Five reasons why the H-1B cap will be increased, revised

President Barack Obama has signaled interest in taking up comprehensive immigration reform. And any push for immigration reform is almost certain to include an increase in the H-1B cap. One year ago, I outlined five reasons why the cap will be increased; this is a revised assessment.

One: H-1B opponents have no friends in the White House. President Barack Obama has appointed an all-star cast of H-1B and offshore outsourcing supporters, and this administration sees the visa as critical to avoiding a "competitive disadvantage." But let's step back just a little. Is the White House really a mirror of the Bush administration on the H-1B issue?  During the campaign, Obama made it clear that he had problems with the offshoring of U.S. jobs, although it was mostly in the context of manufacturing. Obama is now trying to get some of those manufacturing jobs back. The massive federal stimulus includes $2 billion to underwrite the building of lithium-ion battery manufacturing plants to keep Taiwan and China from dominating this market. The tech industry isn't as vulnerable as the battery manufacturing industry, but it's still vulnerable. IBM's U.S. workforce is shrinking and expanding overseas. IT services firm Affiliated Computer Services Inc. said last fall it is moving "more complex and higher paying" jobs offshore. But the Obama administration has put in place appointees who believe the high-tech industry will grow fast enough to offset a shift of tech jobs overseas. The tech industry says that's achievable if it has unfettered access to H-1B visas. 

Two:  H-1B opponents have no money. In 2008, the high-tech industry spent nearly $117 million on lobbying Congress and the White House, according to data compiled by the Center for Responsive Politics. That includes Microsoft, which spent $8.9 million on lobbying last year and Oracle Corp., $5 million.  Let's put those figures in perspective. There are 3.9 to 5.9 million technology workers in the U.S., depending on whose figures you want to use (The National Association of Computer Consultant Businesses and the AeA, now TechAmerica, respectively).  It amounts to about $20 to $30 spent on each and every tech worker.

Three: H-1B opponents still have no clout.  The only lobbying group big enough to counter the high-tech industry, thanks to the election, is Big Labor. The unions -- with the exception of the lone tech union outpost Alliance@IBM -- could care less about tech workers. India's industry groups have more clout with the White House than tech workers. An India industry group recently met with Obama's economic chief Larry Summers to discuss a variety of issues, including the H-1B visa. The opponents will not be offered a meeting. 

Four:  Congress will increase the cap. The deadlock on broader immigration reform is the only thing preventing Congress from increasing the H-1B cap. U.S. Senators Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill), the leaders in the reform effort, are again introducing legislation to set restrictions on H-1B use and cut down on the fraud.  The centerpiece of this measure requires employers to make a "good faith" effort to hire U.S. workers before hiring someone on a visa. But the effort by Grassley and Durbin is premised on the idea that the cap will be increased. They are seeking compromise. (Here's the wild card: Will the Obama administration support reforms? Will it consider a new approach to high-skilled immigration?)

Five:  The H-1B opponents have lost the public relations war. They really have. The New York Times, for instance, ran this story recently, Tech Recruiting Clashes with Immigration Rules. It was pure Walt Disney material that can be summarize this way: Student comes from overseas, studies in the U.S. at a prestigious university and then must fight for a visa in pursuit of the American Dream. This is the prevailing theme in most H-1B stories. It's very, very easy for a publication to get a tech firm on the phone with a hardship story about their H-1B workers. The story that isn't reported as often is the use of the visa by offshore firms that apply for these visas in volume. An H-1B visa worker employed by an offshore firm often works as a liaison to the India-based development center. What makes the offshore model successful is the ratio of low-paid overseas workers to U.S. workers. One visa holder is, in effect, replacing many U.S. workers. Opponents see this as the anti-American Dream at work.

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