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Senator Schumer: H-1B use undercuts pay, discourages tech enrollments

Committee chair says visa program will be 'dramatically restricted' in immigration bill

August 12, 2010 09:20 PM ET

Computerworld - Sen. Chuck Schumer (D-N.Y.) says that the H-1B program has created "multinational temp agencies" that undercut U.S. wages and discourage students from entering tech fields.

Schumer said the H-1B program has morphed into program used to hire foreign tech workers "willing to accept less pay than their American counterparts." He spoke on the Senate floor in advance of its approval Thursday of $600 million for border security that includes an H-1B visa fee increase.

Schumer broadly called these firms "body shops," correcting a characterization he made last week describing firms that use large numbers of H-1B visas as "chop shops."

The impact of the low-wage workers is also "discouraging many of our smartest students from entering the technology industry in the first place," said Schumer. "Students can see that paying hundreds of thousands of dollars for advanced schooling is not worth the cost when the market is being flooded with foreign temporary workers willing do to tech work for far less pay."

Schumer heads the Senate's Immigration, Refugees and Border Security Committee and is spearheading work on a comprehensive immigration bill. A bill isn't expected until early next year, after the November elections, but Schumer warned on Thursday that the H-1B visa was "likely to be dramatically restricted" in the bill.

The border security bill imposes a $2,000 fee increase on those firms that have 50% or more of their U.S. employees on H-1B and L-1 visas. That bill, which funds 1,500 new border officers and drone aircraft, awaits the president's signature.

The Senate had previously approved the border security bill, but when it included the visa fee increase, further House action was needed and the Senate had to act again.

Regarding Schumer's point on enrollments, the number of computer science graduates bottomed out in the 2006-07 academic year, with only 8,021 students receiving bachelor's degrees in computer science at the 170 Ph.D.-granting institutions tracked by the Computer Research Association.

But in the past two years, enrollments have increased 14%. The enrollment declines have been blamed on many things, including the dot-com bubble bust and offshore outsourcing, but increasing enrollments may be helped by the growth of computer science in emerging fields such as computational biology.

It may also be seen as a safer choice today than finance.

Norman Matloff, a professor of computer science at the University of California, Davis, a longtime visa opponent who testified in Congress on this issue, said in a newsletter this week that Schumer's fee increase is a "a setback for reformers, as well as scapegoating and worse."

"This has long been a tactic of the industry lobbyists and their allies in Congress: Blame the Indians," said Matloff, who argues that every company that uses the H-1B visa is abusing the program by "hiring visa workers instead of U.S. citizens and permanent residents in order to save money."

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