Contra County Times
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Published Saturday, January 22, 2000


Furor over visa program rages on
Arrest of Berkeley businessman puts focus on abuses of H1-B program touted by high-tech firms
By George Avalos
TIMES STAFF WRITER

The arrest of a Berkeley businessman in connection with his alleged treatment of Indian immigrants put the spotlight Friday on the furor over the nation's immigration laws and the high-tech industry's growing use of foreign workers.

A number of high-tech companies are pressing the Clinton administration and Congress to pry open the immigration gates for foreign workers under the H1-B visa program, a kind of work permit for immigrants with highly technical skills. They say H1-B visas are necessary to help them cope with a worsening shortage of skilled technology employees.

But foes of the H1-B program question its wisdom, point to studies that suggest it's hounded by fraud, and accuse some high-tech executives of using the initiative to produce an influx of cheap labor for software products.

"There is well-known systematic abuse of the H1-B program," said Dan Stein, executive director with the Federation for American Immigration Reform, or FAIR. "What is happening now is just the tip of the iceberg. As immigration flows increase, there is greater opportunity for abuse."

FAIR officials believe the arrest of a Berkeley man, Lakireddy Bali Reddy, on charges that he imported teenage girls from India for sex, in part by allegedly getting an Indian immigrant to pose as the father of two of them in exchange for an H1-B visa, underscores the potential for abuse of the nation's existing immigration rules. In the Reddy case, authorities say the Indian immigrant who allegedly posed as the father was supposed to work for a high-tech company managed by Reddy's son. Instead, authorities charge, the man worked at a restaurant owned by Reddy.

A 1996 study by the Department of Labor's Inspector General provides some support for FAIR's claims. The agency found that the H1-B program "is being manipulated beyond its intent of providing employers the best and brightest" workers from the global market while protecting wages of U.S. workers.

The inspector general also determined that "some employers use alien labor to reduce payroll costs either by paying less than the prevailing wage to their alien employees or treating these aliens as independent contractors, thereby avoiding related payroll and administrative costs." Some companies act as "job shops whose business is to provide H1-B alien contract labor to other employers."

The federal agency also found that 19 percent of the workers in the program associated with the H1-B visas were paid below the wages specified through the program. About 75 percent worked for employers who failed to adequately document the wages were set at the proper level.

"I suspect the technology industry wants to take advantage of lower-priced foreign labor just like many other industries do," said Ira Mehlman, a spokesman for FAIR.

Yet representatives of the high-tech industry insist they must battle a dire shortage of skilled workers, especially computer programmers.

"We should be able to alleviate some of this terrible problem by having access to skilled foreign workers," said Harris Miller, president of the Arlington, Va.-based Information Technology Association of America, which has lobbied fervently for an easing of the current caps on H1-B visas. The caps were increased to 115,000 a year in late 1998, up from the previous limit of 65,000. High-tech companies and their backers hope to raise the ceiling again.

"It's so easy to move high-tech jobs abroad," Miller said. "If we don't allow a certain number of foreign workers to come into the United States, then we are allowing more of that work to go abroad."

A university researcher in California, though, questions the industry's claim that it is unable to find skilled technology employees.

"There is no shortage of computer programmers," said Norman Matloff, a Walnut Creek resident who is a computer sciences professor at UC-Davis. "Insincere employers are simply using the skills issue to save money. They don't want to hire older workers in their peak earning years and they do want to hire cheaper foreign workers."

In a study that he updated in December, Matloff cited surveys of U.S. technology companies that found that some employers "are not willing to fill (open) jobs with most programmers who apply for them, as can be seen from the extremely low percentages of applicants whom they actually hire."

A survey found that high-tech companies are picky about whom they hire. Of 16 companies surveyed, including Microsoft Corp., none hired more than 5 percent of the applicants for software jobs. About one-third hired 1 percent or fewer of the applicants for the software openings.

"The low offer rates tell the story," Matloff said.

These problems could ultimately undermine the U.S. economy, Matloff warned. That's because youths who have been exposed to a drumbeat of publicity about the go-go technology and dot-com economy may discover they can't find jobs in the technology industry.

"This is one of the most demoralizing issues our economy is facing," Matloff said. "It's a terrible thing when the most promising field for our young people is being greatly interfered with by the H1-B program."

George Avalos covers technology, telecommunications and the Internet. Reach him at 925-977-8477 or gavalos@cctimes.com.