D#12HW#3WP#3Draft#3

Rocki Passano

Eng 102-2513

Professor Devon C. Adams

D#12HW#3WP#3Draft#3

H-1B Visa Program -- Are Increases Necessary?

High technology corporations, special interest groups, Representatives, Senators and Governors are all calling for increases in the H-1B Visa Program quotas on the basis that insufficient educated, high skilled Americans are not available to fill their vacancies. Critics, some educators, high technology workers and their advocacy groups contend that corporations and special interest groups are wrong and through heavy campaign contributions have been able to influence Congress into believing a shortage exist based on inaccurate information. Foreign students who attend American universities and colleges want to remain and work in the U.S. Foreign companies that have opened offices in the U.S. want foreign workers from their own countries to work in their offices. Once we muddle through all of this, the question boils down to what is the truth, do we need to increase the H-1B Visa Program quotas? after graduation.

During the 1990s, the high technology industry was evolving and invading every aspect of daily life from personal computers to e-mail; to intelligent computer chips in household items automobiles and washing machines. Sweeping changes in high technology trade programs as well as changes in telecommunications monopolies (i.e., telephone television, cable, satellite) were in progress. Public school classrooms across the country were being wired for internet access during weekend volunteer programs. Venture capital money freely flowed into Silicon Valley enticing entrepreneurs to begin internet start-up companies that would become Yahoo and Google. This great unplanned success overwhelmed the existing technology workforce creating a demand for qualified skilled high technology workers in both the software and hardware fields. During this same time, Congress had undertaken a major reform of the nations Immigration Act.

The H-1B non-immigrant visa program was established with the U.S. Immigration Act of 1990 to assist U.S. employers in temporarily filling certain position with highly-skilled foreign workers (GAO). Congress had limited the number of H-1B visas to 65,000 each year with an additional exemption of 20,000 for foreign workers who had graduated from a U.S. college or university with an advanced degree, making the actual total of H-1B visa applicants 85,000 each year.

The Y2K problem created a major demand for additional highly skilled software programmers. The Y2K problem is in three parts, according to A. Passano. 1.) Software and databases calculate on or were written with dates with two-digit years; 2.) every year divisible by 4 is a leap year. 2000 is divisible by 4, which make it a leap year. Except years ending in 00 aren’t leap years. However, years divisible by 400 are leap years, which finally makes the year 2000 a leap year; and 3.) That means that following February 28, 2000, software that does not know that the year 2000 is a leap year will use the Julian date (numbers of the day in the year) wrong for the rest of the year, and will get the day of the week wrong forever. There are other problems with dates, but this represents the major Y2K Problem. All this meant that every piece of hardware, every software package and program, every embedded system and every data set could be affected.

With the Y2K Problem looming the need arose for Congress to temporarily increase the H-1B visa quota for 1999 and 2000 to 115,000 when it passed the American Competitiveness and Workforce Improvement Act of 1999. Congress again increased the H-1B visa quota to 195,000 for three years (2001, 2002, and 2003) with the passage of the American Competitiveness in the Twenty-First Century Act in 2000, reverting back in 2004 to a cap of 65,000 H-1B visa applicants each year (GAO).

The pressure to increase the H-1B visa quotas has been consistent since 2003. And today, it is stronger than ever. Corporations, several Governors and Senators (Letter) and special interest groups advocate a desperate need to increase current quotas again, citing a lack of qualified skilled Americans to fill their vacancies. Over 125,000 applications were filed for the 65,000 openings by the second day of accepting applications in 2007. By July, 2007 Department of Homeland Security decided not to accept anymore applications for the 2008 fiscal year because they had more than enough applicants (NumbersUSA). During a vote in July 2007, Comprehensive Immigration Reform (including H-1Bs) was defeated; forcing Microsoft’s CEO Bill Gates to plan the opening of a new development center in Vancouver Canada, “…allows the company to recruit and retain highly skilled people affected by immigration issues in the U.S.” (Broache and Fried). Additionally, Department of Labor records indicate Sun Microsystems has applied for a steadily increasing number of H-1B visas: 751 in 1999; 1870 in 2000: 5179 in 2001.

Many advocates for an increase in the H-1B Visa Program feel America is losing its edge in technology and science; pointing to the erosion of science and math education in U.S. high schools as a key issue. “High school students in the U.S. are consistently outperformed by those from Asian and some European countries on international assessments of math and science (USDE). President Bush decided to do something about the educational situation in our public schools with the “No Child Left Behind” policy in an effort to improve testing scores in public schools. High school drop out rates are on a steady increase over the last several years. This presents a problem because approximately 9% of the fastest-growing jobs of the future will require some post-secondary education or training (USDOL). Between 1989-1990 and 2003 and 2004, of the top five most popular degree fields to decline was engineering and engineering technologies by 5% (USDE).

The high technology industry has continued its evolution; new companies opened, some failed, some succeeded, and some were merged or acquired. High technology stocks hit record highs then record lows. A majority of the high tech companies from the 1980s and early 1990s do not exist anymore. As the technology revolution slowed its growth, first there was outsourcing then large lay-offs or reductions in force and has lead to an estimate of approximately 100,000 American software engineers currently unemployed (NumbersUSA). These numbers change depending on the data presented (see Table http://data.bls.gov/oep/servlet/oep.noeted.servlet.ActionServlet?Action=emprprt&Occ=1510320092&Occ=1510990098&Occ=1510410093&Occ=1510510094&Occ=4920110795&Occ=5140110886&Occ=4390210681&Occ=1510610095&Occ=4390310683&Occ=1730290150&Occ=2710240333&Occ=2920990437&Occ=1510710096&Occ=1510810097&Occ=4720710733&Occ=4120310603&Occ=4920220798&Occ=4990520841&Occ=1130420020&Occ=1310730062&Occ=4351110672&Number=10&Sort=emp_base&Base=2004&Proj=2014&EdLevel=99&Search=Education&Type=Education&Phrase=&StartItem=0 (USDOL).

Congress is looking for ways to give in to the high technology industries demand for permanent increases in the H-1B quotas. Why? Let’s follow the money. As Senator Bob Bennett, R-Utah said after Congress enacted the H-1B visa 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 it in public” (Matloff). Federal Election Commission data shows that high tech companies were contributors to political campaigns during 2004 elections (see Table http://www.opensecrets.org/industries/contrib.asp?Ind=B&Cycle=2004 & Table http://www.opensecrets.org/industries/contrib.asp?Ind=B&cycle=2006 (Opensecrets.org).

Dr. Norman Matloff, professor of computer science at the University of California-Davis is against H-1B Visa Program. He believes the failure of the current immigration reform bill only delays a predictable increase in the number of H-1B visas and green cards allowing an opportunity for high tech companies to exploit the system. “There’s no shortage of American workers for these jobs,” Matloff says, “I don’t like being lied to and the tech industry is lying to us. They simply want access to cheap labor” (Matloff).

Federal auditors in a 2006 GAO audit determined that some H-1B workers are underpaid. GAO found approximately 3200 petitions for H-1B visa workers have gained approval even though the employers involved didn’t commit to paying wages at the prevailing rate (GAO).

It has also been suggested that most of the H-1B visas are going to Indian companies that are taking advantage of the situation in order to not hire American workers. Lou Dobbs of CNN Lou Dobbs Tonight reported recently that U.S. lawyers were giving advice to companies seeking foreign tech workers to circumvent regulations requiring Americans be given first shot at jobs that go to H-1B visa holders (NumbersUSA). On the video, it is clear that corporations are looking for any means to avoid hiring U.S. workers for these jobs. One example is the use of head hunters to give the appearance of interviewing U.S. applicants, but never hiring them for the positions. Some head hunting firms have said they receive over one hundred thousand resumes for one position. These resumes are eliminated for lack of degrees, age, or lack of a very specific skill set. Salaries for technology workers have been flat for the past eight years and many U.S. tech workers feel that H-1B Visa Program is partially responsible for the salary situation.

Several Business Week articles point out that the 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 (Matloff).

Recently, the Programmers Guild, which represents 1,500 technical and professional workers, has drafted its own letter to congressional leaders, warning that the policy called for by Institute of Electrical & Electronics Engineers (IEEE) and Semiconductor Industry Association (SIA) in their October 11, 2007 letter, would further disadvantage American workers. The October 11 letter calls for any foreign student with at least a bachelor’s degree in technology or science be granted permanent residency if they get a job offer (Herbst).

Several years ago, my husband and I both worked in the high-tech industry in Silicon Valley, California. I worked for a technology based trade show company, Interop, that had grown from a weekend bake-off at someone’s home in Monterrey to the top trade show company in the world. Interop was sold to Ziff-Davis after three successful years. Just before this sale became official and public knowledge, Ron and Jacqui Catterall of London, England were persuaded to sell their London based IP Company to Ziff Davis and become part of the ZD organization through the H-1B Visa Program. The Catteralls sold their business and home, packed and shipped their belongings to the U.S. Immediately upon arrival they began working at Ziff Davis; Ron as my immediate Director and Jacqui as my subordinate. They lived in a hotel in Sunnyvale, CA for six months while having a home built in Sunnyvale, CA. Ron, Jacqui, my husband and I became friends and often socialized together. Two and one half years later, during a dinner party entertaining friends, Immigration and Naturalization Service arrived at their door. INS declared the Catteralls were illegally in the United States and had thirty days to leave the country for good. Ron and Jacqui were under the impression that Ziff Davis was processing the paper work to obtain their green cards for them in accordance with their agreement of employment and the sale of their IP Company. ZD failed to notify Ron and Jacqui they would not be applying for their green card; or that ZD would be terminating their employment immediately the next day. ZD had contacted INS prior to advising the Catteralls of the change in their status or of their pending termination. The Catteralls moved to MexicoU.S. It was all very strange as Ziff Davis had assisted when the Catteralls needed social security numbers so they could pay SSI and all associated income taxes and disability. Ziff Davis eventually sold Interop+Networld (the trade show company) to a Korean/Japanese conglomerate and I left the company. My husband became employed with RedBack, Inc. and we moved to Arizona. where they currently reside, but to this day still have problems visiting the

At RedBack, Inc. my husband traveled ninety percent of the time, mostly to Europe, Asia, throughout the U.S. and Canada and occasionally to New Zealand and Australia. When not flying all over the world, he was a technical instructor, training customer engineers on RedBack’s equipment. Shortly after the high tech stock bubble burst, mergers and acquisitions and then corporate downsizing, my husband is training hundreds of H-1Bs to do (what my husband was doing) installations and training. Six months later my husband and several hundred of his co-workers were laid off in a reduction in force. This had been a start up company when my husband started with RedBack. After these employees helped to bring the RedBack to the top of its field and to become a top competitor for Cisco, the company just let them go. It took my husband five years with out of pocket expenses to keep his skill set competitive and leading edge to find another job in the technology field as a contractor with no benefits. During the five years, my husband sent out thousands of resumes and went to hundreds of interviews. But of course he is well over 36 (the industry nondiscriminatory age cap) and he was never hired. Two or three H-1Bs could be hired instead of my husband for less than he would cost.

I don’t like being lied to in much the same was as Norman Matloff, I want to know the real reason behind this push for more foreign labor into the U.S. and I don’t think I am alone. Corporations have a fiduciary right to keep cost down and profits up for their shareholders which in some ways seems to justify their need for H-1B workers. If the motivation for an increase of H-1B Visas is strictly financial, then tell the truth. Amazingly, Americans can adapt, improvise and overcome should the need present itself (i.e., the Space Race), but we don’t like being lied to.

The H-1B Visa Program does not just affect the labor sector or the high tech industry; it has a tendency to set policy. As corporations are able to keep overhead cost down (labor cost, benefits, building and maintenance, etc) and profits up; if successful it becomes a model for conducting a successful business. Filtering into all levels like a domino effect. Eventually, a majority of the companies in the area are following the model; next local companies and local government; then state and federal governments are following the model as well. “Economists, of course, will tell you there's no such thing as a labor shortage. From a worker's viewpoint, many so-called shortages could quickly be solved if employers were to offer more money. And worldwide, millions of people still can't find jobs. The strongest evidence that there's no general shortage today is that overall worker pay has barely outpaced inflation. In the U.S., the share of national income going to corporate profit, rather than, say, labor, is hovering around a 50-year high. With so many people newly available for work in China, India, and the former Soviet Union, the only thing that could cause a real shortage would be "a global pandemic that kills millions of people," Harvard University economist Richard B. Freeman wrote in a research paper in September” (News & Insights). Obviously changes are needed in the H-1B Visa Program as well as in the administration of the program. There are many facets to the dilemma facing U.S. high technology workers, foreigners who want to work in the U.S., and corporations. Congress must have all the facts and the ability to investigate the entire picture prior to making any logical decisions. Real determinations must be assessed for where the need for exceptional high tech workers exist, mechanisms to ensure that there are no qualified Americans and finally issuing visas for those positions that are vitally necessary. Verifying that those workers are being fairly treated would be required to ensure fair and equitable treatment. Additionally, those that abuse and misuse the program should be penalized and/or punished. Anything less will not eliminate the problem or resolve the issue to meet the needs of all involved.

Works Cited

Broache, Anne and Fried, Ina. “Microsoft sings ‘O Canada’ amid Immigration challenges”. C/NETNews.com. 5 Jul 2007, San Francisco, CA CNET Networks, Inc. Business Source Premier, Mesa Community College Mesa, AZ 28 Sep 2007 www.news.com/Microsoft-sings-o-canada-amid-immigration-challenges/21

Daniels, M., Doyle, J., Freudenthal, D., Gibbons, J., Gregoire, C., Napolitano, J., Patrick, D., Pawlenty, T., Perry, R., Ritter, B., Schwarzenegger, S., Sebelius, K., Spitzer, E. “Letter to H. Reid, M. McConnell, N. Pelosi, J. Boehner”. 11 Sep 2007 U.S. House & U.S. Senate Washington, D.C. http://www.aila.org/content/default.aspx?docid=23290

Herbst, Moira. “The Great Tech Worker Divide”. Business Week – Technology. 10 Oct 2007. EBSCOHOST Mesa Community College Mesa, AZ, 28 Oct 2007. www.businessweek.com/bwdaily/dnflash/content/oct2007/db2007109_93

Matloff, Norman. “Should the U.S. increase its H-1B visa program? CON: Wages belie claims of a labor shortage”. San Francisco Chronicle. 7 Dec 2006 EBSCOHost, Mesa Community College, Mesa, AZ 28 Oct 2007 http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/12/07/EDGOULJ5BC1.DTL&hw=Should+the+US+increase+its+1B+visa+program&sn=003&sc=459

News & Insights “Where Are All The Workers Gone”. Business Week – Technology. 09 Apr 2007, New York, NY, The McGraw-Hill Companies, Inc. Business Source Premier, Mesa Community College, Mesa, AZ 28 Sept 2007. http://www.businessweek.com/magazine/content/07_15/b4029050.htm

NumbersUSA.com. Ed. Roy Beck. 28 Jul 2006 (Updated 30 Oct 2007). EBSCOHost, MesaCommunity College, Mesa, AZ 13 Sep 2007. www.NumbersUSA.com

Opensecrets.org. Web site for “Center for Responsive Politics” (note unable to access web site for additional information. Will get this info and update asap)

United States. Congress House of Representatives Subcommittee on Immigration, Border Security and Claims, Committee on Judiciary. H-1B Visa Program: More Oversight by Labor Can Improve Compliance with Program Requirements. Statement of Sigurd R. Nilsen, Director Education Workforce, and Income. Washington: GAO 06-901T, 2006

--. Department of Education. Report on the State of American Schools Shows High School Students Challenged by Math and Science. By Mike Bowler and David Thomas. Jun 2006. 28 Sep 2007 www.ed.gov/news/pressreleases/2006/06/06012006.html

--. Department of Labor, Bureau of Labor Statistics “Tomorrows Jobs”. Occupational Outlook Handbook 2006 – 2007 Ed. 28 Sep 2007 www.bls.gov