Journal of Commerce
April 11, 2000

Face Up to the Problems With H-1B Visas
James R. Edwards, Jr.


It*s hard to disagree with Alan Greenspan because he*s right on so many
things, but pouring in thousands more temporary foreign skilled workers
isn*t a good idea.


The Federal Reserve chairman has expressed support for upping the annual
quota on H-1B visas * from 115,000 to about 200,000 per year. The
high-tech industry especially favors this approach to getting skilled
workers. And industry is making a full-court press in Congress this
election year to nearly double the quota for at least the next three
years.


Several of the pending bills contain loopholes exempting H-1Bs working
at education or research institutions or recently earning a math or
science advanced degree. Those exceptions would further boost the quota
to about 325,000 H-1Bs annually.


And several bills grant a disturbing exception for visaholders here
whose visas have expired and who are waiting to become permanent
immigrants. Given that nearly half of illegal immigration stems from
overstaying a temporary visa, this exception winks at such illegality
and creates a growth opportunity for illegal immigration.


However, all this fervor for more H-1Bs overlooks the fact that the
program suffers from serious flaws. First, H-1Bs are the equivalent of
indentured servitude. Visaholders must stay in the exact same job with
the same firm the entire three-year term of the visa, which may be
renewed for another three years.


These workers cannot job-hunt, plus they frequently ask the employer to
sponsor them as permanent immigrants. A compliant, stuck employee is in
no position to make waves, either about wages or working conditions.


Second, companies are supposed to pay H-1Bs the prevailing wage. But
surveys find wages vary widely. And the Department of Labor says no
appreciable rise in computer programmer wages has occurred in recent
years, while demand for H-1B visas and huge layoffs have risen.


Flooding in hundreds of thousands more foreign temp workers as
indentured servants only depresses the wages of native-born computer
programmers or pushes wages below what a qualified American could afford
to accept.


Third, the H-1B program is highly vulnerable to fraud and abuse. The
State Department and INS found a fifth of visa applications in a
province of India to be fraudulent, while the authenticity of nearly
half the applications could not be verified. In China, sham businesses
aid Chinese citizens to enter the United States on fraudulent grounds.
And businesses can lay off an American, then turn around and hire a
temporary foreign replacement worker.


There*s no guarantee tech firms are getting the world*s *brightest and
best.* Firms don*t verify claims of H-1B workers* education and work
experience. Thus, H-1B largely admits foreign workers with average
skills who badly want to work in America.


Fourth, the H-1B program stimulates allegations of a labor shortage in
high-tech fields. However, by writing programmer job descriptions so
narrowly, tech companies can electronically skim thousands of resumes of
highly capable native-born programmers, yet still not come up with an
exact fit. In this way, as University of California, Davis computer
science professor Norman Matloff points out, the asserted *labor
shortage* is permanent.


Experienced American computer scientists and engineers, as well as
recent graduates, may have training in such programming languages as
Java, but tech firms insist on Java work experience. This ruse blows a
hole in the oft-repeated canard that higher and higher H-1B caps are
only a short-term solution, with retraining of American workers the
long-term solution. Interestingly, many of the H-1B visaholders have no
more than Java training, falsely claiming work experience, and actually
developing this skill on the job, as most American Java-trained
programmers could do.


As H-1B*s popularity has exploded, permanent employment visas have
languished. Only about half the employment immigration quota has been
filled over the past decade. Interestingly, permanent worker visas
require employers first to have sought American workers * protection not
required under H-1B.


Primarily, the H-1B program serves as a back door to employment-based
immigration. The permanent immigration system is biased against
individuals with skills and education. Two-thirds of the roughly one
million permanent immigrants each year enter in the family-based
category. Only about 77,000 immigrants came in the employment category
last year, including the worker*s immediate family members; the
employment immigration quota is 140,000 annually.


Rather than perpetuating a broken system, Congress should reform the
permanent immigration system. Admission should be based on an
individual*s work skills, education level, literacy and English
proficiency, with having distant family members here just one factor
considered. This approach would get the priorities right.


In the short term, any increase in H-1Bs must include tough anti-fraud
measures and effective protections for native-born programmers.
Importing cheap foreign labor is wrong, whether of skilled or unskilled,
if it displaces American workers.


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James R. Edwards, Jr., co-author of The Congressional Politics of
Immigration Reform, is an adjunct fellow with the Hudson Institute.