H-1B reform bill may push more work offshore

H-1B reform bill may push more work offshore

Summary: On paper a bipartisan Senate bill to crack down on H-1B visa abuses doesn't look half bad. Why shouldn't American workers get priority for technology jobs?

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TOPICS: IT Employment
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On paper a bipartisan Senate bill to crack down on H-1B visa abuses doesn't look half bad. Why shouldn't American workers get priority for technology jobs?

The reality is going to be quite different. In fact, don't be surprised if this bill encourages companies to push more work offshore. The H-1B program allows U.S. companies to employ foreigners with at least a bachelor's degree in a specialty for up to six years.

Anne Broache reports that Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) introduced a bill that imposes additional obligations on companies hiring foreigners. Among the requirements in the bill:

  • All companies must pledge that they made a "good faith effort" to hire American workers first and that an H-1B worker won't displace a U.S. worker.
  • Any company wanting to hire an H-1B worker must first advertise the job opening for 30 days on the Department of Labor site.
  • Companies won't be allowed to hire H-1B employees who are outsourced to other companies. They also can't recruit only H1-B holders for a job.
  • If companies employ more than 50 people and half of them are H-1B visa holders they won't be allowed to hire any more.

In addition, the Department of Labor will be empowered to conduct spot checks on companies H-1B hiring practices. The Department of Labor will get more time to review H-1B application and be required to share visa information with the Department of Homeland Security.

“Our immigration policy should seek to complement our U.S. workforce, not replace it,” Durbin said in a statement. Grassley noted that the bill is about "protecting the American worker."

Sounds good right? Now time for the reality check. A company, say Microsoft on any other technology concern that hires a lot of H-1B workers, is going to look at this bill and say it's not worth the effort to hire foreigners in the U.S.

On the surface that may be good--assuming that the company turns around an hires a U.S. worker. The rub: Companies are more likely to go where the engineers and programmers are. And that means the work that would have gone to a H-1B worker in the U.S. will now move to India, Russia, China or elsewhere. Foreigners will still be hired, but not on U.S. soil.

Like most initiatives out of Washington D.C. the H-1B bill makes for good sound bytes. The unintended consequences can be quite different.

Topic: IT Employment

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23 comments
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  • Which means more money goes out than it seems

    Coz these foreign workers, a lot of theme nd up settling down here or at least living here for a long time. Which means they spend their hard earned money in this country - most of it anyways. This doesn't happen when the jobs are shipped outside the country.
    aimlessBrains
    • I knew an a work like that

      His money wasn't really spent here, at least as little as possible was spent here. The rest went to China to his family.
      voska
    • ..or, they could hire an American citizen

      The premise that IT work will be given to a foreign worker, either here in the US on an H-1B visa, or in another country is a false one. If the employer simply hired an American worker, all the hard earned money would stay in the United States.

      (BTW, I think H-1B visas expire at 6 years)

      I found it ironic to see Bill Gates, the worlds wealthiest man who controls a company sitting on billions of dollars in cash, begging the Senate for the opportunity to save a few dollars by hiring more lower cost workers from overseas. At the same time he complained that fewer American students are enrolling in college math and computer science programs. He hasn't made the connection between fewer (and lower paying) available jobs and fewer students setting out to train for those jobs. This is the free market at work. If Gates wants to see those computer science classrooms fill up, he should hire Americans and pay them a reasonable salary.
      WiredGuy
      • Bingo! We have a winner....

        You nailed it: who's going to go into a Comp Sci program for example, when they see Billy G setting up his centers in India and China? I'm gonna think instead about going into another field that requires presence on site and still makes good money...something like dentistry or civil engineering. Billy can stop whining about fewer American students in math and comp sci programs when he stops perpetuating the problem.
        Techboy_z
  • Businessweek: The h-1b program is a "conduit to offshoring"

    Businessweek: The h-1b program is a "conduit to offshoring"

    http://www.businessweek.com/bwdaily/dnflash/content/feb2007/db20070208_553356.htm

    MSNBC: "Work visas may work against the U.S."

    http://www.msnbc.msn.com/id/17048048/

    Bill gates doesn't give XXXX about the U.S. worker, read up on how he sticks it to his own Microsoft employees:

    http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2007/03/30/EDGRJN7CFB1.DTL

    70% (or more) of the 65,000 available h-1b visas are being used by foreign offshore outsourcing companies. These foreign companies are using the Visas to train their workers in the U.S., and then ship them back home to continue the IT offshore outsourcing process.

    Companies are using the h-1b program to help them setup foreign offices, development groups of all sizes, and divisions. H-1b workers are paid 20% less than their U.S. citizen counterpart. That's less tax money, then the company sends the worker back to India (usually), where he doesn't pay a dime in U.S. taxes, and proceeds to build a offshore development group that further removes U.S. jobs.

    Companies such as Microsoft and Oracle are actually just trying to escape the high infrastructure cost (8 trillion dollars worth) of the United States. Half an engineer's salary is taxes. Taxes that pay Social Security to help our senior citizens, that keep the roads up, that assist our farmers, and taxes that are being used to defend the rest of the world from harm.

    The U.S. department of labor has stated that companies can hire an h-1b worker over a U.S. citizen, even if the U.S. worker is just as qualified/capable as the foreign worker.

    In open testimony before the U.S. congress, a job applicant called an agency to see if she could apply for a programming job on the east coast. The congress members were shocked to hear that the agency would not consider her for a job, because she could not be sponsored with an h-1b visa. The George Bush Department of Labor took no action against the company, even though most americans would consider this a clear act of bigotry against the U.S. citizen.

    And the reason is clear, most h-1b visas are used to offshore U.S. jobs, not to create U.S. jobs.

    All over the IT workplace, U.S. citizens are facing open discrimination, simply because their point of origin happens to be the United States. There is an onslought of bigotry being perpetrated by industry against the working U.S. citizen.
    jake_leone
  • a lot of assumtions

    "Companies are more likely to go where the engineers and programmers are."

    So what if there are engineers here? Seems that's the complaint. People claim they workers are here but aren't being hired. If this is true the rub you meantions doesn't exist. If it's not true and there is a shortage of engineers then no loss has really occured.
    voska
  • It's very simple... I don't think the visas work...

    I have YET to have personally seen a company hire a H-1B visa worker, without:

    a) specifically looking for an H1-B visa worker
    b) paying them less (much less) than a comparable U.S. worker would get
    c) holding it over the workers head like a leash

    While I am pretty confident in my skills, and personally don't mind working and competing with foreign workers on level ground. I do have a problem with companies using the visas to hire disposable workers.

    I'm not saying that there aren't some foreign workers who have very special skills and need to be brought in for a very specific position. Yet I find it hard to believe that so many positions cannot be filled with local workers. H1-B visas are businesses way of exploiting cheap foreign labor. Either
    And what's with 'If companies employ more than 50 people and half of them are H-1B visa holders they won't be allowed to hire any more.' So out of 50 people in a company, a company would need to hire 25 foreign workers?! I have friends who work for foreign companies that have opened branches in the U.S. that couldn't get that many foreign workers to work for them if they tried.
    el1jones
  • Fine....

    At least we don't have to train our replacements. Doubt they'll be sending me to India for 4 weeks to train the "new guy". About time Congress sided with the people instead of the corporate pursors.
    Techboy_z
  • This bill is not going to pass

    This bill is not going to pass.
    tech_savvy
  • H1B Minimum Qualifications

    Only fifty-four percent of H1B employment approvals held a Masters degree or higher in 2005. Of the total 117,536 initial employment petitions for the 2005 "Highly Skilled Worker" visa, only 63469.44 had completed a postgraduate degree according to the 54% statistic.

    One way to address the Highly Skilled Worker visa shortage is to raise the educational requirements to "Highly Skilled." AKA postgraduate educational levels.

    By raising the minimum educational requirement for an H1B visa from a bachelors degree to a postgraduate degree, there would have been an H1B for every applicant. The recent addition of 20,000 postgraduate exemptions would not have been tapped.

    Guestworker applications should be graded by salary offers and contract duration -- the best written offers (to the employee) should "win" the H1B visa.

    The first come, first served and/or lottery style visa adjudication is laziness on the part of USCIS, guestworker petitions should be graded on merit of the entire employment agreement.

    Initial H1B Petitions | Initial H1B Approvals | Approval rating
    2002 109,576 103584 94.53%
    2003 108,526 105314 97.04%
    2004 163,549 130497 79.79%
    2005 117536 116927 99.48%
    Total 499,187 456322 91.41%

    Median Salary $55,000.00

    2002-2005 Initial H1B Salaries $25,097,710,000.00
    2002-2005 Continuing H1B Salaries $28,220,720,000.00

    Estimated salary six year impact of H1B salaries.
    $70,913,511,900.00

    That's $70.9 Billion in salaries that are off-limits to American citizens.
    handy_9999@...
    • ammend

      Correction, That's $70.9 Billion [ANNUAL} in salaries that are off-limits to American citizens.
      handy_9999@...
  • Prime jobs not for American Talent

    Either employers are allowed to bring foreign nationals into the US or the employer will move the jobs overseas. REALLY????? H-1B is a required step toward offshoring. The foreign talent need to be trained as Corporate techie and they need training on how to be a consumer that is willing to part with their earnings eagerly like the American Market always was. You see, America's population is aging. We no longer are the 'prime market'. "prime market" are 12-32 years of age. India and China have a population of 1 billion each. That's a lot of potential consumers!!!
    rahcn@...
  • Bill Reveals Hidden US Job Discrimination

    This bill gives us an opportunity to compete for technology jobs currently reserved by the DOL for citizens from abroad under the H-1B program.

    The "outsourcing" scare tatic reminds me of the rumors that less confident Blacks told each other during the transformation to equality: "if we stand up for our rights they will come down even harder." You know the end to that era.

    Yes, guys, this transition into equality, opportunity, and decision-making will "feel" uncomfortable. You may write things you regret like "it will increase offshoring" when you know offshoring companies rely on these goverment programs to serve their customers.

    But, guys, lie down until that feeling goes away. Americans and legal residents aren't willing to narrow American opportunity for everyone so that you can stay in your comfort zone. In fact, they will respond when you step into a strong, upright frame of mind and write about the IT jobs that American opportunity created.

    Bypass & Outsourcing Visa Wins: 16
    American Opportunity & the American Dream Wins: 214
    dmconroy
  • Congress Represents Money

    Congress is trying to prevent merited workers in the US from gaining US power. So it makes a bill, calls it the equivalent of "retroactive tax cut stimulus" for "the rich rob the poor" or "no child left behind" for "loot public education and leave all children together behind," and hopes that by breaking down the proletariat a little more they can keep the Bourgeoisie thriving at the workers' expense a little longer. You gotta be a fool to think the Congress actually does anything for workers. It's all just serving the money that put them there and smacking lip to try to con the people that they're acting at least in part in the interests of the true upper class of America. The bill is absolutely intended to eliminate yet more American jobs. This is the trend. Break the workers down. Make them desperate to answer to money. Break them and empower the merit-lacking old money Bourgeoisie to make the workers do whatever they want. I already sensed this game. That's why a software barter economy is so dangerous to the Bourgeoisie at this time. GNU GPL software barter management online for cell phones. If all these workers without money to live on can find a better way to survive wherein they don't even get bled for their ability to be taxed and conned through corporate capital profit, capitalism is dead. So I'm all for the visa reform bill. Keep breaking the proletariat, and keep ripening the market for GNU GPL barter to take over.
    bcroner
  • Outsourcing

    Well, then it will be morally and ethically correct to put punitive taxes on their products and imports. They are no longer American comapanies if they leave. That way people will have the opportunity to 'build a better company'. And the concept of 'Comoetition' will finally become a reality. And sooner or later put it will help put the traitors out of business. THIS IS GREAT NEWS!!! Have a great day! Zena
    ZenaPrincess
  • Outsourcing

    Competition, I meant.
    ZenaPrincess
  • Not true

    Consider:

    Cost of US worker: 80K
    Cost of H-1B worker: 60K
    Cost of overseas worker:30K

    Cost of lobbying Congress to get overseas worker into US to do the EXACT SAME work he could do at a home: 40 million.

    End result of lobbing for H-1B in this scenario? A loss of 40 million, plus 30K per worker.

    Why would any company do that? They wouldn't.

    H-1Bs are for jobs that are firmly stuck in the US. As soon as the job can be outsourced it is. Sometimes this means sending the H-1B back home, opening a slot for a different H-1B to take yet another job that currently can't be outsourced.

    Many jobs can never be outsourced--or can't be outsourced without unwanted side effects. That's the reason companies are asking for an increase in H-1Bs.

    No company in their right mind has an H-1B (or an American) doing the same work an overseas worker does.

    H1-Bs and Americans are paid similarly, and they are substitutes FOR EACH OTHER. They are not substitutes for overseas workers.

    I got a question. This reply has been posted over and over again every time this false arguement is made.

    How come the media's response is simply to repeat the same false arguement? Can you say "big lie" theroy?

    ----

    One other question. Data entry is easier to outsource than programming--the spec is MUCH easier (as in "type this.")

    And much data entry is being outsourced.

    NOW, HOW COME NOONE IS SUGGESTING WE BRING IN CHEAP DATA ENTRY OPERATORS--SO THAT THEIR RATES WILL BE LOWERED, FOR THEIR OWN GOOD, TO PREVENT OUTSOURCING?

    If this arguement is so logical, why isn't being applied to ALL labor categories?

    The reason: The arguement is false (see above.) But most coders don't have a backgroud in econ and can't defeat this obvoiusly incorrect argument.

    Why don't you run your arguement by someone with an econ background? See if they agree with you--or if they say the reasoning is flawed, and in the interests of telling the truth to the American public, shouldn't be constantly repeated?
    test10022
  • Recent Oracle Quote

    "The problem, obviously, is that not every company has that ability to relocate people overseas," said Robert Hoffman, vice president of government affairs for business software maker Oracle Corp.

    Yeah, that's the "problem." Oracle admits that without H-1B, companies would be forced to hire more Americans at higher rates--because unfortunately, in thier opinion, some jobs are locked in the US.
    test10022
  • Can companies use this same threat to lower taxes?

    IE, if tax rates aren't lowered, they'll go offshore? Why not?

    We can't take the COMPANIES word for what they would do if the laws they aren't asking for aren't passed. Only the company knows what they can and can't send offshore, and there's a strong incentive to lie and say much more can be sent offshore than actually can.

    Obviously the IRS isn't listening to such threats. If they did, they'd never collect taxes.

    So the Department of Labor shouldn't listen either.

    Whatever can be sent offshore, will be. Anyone saying their "going to do it, like, tomorrow, so give me X right now" is bluffing.

    End of story.
    test10022
  • Which means that

    1. your rate is lower
    2. your rent is higher

    If you're a programmer, having another programmer here spending money is not only taking the job away, it's driving your rent up.

    STUDY ECON!
    test10022