Lower H-1B quota seen as too little, too late

Date: Tuesday, October 14, 2003 9:18 AM

JOB DESTRUCTION NEWSLETTER

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http://search400.techtarget.com/originalContent/0,289142,sid3_gci931754,00.html

Lower H-1B quota seen as too little, too late

By Kate Evans-Correia, Search400.com Senior News Editor
13 Oct 2003 | Search400.com

Congress may have let the H-1B visa limit drop back to 65,000, but many
within the IT industry say that the action is like rearranging deck
furniture on the Titanic. Why bother?

"It's certainly a move in the right direction," said Rick Nashleanas,
principal and founder of the IT headhunter firm Monarch Technology
Management LLC, based in Colorado Springs, Colo. "But it's not going to
have the impact that was hoped for. People were looking for a way to
hire [American] again. It's OK, but it's not helping in terms of
preventing the technical jobs from going overseas. It's a finger in the
dike."

Mike Blain, who belongs to a union of high-tech workers in Seattle
that's lobbying for H-1B visa reform, said his organization supports
the lower limit. But he added that the lower limit doesn't change the
fact that the program is riddled with loopholes.

"We're still calling for reform in the program, because it's still
fraught with abuse and fraud," he said.

Labor shortage or cheap help?

Created by Congress in 1990 to help alleviate the shortage of IT
workers in the U.S., the H-1B visa program originally allowed 65,000
foreign workers to enter the country on three-year visas with the
possibility of three-year extensions. In October 2000, under pressure
by groups such as the Information Technology Association of America
(ITAA) -- which is seen as working in the interest of companies such as
IBM and Microsoft -- Congress upped the cap, saying that 195,000 H-1B
visas could be issued annually. The measure was temporary; it remained
in effect until this month.

Now, instead of keeping the cap at 195,000, which it could have done,
Congress has let the limit fall back to 65,000.

Lobbyist groups had gotten the H-1B visa program instituted and the
limit raised by arguing there was a shortage of skilled IT workers. But
high-tech labor experts, who saw the visa program as nothing more than
a way for the Microsofts and the Intels of the world to get their hands
on cheap labor, scorned that position. The program continues to be a
source of controversy among the IT work force.

"My contention is that, from fairly early on, it became more and more
apparent that it was never about a skills shortage -- it was about
cheap labor," said Nate Viall, president of Nate Viall and Associates,
a Des Moines, Iowa-based iSeries research and recruiting firm. "It
wasn't that we didn't have technical staff to do C++ or Visual Basic.
It was that we didn't have people with degrees and three years'
experience with Java to work in San Jose for $25,000 -- that was the
shortage. The point is, the fact that they're still using H-1B when
there's all [these] bodies out there just reinforces that it's about
cheap labor and not shortages."

But who can argue for high limits now, with the high rate of
unemployment among IT professionals?

According to the Bureau of Labor Statistics, there are more than
200,000 U.S. workers who fall into the engineering and computer job
sectors that are out of work. The unemployment rate hovers at about 6%.

No quick fix

The fact is, Nashleanas said, the real drain in U.S. jobs now isn't the
result of H-1B visas -- it's from shipping jobs overseas. The obvious
signs of a problem simply forced Congress into action.

"Congress knows there's a problem, but there's no good way to handle
the outsourcing issue," he said. "Here's something they could do that,
to its constituents, looks like they're doing something to alleviate
the situation."

Even the ITAA, which lobbied ferociously to get the limit raised to
195,000, didn't seem much bothered by the fact that the limit was
allowed to drop -- probably because the number of H-1B applications has
dropped significantly during the past two years.

"The situation reflects what the job market reflects," said ITAA
spokesman Bob Cohen. "The demand has dropped way off in the past two
years -- in a perfect storm of factors."

Reform necessary

Hector M. Rosario, a programmer analyst with the Clark County
Recorder's Office in Las Vegas, questions the stated motive behind the
formation of the H-1B visa program and doubts that lowering the number
of visas will actually help U.S. workers.

Rosario said that, in theory, reducing the number of H-1B visas should
open up more jobs for U.S. workers as the economy picks up. But Rosario
wonders whether the industry is willing to hire back Americans not only
at higher wages, but also to pay for training them in new technologies.

"Unless the government gives industry an incentive to hire and train
us, I don't see industry doing this out of the kindness of their
hearts," he said. "Placing a limit is fine, but unless our government
sweetens the pie, there are no guarantees that more American jobs will
be created by this legislation."

Senior systems analyst Joseph LaFauci said that the fact that the limit
has been lowered is a good sign. But as long as businesses are allowed
to abuse outsourcing practices, lowering the number of visas really
won't accomplish anything.

"Until I see something that tells me that companies are given
incentives not to continue to send jobs overseas," LaFauci said, "the
lower H-1B visa limit is almost a token."

If there is a rise in IT hiring, few believe it will be because of the
lower visa limit. It will simply be because the economy has picked up.

"It'll be more a function of the economy and improvements in job
hiring," Viall said.

Still, Viall said, he expects groups like the ITAA to call for an
increase to the H-1B visa cap this spring.

"In all likelihood, they'll run out of slots," Viall said.

Another factor is that the medical and teaching professions have
discovered the H-1B visa program and have started to bring in workers
from overseas, and they'll be taking up some of those 65,000 slots.
"This isn't just about IT anymore," Viall said.

ITAA's Cohen wouldn't say whether his organization has plans to lobby
for higher limits next year, but he didn't rule it out.

"We're going to wait and see what happens with the economy," Cohen
said.

Blain said that, in the meantime, his organization will continue to
seek reform of the H-1B visa program. The group is working for better
enforcement of the program's requirements. The group is also calling
for rules that would require businesses to wait at least 90 days before
replacing a laid-off worker with an H-1B visa worker.

FOR MORE INFORMATION

Let us know what you think about the story; e-mail: Kate Evans-Correia,
Senior News Editor.

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