High Noon for H-1B Visas

by George F. McClure

On 1 October, the 195,000 temporary visa quota that has been in effect for the past three years will revert to the original level of 65,000 visas per year. H-1B visas are valid for three years and can be renewed for an additional three years. In October, nearly a million guest workers could hold H-1B visas in the United States.

This quota change comes at a time when the U.S. Bureau of Labor Statistics reports that first quarter unemployment stands at six percent overall nationally; at seven percent for electronics engineers; 7.5 percent for computer software engineers; and 6.5 percent for computer hardware engineers. Even so, some business interests continue to beat the drums that we are in the midst of an engineering shortage.

How Did We Get Here?

In 1990, Congress responded to a spurious prediction of impending shortages of scientists and engineers by reforming immigration law and creating the H-1B visa program. At the time, this program provided for 65,000 guest workers per year to enter the United States on three-year visas, which they could renew for another three years.

Soon after, demand for H-1B guest workers increased. In response, Congress increased the H-1B visa quota, first to 115,000 per fiscal year in 1999 and then to 195,000 per year for FY2001 through FY2003. Employers were filling the quotas annually between March and May, and evidence suggests that poor coordination resulted in the actual number of visas issued in between 1998 and 2000 going beyond the quotas.

The Employment Picture Has Changed

The H-1B quota increases came at the end of the Cold War, when many U.S. defense-related businesses that had once relied heavily on engineering talent were downsizing, leading to many layoffs of U.S. scientists and engineers. To make matters worse, the stagnant economy has reduced Information Technology (IT) spending, which has thrown thousands of technology professionals out of work. According to a recent survey, the IT work force in the United States shrank by 528,000 positions last year alone. Many of those are highly experienced professionals, whose skills are now being wasted, as they move to stop-gap positions outside their field.

No Verification Required

Except for companies employing more than 15 percent H-1Bs — the 100 or 200 so-called H-1B-dependent firms — companies do not have to verify that they cannot fill a job with a U.S. worker before filing an H-1B application. The H-1B-dependent firms must attest that they have not laid off any U.S. workers in the previous 90 days and will not lay off any in the 90 days after they submit a Labor Condition Attestation that supports sponsoring H-1B workers. Conversely, non-H-1B-dependent companies do not have to search for U.S. workers first and are not prohibited from laying off U.S. workers and replacing them with H-1Bs.

Further, while H-1B visas are intended for jobs that require degreed training and should be issued to those with baccalaureate degrees or better, exceptions are made for “equivalent experience.” As a general practice, however, no one verifies applicants’ educational credentials or certifies that the schools issuing those credentials are equivalent to accredited U.S. schools.

What About Training for Displaced Workers?

The American Competitiveness and Workforce Improvement Act of 1998 (ACWIA) imposed a $500 fee-per-new-H-1B visa granted for training displaced American workers when the cap increased to 115,000 per year. The American Competitiveness in the 21st Century Act, signed by President Bush on 17 October 2000, increased the fee to $1,000 per visa. But this Act also exempted foreign researchers for university laboratories and non-profits from the quota, and retroactively increased the caps on H-1B visas from fiscal years 1999 and 2000, to match the number of petitions approved in those years.

The training funds accrued from the H-1B visas now amount to some $200 million. But because of the way the U.S. Department of Labor’s Education and Training Administration administers the funds, they have been mostly unavailable for retraining engineers.

Lower Salaries Come at Taxpayers’ Expense

Economist and Nobel Prize winner Milton Freidman has pointed out that lower salaries paid to H-1B workers at U.S. companies amount to a subsidy paid by the U. S. taxpayer to the firms that reduce their labor costs this way, not to mention reducing the amount of taxable wages for which incomes tax can be collected. In addition, foreign students studying at U.S. colleges and universities receive a subsidy amounting to the difference between the tuition charged and the actual cost to provide the education. At state colleges, state taxpayers provide this subsidy. 

Significant differences exist between permanent immigration — the historical path for bringing in the best and brightest talent from other countries — and temporary admissions with work visas. Permanent immigration has helped advance electrotechnology, math and science in the United States immeasurably; consider the work of such giants as Einstein, Fermi, Sarnoff, Slizard, Steinmetz, Teller, and Tesla, who came to America through the standard, permanent immigration process.

For More Information

This year, IEEE-USA’s Board approved a position stating that IEEE-USA strongly supports limiting the use of the H-1B visa at an annual level not to exceed 65,000, with the income from fees for this program to support training of displaced degreed U.S. professional workers. The position and supporting background are available at http://www.ieeeusa.org/forum/POSITIONS/h1b.html 

IEEE-USA is organizing an Engineering Careers Congressional Visits Day to be held in July that will carry the message to policymakers that the H-1B cap should not be raised from the 65,000 in effect for FY2004 and that better training opportunities and better career safeguards should be provided for U.S. engineers affected by H-1Bs, to avoid a domestic talent exodus that could prove disastrous to U.S. technological leadership in the future. For more information, go to http://www.ieeeusa.org/forum/H1Bcvd/index.html

The U.S. General Accounting Office has been tasked to survey the extent to which H-1B workers have displaced U.S. citizen and permanent resident workers. The report of that survey is expected in September — just before the H-1B cap falls. 

See former U.S. Secretary of Labor Robert B. Reich’s related comments.

The U.S. Department of Labor’s Education and Training Administration’s procedures for grant applications are available at www.immigration.com/newsletter/h1btechnicalgrant.html

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George F. McClure is chair of IEEE-USA’s Career and Workforce Policy Committee and IEEE-USA's Technology Policy Editor.