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.

[leadpencil1]

ping for later read

[trini]

Okay.

[null and void]

HA! Beat you! see post #56...

[doc30]

But the spouses and chillins can get their own H1-B's...

But thety must have at least a bachelor's degree related to the work they want to get. Teenage dependants can't even work at the local McDonalds part time. On the other had, the spouse and kids of L-1 visas can get work authorization for any job.

[1rudeboy]

That's what the central-planners have been saying since the early 1900's.

[b4its2late]

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."

What a horses ass. It's must've took Leahy about a day and a half to come up with that one....

[banjo joe]

I disagree. There are some tech jobs you just cannot send overseas. Desktop support, LAN Administration, etc.

That's what I thought. Half out network admins were laid off and their jobs now reside in........ India.

[Southack]

"The problem is that labor cost pressure will simply move major IT projects off shore. The real culprit is government regulation that makes hiring an American employee so expensive;"

No, and no.

First of all, cheap labor is never cheap. Until you've paid the bribes in Beijing and dealt with the surreal bureaucracy of Hyderabad, you just don't get a true feel for how much it costs to obtain the privilege of paying employees very low salaries.

Moreover, "cheap" labor currently only appears to be cheap because the U.S. Dollar is wildly over-valued. Drop the value of the Dollar and all of a sudden all of those offshore contracts are going to take on an entirely new and unprofitable dimension. A lower U.S. Dollar makes existing foreign contracts with U.S. companies worth less. It makes exports to the U.S. more expensive. It makes domestic American goods and services and salaries instantly cheaper and more competitive, too.

And for another "no" to your claims above, the U.S. is actually pretty cheap when it comes to **relative** comparisons of rules and regulatory costs of compliance. Granted, a few individual states in the U.S. have some business costs that could be equal or above what we see in most Asian and European nations, but on the whole doing business in the U.S. is already competitive globally from a regulation-cost perspective.

[null and void]

I'm 29 and won't be seeing any of that cash

Trust me (That's how you say F you in Gov't speak), you'll get EVERY PENNY.

'Course a hamburger may cost $3,000, but you'll get every penny...

[IronJack]

High time!

[Doctor Stochastic]

http://www.freerepublic.com/focus/f-news/987229/posts

[dfwgator]

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.

You mean this Patrick Duffy?

[JohnGalt]

Its all well and good to point out that the US government has screwed up the dollar on the international scene, but pretending that the government can solve the problem with hyper inflation is a risky political venture, but still a more realistic approach that a simple short term labor protection that will help a few older people with experience but will shrink the market over all in time.



If you are honestly saying that US business regulation is fine and not that oppressive, then I beg to differ. You are essentially arguing a reverse 'Whip Inflation Now' scheme to solve what is ultimately still a government caused monetary situation.

[scripter]

Thanks for posting this.

"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.

Yeah, right. Many of my friends have more than enough education, skills nad expertise to fill the need. My job ends in 5 weeks and I've got the education, skills and nearly 20 years experience yet can't get a replacement job. I really hate it when folks like about the shortage of workers.

[JohnGalt]

I still dream of seeing Aged Based Looting, err- 'Social Security' abolished in my lifetime so don't wreck my day by telling me I will have no choice but to accept government welfare checks.

Ugh ;)

[StolarStorm]

Problem is, the coutries we have the biggest problem with peg their currencies to the American dollar... specifically to keep the trade situation to their benefit. I'm a free trader, but free trade isn't happening b/w us and India/china.

[snopercod]

The real culprit is government regulation that makes hiring an American employee so expensive

I'm not so sure of that. Here in North Carolina, it costs an employer roughly $2.50 per hour to have an employee. That includes taxes, workman's comp, unemployment, etc., but does not include any benefits.

OTOH, I know employers who just don't want the hassle.

[null and void]

OOPS. Sorry, WERE underpaid ;-)

Ummm. No.

Although I did take a 50% pay cut to extend the job a few months.

[mpreston]

At this point in time I have more questions floating around in my head than solutions. But to think that reducing H1B visas is the solution to the problem is naive. Technology is making the world smaller and companies that want to remain competitive will look for the best solution. Notice best not always cheapest. Such things as time-to-market and product quality also come into play.

One aspect of this problem is that the world economy is structured around the US being the ultimate consumer and the rest of the world the ultimate producer. At some point debt and social unrest will break this relationship. This is beginning to get some discussion but I have yet to see anyone propose realistic AND acheivable solutions.

[Southack]

"A company that would employ such foreign workers in the U.S. will now just move to India or wherever. Since they can't get enough skilled U.S. workers (so they say), they will move their operations to a foreign country where wages are much lower and the workers will pay no U.S. taxes."

No, the whole idea of outsourcing high-tech work offshore is built upon a logical house of cards.

You see, you pay foreign employees in their local currency. An Indian programmer will be paid in Rupees. A Chinese programmer will be paid in Yuans. A Japanese gamer will be paid in Yen, etc.

So if you move your work offshore (either by contracting it or by setting up your own local company or subsidiary), then you've got to take into account how the U.S. Dollar trades versus the local currency.

In addition, you have to take into account whether or not the local **economy** is majority-export-oriented.

You see, an export-oriented economy will generate a perpetual surplus of U.S. Dollars that can't be spent and must be hoarded by the local central bank in question, otherwise the value of the U.S. Dollar would plummet against said curency, destroying said export-based economy overnight.

And it is this dependency upon the exchange-traded value of the U.S. Dollar versus the local currency that makes the whole offshore outsourcing concept so risky, fragile, and essentially doomed.

If the Dollar goes down, after all, that makes all existing contracts with the Americans worth less in terms of the local currency.

If the Dollar goes down, that makes all future exports of goods and services to the U.S. cost more to the American customers.

If the Dollar goes down, then that makes all American goods and services cheaper in comparison.

To fight this trend, central banks in export-based economies have to continually buy and hoard U.S. Dollars. If these Dollars are ever spent (i.e. put back into circulation), then the value of the Dollar plummets, and you already know what happens when the U.S. Dollar goes down in value...

Likewise, such offshore ventures are vulnerable if the U.S. decides to pump more U.S. Dollars into global circulation. To counter this downside, export-based economies must demand that their central banks buy even more U.S. Dollars to forever hold.

But they can't buy and hold as many Dollars as we can print.

This presents an enormous and insurmountable problem for these offshore ventures and partnerships, simply because the only reason that offshore outsourcing appears to be profitable is because the U.S. Dollar has been over-valued for so many decades.

But past performance is a poor guarantee of future conditions.

There is very little incentive for the U.S. to continue to allow the U.S. Dollar to remain wildly over-valued.

And if the Dollar drops in value, then these offshore ventures are going to become cost-prohibitive.