So, it makes no sense to have those numbers stuck in time
    and to not address them.
        Senator Hatch. What kind of economic boost can we expect if
    we update our high-skilled immigration system?
        Mr. Johnson. That is a great question. I think, because,
    first of all, we have, I think, been mired in dysfunction in
    terms of high-skilled immigrants and because of the incredibly
    diverse role that they play in our economy, coming up with a
    precise number is, I think, incredibly difficult.
        But there is no question we are talking about billions of
    dollars in increased productivity and output and tens of
    thousands of jobs. I will say that there was a study that
    looked at the impact of the components of the comprehensive
    immigration reform bill, just the high-skilled visa components,
    and it estimated that as a result of those changes, there would
    be more than 400,000 new jobs in the U.S. and about $42 billion
    in increased GDP by 2020.
        A lot of that has got to do with multiplier effects. A lot
    of that has got to do with unleashing the power, releasing sort
    of the strange hold that we have on high-skilled immigration.
        Senator Hatch. It seems that we spend too much time talking
    about the occasional shortcomings of the system rather than the
    economic benefits of welcoming foreign-born, high-skilled
    workers who want to stay here, especially after they have been
    educated here.
        I think that is important. A 2014 Government Accountability
    Office report found that in the period between the 2002 and
    2003 academic year and the 2011-2012 academic year, 23 percent
    of graduate degrees earned by foreign students were in the core
    STEM fields of life and physical sciences, engineering,
    computer science, and math, compared to only 2 percent of
    graduate degrees earned by U.S. citizens and green card
    holders.
        How do you respond to those who argue that there are more
    U.S. STEM graduates than suitable jobs?
        Mr. Johnson. Well, Senator, I think my testimony and the
    back-and-forth we have had today makes pretty clear that I
    believe that there is a shortage. I believe that the
    unemployment numbers in the overwhelming number of categories
    that we are talking about here in the STEM categories point to
    a shortage.
        I will take this time to say that I understand that Senator
    Sessions was asking about, sort of, workers going in other
    occupations. I will say that from a larger economic
    perspective, I am not really sure what difference that makes.
        If somebody in the Senate decided that they needed an
    engineer because having the skills and talents of an engineer
    in the work that you are doing is important or if I decided
    that I wanted to have somebody a STEM background, but the
    Senate or my organization are not classified as STEM
    occupations, I am not sure that really matters in terms of
    providing opportunities for people who have STEM skills.
        The fact that our economy really is broadly demanding those
    kinds of skills--the banking industries and educational
    institutions and all kinds of institutions want those kinds of
    skill sets--is a good thing for STEM education.
        Senator Hatch. Let me just say this, Mr. Chairman, one more
    comment: You know, my State of Utah, it is a go-go State. It
    basically is competitive with every other State in the country,
    and I have to say, it is like number 2. It is number 1 where
    people want to go and create businesses.
        And yet, my high-tech business there, from which I would
    like to get some of these graduates that we educate to work for
    them, they cannot find enough engineers or enough highly
    educated people to keep up with the demand.
        And I have to say that we call Utah, ``Silicon Slopes.''
    And it is competing pretty well with Silicon Valley down in
    California. I know both areas very well. And the jobs that they
    create are monumental.
        We would be penny wise and pound foolish to not do the H-1B
    bill, which we have worked on and worked on and worked on to
    try and get it so that it meets the needs of everybody at this
    table. And if you have better ideas, get them to me, because I
    have no desire to politicize this thing.
        I want more jobs fulfilled in our country. I want more jobs
    created. I want to keep these highly intelligent people in our
    country to help us not only with jobs, with national security
    and everything else.
        All I can say is that it is hard for me to understand why
    anybody would be against the H-1B bill, and if you have better
    ideas, get them to me. I am open to those and so are my
    cosponsors who are bipartisan.
        Last time it got called up, we had 26 bipartisan
    cosponsors, most of them--the majority were Democrats. And we
    did not even try to go out and get more. We would have gotten a
    lot more if we would have tried.
        So, do not give up because you have some ideas against some
    of these things. Help us to understand why your ideas are
    better than what I am talking about and help us to know how we
    can do this in a better, more equal, more intelligent way.
        We are open to these type of things. But I can tell you
    this. Our country is a stupid country in some ways. We just
    push these people and we educate them in the greatest educating
    colleges and universities in the world, as a general rule, and
    then we push them out of our country when we need them. And we
    need them to create jobs and that means a lot of union jobs, as
    well.
        I do not get it, to be honest with you, why we would not be
    doing that in the best interest of our country.
        On the other hand, I am going to read every testimony that
    has been given here today and pay very strict attention. You
    folks are fine people. You have all been here. I happen to
    think Mr. Trumka is a very important man in this country and a
    fine man to boot and he has fought for his union members. And
    it is no secret I was a friend of his predecessors. We worked
    all over the world on free trade unionism.
        But to stop it here because we are afraid it might
    interfere with some jobs, it is going to create jobs. And,
    frankly, we have got to wake up in this country or we are going
    to wind up being not the greatest country in the world, but
    having competition that we might not be able to keep up with.
        So, I am concerned about it and if people have better
    ideas, get them to me or get them to those who are working with
    me on these matters and we will certainly give every
    consideration to them.
        You have been very kind to me, Senator Sessions, and I
    appreciate being able to make my comments and have this time.
        Senator Sessions. Very good, Senator Hatch, and thank you
    for the years you spent studying and thinking about this issue.
        I would just say that in the debate in 2007, I was under
    the impression that the one area we had a shortage was in the
    IT area. The area was booming. Let me ask Professor Salzman.
        Professor Salzman, if the I-Squared bill passes, what
    percentage--100 percent of the jobs could be filled by the
    guest worker H-1B program; is that correct?
        Professor Salzman. Close. The I-Squared bill would provide
    150 percent of what the IT industry says it needs each and
    every year. So, I think Brad Smith from Microsoft said you need
    120,000 each year. Our estimated of I-Squared would be about
    180,000. Right now we have two-thirds. So, it is pretty hard to
    find a shortage in gross numbers.
        Now, these hiring difficulties, our friends down here may
    have trouble hiring people and competing with the Googles, but
    as I said, I believe that is the way the market works. But the
    sheer numbers do not show any shortage.
        Senator Hatch. But you are aware that we were 90,000 H-1B
    openings short this year.
        Professor Salzman. Well, short----
        Senator Hatch. And that is every year that we come up----
        Professor Salzman. Short is not--I am not sure that is how
    I would characterize losing the lottery. On Black Friday after
    Thanksgiving, not everybody gets their half-priced TV, and on
    Saturday we do not hear about shortages of TV.
        The H-1B lottery is a 20-percent-off sale on labor, and not
    everybody gets their 20 percent off, and they are disappointed.
    I understand that disappointment, but I am not sure it is a
    shortage.
        You just cannot find it in the data. You cannot find it on
    the streets. You cannot find that happening.
        Senator Hatch. H-1Bs were filled in 1 week this year.
        Professor Salzman. Yes.
        Senator Hatch. And we need, according to everybody I talk
    to, about 90,000 more openings and we do not have them. That is
    what we are trying to do with I-Squared, is to fulfill those
    openings.
        Professor Salzman. I would also like to----
        Senator Sessions. I think I had the floor.
        [Laughter.]
        Senator Hatch. Sorry.
        Senator Sessions. I am so used to Chairman Hatch telling me
    what to do.
        Senator Hatch. Now, now, I have let you interrupt me many
    times.
        [Laughter.]
        Senator Sessions. Well, this is a Challenger, Gray &
    Christmas study, and it was produced in January of this year
    and it talked about the increase in job cuts that we are
    having.
        Computer jobs, there were 59,500 computer job cuts, 19,000
    electronics, 21,000 telecom--a total of 100,000 job cuts in
    this area.
        So, I know people tell me they want more people and I guess
    they hope they are going to get something special, but 60
    percent of these job cuts were in the computer world, according
    to this report.
        I saw in Barron's, I ordered a copy of the report. That is
    where I read about it.
        Mr. Trumka, I know you have got a schedule to keep. So, if
    you get to the point you have to leave, do not hesitate and we
    thank you for the long time you have given us and your
    comments.
        Well, look, I think there is some common ground. I think it
    is obvious that it is in the national interest that the 1
    million people that immigrate to America each year who are on a
    path to citizenship and come lawfully, we should tilt that
    number to more high-skilled people. That is so obvious. Like
    Canada, like Australia, like other countries around the world
    are doing.
        So, this program is a program designed, according to the
    Los Angeles Times in a critical piece on the California Edison,
    they say, ``the purpose is to allow employers to fill slots for
    which adequately trained Americans are not available, not to
    replace existing workers with cheap foreign labor,'' closed
    quote.
        Well, is that not what happened, Mr. Hira, in--well, I will
    ask Mr. Palmer. Is that not what happened when you----
        Mr. Palmer. Yes, sir.
        Senator Sessions [continuing]. Replaced people actually in
    the jobs, doing the jobs, to our understanding, adequately?
        Mr. Palmer. Absolutely that is what happened. Mr. Hatch,
    the day after those visas, the visa number or the cap was met,
    500 of those H-1Bs came over to the United States and they
    replaced those workers at Edison.
        Senator Sessions. Now, Mr. Hira, were these all people who
    are at super levels of intelligence and education that are
    superior to our college graduates or were some of them just
    going to be normal computer operators and probably would be
    that the rest of their lies?
        Professor Hira. Yes. So, if you look at the numbers for
    Tata and Infosys, the two outsourcers in this case, about 80
    percent of their workers, they bring H-1Bs, hold no more than a
    bachelor's degree.
        Senator Sessions. Eighty percent.
        Professor Hira. Eighty percent. And they are the top two H-
    1B recipients. They got 12,000 alone in Fiscal Year 2013.
        These are ordinary IT workers with ordinary skills, skills
    that more than abundantly available here in the U.S., the
    Edison one chose you right way, and/or you could be training
    students into those fields and train them up fairly quickly.
        This is what Infosys and Tata do. They train their workers.
    Over 6 weeks, you can train people to go into those positions
    very easily. They are taking those jobs from Americans.
        Mr. Palmer. Mr. Sessions, just let me say one thing. If you
    want to stop this H-1B replacement of American workers, raise
    the wage floor to equal what that American worker was making
    and if it is truly specialized talent and it is truly a job an
    American cannot do, they will bring that person in, because I
    am telling you the Americans are making $120,000 a year and
    since 1998 the wage floor has been $60,000-some-odd. All they
    are doing is cutting costs.
        So, raise the wage floor and they will stop this
    replacement of American workers.
        Mr. Billhardt. Senator Sessions, I am not sure I am allowed
    to do this, but can I ask a question?
        Senator Sessions. All right. You can ask Senator Hatch.
        [Laughter.]
        Senator Hatch. If I could interrupt. I just want to know
    what you, Mr. Johnson and Mr. Billhardt, what you have to say
    about what Mr. Salzman has said, Mr. Palmer, and Mr. Hira.
        Mr. Billhardt. Senator Durbin had an interesting
    proposition. There are clearly some abuses of the system and
    they are clearly committed by companies that have a certain
    profile. Senator Durbin seemed to think that if there was an
    amendment or a provision that would allow for companies that
    have more than 50 percent of their workforce being H-1B visas,
    that they would have a different status than other companies.
        Do you think that would solve some of the problems?
        Senator Sessions. Well, perhaps. I just believe the data,
    the academic data shows there is not a shortage.
        There could be a shortage in Silicon Valley where it costs
    you $500,000 to have a one-room house.
        Mr. Billhardt. If we are lucky.
        Senator Sessions. But that is their problem, not mine. I do
    not have to fix that. And I have got to tell you that my
    understanding of our role is to serve the national interest of
    the people of the United States.
        Professor Salzman, I believe you have indicated, and
    others, a number of others have said this trend of having such
    a large number of foreign tech workers is depressing wages, but
    it is also depressing the likelihood that American kids will go
    into these fields because they do not see the prospects for
    good pay after borrowing money to go to college.
        Also, you might address the comment that a number of
    members have made this morning that H-1B is being used
    primarily by American college graduates rather than people who
    have graduated from colleges abroad.
        So, those two points.
        Professor Salzman. Let me, again, maybe make also a first
    comment. I think part of where the confusion may be is about
    what the predominant use of H-1B is for, which is, about two-
    thirds is used for offshoring by the IBMs and by the Infosyses.
    So, that is the predominant use.
        And what I think some of the other panelists have talked
    about is probably the 10 to 15 percent use that is really a
    talent search and if we do not separate those out, I think that
    confuses the conversation.
        So, there probably is a real talent search, but it is a
    very small part of what the use of H-1B is for, and that we
    ought to think about seriously supporting.
        But it is the larger two-thirds that is used to move jobs
    offshore. So, whatever the pay, they are just leaving. And
    those are the jobs where they undercut, as I think Mr. Palmer
    has talked about, replacements both here and offshore. So, that
    is, I think, the key point.
        So, your question, Senator Sessions, was about the----
        Senator Sessions. I forgot.
        [Laughter.]
        Senator Sessions. Discouraging graduates.
        Professor Salzman. Discouraging U.S. graduates. You know,
    we have--we look for kind of natural experiments that tell us
    what is the counterfactual, so it is not just a hypothetical,
    and we have that.
        We have an example of petroleum engineers where there was
    an observed shortage, not a hiring difficulty. There were not
    enough people because of major changes in the industry.
        Wages shot up dramatically and the enrollments almost
    tripled. And what is interesting is that the enrollments--in
    graduates, rather, were almost all U.S.--in fact, the increase
    was all U.S. students, both immigrant and native, who responded
    to the wage signals.
        So, the fundamental question we have to ask is, in the IT
    industry about this shortage, where are the wage signals, where
    are the wage increases that would draw people in? And we have
    the earlier period during the dot-com boom, wages were going
    up, Americans flocked to this field.
        That is not happening now. So, the picture just does not
    hold with the complaints about hiring. There are hiring
    complaints. It is how the market works. Those are real. But
    that is not a shortage because a shortage would result in wages
    going up. And, to your point, the students see that. The
    students see this as a discouraging signal about where careers
    are, and where to go to.
        And the ``S'' in STEM is science. If you ask your
    colleagues across town at the National Institutes of Health,
    the number 1 problem they have today is the lack of good jobs
    for Ph.D. biomedical scientists and the fear that the poor
    career prospects are discouraging people.
        In fact, we have a large project called the BEST Program to
    find alternative careers for Ph.D. scientists. So, the
    scientists are being discouraged. We do not have a shortage in
    scientists, we do not in engineers, we do not in
    mathematicians.
        So, out of STEM, all this discussion is about ``T,'' which
    is the IT field, and, as we have said, we do not see it there
    either.
        Senator Sessions. Go ahead.
        Senator Hatch. Let me just say this. I understand that
    about biomedical sciences. Primarily, probably we are talking
    about a lot of engineering businesses and the IT world that
    really does not find enough really competent people to do the
    job that they know they can do and that they can create jobs
    with them.
        I think we agree. We want to encourage U.S. students to
    study STEM fields. I-Squared creates a fund to encourage
    American STEM students and that is one of the things we are
    trying to do.
        I am going to pay very strict attention to what all of you
    have said here today, but I still do not think you have hit the
    nerve that we need to hit in this country. Mr. Johnson, you
    wanted to interrupt there for a minute.
        Mr. Johnson. Well, I want to challenge the notion that H-1B
    workers are being paid less. I think the most comprehensive
    study that I know on this issue from December 2011, from the
    Institute, a study of labor, one that was repeated by the
    Brookings Institute in 2013 and found the same results, which
    were that H-1B workers are paid more than U.S. native-born
    workers with a bachelor's degree generally and even within the
    same occupation and industry for workers with similar
    experience. This suggests that they provide hard to find
    skills.
        So, I am happy to share a copy of this with anybody who
    wants it. I do not--and I also want to say that, in general,
    the wages in these STEM occupations are going up. I agree that
    they are not going up in the same way that we have seen wages
    going up in the past. I acknowledge that we have a challenge in
    terms of understanding how the industries may be changing, this
    dynamic about wage stagnation.
        But, I think the idea that those problems can be solved
    through the immigration system is wrong. I think there are many
    other factors in place here, not the least of which is that we
    see increasingly companies choosing to put profits back into
    shareholder coffers rather than into infrastructure or wage
    development.
        So, there are lots of things going on in a very changing
    economy. I think the idea that you will solve those problems
    through immigration re wrong and I think all of the evidence
    indicates that there is no correlation between the presence of
    immigrants in particular occupations and wage depression.
        Senator Sessions. Mr. Miano?
        Thank you, Senator Hatch, and thank you for your
    leadership.
        Mr. Miano. I just wanted to comment that the Brookings
    result that has the wages of H-1B workers being comparable or
    higher than U.S. workers requires two tricks that you have to
    do mathematically.
        First, you have to exclude geographic regions. So, for
    example, the wages in California are a lot higher than they are
    in Indiana. And the Brookings Institute, even though their own
    study shows that H-1B workers are highly concentrated in a few
    high wage States, when they do their wage calculations, they do
    not take that geography into account.
        The second trick you have to do is you have to divide age
    groups and compare age groups, but you have to compare the
    right age groups to get the discrepancy, to get the result that
    Americans--that H-1B workers earn as much as Americans do.
        Mr. Johnson. Those are two points and Brookings has really
    good responses to both of those things. Again, I think, the
    answer here is to have a fact-based debate that is removed from
    stereotypes, myths, and assumptions, and really bring that kind
    of data and analysis more to the immigration debate.
        Senator Sessions. I agree. Professor Salzman, we need to go
    away from myths.
        Professor Salzman. Just a quick statement that you left out
    from that same Brookings report. I quote, ``It is likely that
    the extra supply of foreign-born workers does bring downward
    pressure on the wages of incumbent workers, as research
    suggests.'' So, that is from the same Brookings report Mr.
    Johnson was citing.
        Senator Sessions. Well, Professor Borjas at Harvard, I
    think, he did it by skill set and found the more of a skill set
    that you have, a flow of foreign labor does pull down wages.
    And if you bring in more cotton, the price of cotton falls;
    bring in more labor, the price of labor falls or it does not
    rise.
        I do not think it will solve all of our problems, but it is
    a factor.
        This is a poll that asked a simple question. We do not get
    these kinds of questions very often by pollsters. They are
    usually paid by somebody with an agenda, it seems to me.
        But the question was if a company is having a hard time
    finding workers, should the company raise wages and improve
    working conditions before they bring in more workers from
    abroad. It was 75 to 8 was the total. Among African-Americans,
    88 to 3; and, among Hispanics, 71 to 11.
        So, I do not think this--I think this is the basic,
    commonsense approach. We should ask ourselves what we are
    doing.
        So, Professor Hira, I think you have written about minority
    groups, Hispanics and African-Americans, and how some of these
    policies are impacting them. Would you comment on that?
        Professor Hira. Sure. The tech industry has had really a
    terrible track record in hiring under-represented minorities,
    African Americans, Hispanics, and also women. And by bringing
    in H-1B workers, you are basically allowing them to continue
    that track record.
        The vast majority of people who are coming into the tech
    industry on H-1Bs are coming from either India or China, mostly
    from India, and most are men. And so that, again, exacerbates
    the problems of gender inequalities there.
        And if anybody thinks that Apple and Google and many of
    these other Silicon Valley-based firms will not take advantage
    of cheaper labor, they should pay attention to the wage-fixing
    scandal that has engulfed those firms recently, where they
    actually settled, and there are pretty detailed emails from the
    executives, billionaire executives, Eric Schmidt and the late
    Steve Jobs, basically saying we will not poach your workers and
    colluding to basically fix wages.
        If they would do that which is apparently against the law,
    it would not be surprising that a lot of firms would have this
    pressure to go ahead and try to bring in cheaper workers on H-
    1Bs, and that is why you see such--a lot of lobbying from the
    industry is because it is extraordinarily profitable to bring
    in cheaper workers rather than keep your income at once rather
    than investing in workforce development and the like.
        Senator Sessions. Well, as you said, I think, in the
    beginning, businesses do what businesses do and if we create a
    law that allows them to bring in unlimited numbers of foreign
    workers, we are going to expect what we get.
        How many, Professor Hira, are H-1B workers and related Ls
    and Os that are here in America today and how big of an impact
    does it have on the economy?
        Professor Hira. Well, this is kind of interesting and this
    goes to some of these studies that Mr. Johnson talks about. No
    one actually knows how many H-1Bs are here at any one time
    because the Government does not keep track of what happens to
    H-1Bs once they are here.
        Some leave, some stay, some convert. There is no tracking.
    So, the estimates are the stock is about 650,000, but we are
    kind of guessing at what that number is.
        With the L-1s, we have even less transparency. We have no
    idea how many folks are here on L-1s, even how may are coming
    by employers, because there are these blanket petitions that
    happen. Probably 350,000, then you add in the OPT, you add in
    the J-1s. You are talking over a million people in those
    occupations, mostly concentrated in those occupations. It has a
    very distorting effect on the labor market because you are not
    talking about 140 million Americans. You are talking about that
    specific labor market, which is about 3 or 4 million.
        Senator Sessions. Well, people are not commodities. We
    compare labor to commodities, but they are not commodities.
    They are human beings. They have families. They have hopes and
    dreams. They want stability in their life. They like to have a
    good job at a company like the biggest utility in California,
    California Edison. How much better does it get? I have got the
    letters here from people without their names, Mr. Palmer,
    because if they say what they know and think about this, they
    will lose the buyouts that they had to have.
        I just would say that this Congress represents the people
    of the United States. And, yes, bringing in talent to America
    is a good thing, but we have no obligation to yield to the lust
    of big businesses, and these big businesses, the new ones in
    the high-tech world are the same moguls that used to run the
    oil and the steel industries. They all want more profits and
    lower pay for workers. That is just what they do.
        Mr. Zuckerberg is worth $27 billion. I guess he is 27 years
    old, I am not sure. So, he wants more foreign workers. I would
    like to think he might want to pay his employees more and maybe
    not have quite so many billions, if he would like to be helpful
    and maybe he could get more local workers.
        So, I just would say, first, I think that is our
    responsibility and we provide education and goals, job
    training, high skills programs that try to help people take
    these jobs and we need to try to have those people first. I
    think that is what the polling data shows. I think the American
    people are right and just in asking for that. So, thank you for
    it.
        Mr. Palmer, my understanding, from a number of statements
    we have gotten, they have called without names or submitted
    statements without names because if they speak out, they would
    lose any of the post-employment benefits they might have. That
    is on that program.
        Would you comment on that?
        Mr. Palmer. Yes, sir. I received--I gave my phone number to
    several newspaper people who had talked offline to some of the
    Edison workers and they reached out to me. And it was the same
    rhetoric we have heard today, you know, what have I done wrong
    or if I talk about this or if I do not train my replacement, I
    am not going to get my severance package and I am going to be
    sued. And that is absolutely true. That is the fear and
    intimidation that these people go through. They are blind-
    sided, absolutely blind-sided.
        Senator Sessions. Mr. Hira, is that true in other places in
    these kinds of situations?
        Professor Hira. Yes, it is absolutely true. When I was in
    Rochester teaching at RIT, which is one of the top engineering
    colleges in the U.S. and in the world, a number of our
    graduates, Americans, were working at Xerox. They were training
    their foreign replacements with an outsourcer, HCL, and I spoke
    to a number of them.
        These were people with advanced degrees, Americans with
    advanced degrees and not just doing ordinary IT work. They were
    doing product engineering, so designing the Xerox copiers and
    those kinds of things.
        They were training their replacements and they were not
    able to talk to anybody. They were even afraid to speak to
    reporters who have some measure of shield.
        There are a couple of reasons that American workers do not
    have these rights or are not willing to speak out. One is, of
    course, the severance package. But if they refuse to train
    their foreign replacement, if they say, look, the labor market,
    I am not going to do it, they are going to be terminated with
    cause, which means they will not even get their unemployment
    insurance. And they know that if they speak out publicly and
    use their names, that they will be blackballed from the
    industry. No one will hire them. And Mr. Palmer has lived this
    himself.
        Mr. Palmer. Yes. I am actually an unemployed IT worker and
    I have 20-some-odd years. Nobody will touch me because
    everybody is cheating, and I do mean everybody. These companies
    are just--it is so hard to enforce. And you know, I did what I
    did and I really at the time did not know what I was doing, but
    I knew it was the right thing.
        And I will also tell you, Senator, I was at Heidrick and
    Struggles in Chicago and I was with Infosys and they brought in
    HCL to replace the entire 40-member IT staff. It got so out of
    hand because they were blind-sided that they sent everybody
    home and the next day we did not go to work. But I was with
    Infosys and we had a project there, too.
        The employees in the IT department got so upset and, again,
    they just shut the office down because of basically almost a
    riot on their hands, because they were blind-sided by HCL.
        Senator Sessions. It is painful. If you read the statements
    that we have got of people----
        Mr. Palmer. Yes, absolutely.
        Senator Sessions. And look at this. These are some reports
    recently. I have mentioned Microsoft and laying off 18,000
    workers. Hewlett-Packard laid off 29,000 in 2012; Cisco, 4,000
    in 2013 and an additional 8,000 cut in the last 2 years; United
    Technologies, 3,000; American Express, 5,400; Proctor and
    Gamble, 5,700; T-Mobile, 2,250.
        Here are some articles. Business Insider in July of last
    year, mass layoffs in the tech industry are up 68 percent.
    Another one, the Spectrum, the electrical engineers trade
    publication, massive worldwide layoff underway at IBM.
        So, I just, frankly, do not see this.
        Mr. Billhardt. But, Senator Sessions, in your opening
    statements, you talked about the free market economy and Mark
    Zuckerberg has billions, but his company is also creating a lot
    of American jobs.
        I think no one here on this panel, no one in America wants
    for jobs to be lost in America. No one wants there to be low
    paying jobs here in America. But the one thing that I know that
    will sure depress American wages and that will make Americans
    lose their jobs is if the next Facebook is created in the
    shores of Shanghai. That is what is going to make American jobs
    be lost.
        Senator Sessions. Well, I understand that. Mr. Zuckerberg
    is a brilliant person. He has done--my wife very much likes
    Facebook.
        [Laughter.]
        Senator Sessions. And I get good information from her about
    what she finds out. So, I do think this is important.
        But as I understand it, Facebook only has 7,000 employees
    and you said, I believe, 2,000 of those are H-1B workers. And
    so it is not that big a deal in terms of Facebook. And would
    you not agree----
        Mr. Billhardt. But smaller companies like mine, it is a big
    deal for us. Mr. Zuckerberg has a lot of lawyers. I do not.
        Senator Sessions. All right. Well, what about a program
    that would allow people from around the world to apply under
    our normal immigration system as exceptional talents, let us
    say, and they submit academic work, test scores they may take,
    maybe they have English skills, all of which would make them
    more successful in the United States?
        Why could we not do that as part of the basic immigration
    system of America rather than focusing it on trying to say that
    the workers we are bringing in are these high-skilled workers,
    since most go back to their country?
        Mr. Billhardt. I mean, I actually think there is some
    consensus, at least, that some of the abuses of the companies
    that are bringing in--where the workforce is 50 percent H-1B
    workers, those types of things can be--probably are not the
    right uses for the H-1B visa.
        But I will say that if I have to prove extraordinary
    ability after I graduated from business school, I did not have
    many papers published under my name there. So, I would have not
    started my company here if I had to prove that level of burden.
        And so the H-1B program was the one thing that helped me
    establish my company here, hire American workers, and
    ultimately apply for extraordinary ability, which I got, but it
    took me 6 years to get there.
        Senator Sessions. All right. Does anyone have something
    they would like to contribute?
        Professor Hira?
        Professor Hira. I just wanted to come back to the layoffs.
    The actual layoffs that you are referring to actually
    underestimate what these current firms are doing. For example,
    IBM no longer calls their layoffs layoffs. They call them
    resource actions and they do this in a very clever way to avoid
    the WARN Act and the mass layoff announcements. They lay people
    off in dribs and drabs.
        And the alliance at IBM, which is a worker group at IBM,
    made a statement to the Committee here saying that they have
    just brought 800 workers in to replace--from offshore on H-1Bs
    and L-1s to replace American workers here, and this has been
    going on at IBM over and over again.
        So, it is not just the firms that get 50 percent or have
    more than 50 percent of H-1Bs in their workforce. It is
    companies like IBM and Accenture and DeLoitte that would have
    never been curbed by S. 744 or any other bills that have been
    out there.
        They have the same exact business model and IBM has shrunk
    its U.S. workforce from 127,000 to 77,000 over the last decade,
    at the same time as increasing its Indian workforce from 6,000
    to 100,000.
        You are basically seeing a whole scale shift of the
    workforce from the U.S. to India not because there is a skills
    gap, but because you can pay people in India much less and you
    can bring in, import those workers from India to the U.S. to
    undercut those American workers and replace them.
        Senator Sessions. Well, I do have a statement here about
    that from the workers at IBM.
        Mr. Miano, I believe you wanted to wrap us up.
        Mr. Miano. Yes. I want to make one comment about reform and
    this is what I call for rational reform; it is that the
    Congress needs to make things simple. And I put the
    illustration that the immigration system was created in 1952 in
    about 125 pages. Comprehensive reform from the last session was
    1,168 pages.
        If you told me as an assignment to write a new H-1B
    program, I would probably do it one, two, maybe three pages.
    Currently, it is a giant, sprawling system and the problem that
    creates is that it is so convoluted that you cannot tell what
    is happening.
        For example, the displacement of Americans, to figure that
    out, you have to go through two levels of indirection in the
    statutes to figure out that it is perfectly legal to replace
    Americans except under certain oddball conditions.
        So, really what you essentially need to do is keep the
    lawyers out and have it written--have it designed by engineers
    to have a rational immigration system.
        For example, in S. 744, there are provisions in there that
    simply rewrote the statute so that it had the same effect. It
    was just text, it was just verbiage in there that had no
    purpose other than adding length to the statute.
        So, if someone comes up with a comprehensive immigration
    bill, it should be 200 pages. If someone comes up with a
    comprehensive immigration reform bill and it is 600, 700, 800,
    900, 1,000 pages, you guys would all be saying whoa.
        Senator Sessions. I think that has much validity and I
    share that view for a lot of reasons. The old criminal laws
    were so plain and so simple and so direct and they had certain
    counts that you had to fulfill, and then we write these multi-
    page things, and I do not know.
        So, I would like unanimous consent to insert several
    letters in the record. Many of these letters and statements are
    from trade unions that represent U.S. workers, including
    engineers and teachers.
        [The letters appear as submissions for the record.]
        I would also like to include several letters from workers
    who have been laid off by companies in recent weeks and months,
    some of which are heartbreaking. And many of these people
    cannot speak on the record, but wanted to have a voice in
    today's discussion.
        So, the record will remain open for 1 week for additional
    questions, and I hope that you will be--if questions are
    submitted to you, we would appreciate it if you could respond.
        Thank you for a good discussion. I know it was a little
    more loose than we normally have, but, I think it allowed
    people like Senator Durbin and Senator Hatch to make their
    points who have wrestled with these issues for some time.
        Thank you. We are adjourned.
        [Whereupon, at 12:46 p.m., the hearing was adjourned.]
        [Additional material submitted for the record follows.]

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