H-1B and L-1 Visas Accelerate
Offshore Outsourcing

by Chris McManes

The presence of guest workers in the United States on H-1B and L-1 visas has accelerated the offshore outsourcing of high-tech work and jobs, said Dr. Ron Hira, chair of the IEEE-USA Research and Development Policy Committee in June testimony before the House Committee on Small Business.

The trend has increased the “movement of work offshore as temporary workers in management positions outsource work to overseas colleagues, and as temporary workers who have returned home use their knowledge and connections in the U.S. market to bid competitively for outsourced work,” Hira said. By shifting policy away from relying on guest workers and toward permanent immigration, the United States could minimize this trend.

In a widely cited Forrester Research analysis, at least 3.3 million white-collar jobs and $136 billion in wages are expected to shift overseas by 2015. Lower labor cost is the principal reason. The World Bank conducted a comparison that showed a $70,000 salary for a U.S. engineer has the same purchasing power as a $13,580 salary for an Indian engineer, or a $25,690 salary for a Hungarian engineer.

The outsourcing hearing, chaired by Rep. Donald Manzullo (R-Ill.) and televised on C-SPAN, was held 18 June to help answer the question, “The Globalization of White-collar Jobs: Can America Lose These Jobs and Still Prosper?”

“Global competition accelerates creative destruction, which can be good for innovative and market-based economies overall but terribly difficult for displaced communities and individuals,” said Bruce Mehlman, assistant secretary for technology policy at the U.S. Department of Commerce. “America must never compete in the battle to see who can pay their workers the least, and it will take sustained innovation to ensure we don’t have to.”

Other testimony included discussions of the H-1B and L-1 temporary visa programs. Limited to congressionally mandated caps, H-1B visas are available to foreign workers with a bachelor’s degree or equivalent who enter the country to perform work in a specialty occupation that requires theoretical application of a highly specialized body of knowledge. On the other hand, L-1 visas are designed to facilitate the transfer of multinational corporate executives and experts into the United States and have no annual limit.

The annual H-1B visa cap of 195,000 will drop back to its historical level of 65,000 on 1 October without further congressional action. As noted in a position statement adopted in February 2003, IEEE-USA supports returning the cap to 65,000 and using the employer-paid visa fees to increase the availability and effectiveness of skills training for displaced U.S. high-tech professionals.

“Congress should see to it that more of the H-1B fee revenue is used to address the specialized instructional needs of unemployed engineers, scientists and other high-tech professionals,” IEEE-USA President-Elect John Steadman said. “In the long term, it should focus support on programs that help financially needy students complete degrees in computer science, engineering and mathematics.”

Congress increased the H-1B visa cap in 1999, due to purported shortages of U.S. high-tech workers during the dot-com boom and in preparation for Y2K. 

“If that were true and the shortage no longer exists, then the justification for the inflated number of H-1B visa holders is moot,” said Rep. Nancy Johnson (R-Conn.), who introduced the USA Jobs Protection Act of 2003 on 24 July to help curb H-1B and L-1 visa abuses. “We have no public interest in keeping qualified American workers unemployed in order to accommodate guest workers.”

Rep. Johnson told hearing participants about a meeting she had had with some of her constituents, all of whom were unemployed information technology workers. These workers, she said, spoke to her about being replaced by cheaper, foreign workers on H-1B and L-1 visas.

“In some cases, the American worker was instructed to train the new arrival — only to be summarily dismissed and replaced by the foreign worker,” Johnson said. “If this is true, it directly contradicts the intention and spirit of our immigration laws.”

For More Information

Ron Hira’s written testimony is available at: http://www.ieeeusa.org/forum/POLICY/2003/061803.html.

IEEE-USA’s position statement is available: http://www.ieeeusa.org/forum/POSITIONS/h1b.html.

---

Chris McManes is IEEE-USA's senior marketing communications/public relations coordinator.