Software group says that without more foreign workers in U.S., jobs may go overseas

Computerworld - The U.S. software industry is larger than the food processing industry in terms of revenue, according to an IT trade group that wants Congress to raise the annual cap on H-1B visas, give permanent residency to foreign nationals who graduate from U.S. colleges and back trade policies that give companies unfettered access to global markets.

The Software & Information Industry Association today released a report (download PDF) that assembles a variety of economic data in an effort to give policy-makers a better understanding of the software industry's importance to the U.S. economy. For instance, the SIIA said that software vendors and digital content providers employed a combined total of 2.7 million people in 2006, a net gain of more than 400,000 jobs over the 1997 level. That's a 17% increase in head count, the group said.

SIIA president Ken Wasch acknowledged that the timing of the report's release was a little awkward, coming during a time when the stock market is falling, interest rates are being cut and Congress is working to craft an economic stimulus bill.

"Our industry is not going to be able to repeal the economic business cycle," Wasch said. If the U.S. economy goes into a recession, he added, "our industry will be impacted as well."

But Wasch claimed that the software industry has outpaced other economic sectors and the economy as a whole on growth over the past few years. "In an economic downturn, surely it's not going to be good news for our industry," he said. "But our industry ought to be performing better than industries that are fading in economic importance."

Nonetheless, Wasch contended that maintaining the industry's current level of growth in the U.S. will require immigration reform. Without the ability to add talented workers as needed, "we're creating an incentive for the industry to create knowledge centers outside the United States," he said.

The average annual wage paid in the software industry during 2006 was $75,400, according to the SIIA, which said that figure is about 78% higher than the median wage for all workers in the private sector.

The numbers cited by the SIIA are largely based on statistics from government reports and, consequently, tend to be one or two years old. But the intent of such reports from trade groups often is to add weight to their congressional policy initiatives.

For instance, the SIIA is calling for improvements to science, math and technology training overall in U.S. schools. That is a common argument made by tech industry groups, which also cite a shortage of skilled talent in the U.S. and the need to bring in qualified workers from overseas. Wasch said he thinks permanent-residency green cards should be "stapled" to the diplomas of U.S. college graduates from foreign countries.

But on the issue of math and science training, the Urban Institute, a nonpartisan policy research and analysis group in Washington, concluded in a report released in November that "the U.S. is not at any particular disadvantage compared with most nations, and the supply of qualified [science and engineering] graduates is large and ranks among the best internationally."

Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology in New York, called the SIIA's report "a defensive document" in an e-mail response to questions about it.

Hira said he thinks that a better comparison than measuring the U.S. software industry against other sectors is to look at the growth rates of the large offshore outsourcing companies vs. the growth of software jobs in the U.S. "I think everyone will be taken aback," he wrote. "The growth of IT labor demand in the U.S. is a pittance compared to the explosive growth in India."

Another policy issue of importance to the SIIA is trade barriers. Wasch said that the European Union and countries in other regions are placing what amounts to a "patchwork quilt" of restrictions that impede the flow of data -- for instance, limiting the ability of companies to store information about overseas customers on systems in the U.S. The trade group would like to see some standardization of such restrictions, he added.