The H-1B Debate Continues As U.S. EEs Face Uncertain Employment Future

by Terry Costlow

Just as during the economic boom cycle, the intermingled issues of jobs and immigration are continuing to stir up emotions during the current slump. While Congress won't debate the quota for H-1B immigrants until next year, there's already a barrage of conflicting data as corporations, engineers and others debate the need for H-1B workers.

While there's controversy over the need for guest workers, everyone agrees that the past year or so has been tough on engineers regardless of whether they're citizens or not. "We're at the worst EE unemployment level since it was a bit over 30,000 at the end of 1994 — the end of the early '90s recession," said Bob Rivers, editor of the Orange, Mass.-based Technology Employment Newsletter. Rivers noted that there were 30,000 unemployed engineers in the first quarter of this year, compared to an average of 8,000 to 10,000 during the latter half of the 1990s.

But the two camps that have been sparring over the need for guest workers don't agree on much else. One side argues that there aren't enough U.S. workers, so they have to go outside to get talent. The other side charges that guest workers are brought in mainly because they work for lower wages.

Proponents of the H-1B program note that only 163,000 H-1B visas were issued in the government's last fiscal year. That's well below the current cap, which was raised to 195,000 visas in 2001, up from 115,000 in 2000.

"If foreign workers were that much cheaper, we would have seen the cap hit. It fell 32,000 short," said Mark Shevitz, marketing director at VisaNow.com in Chicago. "Relocation, legal fees and the time it takes for processing add a lot of expense with H-1Bs," he noted.

Those who feel there are enough technical workers in the United States contend that since the cap only allowed 115,000 H-1Bs into the country during the prior year, the 163,000 figure means that 48,000 additional guest workers arrived during a recession year.

"Clearly the employers' claims of needing visas to remedy a 'labor shortage' were merely pretext to hire cheap foreign labor," said Norm Matloff, a University of Calif.-Davis computer science professor who's outspoken on this issue. He said that the increase is even greater than 48,000, since last year there were several exempt categories that did not exist the year before.

Will the Cap Go Up or Down?

While the debate roils, it's calm now compared to what's expected next year, when Congress will take up the issue of where to set the number of visas for the next few years. When the cap was raised to 195,000, it was set to revert to 65,000 at the start of Fiscal Year 2004 — or 1 October 2003. That's now not expected to happen, but where the level will be set is the subject of much debate. Some observers predict that despite the current slowdown, corporate America will push to have the cap raised even higher. Others say that won't be the case.

A spokeswoman at the Information Technology Association of America (ITAA), an Arlington, Va.-based group that is considered the leading proponent of importing foreign workers, said the group has not yet polled its members to find out what they want to do about the upcoming legislation. In May, ITAA predicted that there will be 1.1 million new jobs during the coming 12 months and that about 600,000 of them would go unfilled because there are not enough skilled workers to fill them. That's got some people thinking ITAA will push for an increase in the cap.

"With the figures they're putting out, there's no question that there will be a massive campaign to raise the cap next year," said Rob Sanchez, creator of an anti-H-1B website.

Many observers have questioned the latest ITAA predictions, saying that the economy isn't expected to rebound quickly enough to create more than a million new IT jobs by May 2003. Some note that even as the dot-com bust sparked the latest recession, ITAA was predicting substantial job growth. In April 2001, the group predicted that despite the economic slowdown, there would be 900,000 new jobs created, and that 425,000 would go unfilled. But in this year's study, the ITAA said that IT firms laid off 2.6 million workers and hired 2.1 million during 2001, as the size of the IT workforce shrank from 10.4 million to 9.9 million.

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Terry Costlow has written about the electronics industry for more than 20 years, covering a wide range of technologies and topics.