H-1B hearing: Companies say foreign workers needed

WASHINGTON -- The yearly number of foreign visas for IT workers and professionals coming into the U.S. will drop by two-thirds for 2004 unless the U.S. Congress acts, and an immigration lawyer group came to Congress Tuesday asking that the cap on H-1B visas not be allowed to slide back to pre-dot-com boom levels.

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Representatives of Intel Corp. and Ingersoll-Rand Corp. also argued that H-1B visas are needed to fill technical positions where they can't find qualified U.S. candidates, but one panelist told the U.S. Senate Judiciary Committee that the visa program is taking money from the pockets of U.S. workers.

"The unemployment rate of electrical and electronic engineers has reached an all-time high," said John Steadman, president-elect of the Institute of Electrical and Electronics Engineers-USA. "This translates to hundreds of thousands of unemployed U.S. engineers. These are people who are degreed and capable U.S. engineers." Unemployment among electrical and electronic engineers reached 7 percent in early 2003, Steadman said.

The annual H-1B cap went from 65,000 in the U.S. government's fiscal year 1998 to 115,000 visas granted a year in 1999 and 2000, then up to 195,000 in 2001 and 2002. The capped H-1B numbers don't include some workers, such as those employed at universities and some research organizations, but the caps do affect how many IT workers U.S. companies can bring into the country. The American Electronics Association noted, however, that the IT industry's reliance on H-1B visas was falling, from 65 percent of the capped number in 2001 to 34 percent in 2002.

The number of H-1B visas, used by companies to bring IT workers from India, China and other countries to the U.S., would go back to a pre-1999 cap of 65,000 if Congress fails to act by Oct. 1. Stephen Yale-Loehr, the business immigration chairman of the American Immigration Lawyers Association, asked the U.S. Senate Judiciary Committee to allow 115,000 H-1B visas for the U.S. government's 2004 fiscal year. The H-1B visa program, popular with technology companies, also allows other U.S. businesses to recruit hard-to-find professionals such as accountants, lawyers and doctors.

Backers of the H-1B program argued Tuesday that the visas aren't taking away U.S. jobs, because some technology companies still can't find qualified workers for some positions. Ingersoll-Rand has searched for more than a year to fill a plastics engineer and an industrial robotics engineer position, finally settling on a Canadian resident in both cases, said Elizabeth Dickson, advisor of immigration services for the industrial equipment manufacturer.

"It is hard to displace U.S. workers when you don't have any U.S. workers to choose from," Dickson said.

Intel attempts to find U.S. workers before bringing in a foreign worker with an H-1B visa, said Patrick Duffy, human resources attorney for Intel, but more than half of the graduate students in physical science programs at U.S. universities are from outside the country. About 5 percent of Intel's U.S. workforce are H-1B workers, Duffy said, and many of them eventually become permanent U.S. citizens.

"This small percentage is comprised of individuals possessing unique and difficult-to-find skills which can only be acquired through advanced, university-level education," Duffy added.

The U.S. technology industry will be in danger of falling behind other countries unless the country can continue to attract "the best and brightest" workers from around the world, Dickson said, "We are looking for a reasonable, market-driven H-1B policy," she added.

The debate between Steadman and the three other witnesses translated into conflicts on the Senate committee, with senators sometimes even expressing conflict within themselves. "We don't want to be a country that turns down Einstein, but we also don't want to be in a situation where we flood the market," said Senator Jeff Sessions, an Alabama Republican.

Steadman and Senator Diane Feinstein, a California Democrat, pointed to abuses of H-1B visas and of a related program, the L-1, which allows companies to transfer employees from outside the U.S. to fill high-level positions. Some companies have used the L-1 visas to import IT workers who are then hired out to other companies, Steadman charged, and Feinstein questioned whether some companies employing H-1B workers were paying the prevailing wage as required. Numerous workers in California have complained to Feinstein that they've been replaced by foreign workers paid a third of their salary, she said.

"My view is (the H-1B cap) should go back unless we are able to produce some stronger safeguards," Feinstein added. "I'm elected to represent people from California, who are losing their jobs big time."

Senator Saxby Chambliss, a Georgia Republican, said he plans to introduce legislation this week to close loopholes in the L-1 visa program.

Committee Chairman Orrin Hatch, a Utah Republican, noted that the sunset of his legislation to expand the H-1B cap to 195,000 will also result in the loss of a $1,000 fee per H-1B application, which has been used for training and scholarship programs in the U.S. Since 1998, when the cap was expanded from 65,000 to 115,000, more than $692 million has been raised by the H-1B fee, providing training for 55,000 U.S. workers and scholarships for 12,500 students in science and engineering.

Hatch said the Senate should not tolerate fraud and abuse in the H-1B program, but he questioned whether it alone was causing the U.S. unemployment problems. He questioned whether the facts supported accusations that companies are using the H-1B visa program to hire cheap labor. The average H-1B worker salary is $55,000, while the average salary of a U.S. worker with a bachelor's degree is $46,000, Hatch said.

But Steadman said Hatch wasn't comparing similar numbers. Engineers typically earn a much higher salary than most other professions requiring bachelor's degrees, he said, and the presence of foreign workers is depressing wages.

Yale-Loehr also noted that 22,000 H-1B applications are pending from last year, and close to 7,000 visa spots were set aside for Chile and Singapore in recent U.S. free trade agreements with those countries. If Congress doesn't raise the 65,000 cap, only about 36,000 new H-1B visas will be available in 2004, he said.

But Steadman urged Congress to look for a longer-term solution to the lack of qualified engineers and IT workers than raising the H-1B cap again. He encouraged Congress to invest more money in programs that encourage U.S. students to study engineering and science. He also asked Congress to strengthen the U.S. Department of Labor's ability to investigate H-1B abuses, as is required in the U.S. Jobs Protection Act, introduced in Congress in July.

Steadman also suggested the H-1B visa program contributes to companies outsourcing jobs and moving them outside the U.S. Some companies use the H-1B workers' contacts in their home countries to set up outsourcing deals, he said.

"These are difficult times for IT and electrical engineering professionals in the U.S.," said Steadman, an engineering professor from Alabama. "But there is a lot more at risk here than jobs for our members. If we continue down this path, the end result is the United States will make itself increasingly dependent on foreign technical expertise, both here and abroad."