Time to Drop the H-1B Visa Program

Last week, a couple of days into receiving H-1B visa petitions, the U.S. Citizenship and Immigration Services (USCIS) announced that it met its congressionally mandated cap for fiscal year 2008. Or, as some people might say, highly qualified, cheap labor sure sells quickly. Like many government programs, the H-1B visa program was probably started with the best of intentions: To help high-tech and other key industries ensure access to the “best and the brightest,” allowing them the ability to temporarily hire foreign workers with rare skills to fill positions for a period of up to eight years. But, with insufficient oversight and worker safeguards, the program has, at least in some cases, failed to sufficiently protect workers, and may be doing little to help U.S. companies prosper. Presently, none of the recommendations made by the IEEE to protect foreign and domestic technology workers have been included in the latest legislation before the U.S. Congress; only the proposed raising of the cap was included, which was pushed for by prominent CEOs.

The controversy over the granting, filling and alleged abuse of H-1B visas is fairly well documented. Some experts say that while the original intent of the visas was to help U.S. companies hire workers with unique skills, the effect has been to facilitate the move of highly skilled jobs abroad, such as engineering and computer science. Many employees talk about large-scale layoffs, followed by the hiring of H1-B visa employees. The IEEE has also contended that it has driven down the wages paid for skilled labor because either foreign workers have been hired at lower levels than an equivalently skilled U.S. worker would be paid (13% lower, according to a study by John Miano of the Programmers Guild) or, over the course of the worker's employment, pay raises become unnecessary because they have no choice but to remain with the employer or return to their country of origin where the job did not exist.

Of course, conditions change quickly in high-tech and related industries. In 1998, eight of the 10 companies that benefited from the H-1B visa program were U.S. companies. But a review of the latest information from the U.S. government showed that the majority are now not U.S. companies — in fact, no preference is given to U.S. firms, only U.S. employers.¹ Although the USCIS does not reveal which companies are awarded visas, we can assume that the applicant population reflects the population of granted visas (it is performed on a first come, first served basis); in 2006, seven out of 10 applicants were Indian firms. The top three were Giants Infosys Technologies, Wipro and Cognizant Technology Solutions — all Indian firms that provide services to U.S. companies, including tech support. Critics claim that these Indian companies are using the visas to attract workers from their home countries, making them more effective at outsourcing jobs in India. The defenders claim they are improving the services provided to their customers — many of which are U.S. companies — and creating jobs in the United States at the same time.

The outsourcing issue is just one problem with the visas, as cited by the IEEE.² The bigger issue has to do with paying foreign workers less for the same job, and having little accountability for doing so. “Rather than having to pay current prevailing wages identified using standardized procedures, employers are free to use a variety of sources to establish the validity of the wages they intend to pay.” In addition, legislators in Congress are making decisions regarding the visa caps when there is limited data to go on. According to Tom Abate of the Technology Chronicles, the USCIS has not only refused to reveal the raw data regarding the H-1B program, but it has also neglected to issue the annual reports on the program required by law since 2003.³ The public (and Congress) do not know:

• The actual number of visas issued
• The jobs for which they were issued
• The actual pay vs. what was recorded on the visa application
• Which companies have been granted visas

In blogs and articles published on the Internet, both laid-off and H-1B workers have reported abuses. Many have claimed that the visa program is not about hiring the best and brightest, but the cheapest workers. Raising or lowering the caps would only change the magnitude of the abuses, distrust and anger surrounding this issue. The first reforms of this program were called for in 2004. It's time to stop waiting for this broken system to fix itself, and let traditional global market forces do the work instead.