First Came the Jobs Americans Wont Do... Now It’s the ’Jobs Americans Aren’t Smart Enough to Do’

When Bill Gates testified on Capitol Hill this spring, he said American business needs more foreign workers. Gates said, ideally, he would prefer no cap on the number that could be brought in to work in the United States. Microsoft is reported to have about 4,000 employees for whom it is now working to obtain permanent residency.

There are numerous work-related visas that are used to bring in foreign workers, and U.S. businesses are clamoring for even more of those workers, many lobbying under Gates’ vision of no limits. The visa getting much attention—and what Gates was arguing for unlimited access to—is the H-1B. Theoretically, it is used to bring in nonimmigrant foreign workers to fill highly skilled professional slots in science, engineering, technology and programming.

In actuality, applicants in recent years have ranged from companies seeking a business communications specialist for an Oriental rug dealer in Los Angeles at $17 an hour to a mortgage loan officer for an annual salary of $39,000 in San Francisco. Immigration attorney Angelo Paparelli, who also is president of the Alliance of Business Immigration Lawyers, says he sees H-1B requests for “virtually every professional classification and every size business.”

WHO WANTS AN H-1B?

Accenture, Bank of America, Barclays Global Investments, Booz Allen Hamilton, The Boston Consulting Group, Charles Schwab & Company Inc., Cisco Systems, Deloitte Consulting, Ernst & Young, The Gap, Goldman Sachs, Google, IBM, J.P. Morgan Chase & Company, KPMG, McGraw-Hill Companies, Macromedia, Pacific Gas & Electric Company, Pricewaterhouse Coopers, Providian Financial Corporation, Visa U.S.A., Wachovia and Wells Fargo have been among past applicants to the H-1B visa program. They are among the highly recognizable brand names. There are many other applicants that don’t have the high recognition brand name. But in total, there are many swimmers in the foreign labor pool.

As reported on CNN by Lou Dobbs, eight of the top 20 companies requesting H-1B visas last year were based in India. “Those firms want to bring cheap labor from India to the United States,” Dobbs believes, “so they can outsource middle class jobs to those workers here—so they don’t have to go to all that trouble of sending them all the way to India.”

Kim Berry, president of the Programmers Guild, notes that there is no requirement that H-1B sponsors be U.S. citizens. Indians account for about half of all H-1B visas issued. Thus the Indian consulting firms, which are bringing in workers for low paying jobs through H-1Bs, can in turn further use the system for green cards and a path to citizenship.

The H-1B visa program allows for the importation of 65,000 foreign workers annually who have a bachelor’s degree or equivalent and an additional 20,000 with advanced degrees from U.S. universities to work here on a temporary basis up to six years (one three-year period with one three-year renewal).

Foreign workers who originally came to the United States as students factor into the H-1B visa equation, as 13 percent end up remaining in the country. These students have been able to stay in the country after graduation and work on a student visa for a year—now two and one-half years by way of recent legislation— then bridge to an H-1B visa, then file for a green card and ultimately work towards permanent residency. Foreign-born students make up more than 50 percent of graduates with advanced degrees in science and engineering.

BY THE NUMBERS

The numbers allowed in under this employersponsored program have moved up and down since the program was implemented in 1990 and have been as high as 195,000 in a year. Interestingly, the increase to 195,000 was for 2000, the year dot-coms began melting down. Prior to that, Congress had increased the 65,000 limit to 115,000 starting in 1998 and running through 2004. Also since 2000, there has been no limit on the number of H-1Bs for universities and nonprofit and government research facilities.

In recent years, demand for H-1Bs has been higher than supply. This year, applications were received for nearly double the allotted number of visas.

The high number of applications notwithstanding, whether there truly is a need for foreign workers is hotly debated. Immigration attorney Paparelli believes the visas are “critically valuable,” allowing “American companies to reach business objectives without damaging the country or citizens.” He says his business clients are more than frustrated. “They can’t fill the jobs.”

While this is one side of the discussion, organizations including the Programmers Guild say there is a large surplus of qualified U.S. tech workers ready and willing to work. In May, total unemployment in the United States stood at 8.5 million. Of that number, nearly 1.2 million were in job categories used by financial, professional and business institutions.

DEMAND FOR H-1Bs GREATER THAN JOB CREATION

According to a recently published report by the Center for Immigration Studies (CIS) and authored by John Miano, job creation was actually less than the number of H-1B visas issued for computer workers in 2001, 2002 and 2005. The same held true for engineers every year since 2001, writes Miano, who concludes that the H-1B visa program has little linkage to job creation, but rather serves as a delivery mechanism to bring more immigrants to the country.

In fact, his study for CIS says, “If current employment trends continue and the H-1B quota remains unchanged, the United States will approve enough H-1B visas for computer workers to fill about 79 percent of the computer jobs it creates each year.” Proposed legislation would bump up the number of H-1B visas for computer workers to more than the number of computer jobs created annually.

The discussion on increasing H-1Bs also is occurring against an overall grim backdrop of limited job creation and failed education during the last eight years. In June, California’s unemployment rate jumped up to 6.9 percent. Nationwide through May there was a loss of 124,000 jobs in the professional and business category. Further, new figures from California’s Department of Education show that one-third of California’s students are dropping out, while the dropout numbers for the Los Angeles Unified School District— previously beyond shocking at 50 percent—are now at 60 percent.

So while Rome burns, American business and government bring in mercenaries to work, and not temporarily, but permanently. Yet, the social contract with the country’s citizenry is to provide excellent public education so that American workers can compete for available jobs in their own country and not have to compete with cheaper foreign labor. That contract was first eroded and then broken by greed.

We are accepting the write-off of hundreds of thousands of American students by taking what’s become the money-saving route. This has been exacerbated by the swamping of many of our previously exemplary public schools by more difficult-to-educate English language learners, whose parents are imported for the same reasons as computer programmers. Cheap labor at both ends of the skill spectrum is now the focus of our elected officials, no matter to whom the ultimate costs accrue.

Paparelli, from his legal vantage point, believes fixing our educational system will take years. In the meantime, he believes America has benefited from the visa program by being able to bring in bright and talented people from abroad to create economic vitality and to lead to scientific innovations and new products “we would never have without it.”

FOREIGN BORN PERSPECTIVE

A native of Canada, Mike Murray came to the United States to work after college and benefited from the dot-com boom, working in the Bay area and Myrtle Beach before returning to Canada and then coming to the States again.

He found the amount of paperwork to be able to work here ridiculous. “Effectively my home is here, but going back to Canada, I didn’t know if I’d be able to get back to the United States.”

The manager of information security professionals believes the old way is broken and agrees with Gates that there should be no limits. Being familiar with “every angle of this,” says Murray, “there’s a real advantage to bringing in the best and the brightest.” Murray says some of the most talented engineers he’s worked with have been on visas.

“If you can bring in highly talented people, you’re increasing the tax base,” says Murray. “Silicon Valley has been built on bringing the best and the brightest from anywhere.” Murray believes America is producing generalists when the world isn’t built on generalists anymore. “You can’t know everything anymore,” he says.

“In this economy,” Murray believes, “there may be only one or two people in the world who have the specialty you need.” As such, he believes a company has to be able to go get the human resource it needs—wherever that resource resides. “To get the best computer programmers, there might only be 5,000 in the world,” he explains. “What are the chances that they’ll all be in the United States?”

THE MYTH OF THE HIGHLY SKILLED FOREIGN WORKER

The opponents of H-1Bs, however, see the importation of tens of thousands of foreign workers differently.

While the line “the best and brightest” is overused in discussions about H-1Bs, it’s also misused Norman Matloff has found. He has written extensively about the negative impacts of hiring foreign workers to fill jobs in computer science in the United States and found that most of the foreign workers are “people of just ordinary talent, doing ordinary work.” This includes those at most of the big tech players.

“Lawmakers are often dazzled by the idea that these people are working with computers,” according to Mark Krikorian, the executive director of the Center for Immigration Studies, “but this is the post-industrial era, and an H-1B worker today is not much different from a railroad worker of 100 years ago.

“This is just a cheap-labor program and another example of American businessmen being against capitalism,” says Krikorian.

CIS found that between 2001 and 2004, more than 400,000 Americans lost IT jobs, while U.S. high-tech companies were bringing in more than 250,000 H-1B workers. Entry level workers or trainees held half of these jobs, according to CIS research.

Looked at another way, the flow of H-1B visa workers has similarities to the flow of illegal aliens to work at low-wage jobs. Since H-1Bs often are used to fill needs at the bottom of the professional job funnel, just like with illegal aliens working the lower wage jobs in agriculture, hospitality and construction, a continuing stream is needed to keep feeding the bottom demand. This also means hiring younger foreign workers versus older, experienced American workers.

This can be seen in the public accounting sector, which historically has had an “up or out” approach to its staffing. Whereas in the past the firms recruited accounting graduates who were American citizens, these entry level professional positions are now increasingly filled with foreign born. This is borne out through discussions with those working in the industry and by looking at the number of users of the H-1B program that are accounting firms.

The founder of two software companies, Vivek Wadhwa knows from experience that H-1Bs are cheaper than domestic hires, and he’s on the record saying that. Numerous studies support the position that H-1B workers are paid lower wages which drives down wages. For example, cheap foreign labor has driven down hourly rates of U.S. consultants by an estimated 10 to 40 percent, according to the Independent Computer Consultants Association. One study of 2004 salaries indicated Oracle paid its H-1B workers an average of $18,000 less than the median U.S. wage.

“Staying competitive” really is code for lowering wages.

Basic economics would indicate if there is an existing supply of workers to fill jobs and the supply is increased, with demand being constant, wages would fall. In addition to functioning as a wage depressor, it can be argued that H-1Bs put workers in a position of servitude, as they are not allowed to change jobs without employer buy-in.

OVERSTAYING THE WELCOME

An estimated half of all illegal aliens came to the United States legally and overstayed their visas. One California Web designer who has lived in the country for several years now said he had done that and saw no problem with doing so.

Such nonchalance is hardly surprising given America’s longstanding failure to enforce its immigration laws, a stance which has essentially served as a looped broadcast to people across the border and across the world that if they can figure out how to get here, they can likely make a home here. Pass go; collect $200.

It’s worth remembering that all of the 9/11 airplane hijackers were in the United States legally, having come into the country on temporary visas.

UNINTENDED CONSEQUENCES

Any “process” not thoroughly conceived can be gamed. Even when well conceived, undoubtedly there are unintended consequences. H-1Bs are no exception.

A Department of Homeland Security report stated that an estimated 11 percent of H-1B visa petitions are fraudulent, while a Department of Labor audit found that 19 percent of H-1B workers were being paid salaries lower than what had been promised by their employers on the filed labor application forms.

As well, numerous companies have had complaints filed against them for recruiting specifically for H-1B visa holders. And the Portland Press Herald/Maine Sunday Tribune conducted an investigative series on a shell company set up to file fraudulent paperwork for foreign workers using the H-1B program.

Most recently, the Associated Press reported that the country’s largest immigration law firm, Fragomen, Del Rey, Bernsen & Loewy, is being audited by the Labor Department to determine if it aided its clients in disqualifying American job applicants in favor of foreign workers. Among the firm’s clients are large corporations such as Bank of America and Intel.

CONCLUSION–OVERPOPULATED AMERICA

Immigration—both legal and illegal—is out of control in the United States. The country needs to call a timeout. At least 3 million people are added to the country annually, with no end in sight. The current U.S. population is 304 million, and projections indicate America will have a population of 420 million by 2050. The majority of the country’s growth is due to immigration. Until achieving population stability, America cannot expect to see a sustainable future.

While the H-1B visa is just one piece of the immigration puzzle, it does have long-term impacts on both the economic direction and the population growth of the country.

On the economic front, after first outsourcing jobs to other countries, it appears business with its aggressive lobbying for more foreign workers is bent on providing the remaining jobs to foreigners giving no preference to American workers and even working to disqualify American workers from the job selection process. It’s theorized too that the H-1B is just one tool to help further ensure the smooth offshoring of jobs. H-1B workers come in and learn a job and then the job is sent offshore where the worker returns to fill it.

On the population front, a visa holder is likely to apply for a green card as the clock starts to run out on the H-1B. So ultimately this program is adding more permanent residents to the United States—along with spouses, children and the chain migration that can ensue. Assuming the majority of H-1B visa holders remain in the country (versus the theory that they’re being trained and then returning to home countries), this policy has added as many as 1 million people to the country, and that excludes spouses, children, etc.

It has been proposed to increase the fee an employer pays for an H-1B visa petition and put those funds towards scholarships for American students to pursue studies in computer science, health care, math, science and technology. That energy might be better directed to first reducing the number of H-1Bs and assuring that those issued really are used to bring in the “best and the brightest” at the top of their fields. Second, corporate America should expend energy doing its part to reaffirm a commitment to citizens.

As University of California computer science professor Norman Matloff has concluded, there’s no shortage of qualified and skilled American workers—just too few employers willing to pay for talent and elected politicians willing to do the right thing.

For more information, contact info@capsweb.org.


Sources:

  • Associated Press, “California unemployment rate rises to 6.9 percent,” by Elliot Spagat, July 18, 2008
  • BusinessWeek online, “Work Visas: Lose the Lottery,” by Vivek Wadhwa, April 23, 2008
  • Center for Immigration Studies, “Best? Brightest? A Green Card Giveaway for Foreign Grads Would be Unwarranted,” by Norman Matloff, May 2006
  • Center for Immigration Studies, “H-1B Visa Numbers: No Relationship to Economic Need,” by John Miano, June 2008
  • CNN, Lou Dobbs Tonight, June 19, 2008
  • computerworld.com, “With H-1B in limbo, congressional backers push green card fix,” by Patrick Thibodeau, May 14, 2008
  • Congressional Research Service, “Foreign Science and Engineering Presence in U.S. Institutions and the Labor Force,” by Christine M. Matthews, June 21, 2007
  • http://www.h1b.info/
  • The Herald-Sun (Durham, NC), “Bordering on the ridiculous,” by Peter A. Coclanis, June 8, 2008
  • Information Week, “Who Got H-1B Visas Petitions Approved Last Year?,” by Marianne Kolbasuk McGee, April 2, 2008
  • Portland Press Herald/Maine Sunday Telegram, “Rubber-stamp bureaucracy,” by Matt Wickenheiser, September 24, 2006
  • The Press Trust of India, “Cap on immigration to U.S. may see surge in outsourcing: Rand,” by Sridhar Krishnaswami, June 13, 2008
  • Professor Norm Matloff's H-1B and Offshoring Web Page, http://heather.cs.ucdavis.edu/itaa.html The Programmer’s Guild, programmersguild.org
  • Sacramento Bee (California), “McCain supports visas as part of immigration plan,” May 22, 2008 sfgate.com, “Should the U.S. increase its H-1B visa program?,” by Norman Matloff, December 7, 2006
  • States News Service, “Durbin and Grassley Zero in on H-1B Visa Data,” April 1, 2008
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