Will Drop in Work Visas Really Help U.S. Tech Force?

While politicians call the recent drop in the number of H-1B visas allowed this coming year a 'victory for American workers,' some IT workers and industry analysts say it's too little, too late to help an ailing tech workforce.
Politicians are calling the recent drop in the number of H-1B visas allowed this coming year as a "victory for American workers," but some IT workers and industry analysts say it's too little, too late to help an ailing IT workforce.

But the head of a trade organization representing many of the companies that hire foreign IT workers using H-1B visas says the idea that American workers are being hurt or even affected by them is simply "a myth."

H1-B and, more recently, L-1 visas have become more than a hot topic in the high-tech industry. They've become a battle cry in a field that has been devastated in the last three years by the bursting of the dot com bubble and a sagging economy. Hundreds of thousands of IT workers have been laid off since the height of tech prosperity back in 1999. Some have gotten new jobs. Some have not. Some are working whatever jobs they can at whatever pay rate they can get.

"There's a significant amount of movement and uncertainty in IT professionals today,'' says Diane Morello, vice president of research at Gartner Inc., an industry analyst firm based in Stamford, Conn. "Based on what I've seen, there are a number of unemployed but a greater number of underemployed working at a significantly lower pay rate.

"I think American workers are feeling the pinch right now," Morello adds. "And I think it will intensify over the next year or so."

In great part to alleviate some of that pain, the U.S. Congress last week allowed the cap on the number of H-1B visas allowed to drop from 195,000 to 65,000. H-1B visas allow foreign workers to take temporary jobs in the United States. The cap was raised during the dot com boom to help U.S. companies fill a glut of job openings.

However, some industry watchers and tech workers say visas are being used to bring in foreigners who will work for less pay than their American counterparts.

U.S. Reps. Nancy Johnson (R-Conn.) and Rob Simmons (R-Conn.) said the scheduled lowering of the cap is a great boon for American workers.

"Because of inadequate domestic worker protections, H-1B visa use by domestic firms is forcing American IT professionals out of work," they said in a joint statement. "Fewer available H-1B visas will help level the playing field for American workers."

But Dr. Norman Matloff, professor of computer science at the University of California, Davis, says this move will not be enough to level the playing field.

"It will not be helpful, at least for the present time," says Matloff. "Right now there are far fewer than 65,000 new job openings in the field per year, so a cap of 65,000 doesn't have any effect. Most new job openings in the field are going to H-1Bs and L-1s."

Matloff says the visas are keeping American IT workers unemployed and underemployed.

And in the past several years, there have been a lot of IT workers joining the ranks of the unemployed.

There were 47,998 job cuts announced in the high-tech industry in the third quarter of this year, bringing the 2003 total so far to 145,997, according to a new report from Challenger, Gray & Christmas Inc., an international outplacement firm based in Chicago. Last year's total of IT job losses was approximately 400,000. High-tech job losses have been slowing down. This year tech jobs accounted for only 17% of the 872,080 jobs lost so far this year. In 2002, one in three layoffs came in the high-tech field.

John Challenger, president of the outplacement firm, says he hopes the slowdown in layoffs means job creation is on its way, but he hasn't started to see it yet.

Harris Miller, president of the Information Technology Association of America, calls the IT employment climate "challenging" right now but says he sees positive signs for it to pick up next year. The ITAA is a trade organization representing high-tech companies like IBM, Intel Corp. and Hewlett-Packard -- all of whom hire H-1B visa workers.

And Miller says the number of H-1B visa workers coming into the U.S. is not hurting the national technology field.

"No. I think that's always been a bit of a myth. The largest number came in 1999 and 2000 when unemployment in IT in the US was virtually zero," says Miller. "As the number of unemployed workers increased, the number of H-1B visas decreased dramatically. The system works as intended. The numbers decreased as the job outlook got more negative."

Miller also says in fiscal 2003, which ended Sep. 30, only about 70,000 H-1B visas were issued, despite the fact that the cap was more than double that.

John Bauman, president of the Organization for the Rights for the American Worker and an unemployed tech worker himself, takes issue with that number.

Bauman says closer to 370,000 H-1B visas were issued last year - well over the cap. Certain job categories, such as non-profits and educational-related fields, are not counted against the cap. Bauman also notes that foreign workers who were issued H-1B visas in previous years can renew those visas - and that won't be counted against the cap either.

"The cap is a myth," says Bauman, who adds that the visas are hurting the IT workforce and helping to keep him unemployed. "It's hurting it far beyond what anyone ever dreamt it would. When you have unemployed high-tech workers and foreign workers here on visas, it's a problem."

The U.S. Department of Commerce could not offer up numbers on unemployed IT workers or the number of foreign workers in the U.S. on H-1B visas. The U.S. General Accounting Office is struggling to track the influx of H-1B visa workers because of databases that don't communicate with each other.






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