H-1B visas produce net IT job boost

Industry group argues that Congress' refusal to hike H-1B caps hurts IT job creation

The high-tech industry contends that Congress' failure to raise the cap on H-1B visas is costing the U.S. an opportunity to create a new job every 43 seconds.

To make its point, Compete America, which represents many major high-tech firms on immigration issues, has built a calculator that ticks away jobs that it says are lost, or not created, because of visa restrictions.

"Immigrants have long been a really important part of America's talent pool that drives innovation, creates new jobs and ultimately, creates higher standards of living," argued Matthew Slaughter, an economist at the Tuck School of Business at Dartmouth College, at a Compete America press conference Wednesday.

Slaughter said restrictions on H-1B use have cost the U.S. economy 100,000 new direct jobs over the past year, a figure that rises to 500,000 when indirect jobs are added. In total, the group estimates each H-1B worker helps create an additional four direct and indirect jobs, and that U.S. job creation would have been 21% higher in the U.S. had visa use not been capped.

Slaughter didn't deny that the H-1B visa program can also lead to some job displacement. Last year some 2.4 million net jobs were created in the U.S., but that net job creation number "masks a tremendous amount of gross job destruction and gross job creation," he said.

Compete America's latest effort won't sway the contentious debate. The visa issue is too emotional, too intense and too real for many people in IT.

Underlying H-1B use are the experiences of U.S. workers, particularly those at risk of job loss because of offshoring or age.

One IT worker, who spoke to Computerworld on the condition that his name and company not be identified because of possible retribution, outlined his problem with the H-1B visa.

The worker is employed at a company that brought in Indian offshore firms, which are among the largest H-1B visa users, to take over a significant part of the firm's IT operations.

"The biggest slap in the face to all of us here is we have to train all of our replacements," said the IT worker. Once that training is completed, the IT workers receive severance pay. Some employees were offered jobs with the offshore firms, but at lower salaries and with reduced benefits, he said.

"We're all being marched out the door, so how does [Compete America's effort] save American jobs?" the worker said.

After Computerworld recounted the issues raised by the worker, Slaughter said the job creation and destruction "is a permanent feature of how economic growth happens" even during strong economic times.

"I don't deny that those job separations happen throughout the U.S. economy, in every industry, every hour, but it's important to keep that in context of trying to get policies in place to increase net job creation in America," said Slaughter.

Scott Corley, executive director of Compete America, said an anecdotal case of a displaced worker could be countered by companies "that have created a lot of jobs, but aren't able to right now because they can't get the workers they need."

The H-1B issue cuts across many issues, such as wage pressure and age discrimination.

On the latter point, one reporter on the press call, Beryl Lieff Benderly of Science Careers, asked, "If there is such a desperate need for talent why not [retrain] some of the tens of thousands of people over 35 who have been laid off?"

Corley said "it's not easy to retrain people," and that "the further you get away from your education the less knowledge you have of the new technologies, and technology is always moving forward."

The Economic Policy Institute has found that guest workers are mostly young and provide competition to new U.S. graduates and priovide companies "a large supply of younger, lower-paid workers who can substitute for older workers."

The institute says the large supply of guest workers has kept IT wages flat.

Demetrios Papademetriou, executive director of the Migration Policy Institute, an independent, non-partisan think tank, agrees that immigration can increase IT employment numbers.

In an interview, Papademetriou said that the literature on this issue "has become comfortable with a consensus that basically says that high-end immigration produces more jobs than it takes." However, he didn't put a number on the number of jobs created.

Employers that use H-1B visa workers are not obligated to first try to fill the job with a U.S. worker, either a citizen or permanent resident.

Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher of tech immigration issues, said that most studies try to measure the impact of immigrants on the wages of Americans rather than number of jobs for Americans. Some analysts find negative impacts, others neutral or positive, he said.

"The upshot is that economists say that H-1B workers who complement the skills and capabilities of American workers increase the wages for those Americans," said Hira. "H-1B workers who substitute for the skills and capabilities of American workers lower wages for those Americans."

H-1B workers at the large offshore firms "are mostly substituting for Americans," said Hira.

Only NASSCOM, the Indian trade group, "has had the gumption to claim that offshore outsourcing firms are doing good for America," said Hira.

But that trade group's principal argument is that it helps America by making its customers more efficient, said Hira. It "has rarely argued that their firms create jobs for Americans," he said.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

See more by Patrick Thibodeau on Computerworld.com.

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7 Comments

John Kraft

1

I'd think the solution would be simple: companies can apply for as many H1-B visas as they want, with a couple of changes. Each visa would cost $100000 (the fee would go into a fund used for retraining workers), and the visa is transportable and allows the holder to work anywhere after 3 months.

Colin Tree

2

You must present real statistics for the claim of extra jobs generated. The real issue is keeping wages down. Long term IT workers are adept at learning ever changing technologies. Because they build on what they already know, old mistakes aren't re-invented.
"There is nothing new under the sun" it works in the Bible and it works in IT, if you don't believe it you're too young and lack experience.

Gilbert

3

The education system does produce highly efficient people. But they are going to other jobs, because they pay is better.

The IT problem in the US is a payment issue. They have lowered the money they give. If you raise the pay, people will come back.

They are now making people come from abroad to do those jobs because they do not want to pay what it's worth. That's as simple as that.

This is capitalism. People are not stupid. They can, with their studies, get better wages from other jobs. If you do not want to raise wages : that's your problem. Offer and demand at its best.

You make much more money working for fhe finance than working in IT with the same diploma. That's what I do. The wage is much higher (as in going from 30/40K to over 100K).

rick

4

This is the most ridiculous thing I've ever heard. I'm 40 years old and am in more demand now then ever. I constantly get jobs because out sourcing and h1-b visas don't work and certainly hiring younger tech folks who only know "new technologies" doesn't work. You have no idea how many times i've walked into a place full of 20 somethings who know "rabbitMQ" & "celery" but couldn't write their own queue or distributed processing system if their lives depended on it. Innovation doesn't come from "using technology" -- using someone elses packages. Innovation comes from building your own stuff to solve your specific problems and building it in a generic SOA and scalable way so that it's useful to others. If you're problem can be solved by just gluing someone elses packages together then you don't have a real business model and you havne't created a "market" or solved anything. Those types of businesses are the type that are built to "Flip" and they do nothing to help the economy or the future of technology because they are not "foundations" in which you can build other technologies on top of. They are evolutionary dead ends. Typically when people make claims about "younger workers" and 'out sourcing" they are capitalist and/or "lobbyist" who are just trying to enslave people for minimium wage and they typically don't know anything about engineering or technology.

Jos

5

Make it so that the H1B workers can switch companies without having their visa's used against them. I've seen foreign workers come here and want to switch companies. However, the company they originally worked for, doesn't do the paper work out of spite and forces the worker to loose both jobs. Having foreign workers employees gives companies more control and bargaining chips over the workers since the government doesn't protect them. It also allows for an avenue for human trafficking and abuse. It hurts the economy, not helps it if you don't take care of your own people first.

Bob

6

This guy's attitude is why so much corporate IT is so very, very bad. H1-Bs are a side show, it's the idea that producing good technology is a simple rote based thing that anyone can do with a bit of training that's so wide of the mark. I liken it to someone trying to start an orchestra by buying a job lot of the cheapest beginner instruments they can find then handing them to people pulled in off the street and given a 3 week 'musical expert' course.

idic5

7

Can someone please tell me how increases in H-1b workers creates (nets after job destruction) more american jobs?

IS there any BLS data on this vs partisan declarations?

The other statement in this article is that such increases also increases American IT jobs.

"Demetrios Papademetriou, executive director of the Migration Policy Institute, an independent, non-partisan think tank, agrees that immigration can increase IT employment numbers."

Does he mean non american IT employment?

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