The H-1b Visa: Everywhere It Shouldn’t Be
Imagine a system where faceless bureaucrats decided how much of a product was available at a given time, what channels of distribution it would take, and what price it would sell for. Imagine the producers who were unable to compete with this product because the market was flooded and the price had fallen below the costs of production.. This is the situation facing many African growers who are unable to compete with European agricultural subsidies and tariffs which artificially inflate the supply of bananas from former EU colonies in order to out-compete recent free-market “recruits” like Ghana.
Such a situation is happening in the USA. For several years companies have been trumpeting a skills shortage in the IT field in order to convince lawmakers and the Immigration and Naturalization Service to allow foreign entry into the United States under the H1-B visa program. In the June 3, 2002 issue of Computerworld a front-page article, Workers Blast ITAA Claims argues that the ITAA grossly inflates the number of positions in order to justify the tidal wave of H1-Bs and offshore sourcing. While most IT workers ignored the influx when jobs were plentiful, it has become much harder when IT workers are now sacked in one department while H1-B workers who do the exact same job remain employed in another. The tidal wave of H1-B visa holders and the off-shoring of IT has lead to declining wages and worse, unemployment in a field which had been hailed as the engine of the “New Economy”.
In a press release dated April 2, 2001, ITAA states: “While demand is off by forty-four percent, the talent gap remains large. Hiring managers still predict a shortfall of 425,000 skilled workers this year.” From an ITAA release dated May 6, 2002: “US companies shed over 500,000 IT workers in the past year”. In an attempt to answer this discrepancy of roughly 10% of the entire IT field, Tinabeth Burton of the ITAA.org was contacted. In addition she was asked if the ITAA forecast of 600,000 unfilled positions was accurate, why there were only 30,930 job postings at Dice.com for the very skill sets the ITAA calls “hot”: SQL, Java, and Windows NT. Finally, she was asked if the ITAA forecast for 2002 would follow the trend and we could expect greater layoff’s than last year’s 500,000. She has yet to respond.
There are several possible reasons for this discrepancy. First, many positions are “virtual positions”. These are left unfilled specifically so that they can be cut when the time for “belt-tightening” arrives. This allows a department to follow corporate changes while protecting their BAU (business as usual). This practice would inflate the available positions when ITAA surveys the hiring managers. Secondly, HR departments often have a particular candidate in mind for a job, but must legally open the position to other candidates. In order to guarantee that their candidate gets the job, they in effect post the resume of the candidate. Since no one but that candidate matches that particular skill set, the position goes unfilled until the specific candidate accepts the offer. At the very least the ITAA should account for these practices when they analyze their survey data.
Finally, it should be noted that the ITAA is an organization sponsored by the IT industry and therefore represents the interests of corporations and not the workers, contractors and consultants employed by them. In service areas such as the IT field labor is often the largest component of a project. By propagating the myth of oversupply of jobs, it forces down the cost of labor since H1-B visa holders typically make 15%-30% less than legal immigrant and native workers. Because the H1-B is viewed as a stepping stone to the green card, the holder is unlikely to contest working hours or wages. One cannot even “vote with one’s feet” by leaving a job, since switching employers forces one’s green card application to the back of the line. Since this process is a 3-7 year process, one is unlikely to protest one’s job situation.
Recently an article at Frontpagemag.com. “Do We Still Need As Many H1-B Visas?: No” by Congressman Tom Tancredo® Colorado Sixth District calls this practice “indentured servitude”. He states “Importing hundreds of thousands of foreign workers at a time of growing unemployment in America is obviously absurd.” Indeed, does it make sense to continue flooding the market with foreign programmers as well as making it easy for American jobs to be sent overseas? Artificially skewing the demand for jobs at the expense of local workers is market manipulation by the State – the anti-thesis of laissez-faire, free-market capitalism.
The job situation should be allowed to correct itself by allowing the internal market to balance itself with increasing layoffs showing new graduates that computer programming was not a good field to get into – thereby allowing the market to curtail the demand for programming jobs. This cannot happen while the government meddles in the marketplace.As Congressman Tancredo puts it, “market economies operate by increasing the price of something in high demand until the supply increases sufficiently. We don’t need the federal government to fine-tune such things as though this were the Soviet Union implementing a five-year plan.” Many computer programmers are leaving the field and computer science isn’t very popular as a major as the number of jobs shrink, which eventually will create a balance between the supply and demand for these jobs – but only if the flood of offshore talent stops.
While goods should be allowed to cross national boundaries freely, the state of the world shows that the labor market is not ready for internationalization. Should doctors trained in the Congo be allowed to practice freely in the USA? Should American lawyers be allowed complete access to Japan where there is an extreme shortage of litigators? How can H1-B candidates be screened to prevent the program from being used as an avenue for terrorism – and who is liable should the screening process fail? Conversely, what protection can American companies be afforded if their intellectual property is sold to a competitor in a country that does not recognize intellectual property rights?
The federal government cannot answer these questions, nor should it pose them by continuing the H1-B process. The H1-B process should be scaled back to it’s original cap of 60,000 visa holders or better yet, dismantled completely.
