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

 

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

Articles - Thursday, May 8, 2008

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

Norman Matloff, December 7,2006

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.

Labor shortage?

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: cheap labor

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."

False claims of the industry

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.

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

Norman Matloff, December 7,2006

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