U.S. to Sharply Cut Number of High-Tech Work Visas

Reuters ^ | September 22, 2003 | Alan Elsner

[AntiGuv]

WASHINGTON (Reuters) - The United States is about to cut the number of employment visas it offers to highly qualified foreign workers from 195,000 to 65,000, immigration experts said on Monday.

Unless Congress acts by the end of this month -- and there is little sign it will do so -- the change will automatically take effect on Oct. 1. Employers, especially technology companies, argue the move will hurt them and the economy.

The change will affect the number of H1-B visas that can be issued each fiscal year. The visas are mostly used to bring high-tech experts from Asia, especially from the Indian sub-continent, to work in the United States for up to three years.

"The fact that Congress doesn't seem anxious to act reflects the political climate, with a lack of jobs for Americans," said New York immigration lawyer Cyrus Mehta.

"The pressure to change the limit will build up again when the economy picks up."

The Senate Judiciary Committee held a hearing on the issue last week. Republican chairman Orrin Hatch of Utah noted that many U.S. high-tech workers are unemployed and the committee needed to find ways of helping them without hurting the country's ability to compete globally.

Vermont Democratic Sen. Patrick Leahy said: "Given the weakness of our current economy, and the rising unemployment we have experienced under President Bush's stewardship, many who supported the increase in 2000 now believe that 65,000 visas are sufficient."

But Patrick Duffy, Human Resources Attorney for Intel Corporation, said finding the best-educated engineering talent from around the world was critical to his company's future.

"We expect that we will continue to sponsor H-1B employees in the future for the simple reason that we cannot find enough U.S. workers with the advanced education, skills, and expertise we need," he said.

Elizabeth Dickson, director of immigration services for the Ingersoll-Rand Company, speaking on behalf of the U.S. Chamber of Commerce, said: "In the near-term, we simply must have access to foreign nationals. Many of them have been educated in the United States. By sending them home, we are at best sending them to our own foreign plant sites, and at worst to our competitors."

Immigration attorneys expect the new rules to set off a scramble by companies to fill their slots early before the ceiling is reached. How quickly that happens depends on the state of the economy, they said.

[dangus]

Wouldn't it be nice to be paid what you're worth so you didn't *have* to work three shifts? :)

[null and void]

I took a 50% cut to prolong a job for 3 more months, last year.

[kesg]

Really? An H1-B is REQUIRED to go home after 6 years. (Where they often take the skills they learned here to start/work for companies that compete with their former US employer.)

The H1-B policy is flawed in this respect. These foreign workers should have the option of staying here and attempting to become naturalized American citizens if they so choose.

Even so, if I am better off hiring them, I will make more money, which I can then spend or invest, which will ultimately create more jobs and wealth in the American economy.

[null and void]

I'd have to work 3 shifts to cover for my 3 H1-B replacements on the last job.

I can survive on a lot less than what I'm worth.

I'm trying to be a consultant. Frustrating - lost a contract today, reasonable price, and I KNOW I could help them earn a whole bunch of money. But they're tapped out, only enough reserves for two months of operations.

Didn't burn the bridge, they are hoping for additional funding.

Meeting with another potential client tomorrow, for the third time. Still no contract. Maybe this time.

I hate being self-unemployed! I've gotten one gig in a year, low rate, mediocre hours, abusive boss. Better than nothing, sort of...

[null and void]

Making money is easy. If ALL you care about is money...

[doc30]

I think you're using the phrase "prevailing wage" loosely. If the "prevailing wage" is less than anyone will work for, how did that wage come to "prevail" in the first place?

I'm using the prevailing wage as defined by the Department of Labor. Go to http://www.flcdatacenter.com/ and you can look it up. They track the prevailing wages accross many different careers and positions.

I do understand the point you are making regarding a circular arguement. My point is that it is an employers market for IT workers. Lots of IT workers in the market for a job means lower salaries for IT workers. This is the laws of supply and demand. The problem is that many of these workers are used to the wages from when Tech was booming and they could practically dictate their paycheck. They still want huge salaries while wages have dropped. If they don't want to work for what the free market has detemined the wage scale to be, then companies can look for employees who will. When they say there are no U.S. workers available to do the job, that means there are no American workers willing to work for the going rate for IT workers. That opens the door to hire foreign workers at the prevailing wage. It is a real step backward for an IT worker previously making, let's say for example, $80K, to work in a new position for $30K. However, a recent graduate who has never worked for the higher wages would be willing to work for $30K becasue they were never accustomed to the higher salaries. The H1B workers would be paid on the same scale. The company I work for does hire H1Bs (typically people with MSc's or PhD's) for R&D positions and their salaries are near the industry median. No wage suppression here.

[doc30]

You are quite correct. When I got my PhD in chemistry, I was required to teach undergraduate chemistry labs. The native born students typically could not form a coherent sentence and their writing was the worst chicken scratch I've ever seen. The foreign students were far more literate, neat and organized in their writing. In freshman chemistry, there were about 120 students. In sophomore chemistry, the number dropped to about 25. The only foreign students that dropped were the ones that had minimal English skills. Most of the student that dropped were native ones. They simply could not handle the workload, stress, the requirement to calculate the correct answer and the fact you had to know the previous chapter in order to do the next. Some American students actually complained that the second mid-term was cumulative. They though it wasn't fair to be tested on material they had already been tested on. They didn't understand they needed to know that material in order to do the more advanced work!

On the other hand, the foreign students were paying 5 times the in state tuition rate and knew there'd be h*ll to pay from their parents if they didn't do well. Couple that with the strong work ethic found in most Asian countries and you have foreign students that do rather well compared to American students.

[doc30]

and not to mention the lost tax revenues from the H1-B not being required to pay SS,

H1B's are required to pay the same taxes as AMericna workers. They pay SS, FICA and income taxes like everyone else.

[doc30]

Baloney! Fire a few lawyers and they can find the money to hire engineers. Plenty of "unattached"and qualified guys just in the DFW area.

Curiously enough, foreign lawyers are also eligeible for H1B visas. But do we really want more lawyers of any nationality?

[trini]

I had that type of experience as a foreign student as well. Imagine taking a test where the review was done in class and consisted of the teacher READING questions straight from the test and giving you the answer! People still did poorly simply because they were too lazy to listen or too busy partying to show up for the review. I found that the pervasive attitude was one of having a good time. As a foreign student I didn't have that luxury, my tuition, books, room and board cost my parents dearly. You are right, there would have been big trouble if I did not perform to the best of my ability.

[doc30]

My wife is from Japan. I met her while she was in college here and I've never seen someone so dedicated to making sure she does well. She got a socialogy degree and found that any degree does not guarantee a good job. She didn't have anyone who knew the U.S. well, or the value of different degrees to mentor her. Now she's gone back to school for pharmacy. She's doing her premed and studies avery available minute. I help her with the chemistry and I'm amazed at how well she is doing. Going from the liberal arts to the hard sciences has been a BIG change for her.

[Nataku X]

I apologize for my error regarding taxes, but will stand by the rest of my statements (although I will clarify that the 1M H1-B estimate includes L1s... however, it is hard to get an exact number because even the INS does not apparently know). You don't pay Medicare, EIC, et cetera for an out-of-work Indian.

In 2001, more than 715,000 foreigners were issued NIVs to fill U.S. jobs, and another 110,000 visitors received permission to work here after arriving.

[Lael]

BTTT!!

[oceanview]

from who? no one will be making the stuff in the US anymore.

[oceanview]

we understand you just fine.

our point is: with those industries gone from the US, we'll have to pay more. those industries aren't going to come storming back into the US, building new chip plants, etc just because the dollar devalues. if the price of a cell phone needs to go up 15% because of a dollar devaluation, it will.

The time to try and save even some portion of these industries in the US from being sent offshore is NOW. Once they are GONE, they aren't coming back.

[risen_feenix]

It really seems that FR is for knee-jerk protectionists.

The labor market is currently in the process of correcting the global imbalance in IT wages. One way that American companies have been able to remain "in the hunt" has been by importing lower wage IT workers to increase their competitiveness. This new "law" simply hastens the all-out migration of whole companies and industries overseas. We will lose our competitive edge. Why develop software here in the US, where wages run on average $80K, when the same software can be developed overseas at wages of $8K? Americans are not genetically 10x more intelligent or productive than their foreign born counterparts.

American companies are now handicapped to pay higher salaries, but the market will see to it that:

- whole US divisions are laid off and the work is outsourced to overseas companies
- American products will be unable to compete in price with foreign developed products.

H1-B workers lowered that $80K average down to maybe $65K, increasing the US's ability to compete. Now, we won't be able to. Just because I, as a programmer, want $100K a year does not mean I deserve it. Especially not if there are 20 million starving people a T-1 line away who will do it for $10K/year.

As with any government initiative... penny-wise but pound-foolish.

[Southack]

"Once they are GONE, they aren't coming back."

I'm fine with saving industries right now, but it is IDIOTIC to claim that industries "don't come back."

Mercedes, Toyota, BMW, Honda, and KIA have all brought back automobile manufacturing to the U.S. itself after the great declines from the 1960's.

Aircraft plants that have been shut down (e.g. Piper, Mooney) have come back, too.

South Korea's "lock" on memory chips in the late 1980's disappeared overnight.

Boeing is making cheaper and higher quality rocket engines in Alabama than China can build in the land of the nearly-free-wages.

Alabama and Pennsylvania steel is once again competitive with Japanese and Russian imports. So much for all of the doom-sayers who claimed that the U.S. had lost the steel wars to cheap labor in foreign nations.

It's also safe to say that the U.S. concrete sector is going to continue to make its production here in the U.S.

In the meantime, devaluing the U.S. Dollar will make all of the above (and more) even more competitive with foreign offshore production and services.

[Southack]

cpost#69

[risen_feenix]

Oh please, it's easy. Devalue the currently over-valued U.S. Dollar and all of a sudden offshore outsourcing won't look quite so attractive financially

Come on now. The level of devaluation in the dollar required for such an act would be economic suicide. When you devalue the dollar, you increase inflation. When you increase inflation, my savings and 401(k) is worth less.

Not the right solution.

[Southack]

"Come on now. The level of devaluation in the dollar required for such an act would be economic suicide. When you devalue the dollar, you increase inflation. When you increase inflation, my savings and 401(k) is worth less."

It's not linear. Devaluing the Dollar doesn't make American goods cost more, certainly not in proportion to how such a devaluation makes foreign goods and services increase in price.

This is due to America being primarily an internalized economy, whereas most of our imports come from export-based economies which are far more succeptable to currency devaluations.

The U.S. GDP is 85% domestic, 9% imports (and more than half of that is traded in Dollars due to oil), and 6% exports.

Devaluing the U.S. Dollar has a negligible effect on the 85% domestic internal economy, an enormous impact on the 9% of imports (or at least those imports that aren't already traded in Dollars), and makes our 6% exports vastly more competitve on the world stage.

The simple fact is that the U.S. Dollar has been the LARGEST SUBSIDY of most foreign economies since WW2.

For decades we have winked and nodded at the over-valuation, remaining chivalrous by keeping a propped-up valuation in order to boost the economies of developing nations.

But there is nothing that says that we must continue with this charade.

It is time for the over-valuation of the U.S. Dollar to cease.