U.S. view: Shortage or no shortage? Foreign workers throw the question into turmoil

http://www.computerworld.com/home/print.nsf/all/9812078286
ComputerWorld
U.S. view: Shortage or no shortage? Foreign workers throw the question into turmoil

By Torsten Busse
12/07/98 Mention H-1B visas to Linda Kilcrease, a New Jersey-based programmer, and she sees red.

In 1994, Kilcrease and the 250-strong information systems department of insurance firm American International Group Inc. was fired and replaced with foreign workers brought in on H-1B visas by the outsourcing service Syntel Inc. The H-1B visa is a "specialty occupation" visa offered annually by the U.S. to 65,000 foreign workers. "Before we left, they made us train our replacements at our own desks," says Kilcrease, who now actively lobbies against the H-1B program.

In the U.S., the debate over the information technology labor shortage has become a very divisive issue. Throughout the year, vendors such as Sun Microsystems Inc., Intel Corp., Microsoft Corp. and their lobbying organizations have battled unions, industry associations and the U.S. government as they sought an expansion of the H-1B program. Proponents of H-1B visas argue that unless they're allowed to look across borders for engineers and programmers, the IT sector will lose its competitive edge. They would like to see the cap doubled or tied to some economic indicator such as the U.S. unemployment rate. But critics blast the labor "crisis" as a myth created by a greedy industry that wants to hire cheaper foreign workers. Many programmers, for instance, fail to see the crisis after running into highly selective hiring practices. The U.S. government, meanwhile, says the H-1B program is in need of reform. For instance, more than 80% of H-1B holders now earn salaries of less than $50,000 per year, according to John Fraser, deputy wage and hours administrator at the U.S. Department of Labor. If H-1B visas were really being issued to foreign nationals with unique skills, they would earn a lot more, he says.

A case in point is Syntel, which because of its contract with American International, was slapped with a hefty fine by the Department of Labor for paying its computer programmers from India wages 20% below the legal standard. Other H-1B critics say the number of visas is rising 10 times faster than the growth rate in IT jobs. Still others point out the low hiring rates — about 2% of all software applicants — and moderate wage increases, which stood at 7% last year.

But IT vendors maintain their demands, arguing that if they're prevented from hiring additional H-1B workers after the cap is reached — which occurred in May — the U.S. high-tech industry will suffer.

Amid a raging debate, lawmakers responded to industry's calls for action. In mid-September, Congress and the Clinton administration agreed on a compromise bill that raises the number of H-1B visas to 115,000 next year. In 2001, the number would drop to 107,500; it would return to 65,000 in 2002. The compromise bill would provide college scholarships for low-income students and job training for U.S. workers.

A final vote on the bill was unexpectedly blocked in October by Sen. Tom Harkin (D-Iowa), who said he felt there was no need for it. It was then passed as an amendment to the Omnibus Appropriations bill, which was approved by Congress and signed into law by President Clinton at the end of October. Meanwhile, organized labor and university officials say the U.S. would be better off investing more in educational programs and initiatives. "We have a skills, not a labor shortage," says Paul Anderson, an official at the Communications Workers of America in Washington.