[Here the shortage is 400,000]

SF Examiner

Visa rule's effect on 2000 election
Mark Helm
EXAMINER WASHINGTON BUREAU July 11, 1999

WASHINGTON - Rekindling a debate that could spread to the presidential
race, Sen. Phil Gramm, R-Texas, plans to introduce legislation this
week that would expand the number of skilled foreign workers allowed
to get jobs in this country.

Gramm's proposal has drawn cheers from the high-tech industry and boos
from labor unions. Both groups are pivotal to the presidential hopes
of Vice President Al Gore and Texas Gov. George W. Bush.

Each has courted high-tech leaders, hoping to gain their blessings as
the candidate who understands the modern economy and to reap millions
of dollars in campaign contributions.

But Gore also must avoid angering one of his core constituencies -
organized labor, which views any foreign workers increase as a sellout
of American workers.

So far, Gore has not stated his position on Gramm's measure. Nor has
President Clinton, who supported an increase last year.

Gore spokesman Alejandro Cabrera says, "While we recognize the need
for these workers, we feel the country needs to invest in our workers
at home to ensure that the high-tech industry's future is secure."

However, Bush, speaking to computer industry leaders in Palo Alto
earlier this month, favored boosting the number of immigrants under
the visa category known as H1-B, although he did not say how many more
should be allowed in the country.

"The limit on H1-B visas should be raised, Mr. President and Mr. Vice
President," Bush said.

Congress established the visa program in 1990 so that high-tech
companies would be able to quickly bring in foreign workers with
special skills. Lawmakers placed the program under the Immigration and
Naturalization Service and set the number of H1-B visas at 65,000.

For seven years, the 65,000-worker quota was not met. But as the
economy boomed and high-tech companies expanded, computer firms,
saying they didn't have enough skilled workers, began to recruit
overseas more intensively. As a result, the annual H1-B quota was met
before the 1998 fiscal year ended on Sept. 30.

Last year, after heavy lobbying by high-tech leaders, the Clinton
administration, which had initially opposed increasing the number of
H1-Bs, and Congress agreed to expand the program.

The new law lifted the 65,000 cap on H1-Bs, allowing 115,000 such
visas a year in fiscal 1999 and 2000 and 107,500 in 2001. The cap
would revert to 65,000 in fiscal 2002.

But despite the quota increase, the fiscal 1999 cap was reached last
month. As a result, high-tech firms will have to wait three months -
until Oct. 1 - before they can again apply for H1-B visas.

Gramm's proposal, which most Democrats are expected to oppose, would
raise the cap to 200,000 and make that number permanent.

"These workers are needed to ensure the growth of America's most
important industries," Gramm says. "High-tech, highly skilled people
create jobs. They don't take jobs away from Americans."

Workers can stay six years

H1-B visa holders are largely employed in the computer and health care
industries. They are allowed to stay in the United States up to six
years and often remain in the country permanently by applying for
citizenship.

"Taking in a worker under the H1-B program is really a last resort
used by companies when there simply isn't an American who has the
special skills needed to work on a project," says John Palafoutas,
spokesman for the American Electronics Association, a Washington-based
lobbying group.

He says the loss of H1-Bs until October would force many firms to put
projects on hold, which could allow foreign competitors to get their
products to market first.

"Often a few weeks, much less a few months, means the difference
between being first and being second, and in the high-tech industry
being first usually means winning," Palafoutas said.

In January, the META Group, a computer consulting firm in Stamford,
Conn., released a study that showed a shortage of 400,000 electrical
engineers and computer programmers in the United States. In addition,
the Commerce Department estimated last year that the information
technology industry will need an additional 1.3 million skilled
workers over the next decade.

Critics of the H1-B program agree that a shortage of highly skilled
workers exists - although some say the number is 100,000, not 400,000.
But they say the gap can be filled by retraining American engineers
and computer programmers.

"Basically, these companies are looking for cheap labor overseas so
that they don't have to spend money on educating older U.S. workers,"
says Paul Kostek, president of the Institute of Electrical and
Electronics Engineers, a Washington-based union with 330,000 members.

Worse in the long run

Kostek says that bringing in foreign workers makes the shortage worse
in the long run because they hold down wages in the computer
engineering field.

"If we allowed wages to rise quickly instead of bringing in cheap
foreign labor, you'd see (American) people flooding into computer
science programs at universities around the country," he argues.

But Palafoutas says that "a lot of these H1-Bs are Ph.D.s who have
been working in one specific area for six or seven years; so it's not
something a company can just teach someone else in six months."

Labor groups insist that the H1-B program has been widely abused. Far
from having exceptional skills, most computer workers brought in under
the visas are average programmers, they contend. Labor groups say that
because the H1-Bs are beholden to the company that sponsors them, they
often are overworked and underpaid.

Under the program, visa holders can work only for the firm that
applied for their H1-B. In addition, they must rely on their sponsor
firms to process the paperwork needed to secure a green card, or work
permit for immigrants, which eventually can lead to permanent
citizenship.

"Basically, these people are indentured servants, who serve out
six-year terms," Kostek says.