http://www.redherring.com/mag/issue80/mag-high-80.html

High Tech's Indentured Servants
As Silicon Valley prospers, foreign workers are trapped in a tricky
waiting game.
By Pham-Duy D. Nguyen
From the July 2000 issue

In the 1600s, plantation owners in America routinely sent to England
for workers to plow their fields. As many as three-quarters of the
immigrants landing in the colonies were servants indentured to the
sponsors who paid their passage. Although the practice was officially
outlawed in 1885, indentured servitude has always thrived in the shady
backwaters of the American economy. Even today, Chinese workers are
smuggled into the U.S. illegally on container ships to sew khakis in
sweatshops or to bus tables in Chinatown.

A variation on this theme is rippling through Silicon Valley, where
thousands of foreign workers bearing three-year H-1B visas write
computer code, do biotech research, develop marketing plans -- and
dream of the day when they can take advantage of the boundless
opportunity that has produced riches for so many tech workers in the
Valley.

At first glance, foreign high-tech workers seem to have little about
which to complain. They arrive in the United States on jets. As a
group, they earn more money than the average American and sometimes
more money than their countrymen at home will see in a lifetime. They
never experience the kind of physical imprisonment endured by some
illegal immigrants, like the Thai garment workers in Los Angeles who
were kept behind barbed wire fences.

Nevertheless, many of tech's indentured servants are emotionally
enslaved and intellectually trapped. Their lives and careers are
suspended by an inefficient system that promises them America, keeps
them waiting for years, and then sends them back to their countries of
origin because it has made the same promise to too many people.

Take the Sundars, an Indian couple who work at Intel (Nasdaq: INTC).
Their green cards, which would grant them permanent residency, were
promised nearly a year ago. But their application is stalled -- one of
1,045,000 green card applications stuck in a backlog at the
Immigration and Naturalization Service. Meanwhile, Mr. Sundar's visa
is due to expire in three months. He and his wife want to have a baby,
but Mr. Sundar says they should wait because he might not be in the
United States for long. Given the uncertainty, they're reluctant to
make even the simplest plans. "I don't buy rose bushes because I don't
know if I'll be here to see them bloom in three months," says Mrs.
Sundar.

The problem for foreign workers is not the temporary H-1B visa itself,
which is granted for three years and is renewable for only three more.
Workers may switch jobs and companies at will while they're on the
visa, as long as their prospective employer will sponsor it. (A
transfer usually takes up to four months.) The problems begin when a
worker applies for a green card, as more than half of H-1B holders
eventually do.

Under federal law, green card applicants must stay in the same job at
the same company throughout the application process. Workers who
switch jobs risk having to start their application over; in effect
being sent to the back of the line, like impatient children who refuse
to wait their turn. The average wait for a green card is 33 months,
according to the INS. But for H-1B holders the wait can last even
longer. About 40 percent of green card applicants are H-1B workers,
but fewer than 20 percent of green cards granted each year are
allotted to H-1Bs. And if a worker's H-1B expires before their green
card comes through, they must leave the United States for at least a
year before returning and trying again.

The story of one 29-year-old software engineer illustrates the
bureaucratic trap. He came to the U.S. from Suryapet, in southern
India. In 1997, a computer consulting company in Chicago sponsored his
H-1B visa and placed him in Wisconsin. During his third year in the
United States, he looked for a job that would lead to a green card.
After reviewing offers from four companies, he settled on Oracle
(Nasdaq: ORCL), in Redwood Shores, California. He reasoned that an
established corporation would not, like some startups, go kaput while
his green card application was pending.

But soon after arriving in Silicon Valley, the young engineer found
that his salary, "the going rate for programmers," did not go far. He
declined to say how much he earned, but at the time, the average
programmer's salary was $60,000 to $80,000 a year, or about $5,000 to
$6,700 a month. After taxes, he paid $1,500 a month to rent the
one-bedroom apartment that he shared with his wife in Foster City,
near Oracle's headquarters. He spent $600 a month for his Honda Accord
and $200 for car insurance. By the end of each month, he could barely
save $200 to send to his aging parents in India.

All this took place in a climate of staggering economic growth --
growth fueled in part by the labor of skilled foreign workers. The
engineer received offers from startups with stock options and
rocketing wages. He saw American colleagues jump to new jobs and grow
rich. But he had to say no.

Of course, not many Americans would scoff at the decision to stay in a
secure, well-paying job. But in Silicon Valley -- where it's not
uncommon for employees to stay at jobs for only a year, the time it
takes to be vested in one-quarter of a startup's stock -- three years
can seem like a lifetime of missed opportunities.

According to the INS, some 420,000 people living in the United States
hold H-1Bs. That number is expected to grow to 710,000 by 2002. The
visa is granted to professionals -- notably computer programmers,
scientists, and academics -- whose skills are desperately needed in
this country. According to the Information Technology Association of
America, U.S. companies reported in April that they want to hire 1.6
million IT workers in the next 12 months. At best, only half of those
jobs will be filled, due to a lack of qualified candidates.

Unemployment for high-tech personnel in Silicon Valley was 2.1 percent
in March, according to the U.S. Department of Labor. Attracting
workers from abroad seems to be the only way to begin to meet the
demand. "It's not our first choice to hire anyone with an H-1B. But we
need people immediately," says Maggie Fong, chief financial officer of
Uniscape, a Redwood Shores, California-based applications service
provider that enables companies to do business online in 42 languages.

Some companies, like Intel, hire foreign workers with the goal of
keeping them permanently. In 1999, the company hired about 300 workers
on H-1B visas. It is company policy to hire people already in the
United States on student visas and then convert those into H-1Bs.
Intel encourages those employees to apply for permanent residency.
"The notion that these people are cheap and temporary is crazy," says
Tracy Koon, Intel's director of corporate affairs. "Mostly they come
to us from graduate programs at the best American universities. We
intend to keep them long-term."

Most companies, however, have tacitly accepted an employee
merry-go-round. When one group's six years are up, they go home and a
new batch is hired to replace them. Silicon Valley corporations have
long pressured politicians to increase the H-1B quotas; currently
115,000 are granted per year. Congress is considering three bills that
would increase quotas or lift them altogether. But none of the
proposed legislation addresses the plight of workers who are already
here.

In early May, a group of high-tech heavy hitters, including Steve
Wozniak and Esther Dyson; Linus Torvalds, a Finnish citizen awaiting
his green card; and venture capitalist Vinod Khosla wrote to Congress,
saying that all the bills would, if passed, make the green-card
backlog worse. The letter urged Congress to approve conditional green
cards for foreign workers instead of simply granting more temporary
visas.

It is hardly surprising that so many workers who come to the United
States want to stay. That is, after all, the story of America. But
some legislators say that workers on H-1Bs must understand that coming
here to work does not necessarily mean they can live here forever.
"They want to marry their career to their immigration goals, and the
INS doesn't work that way," says Casey Beyer, chief of staff to
Congressman Tom Campbell (R: California), whose district includes
Silicon Valley and who is cosponsoring a bill to lift the H-1B
application cap.

But how do you tell that to a worker who came here and found a kind of
freedom unimaginable in her homeland?

That's the story of a Brazilian woman living in San Jose. In 1995, she
came to the United States to join her husband, who was studying at San
Jose State University. Since then, she found a job marketing software,
divorced her husband, and came out as a lesbian. "I blend in very well
here as an individual and that's what I treasure," she said. "I don't
want to go back to a society that's not accepting of gays."

She works up to 60 hours a week for $38,000 a year plus a few stock
options. Another company courted her, promising $50,000 a year and
more stock options. She was just starting her green card application,
and losing her place in line was no big deal. She accepted the offer,
only to have it rescinded when the company realized it would take four
months to transfer her H-1B visa.

So she stayed at her original job. "I don't feel like I can relax for
any reason," she says. "I do a good job and I get paid for it, but I
can get replaced. It's very stressful."

The situation for foreign workers is bound to grow worse.
Historically, more than 50 percent of H-1B workers have applied for
permanent residency. But as the backlog grows larger, only 15 percent
can expect to receive a green card. And the INS still accepts green
card applications despite the backlog.

"It's difficult to cope with the large amount of work, but basically,
we have to," says INS spokesperson Eyleen Schmidt. "Under federal law
and INS regulations, anyone who qualifies can apply, so we have to
accept their applications."

Of course, not all H-1B workers want to remain in the United States
permanently. Recently, at an Indian lunch buffet in downtown San
Mateo, California, six newly arrived Indian computer programmers
sneered at the idea that foreign workers like them could be viewed as
victims or indentured servants. The average age at the table was 26;
only one was a husband and father.

They all graduated from a technology college, worked two years in
India, and then answered an ad in a newspaper for computer
consultants. At the first interview, they were given a skills test.
Once they passed, they had two telephone interviews from the United
States -- first with an Indian, then with an American to gauge their
English. But the phone connection was so poor, they say, it didn't
matter if their English was awful, because most of the conversation
was unintelligible. But they could write code, so they were sent
airplane tickets.

Mahesh Pasupuleti, 25, is the only one of the six who has been offered
a permanent job at the B2B print startup where they all work as
contractors. When he arrived in August 1999, the contracting firm
agreed to pay him a $50,000 annual salary. Six months later, Mr.
Pasupuleti was given a $10,000 raise. The startup recently hired him
at $85,000 -- plus stock options.

But Mr. Pasupuleti doesn't harbor fantasies of spending the rest of
his life in the United States. He plans to stay for the six-year term
of his H-1B visa and then return to India. He regards his time in the
United States as an extended tour of a foreign land -- and a chance to
claim his own share of the Silicon Valley gold rush. Until U.S.
immigration laws change drastically, that's about all a foreign worker
can truly expect.

Pham-Duy D. Nguyen is a writer based in Palo Alto, California. Write
to letters@redherring.com.