Should the US Increase Its H-IB Visa Program

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Should the U.S. increase its H-1B visa program?

CON: Wages belie claims of a labor shortage

Norman Matloff

Thursday, December 7, 2006

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-1B 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 2003 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 far more than $100,000. And the vast majority of
awards for innovation in the field have gone to U.S.-born workers.  [Added
later--NM:  The per-capita level of entrepreneurship has also been higher for
the natives.]

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.

Norman Matloff is a professor of computer science at UC Davis.