Brookings H-1B report draws criticism

In a forum Wednesday, criticism focused on absence of test to determine if U.S. workers available before hiring foreign worker

A Brookings Institution report that looks at H-1B use in U.S. metropolitan areas is being criticized for its approach, as well as its research data.

Some of the criticism is coming from Jared Bernstein, who until last year was a member of President Barack Obama's economic team.

At a Brookings forum on Wednesday to discuss the report, released Wednesday, Bernstein raised a number of criticisms about the H-1B program, in particular the absence of what is called a "labor market test" to determine whether U.S. workers are available for a job being filled by a foreign worker.

But what Bernstein said he has not seen in research studies, including in the Brookings paper "is a rigorous labor shortage analysis -- real identification of a [labor] demand shortfall."

The Brookings research shows H-1B visa holders are used in 106 metropolitan areas, with New York at the top of the list. It also identifies the leading users, whether it's a business or university.

"Do not confuse H-1B demand with labor demand -- they're not the same thing," Bernstein said. There may be "lots of employers" seeking visas "in a climate with very high unemployment even among skilled workers," he said.

"Below-market wages is a real concern here," said Bernstein, who added there is evidence of H-1B visa use applying downward pressure on wages.

More generally, Bernstein was critical of how the H-1B program works. The employer applies for the visa and has a lot of control over the employee, something that is ripe for exploitation, he argued.

On the use of the visa by offshore outsourcing firms, Bernstein said he was comfortable with offshoring. It's a global world, he said, "but I certainly don't want to incentivize any more of it."

On the panel was Vivek Wadhwa, vice president of academics and innovation at Singularity University, and a longtime advocate of immigration policies as a competitive driver. While he agreed that the H-1B program has its problems, including keeping visa holders from launching their own companies, he argued that the "real market test" in hiring ought to be the company that's doing the hiring.

"Let them hire who they want," Wadhwa said. "Why do we have to tell companies who they can hire?"

Aside from Bernstein's point of the need for analysis of labor demand, the Brookings paper is getting criticism over its use of its reliance of Labor Condition Applications (LCA), from H-1B applicants filed with the Labor Dept.

Brookings turned to LCAs because they include the location of the workers, unlike the petition approvals that come from the U.S. Citizenship and Immigration Service.

Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher on H-1B issues, said the use of the LCAs "creates a significant and systematic bias that under-reports the offshore outsourcing firms' use of the H-1B program."

"It's very clear that companies like Infosys regularly include many more than one person for each LCA, while companies like Microsoft almost always include not more than one worker on each LCA," Hira said. "As a result of their dubious choice, they are understating the use by offshore outsourcing firms and overstating the use by companies like Microsoft."

Computerworld publishes an annual list of top H-1B employers that relies on USCIS data, and typically an offshore outsourcing firm will lead the list. In the Brookings report, Microsoft leads the list of top H-1B employers.

John Miano, the founder of the Programmers Guild, has also looked at the locations in LCA data and said the problem with them is that employers can file them without getting the visas, and an LCA can apply to multiple employees.

Miano, using data about H-1B use and LCA on that disclosed usage by state, found that California led the list at 16%, followed by New York at 15%, in a post published by the Center for Immigration Studies.

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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Copyright © 2012 IDG Communications, Inc.

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