[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
                 
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                       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

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                        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.]

                            A P P E N D I X

              Additional Material Submitted for the Record

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