Numbers USA

U.S. Lawyers Intentionally Cripple America's High-Tech Workers

For years, American programmers have said that businesses only pretend to look for American workers and that the regulations requiring giving Americans first shot at these jobs are full of holes and meaningless. Now, this video of lawyers giving advice to companies seeking foreign tech workers has provided a window on what American workers have been contending.

Should the U.S. increase its
H-1B visa program?
CON: Wages belie claims of a labor shortage

The following analysis was prepared by U.C. Davis Computer Science Professor Norman Matloff and published on December 7, 2006 in the San Francisco Chronicle.

Once again, the tech industry is putting heavy pressure on Congress to expand the H-1B visa program. Though the industry says the foreign workers are needed to remedy a tech labor shortage, for most employers the attraction of H-1Bs visa holders is simply cheap labor. The H-1B visa program allows skilled immigrants to work in the United States on a temporary basis.

The program's scope is far more general than just the tech industry. For example, the San Francisco Unified School District has hired a number of H-1B visa-holding school psychologists, elementary school teachers and so on. But the most common field in which employers hire H-1B visa holders is software development. The visas granted in computer-related fields are 10 times more numerous than in the next most common tech field, electrical engineering.

The industry claims that it needs to import workers to remedy a severe labor shortage. Yet this flies in the face of the economic data.

A Business Week article has pointed out that starting salaries for new bachelor's degree graduates in computer science and electrical engineering, adjusted for inflation, have been flat or falling in recent years. This belies the industry's claim of a labor shortage. Additional analysis at the master's degree level shows the same trend, flat wages -- contradicting the industry's claim that workers at the postgraduate level are in especially short supply.

Microsoft founder Bill Gates is personally leading the industry's charge for more H-1B visas. Yet Microsoft asked its contract software developers earlier this year to take a seven-day furlough, to save money. And the firm admits that its salaries are not keeping up with inflation. Again, none of this squares with Microsoft's claims of a labor shortage.

The hidden agenda here is industry access to cheap labor. Several university studies and two congressionally commissioned reports have shown that H-1B visa holders are paid less than Americans. Though the law requires H-1B holders to be paid the "prevailing wage," the definition of that term is filled with numerous gaping loopholes, as a 2002 congressional report showed. Yet Congress added even further loopholes in legislation in 2004. Just think tax code, and you'll understand what I mean.

The H-1B program does not require most employers to give hiring priority to qualified U.S. citizens and permanent residents. If the employer is also sponsoring the foreign worker for a green card, there is such a requirement, but again loopholes render the rule meaningless. As prominent immigration attorney Joel Stewart has said, "Employers who favor aliens have an arsenal of legal means to reject all U.S. workers who apply."

The industry says the H-1B holders are needed to maintain its level of innovation. I, too, support facilitating the immigration of "the best and the brightest," but very few H-1B holders in the tech field are in that league. Government data show that the vast majority make, at most, in the $60,000 range (Intel's median is $65,000). Yet even non-techies know that the top talents in this field make more than $100,000. And the vast majority of awards for innovation in the field have gone to U.S.-born workers.

The industry lobbyists highlight some of the famous immigrant entrepreneurs in the industry, such as Jerry Yang and Sergey Brin, co-founders of Yahoo and Google. Yet neither of them immigrated to the United States as an H-1B visa holder; both came to the United States as minors with their parents. Thus they are irrelevant to the H-1B issue. The lobbyists also like to cite Andy Grove, an early Intel employee, yet he came to the United States as a refugee, not under employer sponsorship.

More important, none of these firms has been pivotal to the industry technologically. There are lots of good Web search programs. In fact, Yahoo bought the one it uses, rather than developing its own. Rest assured, we would all still be surfing the Web without Yahoo and Google. And we would have the hardware to do it too, without Intel; IBM could have chosen from many good chip vendors when it introduced the PC in 1981. Indeed, no one firm has been crucial to the tech industry in general.

Why, then, is Congress now poised to accede to the industry's demands on H-1B visa quotas? As the saying goes, "Follow the money." As Sen. Bob Bennett, R-Utah, said after Congress enacted the H-1B program expansion in 2000, "There were, in fact, a whole lot of [members of Congress] against it, but because they are tapping the high-tech community for campaign contributions, they don't want to admit that in public." Meanwhile, a reasonable H-1B reform bill by New Jersey Rep. Bill Pascrell is being ignored, not only by the Republicans but also by his fellow Democrats.

You may have thought that November's election changed things, but they aren't changing that much after all.

In the fall of 2004, Congress included in the Omnibus Appropriations Act for Fiscal Year 2005 a permanent increase of 20,000 in annual admissions of H-1B visa holders by exempting from the annual H-1B cap foreign graduates of U.S. institutions with masters or PhD degrees.

However, according to a recent U.S. Citizenship and Immigration Services (USCIS) press release about the implementation of the new H-1B provisions, it appears that USCIS Director Aguirre has decided not to limit the additional 20,000 H-1B visas to people with an advanced degree from a U.S. university. USCIS says that it has already issued 20,000 H-1B visas to workers with advanced degrees from U.S. universities in FY 2005, so the restriction does not have to be applied to these 20,000 extra visas. There is a significant problem with this (in addition to the fact that the administration has chosen to ignore both the letter and the spirit of the law, despite that it is constitutionally bound to ensure that "the laws be faithfully executed"). The provision in the Omnibus spending law says specifically that the H-1B increase took effect "90 days after enactment" or March 8. Had Congress intended the interpretation USCIC has announced, it would have mandated that the increase "take effect as if enacted on October 1, 2004."

USCIS does not have the legal authority to effectively amend a law to make it apply retroactively. Neither does USCIS have the legal authority to effectively delete parts of a law by ignoring those parts that are inconvenient or with which it disagrees. Yet, Aguirre and his agency have done just that by issuing 13,000 more H-1B visas in FY 2005 than the law allows. Rather than limiting issuances to the 65,000 H-1B visas Congress authorized by law, USCIS issued 78,000 visas not including those that are exempt from the cap or the additional 20,000 authorized in the omnibus.

Since USCIS is playing fast and loose with the law anyway, one might hope that Aguirre would order his agency to correct its error by subtracting 13,000 from the 20,000 visas that are newly available. However, it appears that Aguirre has every intention of issuing the full 20,000 additional H-1B visas.

The legal cap on H-1B visas dropped from 195,000 back to its original level of 65,000 on October 1, 2003. Almost immediately, certain Members of Congress began looking for ways to increase this level, despite the fact that the number of available jobs is decreasing and unemployment among American workers is increasing. The Wall Street Journal announced the same month, for example, that Senator Hatch was working with employers like INTEL and the Indian Government to increase the H-1B cap.

Some 14 million Americans and legal workers currently cannot find full-time jobs in the United States. More than 100,000 American programmers are unemployed. When those who are underemployed or working in other jobs because they cannot find programming jobs, the total grows to about half a million. At the same time, more than 450,000 H-1B workers are employed as programmers in the United States. U.S. employers are cutting jobs at the same time they are importing H-1B workers to fill the remaining jobs.

In FY 2003, the Bureau of Citizenship and Immigration Services approved 217,340 H-1B petitions, despite the fact that the legal cap on H-1B visas was 195,000. Amazingly, only 78,000 of the more than 200,000 approved H-1B petitions was counted toward the legal cap. The rest were approved for employment in "exempt" institutions, including universities and nonprofit organizations, which were permitted to apply for unlimited numbers of H-1B workers.

In October, 2000, Congress increased the annual allotment of H-1B visas for foreign, high-tech workers to 195,000 a year for three years beginning in FY 2001. The Senate passed the increase by a vote of 96-1 and the House passed it by voice vote.

These bloated visa numbers were in effect through FY 2003. After October 1, 2003 the annual allotment of H-1B visas returned to 65,000.

More on L-1 Visas

L visas are available for "intracompany transferees" -- they allow employees working at a company's overseas branch to be shifted to the company's worksites in the United States. A visa is available to an alien who will work in a managerial or executive capacity, or has "specialized knowledge", and to spouses and minor children. "Specialized knowledge" with respect to a company is special knowledge of the company product and its application in international markets or an advanced level of knowledge of processes and procedures of the company.

An alien can stay in L status for up to five years if admitted to render services in a capacity that involves specialized knowledge and for up to seven years if admitted to render services in a managerial or executive capacity. The initial period of admission is no longer than three years. Extensions of stay may be authorized in increments of up to two years - new petitions must be filed for all applicants seeking an extension of stay. In 2004, the State Department issued 62,700 L visas (not including visas for family members). In 2004, the Department of Homeland Security approved petitions (including petitions for extension of stay) for 49,696 aliens (not including family members), including 28,840 managers and executives and 20,261 aliens with "specialized knowledge".

"Specialized knowledge" L visas are somewhat comparable to "H-1B" visas, which are temporary visas available for professional workers. However, unlike L visas, H-1B visas are numerically limited (65,000 annual cap) and require payment of at least the prevailing wage, among other requirements not found in the L program. In addition, a $1,500 per alien fee applies to the H-1B program. It has been alleged that certain employers have been intentionally evading the requirements of the H-1B program designed to protect American workers by instead seeking "specialized knowledge" L visas for aliens and then "contracting out" these aliens to other companies, especially after the H-1B program's numerical caps were hit in 2004 and 2005. Allegedly, American workers are being replaced by these alien workers. Since 2002, the number of "specialized knowledge" L visas granted to Indian companies has increased by 400%.