Five reasons why the H-1B visa cap will increase

Two bills were introduced this week to raise the H-1B visa cap. They follow Microsoft Corp. Chairman Bill Gates' visit to Washington and his push for a H-1B cap increase. The opposition faces a daunting task in challenging the push to increase the H-1B visa.

H-1B proponents in Congress acted quickly to take advantage of the attention Gates brought to the issue. U.S. Rep. Lamar Smith (R-Texas) introduced legislation Friday that would retroactively increase the 2008 visa cap to 195,000, as well as set that level for the fiscal year, 2009, that begins Oct. 1. Gabrielle Giffords (D-Arz.) introduced legislation the same week to increase the cap to 130,000 a year. The current cap is set at 65,000, with an additional 20,000 for holders of advance degrees.

Here are five reason why opponents face a very difficult, if not impossible task, in stopping a visa cap hike:

One: H-1B opponents have no clout

If H-1B visas weren’t part of the larger immigration reform issue in Congress, the H-1B cap would have been increased long ago. The opponents have been piggybacking on the broader immigration debate and they know it. But the H-1B opposition is in decline even as the debate grows more intense. Five years ago, tech workers in Connecticut – many working or connected to the financial services industry (the first industry to really embrace offshoring) – organized a lobbying group, the Organization for the Rights of American Workers (TORAW). By 2003, Connecticut's congressional reps had introduced several bills – all affecting the H-1B issue. The legislation went nowhere, but Connecticut tech workers proved that an organized effort can have impact. It’s all part of history now. TORAW has disbanded, out of money and members. The broader base of opponents are alert, well connected and can fire off thoughtful, well researched emails to lawmakers at an instant, but TORAW is illustrative of the anemic state of the opposition. Opponents lack lobbying muscle in Washington.

Two: The Gates effect

Bill Gates is, obviously, a powerful proponent of the H-1B visa. But where is the opposition’s star power? Lou Dobbs isn’t it. The Programmers Guild has been effective in raising issues, but the real heavy weight organization, with true lobbying ability, is the IEEE-USA, and it has scaled back its opposition to H-1B visas. This group has staked out a position focused on visa reform and improving access to permanent residency, the Green Cards. The IEEE-USA was once more direct about the impact of the H-1B visa: In 2004, when the cap was scaled back to 65,000 the IEEE-USA pointed out: The number of unemployed U.S. high-tech professionals dropped sharply from the first quarter of 2004 to the third quarter. The decline mirrors the reinstatement of the H-1B visa cap to its historical level of 65,000 in Fiscal Year 2004 from 195,000 in FY 03. That was a strong message to send to Congress. But the IEEE-USA also represents many academic institutions that depend on the H-1B visas. Although universities are exempted from the cap, foreign enrollments may suffer if students feel they have little chance of remaining in the U.S. longterm. Universities also have strong ties to tech companies. It is probably safe to say that the IEEE-USA, as an organization, is getting pulled in different directions.

Three: There is grass root support for the H-1B visa

A major use of H-1B visas is to help facilitate offshore outsourcing and even in this downturn outsourcing will continue to grow. That’s the broad outlook by industry analysts. The pressure for visas remains. But the H-1B visa has a very broad, grass root constituency that extends beyond the tech sector. In the 2007 fiscal year, nearly 20,000 companies, academic institutions, hospitals, public schools and others received only one H-1B visa. These organizations send emails as well.

Four: The H-1B lottery is a big problem for tech firms

The forecasted demand for H-1B visas is going to force the U.S. Citizenship and Immigration Service (USCIS) to hand out visas via a random lottery for the fiscal year 2009 that starts Oct 1. For the 2008 fiscal year, the USCIS received more than 123,000 visa petitions in two days for the 65,000 cap. Despite that number, the odds were still good that a petition would be approved in its lottery. The USCIS put all those visa petitions in a hat and selected about 100,000, rejecting the rest. The selection process works like college admission: The USCIS accepts more petitions then it has slots and expects a certain number of these applications to be withdrawn or disqualified. But this year there seems to be broad consensus that the number of visa petitions will exceed last year's total, and companies may face visa odds of two-to-one or higher. This makes the outlook for getting a visa very unpredictable and unacceptable to tech groups, which are now pushing for a cap increase with special urgency. But here is an important point to keep in mind: The people who receive visas under the 65,000 cap are more likely to only have a bachelor degree. They are the worker bees. The U.S. has a separate H-1B visa cap of 20,000 for foreign nationals who graduate with advance degrees from U.S. universities. But there was no lottery for these graduates because there was no sudden rush in demand. The USCIS filled those petitions on a first-come, first serve basis until April 30 that year. That may change this year.

Five: Congressional support for visa

Lawmakers have moved the cap up and down before and they will do it again. Congress will increase the cap this year or next and may make it retroactive as well. Had an immigration bill been approved last year the cap would have been 115,000. The open question is whether the H-1B visa will be reformed as part of a cap increase. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) last year pushed for a reform that set a limit on how the visa is used. One rule set a limit that no more than 50 percent of the U.S.-based employees at a company using H-1B workers can be visa holders. It was a measure aimed at making the India offshore firms a little less nimble and raising it as a trade issue for India.

Copyright © 2008 IDG Communications, Inc.

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