Study: H-1B crucial to economic growth

Report for Congress supports use of foreign workers, is inconclusive on age bias claims

A report released by the National Academy of Sciences last week supported the industry's use of foreign worker visas in a tight labor market and found no definitive evidence of age discrimination in information technology.

The 15-month study, commissioned by Congress, also called for broader education initiatives to train the domestic workforce.

"We risk not allowing the economy to grow at all if we don't have workers with the right kinds of skill sets available," said Sandra Boyd, chairwoman of American Business for Legal Immigration, which represents high-tech firms.

Boyd said the coalition supports the NAS report's recommendations for better education and training, as well as the decision by Congress earlier this month to double the H-1B visa fee to $1,000 as a means of funding high-tech training programs.

The NAS committee, which included academics, policy researchers and private-sector employees, based its findings on oral testimony from more than 100 IT workers, employers and government agencies, as well as input submitted to its Web site. Congress asked the Washington-based NAS to investigate high-tech workforce needs and allegations of H-1B abuse and age discrimination cited by immigration opponents.

The report did find that the supply of H-1B holders is large enough to prevent wages from rising as quickly as they otherwise might in a tight U.S. labor market. But it failed to find conclusive evidence of disparity between the wages of domestic IT workers and foreign workers.

"Employers who want to save money have more incentive to send work overseas," said Herb Lin, who directed the study. "They don't save much by bringing people here."

Craig Hopkins, a network engineer at Houston-based accounting firm Harper & Pearson Co., said he believes that companies are hiring H-1B holders rather than promoting employees from within or training older IT workers.

But Jake Karrfalt, CEO of software company Alternative System Concepts Inc. in Windham, N.H., pointed out that employers are required by the government to pay H-1B holders prevailing wages.

Mark Pomerantz, director of technical services at Alliance Technology Staffing Inc. in New Canaan, Conn., said H-1B visa holders who work as contractors - rather than full-time employees - depress consulting rates. He said he's seen contracting firms get around Immigration and Naturalization Service regulations by classifying workers in a lower job category.

Suresh Raman, an SAP consultant and a six-year H-1B holder, said, however, that the view that H-1B holders depress wages is a myth. Raman has seen his earnings rise steadily over the years, and he now earns $150,000 per year.

Raman's wages are commensurate with U.S. professionals in the same field, said Pomerantz, but he said he believes Raman is an exception.

Using data on company layoffs from the U.S. Bureau of Labor Statistics, the study also found that while older workers - 40 years or older - are more likely to lose their jobs than younger ones, they find new jobs almost as quickly as younger IT workers.

But Pomerantz said the data was skewed because the study looked at workers 40 and older, while discrimination is mostly against workers 50 and older.

"There are plenty of 50-year-olds who would love to get training" in newer technologies, such as Java, but employers won't make that investment, said Pomerantz.

Copyright © 2000 IDG Communications, Inc.

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