Tech Sector Presses for H-1B Visa Reform

Published May 1, 2008

In the wake of the April 1 filing date for H-1B visas, the U.S. technology industry is ratcheting up its efforts to raise the 65,000-person limit on the coveted documents.

Analysts expected another flood of applications similar to 2007, when the government received more than double the annual quota in the first two days.

The H-1B program involves non-immigrant visas granted to foreign workers in specialty occupations in the United States. It is seen as especially important to the American technology industry, which makes use of the visa to obtain needed personnel.

The spotlight has been on the H-1B program since March 12, when Microsoft Chairman Bill Gates urged Congress to ease restrictions. Gates and other industry leaders claim the current domestic U.S. labor pool is inadequate to fill the growing need for skilled employees. Without access to the pipeline of highly qualified immigrant workers, they say, U.S. companies are at a competitive disadvantage.

Visas Create Jobs

Advocates for visa expansion were buoyed by a recent study by the National Foundation for American Policy (NFAP), which found H-1B visas can help create jobs in the United States. The findings indicate technology companies hired five new employees for every one H-1B applicant.

Those numbers were even more promising for companies with fewer than 5,000 employees, showing an increase of seven-and-a-half workers per visiting H-1B.

“Companies have lots of opportunities for expansion. Either they have the domestic manpower to do it, or open up overseas shops. Clearly it’s better to have those workers here, creating jobs and taxes and contributing to the economy, than to do it abroad,” said Timothy Lee, an adjunct fellow at the Cato Institute, a Washington, DC-based think tank.

Opponents See Outsourcing, Abuse

Critics of the H-1B program paint a very different picture. They say companies use the system as a source of cheap labor that displaces American workers, because companies are under no obligation to consider U.S. workers first. This has the effect of driving down salaries, they claim. The program also allows businesses with international offices to train workers in the United States and then send the jobs permanently overseas, critics say.

“In reality, the top employers of H-1Bs are offshore companies that hire very few Americans. So if the goal is to slow down outsourcing, you would have to give it a failing grade,” said Dr. Ron Hira, an assistant professor at Rochester Institute of Technology. “In many cases, an H-1B is not a bridge to permanent immigration.”

Prominent congressional detractors such as Sens. Charles Grassley (R-IA) and Richard Durbin (D-IL) insist any modifications to the visa program must include reforms to curb abuses.

One such change was announced on March 19 by the U.S. Citizenship and Immigration Services (USCIS), which oversees the program. It now prohibits companies from submitting multiple H-1B applications for the same workers in an attempt to “game” the lottery selection system.

Momentum in Congress

The week of Gates’s testimony, two bills to increase the visa cap were introduced. Rep. Lamar Smith (R-TX) offered the SUSTAIN Act (HR 5642), which would retroactively set the 2008 cap at 195,000 and retain that level in 2009. Rep. Gabrielle Giffords (D-AZ) proposed similar legislation, the Innovation Employment Act (HR 5630). Giffords’ bill calls for expanding the cap to 130,000 with a provision that could increase the number in future years.

Reform advocates also have floated a series of other policy alternatives to improve the situation. One is to extend the visa time limit on foreign student work programs. Another popular option would authorize the use of visas that were not utilized in previous years.

“Rather than increasing the number of H-1Bs, recapturing unused visas would open up around 300,000 spots,” said Michelle Mittelstadt, communication director of the Migration Policy Institute, a nonpartisan think tank.

Election, Economy Hurt Chances

Despite the legislative movement, the current political climate is not particularly conducive to change on the issue. Both bills were referred to the House Judiciary Committee, and proponents are not optimistic action will be taken any time soon.

The situation is exacerbated by the slumping economy, which has encouraged protectionist rhetoric during the presidential campaign.

Though H1-B expansion would likely pass as a standalone measure, efforts to raise the cap have suffered from being tied to comprehensive immigration reform.

“The idea that you can do anything narrow on H-1Bs and have it pass through Congress right now is very unlikely,” Mittelstadt said.

Michael Toguchi ([email protected]) is a vice president at eResources, LLC in Alexandria, Virginia.