H-1B: Ripe For Reform - InformationWeek

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IT Leadership // Team Building & Staffing
Commentary
4/15/2013
01:48 PM
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H-1B: Ripe For Reform

20% of H-1B petitions granted last year went to just four firms, all outsourcers. That's just one of several proofs that the controversial visa program is hurting U.S. tech.

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What to do about the H-1B? It's either abuse of immigrants not seen since The Jungle or it's the only thing keeping our innovation economy from falling apart.

That's how people seemed to react to the H-1B visa program hitting its cap a mere week after petitions were opened.

The H-1B lets U.S companies bring in immigrants with special skills, and should serve as a leading indicator that U.S. companies want to lift all their boats. But in a time of anemic job growth, people question whether we need immigrants with special skills.

[ Is the U.S. talent pool really that dangerously shallow? Read IT Talent Shortage Or Purple Squirrel Hunt? ]

John Miano, who founded the Programmers Guild and now is a fellow at the Center for Immigration Studies, wrote me in an email that "the economy is in the toilet. Job creation sucks. Yet the H-1B cap gets hit." Miano's not against talented immigrants coming to the U.S., but thinks they can cost talented Americans their jobs. Although the tech industry is the most aggressive lobby in favor of the H-1B, Miano documented that in 2011 we hit the H-1B cap despite substantial net job losses in the computer science, engineering and scientific fields.

Besides evidence of unemployed American tech workers who might be losing out to this program, there's also evidence that the typical H-1B recipient isn't particularly talented. Other numbers show wages as a share of U.S. gross domestic product are at the lowest they've been since the Great Depression, as is the percentage of Americans working, despite record corporate profits.

Those are ugly economic numbers. We humans expect they'll continue, a phenomenon called recency bias, which makes them extra scary. Fear drives a lot of the heat around the H-1B.

That heat will almost certainly forge a new H-1B system in the current push for immigration reform on Capitol Hill.

How many jobs are we talking about? There are only 85,000 H-1B visas issued each year. Of those, 20,000 go to newly minted holders of advanced degrees from U.S. universities, presumably the best and brightest of immigrants. We want these 20,000 people here, although they should get green cards, not H-1Bs.

Of the other 65,000, more than half the jobs given to H-1B workers go to not-so-high-tech jobs, such as pharmacist, architect and nurse. So let's say on average 45% of H-1Bs go to high-tech workers. That's 29,250 a year. An H-1B holder can stay in the U.S. for three years, plus up to three more if extensions are requested and granted. If every high-tech H-1B visa holder stayed for six years, that'd be a rolling average of 175,500 jobs a year.

One hundred and seventy-five thousand jobs doesn't even make a good monthly jobs report.

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Deirdre Blake
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Deirdre Blake,
User Rank: Apprentice
4/16/2013 | 3:02:01 PM
re: H-1B: Ripe For Reform
"One obvious potential reason to hire H-1B workers is that they are chained to their sponsoring company." Modern indentured servitude.
twins.fan
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twins.fan,
User Rank: Apprentice
4/16/2013 | 3:06:43 PM
re: H-1B: Ripe For Reform
The H-1B visa allows employers to reduce labor costs, at the expense of US workers, in many ways besides direct labor costs of the H-1B visa recipient.

Microsoft, Google, and Intel hire H-1B visa recipients, especially Indian H-1B visa recipients because it builds a line of communication with workers back in India. It is my understanding that Microsoft's India programmers are paid $7/hour. Hiring India H-1B visa recipients helps Microsoft move more and more business units to India after dismantling that business unit here in the US.

Over the past ten years, Microsoft has been laying off thousands of US workers and backfilling the jobs left emptied with H-1B visa recipients, especially Indian H-1B visa recipients.
Donna Conroy
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Donna Conroy,
User Rank: Apprentice
4/16/2013 | 3:33:04 PM
re: H-1B: Ripe For Reform
Michael, good analysis. However, you miss the main issue in tech: a corporate culture of employment discrimination based on age, gender, race, and national origin. Visa programs give legal cover to discriminate based on national origin. This is what Bright Future Jobs wants to fix.

Another secret that Stockman, from the Boston Globe, covered is the high levels of unemployment among visa holders. In a report I authored, 20% of want ads targeted to foreign students or H1-b holders did not even offer jobs but promised helping getting a job.

Legal means of avoiding hiring local talent is an open invitation to trafficking unemployed visa holders. Many Indian bodyshops, which are really American staffing agencies, have enthusiastically RSVP'd by warehousing unemployed visa holders in their company owned guest houses that are really little more than unemployed camps.

Donna Conroy, Director
Bright Future Jobs
rlawson346
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rlawson346,
User Rank: Apprentice
4/16/2013 | 3:51:12 PM
re: H-1B: Ripe For Reform
I think that Michael Fitzgerald may be trivializing or making light of some very serious issues, and perhaps downplaying the extent of it. For example, he didn't include L-1 numbers in the totals. That's OK because I think we have enough to agree upon here than to disagree about.

I agree strongly with his final thoughts:

"The H-1b isn't supposed to aim at our wallets, except by boosting our collective brainpower. That's gone off track. Let's make sure we change the H-1B so it's no longer the outsourcing visa, but the innovation visa."

It is off track. It may debatable as to how far off, but at least we can agree that it is off track. The solution to this problem can be accomplished by doing two very basic things.

First, require that workers be paid in the 75th percentile across their occupation/region. A large number of workers are currently paid closer to the 25th percentile.

Second, allow workers full control of their visas so that employers don't have that as leverage over them, and don't allow changing jobs to negatively impact any pending permanent immigration process.

If you do those things we have some assurance that the program isn't being used to flood the market with cheap labor. We price out the body shops. Americans may finally see their salaries rise instead of fall, and employers would have no trouble filling true shortages.

I was warned not to say this because it could be taken out of context, but if we had those protections we could live without the cap. The cap probably would never be hit anyways because the biggest demand is for low cost labor.
KawiMan
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KawiMan,
User Rank: Apprentice
4/16/2013 | 5:55:18 PM
re: H-1B: Ripe For Reform
The corporate world lamenting the so called, shortage of qualified IT workers in the US is ludicrous. Like what has been already stated by Deidre Blake it's " Modern indentured servitude" or "White Collar Slavery".

When I worked at Countrywide in their IT groups, there was a 3+ year period where I was the only American in the group. The rest were primarily from India. They were obligated to stay with Countrywide for a lengthy number of years before they were able to acquire permanent resident alien status.

There are many American IT workers out of work. Our workers need to be employed here first before accessing the pool of H1-B workers!

This is just one of the symptoms of the greed of Corporate America executives. They have no problem replacing American workers with cheaper H1-B labor to pad their profits and bonuses.
ANON1250703092871
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ANON1250703092871,
User Rank: Apprentice
4/16/2013 | 6:05:12 PM
re: H-1B: Ripe For Reform
Big Business problem is it can only see the cheap way out. How about training workers, work with local schools. Let's keep the jobs and money in the USofA.
SAuge
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SAuge,
User Rank: Apprentice
4/16/2013 | 6:09:32 PM
re: H-1B: Ripe For Reform
This has been going on for twenty years... so nothing has really changed except less teens going into IT.
z80man
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z80man,
User Rank: Apprentice
4/16/2013 | 6:46:13 PM
re: H-1B: Ripe For Reform
Those are ugly economic numbers. We humans expect they'll continue, a phenomenon called recency bias, which makes them extra scary.

I call it remembering the recent past and learning from a lifetime of experience. Things continue down the same path until events happens that change the path. Doing the same thing over and over does not change the path.

Companies know that things will change over time but how they will change and when the change will happen is the questions. This leads to many decisions being made to serve short term goals, in the corporate world that often means a quarter or maybe a year at best. Reducing labor either via layoffs or cheaper labor is always the solution when a quarter does not look so good because the company did not plan for the future.

Companies like to say they cannot find enough talent in the US to fill position, however companies like IBM have offered US employees the oppurtunity to move to a foreign country with wages that match the countries rates or the opportunity of finding another job.

I have worked with a lot of people from India over the years and many of them were very talented and well worth their wages. On the other hand I have work with many of them that had poor english skills and very narrow technical skills. In most cases they were not hired because they had unique or proven skills but because they were college graduates that were hired in bulk to fill a project with people who were talented enough as a whole to get the job done.

India learned that an educated population was the key out of poverty for their people and they work very hard to make it happen. While the US prices education out of reach of many and allows education scams to widely prevail. Many of the training programs offered claim to help students get jobs but the reality is that the programs put the students in debt and helps students get jobs with only marginally better pay that they could get before the training. Only by getting a real college education do these students have a shot at getting jobs with good pay.

If you learn quickly, persisantly persue opportunies, and can make it through the ruff times you can still make a decient living. The problem is you can also expect that your job may end with little warning due to layoffs, buyouts, or company financial failures. You may end up with debt you cannot pay off that hurts your credit, hurts the economy, and may lock you out of some employement opportunies.

As long as the favored solutions continue as follows how can you expect things to change for the better?

- Layoffs are the solution to bad quarters
- Buyouts followed by gutting the labor is the solution to innovation
- Government allowing large companies to violate rules but killing small companies off with excessive overhead trying not to run affoul of the rules.
- Ignoring that sending money out of the economy your customers live in means you customers have less money to spend on your goods and services.
- Thinking that you can continue to pollute without ever having to pay the price for doing it by shifting the burden to someone else.

Some countries have learned these lessons through failure, can we learn them through observation of their failures?
Jed Davis
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Jed Davis,
User Rank: Apprentice
4/16/2013 | 8:19:58 PM
re: H-1B: Ripe For Reform
Not to pick nits, but the net loss of jobs you reference here occurred in 2010. IT unemployment nationally is below 4.3%, and has been so for the past 2 years. I can tell you that, as the owner of an IT recruiting firm, we are finding the search for qualified IT talent to be at almost late 1990's level difficulty. Of course, that does play right into your "Purple Squirrel" theory, with which I wholeheartedly agree.
_
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_,
User Rank: Apprentice
4/16/2013 | 9:20:58 PM
re: H-1B: Ripe For Reform
the ironic thing, is that H1b's aren't even cheap, but as the article intimates, they've been "hijacked" by "consulting" and contracting companies. H1b's are actually more expensive, in terms of productivity and the quality of what gets done, on direct account of the no/low skill of the visa holder. However, outsourcing and onshoring companies are in love with the H1b, because it allows them to acquire a serf worker that can be heavily marked up - so it's really all about big profits for middle-men companies, this is the truth. H1b is ALL about depressing wages for American workers and passing on the true economic costs to the rest of American society. Don't believe any of the corporate shill b/s about their desire for "immigration reform" and other loft high-sounding concepts, they could care less about any of that, and if it wasn't for the H1b gravy train they've been riding - up to now - they would never even bring up the "immigration reform" facade. H1b/L1/B1, all toxic to our economy, our profession and our society in their present form, they are not being used for their original purpose, rather they've all been misappropriated by companies that are looking to depress wages and kick Americans directly out of their jobs...
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