Immigration is becoming as nettlesome to high-tech companies as it has long been in the agriculture and construction businesses.
Although technology firms don’t reach into the same labor pool as do ag comglomerates or building contractors, their problems are converging.
The challenge, advocates of immigration reform say, is a lack of government responsiveness to their need for brain power.
Perhaps the prime example is the H-1B program, which — with a few exceptions — has capped the number of six-year visas at 65,000 since the 1990s.
There’s been a growing outcry in the technology sector, in particular, arguing that the limit is way too low.
“I think that the reality over the last few years has been that when a nation has a visa quota that runs out within the first day or two of being opened, and then all economic growth that should be derived is put in suspended animation for another year — it suggests that something is wrong,” Angelo Paparelli, managing partner of Paparelli & Partners, told the E-Commerce Times.
Political Hot Potato
Neither of the two major political parties seems eager to do much about it, noted Paparelli, who also is president of the Alliance of Business Immigration Lawyers, which includes 19 law firms.
“Unfortunately, this is a neglected issue,” he said. “In this heightened economic turmoil we’re facing, this could be an easy remedy to add some economic vitality into our nation’s economy.”
Much as AgJobs and H-2A and H-2B programs are designed to help agricultural employers find badly needed field help, the H-1B visa program is key tool high-tech companies use to bring in professional-level foreign employees. Unlike their farm-based counterparts, H-1B visas allow workers in specialty occupations, which generally require college degrees, to work in the U.S. for as long as six years.
Both presidential contenders support adjusting the caps on H-1B visas.
Republican John McCain pushes changes in the system that would allow the caps to fluctuate in response to market conditions. McCain also supports cutting bureaucracy and waiting times for workers to arrive in the U.S., increasing available green card numbers to reflect employer and employee demand, and extending the ability for H-1B visa holders to renew their H-1B status while waiting for their green card number to become available. McCain also says he wants to make sure “available and qualified American workers are given adequate and fair opportunities to apply for available positions.”
Democrat Barack Obama has a similar position, supporting opportunities for U.S. workers first. Until that happens, he has said, he backs a temporary increase in the H-1B program “as a stopgap” move, pending comprehensive immigration reform.
Neither candidate has addressed the issue much, though — and changes are unlikely before a new administration and Congress are in place next year.
Even then, there’s no telling when the issue will reach the front burner.
“Perhaps the reason you see the issue not elevated in the presidential campaign discourse is the two major-party candidates seem to agree on the issue of reform overall, but, as you know, the issue of border security is distinguished from the issue of visa reform,” said Tim Jemal, executive director of the Technology Leadership Political Action Committee, a group formed to represent technology interests in Washington, D.C.
“Because they seem focused on comprehensive immigration reform, perhaps that has kept visa reform off the front pages — which is a shame, because it’s important to America’s competitive posture,” he told the E-Commerce Times.
Going Elsewhere for Workers
Companies need employees, Jemal said, and they’ll get them even if they have to build satellite offices in less restrictive environments.
Redmond, Wash.-based software giant Microsoft did just that, opening its Microsoft Canada Development Center in British Columbia as a way of recruiting foreign workers without the limits it faces in the U.S.
“That example indicates, where I see this hopefully going is a comprehensive set of reforms that both offer incentives and relief to the technology industry,” Jemal said. “When you look at wages, they’re substantially higher than other sectors in the country. In California, we see a lot of lip service praising the high-tech industry for high-skilled high-tech jobs, but see little in the way of reforms.”
Meanwhile, he said, other countries are forging ahead of the U.S.
“We see China, India, Australia and Europe have taken notice — and, unfortunately, it’s having a negative impact on our posture,” he said. “It’s an outdated system, the H-1B process. There’s a cap of 65,000 for FY09, and all the applications were exhausted the first day. So, basically, it leaves American employers in the high-tech industry to try their luck in the H-1B lottery next year.”
The cap doesn’t just affect mega-corporations like Oracle, Microsoft and Intel, Jemal said. “It also impacts small companies, which also need talent from foreign-born individuals.”
Whatever the U.S. government does to address problems with the cap, the first move should be to raise it, said Mark Koestler, a partner with Kramer Levin Naftalis & Frankel.
“In my mind, they should absolutely raise the quota, because it is just not enough for the size of our economy,” Koestler told the E-Commerce Times. “Given that the numbers run out in one day, it’s clear that there just aren’t enough.”
The current cap was designed for a tech economy that was just beginning to blossom, Koestler said.
“Companies feel they can’t remain competitive because they can’t hire who they want, so they’re going to ship jobs overseas,” he said.
Immigration is, in many ways, a third-rail issue to politicians, which only deepens the challenge of changing the laws, Koestler noted. “There are many different viewpoints, and it’s very tough to deal with. For every person who is for increasing the quota, there is opposition, so the politicians are scared of touching it.”
Is There a Magic Number?
How high should the quota be?
“That’s a great question,” Robert Meltzer, chief executive officer of VisaNow, told the E-Commerce Times. “Sometimes I say, ‘Why should there be a number?’ I know that’s an extreme position. That’s a great question. I think if the number was 300,000 and there were 300,000 filed, I’d say we need more — as long as you’re addressing all the other concerns.”
Among those concerns, Meltzer said, are pay and potential abuse of the system.
“Some years ago, Congress had some concerns that employers were using the H-1B program to get cheap labor,” he said. “So, they had to file papers to show they were paying the minimum prevailing wage, which they do today.”
Another criticism has focused on foreign-based companies operating in the U.S. accessing the system. “Again, you don’t want to leave it unlimited for foreign companies to make use of the program, so you don’t let them into the program — or create a separate category for them,” Meltzer said.
H-1B is only one of a jumble of questions that have to be addressed in the immigration debate, he added.
“We have to realize there’s many interests at play in the immigration debate, and I think that’s why the reform bill failed,” said Meltzer. “There were too many interests to juggle in the discussion. We’re interested in border protection, employee protection and company protection.”
Over 600,000 science and engineering degrees are granted annually from American universities.(1) The US produces only 120,000 science and engineering jobs per year (much less lately).(2) That leaves 480,000 graduates per year without jobs in their chosen careers. Add to this over 240,000 H-1B visas and an equal number of L-1 visas each year. Half a million Americans are losing their jobs to cheap foreign technical workers every year. Another half million Americans waste their S&E degrees on non-S&E jobs.
(1) Tabulated by National Science Foundation/Division of Science Resources Statistics (NSF/SRS); data from Department of Education/National Center for Education Statistics: Integrated Postsecondary Education Data System Completions Survey and NSF/SRS: Survey of Earned Doctorates.
(2) http://www.bls.gov/opub/mlr/2004/02/art5full.pdf page 83
H-1B and L-1 visas are the Trojan Horse to offshoring of American Jobs.