H-1B Visas - Good For America?
H-1B. Nothing is quite so sure to provoke feelings of rage and disgust among American technology workers than those three innocent letters. Why are our tech workers so incensed over three little letters? Well, in the aforementioned combination, they represent a visa that allows highly skilled foreign workers to come to the U.S. to fill high tech jobs that, ostensibly, American firms can't find workers for. Try telling that to the 100,000 network engineers, software developers, computer scientists and electrical engineers that are unemployed in this country. What the industries mean is that they can't find workers to fill those positions at severely depressed labor rates. A strong argument could be made that they could actually find plenty of qualified Americans to occupy the jobs in question.
After the H-1B visa cap was lowered from 110,000 to 65,000 for 2004, the sector's unemployment fell from 208,000 to 116,000 in nine key areas, according to the Department of Labor's Bureau of Labor Statistics (BLS). To make this figure even more dramatic, that decrease occurred in only two fiscal quarters. Some of this can be attributed to the sector's continuing recovery after the tech bust at the beginning of the decade, but the fact remains that there are plenty of Americans who would be happy to take these high paying jobs, if offered the chance. It is further evidenced that in 2005, an additional 65,000 technology jobs were added.
According to the GAO report on H-1B visas issued in 2003, “From March 2001 to March 2003, unemployment among highly educated individuals increased by about 400,000, resulting in 1.2 million of these individuals being unemployed. In particular, employment substantially decreased within information technology (IT) occupations, for which employers often requested H-1B workers.” The whole H-1B visa fiasco just doesn't pass the smell test at all.
As successful as the decrease in the number of H-1B visas has been to providing Americans with high paying technology jobs, the Senate caved to pressure form the high tech industry, and voted to increase the number of H-1Bs up to 115,000 as part of the immigration reform package. This is an excellent example of great lobbyists in action. The technology industry, although late to the lobbyist party, has really proved to be a quick study on how to get things done inside the beltway. Look here, Congress, we need to stem the flood of illegals across our borders as part of immigration reform, not encourage more foreign high tech workers to come here and compete for American jobs at a reduced rate.
In addition to not incentivizing U.S. companies to hire foreign workers, the U.S. must fight even harder to maintain it's competitive advantage in the world economy. As countries such as China and India develop increasing industrial and technological sophistication, this is going to be even more difficult. To further this goal, we need to reward research and development efforts conducted by U.S. firms on U.S. soil. As such, congress should make the 10% R&D tax credit permanent. This credit has been in place since 1981, but requires congress to reauthorize it every so often, or it will expire. Now is hardly the time to inhibit the research required for American companies to develop the new technologies that will sustain our economy in the future.
Innovation made this country the economic powerhouse that it is today and we need to ensure that we retain the position as the world's innovator. American industry needs great basic research as the foundation for developing the future generation of technologies and products that will power our industrial base in the future. So many different world changing innovations have come from basic research in the U.S. They include the transistor, the integrated circuit, the laser, the computer mouse, nuclear reactors, digital computers, the defibrillator, genetic engineering, the Internet (no, it wasn't Al Gore, either), Kevlar, the LCD display, the LED, frozen foods, email, MRI, fluorescent lights, the pacemaker, TV remote control, Teflon, video games, DLP imaging chips, and laser vision correction.
This is just a partial list of the life changing innovations created by U.S. firms through basic research conducted in the last 75 years. If we want this string to continue, we need to get off our collective asses and get our house in order. We need a focused plan to further our R&D efforts, and develop what will enable such dramatic success to continue. The world is not standing still, and our future economic success depends on nothing less.
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Comments
But don't H1-B's encourage investment here rather than overseas?
Posted by: Joshua Sharf | July 17, 2006 02:24 PM
Joshua,
Not really. Much of the money is sent back to family members abroad. In addition, although they are required to be paid the prevailing wage, many H-1B visa holders are paid below that. These two facts combine to actually put less investment into the US economy then if American workers were hired at prevailing wage rates. There is another Visa looming on the horizon that threatens to cause additional conflict. This is the L-1. The L-1 visa allows companies to import foreign workers to the U.S. if they are already employed by the company in foreign operations. This type of visa doesn't even give the workers the same protections that the H-1B visa does.
The fewer protections that the companies are allowed to offer mean that they can save additional money at the expense of American workers. The U.S. issued over 57,000 L-1 visas last year. To top it off, a provision in the omnibus spending bill that went into effect last year allows the U.S. government to charge the issuing company $500 per H-1B visa. This nets the U.S. government a healthy $30+ million. This seems a disincentive to reduce the number of H-1Bs.
I don't have a problem with competition and do not, in general, agree with many tenets of union and worker protection types that feel that, to a great extent, business are exploitive and out to extract every dollar they can at the worker's expense. The problems with the H-1B and other similar programs are that much of the training, knowledge, and investment provided by U.S. firms goes back to the country of origin with the workers when they leave. This helps foreign firms compete more effectively against U.S. firms in the future. In addition to this, as stated previously, the foreign workers send a large percentage of their money out of the U.S. If U.S. workers were hired for the positions where ever possible, all the training, HR investment, and dollars would remain in the U.S. to energize our economy.
Posted by: Debt Free | July 18, 2006 01:07 PM