IT workers and H-1B visas: necessary or a scam?

A New York Times article today reports on the demand for temporary professional workers from abroad, which is mostly run through the H-1B visa program. Silicon Valley is pressuring Washington to greatly expand the program.
Do these temporary hires suppress the job market prospects for U.S. professionals. And, are temporary visas for professionals, especially in information technology, mainly a way to cycle back to home countries practical expertise in American work styles, thus enabling more overseas outsourcing?
A 2011 GAO report is the source of much that follows:

How many awarded per year:

A statutory cap of 65,000, with exemptions that cause the number to swell well above that.
While the H-1B visa is not considered a permanent visa, H-1B workers can apply for extensions and pursue permanent residence in the United States. Initial petitions are those filed for a foreign national’s first-time employment as an H-1B worker and are valid for a period of up to 3 years. Generally, initial petitions are counted against the annual cap. Extensions—technically referred to as continuing employment petitions—may be filed to extend the initial petitions for up to an additional 3 years
Over the last decade, the top four countries of birth for approved H-1B workers were India, China, Canada, and the Philippines. Across all 10 years, about 64 percent of approved H-1B workers were born in these four countries, with the largest group from India
Employer not required to test U.S. worker supply:
Unlike some other temporary visa programs, the H-1B program does not require employers to provide evidence that they have first “tested” the U.S. labor market by trying to hire a U.S. worker.

Most new H-1B visas are awarded to foreigners already studying in the U.S.:

From fiscal year 2000 to fiscal year 2009, the proportion of newly approved H-1B workers that were already living in the United States increased from 43 to 62 percent. Many of these workers are likely to have been on student or another visa status. In 2000, 40 percent of approved H-1B workers (initial and extensions) possessed an advanced degree (master’s, professional, or Ph.D.), which increased to 59 percent by fiscal year 2009 (see fig. 11). One reason for this increase may be the H-1B Visa Reform Act of 2004, which allowed for an additional 20,000 approvals each year for foreign workers holding a master’s degree or higher from an American institute of higher education.

There has been an increase in the number of approved H-1B workers receiving advanced degrees from U.S. universities, as well as those who are already residing in the United States at the time of H-1B visa approval. This in turn suggests that, in general, the approved H-1B population may include more recent graduates, who are younger and more highly educated, as compared to their U.S. citizen counterparts in similar occupations. In turn, the U.S. citizen population in similar occupations may include older, more experienced workers.
Three key occupations:
The three occupations with the highest number of H-1B approvals relative to the number of U.S. workers in that occupation were (1) systems analysts, programmers, and other computer-related workers;62 (2) electrical and electronics engineers; and (3) college and university educators. For example, among systems analysts, programmers, and other computer-related workers aged 18 to 50, the number of approved H-1B petitions (initial and extensions) was 10 percent of the total stock of U.S. citizen workers in private sector jobs in this occupation in calendar year 2008
Morphing a 1952 initiative for exceptional talent to towards a more general program:
The original H-visa program, established under the Immigration and Nationality Act in 1952, authorized visas for aliens with a residence in a foreign country that the alien had no intention of abandoning, who were of distinguished merit and ability, and were coming to the United States to perform temporary service of an exceptional nature requiring such merit and ability. However, in 1990, besides removing the foreign residence requirement, the original language was replaced with language authorizing H-1B visas for aliens coming temporarily to the United States to perform services in a “specialty occupation.” A specialty occupation was defined as one that required a theoretical and practical application of a body of highly specialized knowledge, and at a minimum, a bachelor’s or higher degree in the specific specialty. This increased the pool of eligible workers to include a wider range of skill levels.
Over half (54 percent) of the workers with approved LCAs (“Labor Condition Application” or the initial H-1B application) from June 2009 through July 2010 were categorized as entry-level positions and were paid at the lowest pay grades allowed under the prevailing wage levels. This pay grade is designated for jobs needing a basic understanding of duties and the ability of the worker to perform routine tasks that require limited judgment. In comparison, 6 percent of approved applicants whose wages were reported on the LCA were paid within the top pay grade designated for workers that requires sufficient experience and a high level of independent judgment.

Transition from H-1B to permanent residence:

Since the 1990s, the law has allowed H-1B workers to pursue permanent residency in the United States and to remain in the country for an unlimited period of time while their permanent residency application is pending. At least 18% of H-1B workers apply for green cards within six years of coming to the U.S.
The role of large staffing companies:
Among the top H-1B-hiring employers—those approved for large numbers of H-1B workers—are employers that function as “staffing companies,” (i.e., employers that apply for H-1B workers but ultimately place these workers at the worksites of other employers as part of their business model, many of which also outsource work overseas).35 Some foreign-owned information technology (IT) services firms have publicly stated that their ability to provide IT services to U.S. customers depends in part on access to significant numbers of H-1B and L-1 visa workers. over the decade, less than 1 percent of all employers with approved petitions were approved to hire almost 30 percent of all H-1B workers.
One critic of H-1B visas says that “In 2012, the 10 employers receiving the largest number of H-1B visas were all in the business of outsourcing and offshoring high-tech American jobs.”
He goes on to say that there are two reasons these firms hire H-1Bs instead of Americans: 1) an H-1B worker can legally be paid less than a U.S. worker in the same occupation and locality; and 2) the H-1B worker learns the job and then rotates back to the home country and takes the work with him. That’s why the H-1B was dubbed the “Outsourcing Visa” by the former Commerce Minister of India, Kamal Nath. Rather than keeping jobs from leaving our shores, the H-1B does the opposite, by facilitating offshoring and providing employers with cheap, temporary labor – while reducing job opportunities for American high-tech workers in the process. The I-Squared Act does nothing to protect against this, while vastly expanding the size of a deeply flawed program that accelerates the offshoring of American high-tech jobs and reduces America’s future capacity to innovate.

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