Professors warn that grads could face competition from H-1B workers

H-1B workers, many under 30 and getting entry-level work, compete directly with new grads

WASHINGTON -- If Congress does take action on an immigration overhaul, an increase in the cap on H-1B visas would be part of it. And the prospect of a big jump in the temporary work visas is worrisome to some academics, who say it will have consequences for students.

The nexus of H-1B visas and higher education came up Friday during a policy forum for U.S. House staff members focused on H-1B visas.

Karen Panetta, IEEE-USA Vice President for Communications and Public Awareness, and a professor of electrical engineering at Tufts University, said a master's degree is the new bachelor's degree in the U.S. labor market, and that puts an added financial burden on students. The cost of tuition in the U.S. "is so unrealistically prohibitive" that we are seeing "a class shift," said Panetta.

"The really wealthy are the only ones who can afford to send their kids to school," she said.

And the young people who do go to college will face increasing competition from lower-wage H-1B workers if the federal cap on visas rises -- and Panetta doesn't believe people see the connection between student debt and H-1B workers. "We can't solve the problem unless we have all the parameters and variables of the equation," she said.

One big variable for Panetta is tuition debt. She said her students owe $50,000, on average. "It's the house you are not going to be able to buy for another 10 years," she said.

Ron Hira, a public policy professor at the Rochester Institute of Technology and the forum moderator, said there are an estimated 650,000 H-1B workers in the U.S., and the visa program "is used very extensively for cheap labor."

The companies that are the biggest users of H-1B visas are mostly based overseas. At those employers, median salaries range from $61,000 to $70,500. But at U.S. companies that are also large users of H-1B visas, median salaries are higher. They include Microsoft, where the median salary is $95,000, Intel, where the median is $85,000, and Google, where it's $110,000, according to Hira's data.

In May, the Senate passed a comprehensive immigration bill that immediately increases the cap on H-1B visas from 65,000 to 110,000 and allows it to gradually increase to as high as 180,000 visas a year. The cap on visas for holders of advanced degrees from U.S. universities would increase from 20,000 to 25,000.

Despite the Senate action, the U.S. House has not acted on any immigration bill. The outlook for any action in that chamber is uncertain at best.

Hal Salzman, a professor of public policy at Rutgers University, said that the U.S. produces enough graduates to satisfy the demands of the labor market. But if the cap increase goes through, the market will be flooded with workers, and people under the age of 30 would be especially hard hit by the increased competition for jobs.

Neeraj Gupta, the CEO of Systems in Motion, a U.S.-based provider of IT services, said the purpose of the visa program should be to supply workers needed for important jobs that are hard to fill -- not as source of low-cost labor.

Systems in Motion employs about 300 tech workers. It's based in Ann Arbor, Mich., and is opening a second services center in Columbus, Ohio.

"If you stop the flow of H-1Bs, it will encourage businesses like us" and "it will encourage the offshore businesses to start investing in local workforces," Gupta told the audience of House policy analysts. "Today, they have no incentive to hire an American workforce."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at  @DCgov, or subscribe to Patrick's RSS feed . His email address is

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Copyright © 2013 IDG Communications, Inc.

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