An H-1B cap hike would mean a grim future for workers

In the immigration debate, its tech versus academics

WASHINGTON - If Congress approves comprehensive immigration reform, it will likely more than double the cap on H-1B visas. What would happen then?

Some of the leading academic critics of the H-1B program gathered Friday to talk about the problems the visa program is creating, and what will happen if the cap grows from 85,000 to 180,000, as set in the Senate's immigration bill.

The offshoring of jobs will increase if the H-1B cap is increased, was one warning. As the percentage of guest workers in the IT workforce rises, so will age discrimination for anyone over 35, came another.

The litany of potential woes continued. Hiking the H-1B cap would hurt the ability of Americans to find jobs, wages will suffer, U.S. students may be deterred from science and engineering programs, and America's innovation capacity will decline, said various forum participants.

Those predictions came from a group that included Ron Hira, assistant professor of public policy at the Rochester Institute of Technology; Hal Salzman, professor of planning and public policy at Rutgers; Michael Teitelbaum, a senior research associate at Harvard Law School; and Norm Matloff, a professor of computer science at University of California at Davis.

The forum was sponsored by U.S. Sen. Jeff Sessions (R-Ala.). The intent was to dispel the notion of a tech and engineering shortage and to counter high-tech industry lobbying.

Stephen Miller, Sessions' communication director, who introduced the conference call, said immigration reform should make it easier for American college graduates "to find jobs with good pay with rising wages, and it should make it harder for companies to circumvent and avoid hiring Americans."

Hira said science and engineering workers accounts for about 5% of the overall workforce, "but it plays an outside role in economic growth and national security" and paying attention to that sector's health is critical.

"The advocates for more H-1Bs have claimed that there is a systemic widespread shortage of STEM workers," said Hira. The H-1B program is justified as filling gaps in the labor market, but it operates in a way has nothing to do with shortages.

"The majority of the H-1B program is now being used for cheaper workers," said Hira. More than 50% of visas under the cap last year were used by offshore outsourcing firms such as Infosys, Cognizant and Tata Consultancy Services.

The offshore business model is involves bringing in lower-cost H-1B workers and replacing American workers, said Hira. "Instead of complimenting the U.S. workforce, as it should, its actually a substitute for the U.S. workforce and then taking away future opportunities by shipping that work overseas," he said.

The wage floors set in the H-1B program are far below market wages for American workers, and there is no requirement to recruit or look for U.S. workers first, said Hira. "You bring them in to undercut Americans," he said.

Salzman said that only one of every two STEM graduates is now employed in a STEM job after graduation, even in professional fields such as computer science and engineering. Schools "produce 50% more graduates than are hired every year," he said.

Supply is also very responsive to demand, and average wages, adjusted, have remained the same since the 1990s, said Salzman.

Today, guest workers fill a third to a one-half of all openings in IT each year, said Salzman. For those under 30 years of age, the number of guest workers equals about two thirds of all new hires in IT, he said.

Guest workers make up about 30% to 40% of the IT workforce "and we expect that number to be increasing as a large supply comes in," said Salzman.

H-1B workers earn less, 5% to 10% below a comparable U.S. worker, and the program shifts hiring to younger workers, replacing older workers, said Salzman. It also weakens the bargaining position of older workers, he said.

Salzman, Matloff and others have pointed to the recent " no poaching" case in Silicon Valley, where high-tech firms were accused of agreeing not hire key employees from one another, as evidence that tech firms want to keep employees from leaving their jobs.

Similarly, the H-1B worker is attractive to tech firms because it's difficult for these workers to change jobs, particularly if they are being sponsored for a green card. It amounts to a form of "handcuffing," and given a choice between an equally qualified American worker and an H-1B worker, the tech firm may favor hiring a visa worker.

Brad Smith, Microsoft's general counsel and executive vice president, has argued that the number of new job openings requiring a bachelor's degree in computer science equals about 122,300 a year. To that, Salzman points out that the 180,000-visa cap in the Senate bil would give the IT industry 150% of what it says is needed.

Teitelbaum said the U.S. gone through five cycles since World War II, where alarms were sounded about shortages of scientist and engineers, with the government responding by increasing the flow either with visas or through education "and then after a booming period of growth, the system sort of busts and we have large numbers of people in these fields laid-off and a lot of prospective students turned off from going into these fields."

Teitelbaum called it an unhealthy history, and "we may be in the process of repeating it."

Tietelbaum's research is in his new book, Falling Behind, Boom, Bust & the Global Race for Scientific Talent. In it, he said that over the past two decades, lobbying and public relations efforts to convince U.S. political elites "that the country faces damaging and widespread shortages in its critical science and engineering workforce can only be described as stunning successes.

"This apparently broad consensus prevails notwithstanding almost universal inability by objective labor market analysts to find any convincing empirical evidence to confirm the existence of such generalized shortages," wrote Tietelbaum.

Matloff said the real problem with H-1Bs is their use to hire young workers over older IT employees, which he calculates as anyone over 35.

While most of the focus of this forum was on the H-1B visa, plans that would give fast-track green cards to advanced degree STEM grads were also seen as problematic. Matloff said it would exacerbate the age discrimination issue.

Matloff said H-1B workers don't represent the best and brightest, and evidence is in the number of patents issued per capita. "In fact, it's the opposite: on average, they are slightly below the quality of Americans," said Matloff.

When patents are measured at a per capita rate of patent production, the immigrant engineers are shown to produce fewer patents than the Americans, said Matloff.

There is a lower patenting rate by the foreign engineers than by Americans, and if you combine that with the displacement of American workers, "that means we have a net loss of innovation ability," said Matloff.

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 e-mail address is

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