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Lower H-1B quota seen as too little, too late

A lower H-1B visa quota is a good thing, some say, but many in the IT industry are still calling for a major overhaul of the program.

Congress may have let the H-1B visa limit drop back to 65,000, but many within the IT industry say that the action is like rearranging deck furniture on the Titanic. Why bother?

"It's certainly a move in the right direction," said Rick Nashleanas, principal and founder of the IT headhunter firm Monarch Technology Management LLC, based in Colorado Springs, Colo. "But it's not going to have the impact that was hoped for. People were looking for a way to hire [American] again. It's OK, but it's not helping in terms of preventing the technical jobs from going overseas. It's a finger in the dike."

Mike Blain, who belongs to a union of high-tech workers in Seattle that's lobbying for H-1B visa reform, said his organization supports the lower limit. But he added that the lower limit doesn't change the fact that the program is riddled with loopholes.

"We're still calling for reform in the program, because it's still fraught with abuse and fraud," he said.

Labor shortage or cheap help?

Created by Congress in 1990 to help alleviate the shortage of IT workers in the U.S., the H-1B visa program originally allowed 65,000 foreign workers to enter the country on three-year visas with the possibility of three-year extensions. In October 2000, under pressure by groups such as the Information Technology Association of America (ITAA) -- which is seen as working in the interest of companies such as IBM and Microsoft -- Congress upped the cap, saying that 195,000 H-1B visas could be issued annually. The measure was temporary; it remained in effect until this month.

Now, instead of keeping the cap at 195,000, which it could have done, Congress has let the limit fall back to 65,000.

Lobbyist groups had gotten the H-1B visa program instituted and the limit raised by arguing there was a shortage of skilled IT workers. But high-tech labor experts, who saw the visa program as nothing more than a way for the Microsofts and the Intels of the world to get their hands on cheap labor, scorned that position. The program continues to be a source of controversy among the IT work force.

"My contention is that, from fairly early on, it became more and more apparent that it was never about a skills shortage -- it was about cheap labor," said Nate Viall, president of Nate Viall and Associates, a Des Moines, Iowa-based iSeries research and recruiting firm. "It wasn't that we didn't have technical staff to do C++ or Visual Basic. It was that we didn't have people with degrees and three years' experience with Java to work in San Jose for $25,000 -- that was the shortage. The point is, the fact that they're still using H-1B when there's all [these] bodies out there just reinforces that it's about cheap labor and not shortages."

But who can argue for high limits now, with the high rate of unemployment among IT professionals?

According to the Bureau of Labor Statistics, there are more than 200,000 U.S. workers who fall into the engineering and computer job sectors that are out of work. The unemployment rate hovers at about 6%.

No quick fix

The fact is, Nashleanas said, the real drain in U.S. jobs now isn't the result of H-1B visas -- it's from shipping jobs overseas. The obvious signs of a problem simply forced Congress into action.

"Congress knows there's a problem, but there's no good way to handle the outsourcing issue," he said. "Here's something they could do that, to its constituents, looks like they're doing something to alleviate the situation."

Even the ITAA, which lobbied ferociously to get the limit raised to 195,000, didn't seem much bothered by the fact that the limit was allowed to drop -- probably because the number of H-1B applications has dropped significantly during the past two years.

"The situation reflects what the job market reflects," said ITAA spokesman Bob Cohen. "The demand has dropped way off in the past two years -- in a perfect storm of factors."

Reform necessary

Hector M. Rosario, a programmer analyst with the Clark County Recorder's Office in Las Vegas, questions the stated motive behind the formation of the H-1B visa program and doubts that lowering the number of visas will actually help U.S. workers.

Rosario said that, in theory, reducing the number of H-1B visas should open up more jobs for U.S. workers as the economy picks up. But Rosario wonders whether the industry is willing to hire back Americans not only at higher wages, but also to pay for training them in new technologies.

"Unless the government gives industry an incentive to hire and train us, I don't see industry doing this out of the kindness of their hearts," he said. "Placing a limit is fine, but unless our government sweetens the pie, there are no guarantees that more American jobs will be created by this legislation."

Senior systems analyst Joseph LaFauci said that the fact that the limit has been lowered is a good sign. But as long as businesses are allowed to abuse outsourcing practices, lowering the number of visas really won't accomplish anything.

"Until I see something that tells me that companies are given incentives not to continue to send jobs overseas," LaFauci said, "the lower H-1B visa limit is almost a token."

If there is a rise in IT hiring, few believe it will be because of the lower visa limit. It will simply be because the economy has picked up.

"It'll be more a function of the economy and improvements in job hiring," Viall said.

Still, Viall said, he expects groups like the ITAA to call for an increase to the H-1B visa cap this spring.

"In all likelihood, they'll run out of slots," Viall said.

Another factor is that the medical and teaching professions have discovered the H-1B visa program and have started to bring in workers from overseas, and they'll be taking up some of those 65,000 slots. "This isn't just about IT anymore," Viall said.

ITAA's Cohen wouldn't say whether his organization has plans to lobby for higher limits next year, but he didn't rule it out.

"We're going to wait and see what happens with the economy," Cohen said.

Blain said that, in the meantime, his organization will continue to seek reform of the H-1B visa program. The group is working for better enforcement of the program's requirements. The group is also calling for rules that would require businesses to wait at least 90 days before replacing a laid-off worker with an H-1B visa worker.


Let us know what you think about the story; e-mail: Kate Evans-Correia, Senior News Editor.

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