5-2-00

www.dailyrecord.com


Competition from abroad


Increasing visas for high-tech workers criticized


By Douglass Crouse
Daily Record


One day in September of 1994, Linda Kilcrease received a memo from her
employer, insurance giant American International Group in Livingston,
instructing her and 129 fellow computer programmers to show up the next
day at a local hotel.


"After we were seated," she recalled, "an executive stood in front of
the room and coldly told us that the computer systems were outsourced.
We were each handed a folder of papers that detailed our 60-day notice
and severance."


Their jobs, they learned, would go to a group of foreign workers
contracted from a consulting firm: Syntel Inc. Most possessed H-1B work
visas, which the high-tech industry argues are necessary to compensate
for a shortage of American programmers.


That argument, however, now faces fresh attacks as members of Congress
peruse three competing bills that would increase the number of H-1Bs.
They don't have far to look for a precedent: A 1998 measure increased
the annual visa allotment from 65,000 to 115,000, where it stands today.


The Information Technology Association of America (ITAA) trade group,
which conducted a study recently that found 800,000 high-tech job
vacancies nationwide, insists that's not enough.


Sen. Frank Lautenberg said he supports an increase coupled with
protections for American workers.


"I would look favorably on legislation that would allow additional
high-tech workers to enter this country as along as we ensure adequate
protections for U.S. workers, including education and training," he
said.


Sen. Robert G. Torricelli voted in committee for the Hatch bill, which
calls for a step-by-step increase in visas over the next three years.
Rep. Rodney P. Frelinghuysen, R-Harding, could not be reached for
comment.


Kilcrease, who has become an outspoken critic of increasing the number
of H-1Bs, lost her health benefits and accumulated pension after being
fired. Syntel, meanwhile, was being investigated by the U.S. Department
of Labor for underpaying its foreign workers, including those at AIG.


"As soon as I got off the payroll, I started making calls and following
the investigation," said Kilcrease, a Dover resident. "For two years I
was dedicated to full-time activism," including four unsuccessful tries
to sue AIG.


The courts found that the company had done nothing illegal.


While the H-1B program is aimed at filling job vacancies in diverse
industries, high-tech companies have become the program's leading
advocates. Many find fault with their main argument, however.


"There is no discernible indicator in unemployment and wage data
consistent with a labor shortage," said John Fraser, deputy
administrator of the U.S. Department of Labor's Wage and Hour Division
in Washington.


Nonetheless, Kilcrease and others say experienced American tech workers
- citizens and naturalized residents alike - continue to lose their jobs
to poorly trained H-1B visa holders.


Kathy Nolan holds up her own case as an example.


Nolan worked for six months as a data processor at Criterion, a medical
supply company in her hometown of Riverdale. Following a change in
management, a young man from India was hired in her place, she said.


"He was a nice man but very inexperienced," she said. "After three weeks
of training him, they told me I was being replaced. Until then, I didn't
know what an H-1B was."


Department of Labor data indicate that there were 2.5 million high-tech
jobs (the category includes positions for programmers, systems analysts
and researchers) in 1999. Doing the math, the ITAA study would mean that
one-third of all high-tech positions are currently open, a conclusion
one H-1B expert called misleading.


"That the industry is spending millions, if not tens of millions, to
train U.S. workers is a clear indication that companies are doing
whatever is necessary to have the top people," ITAA Vice President
Jeffrey Lande said.


"The majority of those claimed 800,000 jobs are for technicians, not
programmers," said Norman Matloff, a computer science professor at the
University of California at Davis. "The high-tech H-1Bs are
overwhelmingly working as programmers. This is yet another instance of
the ITAA deliberately obfuscating the issue."


Few people enmeshed in the H-1B debate dispute that demand for workers
in high-tech fields is hot. A Labor Department study projects a need for
170,000 new and 30,000 replacement workers each year for the next 10
years.


Supply, Fraser said, "is where the equation gets murky."


ITAA faced a credibility slip two years ago after conceding flaws in a
study by Virginia Polytechnic Institute used to support its labor
shortage claim.


Despite its wishes for more visas, the ITAA rejects a House bill that would
remove the cap on H-1Bs altogether for the next three years. It calls
provisions to limit fraud and workplace abuses too stringent.


A recent State Department study found that 21 percent of H-1B
applications were fraudulent and 45 percent of job offers by U.S.
employers could not be verified. The Immigration and Naturalization
Service admits that it does not check up on H-1B visa holders after they
arrive here.


That needs to change, critics say. Citing published reports, they say
the H-1B program has given rise to a system of indentured servitude
wherein visa holders are often trapped at their employer-sponsor while
the INS processes their permanent residency application. Studies have
found that most visa holders hope to stay on after the six-year visa
expires.


"There's no incentive to obey the law," Kilcrease said. "Underpayment is
illegal, but penalties are light. The up-front fees (to hire visa
holders) are nothing compared to the money companies see themselves
saving by bringing in foreigners who they can pay lower wages."


In 1998, the Department of Labor reported that 80 percent of H-1B
holders made less than $50,000, below the average for American high-tech
workers.


"That essentially rebuts the notion that the program is used to recruit
the best and the brightest," Fraser said. "Our data indicate that it's
more often used to fill journeyman and even entry-level positions."


He added that static pay rates contribute to making talk of a labor shortage
tough to
swallow.


"When you look at wage growth, it's been relatively flat for the last 20
years," he said.


So-called "body shops," companies where the workforce is made up of more
than 15 percent H-1B holders, fuel much of the visa program's growth.
They include Tata Consultancy Services, based in India, and Troy,
Mich.-based Syntel, which the U.S. government fined more than $1
million for underpaying workers at AIG. Syntel later appealed the fine
and won.


Syntel's 850 H-1B visa holders today represent 60 percent of its U.S.
payroll. It runs a development center in India for 600 additional
employees who work as part of outsourcing agreements.


The company insists that it pays its visa holders according to state labor
guidelines.


"We can track all of our consultants and make sure they are paid the
prevailing wage," company spokesman Jonathan James said.


AIG officials declined to comment on the 1994 layoffs or the H-1B issue.


Several Morris County companies said that, despite conducting many
interviews, they are handing out few job offers. One human resources
specialist at DPC Cirrus, a maker of laboratory testing equipment with a
large office in Randolph, said he made only two offers after
interviewing close to 40 applicants. The company is now looking more
seriously at sponsoring H-1B visa holders.


Others, including ShareMax.com, a Parsippany-based company specialized in
online procurement services, and Plural.com, an Internet development
company with an office in Morristown, said they face little difficulty
in filling spaces. Acuent Inc. has opened its own center in Parsippany
to train current and future employees.


Yet some companies argue that they have a real need for applicants
already familiar with such programming languages as C++ or Java.


Nick Halchak, senior director/market manager at the Kforce.com
recruiting company in Parsippany, said companies in Morris County are
reluctant to retrain American programmers because of time and expense,
which he said they can avoid by hiring H-1B holders.


"For your traditional (American) worker who's worked in mainframe, it
takes more than a few weeks, and with some of the skills it takes
months," he said.


"In the meantime, someone at the managerial level has to baby-sit these
folks, and that hurts operations. (Companies) would take the risk if
they felt they would keep the best-skilled people, but they don't have
that guarantee."


U.S. programmers call such claims disingenuous, saying there are more
than enough Americans who have the skills or the ability to learn new
ones. Hiring younger workers or H-1B holders, they say, is just another
way of saving money.


"It's very easy to make a software person out of an engineer," said
Richard Tax, an engineer from Bergen County.


"It's harder the other way around. Newer software languages are created
to be easier to learn."


Tax, 65, said he has sought full-time employment for a year-and-a-half
and is working on contract in the meantime.


"Companies refuse to hire any seasoned people who are doing anything but
what they're looking for," he said. "Congress has made it too easy to
bring in cheap labor (from overseas)."


Fed up with many companies' claim that training her would take too long
and cost too much, Kilcrease took three weeks' vacation in December to
study Java, then passed the certification test shortly afterward. She
declined to reveal her current employer's identity.


"Companies wait four to five months with no programmers," she said. "If
they had begun training people back in 1994 they'd have all the Java
programmers they want."


Douglass Crouse can be reached at dcrouse@morristo.gannett.com or (973)
428-6652.