Coined by the Department of Commerce, “America’s new deficit” doesn’t refer to dollars. Instead it refers to a high-tech worker pool allegedly in the red. The American Competitiveness Act making its way through Congress as of July calls for increasing immigration of high-tech workers. The Bill is based on reports of a shortage of information technology (IT) workers. But some claim an untapped pool of older Americans is being unfairly ignored.
The annual cap of 65,000 H-1B visas was hit on May 7. The H-1B visa program was created by the Immigration Act of 1990. The visa allows stay for immigrants with advanced degrees and/or exceptional ability in the sciences, arts, or business sought by U.S. employers — it is not restricted to IT workers.
The bill proposes to raise the number of available visas to 95,000 this year and to 85,000 in future years. It also provides a safety valve by allowing 20,000 additional unused visas to be transferred from another visa category.
However, the AFL-CIO Department for Professional Employees (DPE), along with other professional organizations, disputes the allegation that there is a shortage of information technology workers. “We should be very careful about IT employers crying wolf just to enlarge the labor pool, depress salaries and benefits, and undermine working conditions as has been done by other employers in the past,” says DPE chairman Morton Bahr.
The American Engineering Assn. (AEA) also opposes any increase in H-1B or other labor-related visas on the grounds it will harm American scientists and engineers. AEA is an association for all disciplines of engineers, scientists, computer programmers and others within the technical community. The association is concerned with immigration, unemployment, loss of manufacturing base, and other professional issues. Its board of directors is made up of engineers.
Dr. Gene Nelson, a survivor of multiple job cuts and a crusader for the high-tech work force, points out that there are over 12 million scientists and engineers according to the National Science Foundation (NSF). This is derived from adding the number of bachelor’s degrees in science and engineering earned from U.S. colleges and universities and includes scientists and engineers below retirement age. The Census Bureau, through its Current Population Survey, indicates that only about 3 million of the 12 million engineers and scientists are actually employed as scientists or engineers in R&D fields. Nelson believes ageism is a major culprit for the alleged shortage of ITs.
The H-1B system has been abused, claims Dr. John R. Reinert, president of the Institute of Electrical and Electronics Engineers-USA (IEEE), with U.S. workers being fired and replaced with lower-paid foreign workers. The IEEE is a technical professional society of more than 320,000 electrical, electronics, computer engineering, and computer science professionals. Through technical conferences, symposia, published papers, and local meetings, the organization aims to improve awareness of its technologies and advance the standing of the engineering profession and its members. In his testimony, Reinert also recalled the aftermath of creating the H-1B visa program in 1990. After claims of an engineering shortage from the NSF pushed Congress into setting up the program, it was followed by a recession, defense-cutbacks, and corporate restructuring with resulting high unemployment and low salaries for engineers.
Senate backs Act
The American Competitiveness Act made a “vetoproof” showing in the Senate, passing 78 to 20. Chairman of the Senate Immigration Subcommittee, Sen. Spencer Abraham (R-Mich.) urges the House and White House to approve the legislation. He says, “The ramifications are considerable. Many U.S. companies, from Intel to the Ford Motor Co., have informed us that critical projects will be abandoned or put on hold if this legislation is not enacted quickly this year. It could cost us many American jobs, layoffs could result, and economic growth could be impacted.”
In the February 25 hearing on the matter, Kenneth Alvares, vice president of human resources for Sun Microsystems Inc., said at the time Sun had 2,300 unfilled positions, 1,200 of which were in core information technology positions. He anticipated Sun would need to hire 6,000 more people in the next year, and feared that without raising the limit on H-1B visas, the company would not be able to do so. He says increasing education and training is important, but not enough.
The Labor Department predicts the U.S. economy will produce more than 130,000 information technology jobs in each of the next 10 years. Between 1986 and 1995, the number of bachelor degrees awarded in computer science declined by 42%. Information technology professionals do not necessarily have an educational background in computer science though.
If the Act passes, the NSF will oversee a 10-yr study to assess the labor market needs for high-tech workers.
Basis of the Bill
The Bill hinges on a study conducted by Virginia Polytechnic Institute and State University for the Information Technology Assn. of America (ITAA) estimating that there are more than 340,000 unfilled positions for highly skilled information technology workers in American companies. The ITAA is a trade association made up of 11,000 direct and affiliated companies that market computer, communications, and data products and services. Its goal is to promote a healthy, competitive IT industry through advocacy on governmental issues and market development.
According to the study Help Wanted 2: A call for Collaborative Action for the New Millennium, the average number of IT vacancies per company did not vary significantly across regions of the country, and they represent about three vacancies for each company.
The Hudson Institute, a private, non-profit research organization which analyzes and makes recommendations about public policy for businesses, the government, and the general public, estimates that the shortage of skilled workers in the U.S. economy will shrink the growth rate of GDP by 5%. That translates into approximately $200 billion in lost output, nearly $1,000 for every American.
The Department of Commerce issued a report America’s New Deficit, the Shortage of Information Technology Workers in concurrence with the ITAA’s findings. Salaries on the upswing are reported as the “strongest” evidence of a shortage. The report says hourly compensation for system operators, software writers, and consultants rose nearly 20% from 1995 to 96 and that salaries for computer network professionals rose an average of 7.4% from 1996 to 97.
In a letter to the editor, The Washington Post, Thursday April 2, 1998, Gary Bachula, Acting Undersecretary for Technology for the U.S. Dept. of Commerce disputes the General Accounting Office’s (GAO) criticism that the report has analytical and methodological weaknesses. He says the GAO applied the wrong standard to the report. But the report, he points out in the cover letter and introduction, was designed to “stimulate a dialogue among stakeholders to examine the potential for shortages that undermine U.S. economic performance.” Bachula says the report was meant to be a starting point for discussion, not the final word.
An age-old problem
The AEA blames the IT industry for committing “de facto age discrimination,” especially toward those over 40 years old. It suggests companies should retrain workers rather than import low-cost replacements. The organization calculates that retraining would cost a mere $100 per person per year. AEA’s call for education, both for youth and the work force, is touted as a cure to corporate America’s “addiction” to foreign technical workers.
The unspoken policy of relying on foreign workers also slights immigrants. In his April 21 testimony submitted to the House of Representatives Subcommittee on Immigration, for example, Rep. Ronald Klink says, “I know that H-1B workers are too often high-tech braceros, with their destiny in the U.S. completely in the hands of their sponsoring employers. This can and does lead to abuse.”
Klink noted that Pa.-based Mastech Systems, the top user of H-1B visas last year, had been able to train local people and recruit throughout the U.S. to compensate for a shortage of visas. He said the same is true for Syntel, which was barred from using the H-1B program for several years under a consent decree “for not paying the prevailing wage to H-1B employees.”
Immigrants, along with recent graduates, accept lower salaries than established 10 and 15-yr employees. And recent graduates are said to be in hot demand for their cutting-edge skills. Classified ads limiting work experience to “two-to-ten years” and excessively detailed background requirements often exclude older, experienced workers who could be retrained in new skills, but might earn a higher salary than a new college graduate or immigrant.
Klink gives the example of a consulting engineer who was laid off and could not find another job until his old company hired him back to “mentor” a foreign employee who now does his job.
For whom the school bell tolls
But all sides agree on one thing: the need to educate Americans, young and old, to fill high-tech job vacancies. There is a provision in the Bill for scholarships in mathematics, computer science, and engineering for students in financial need.
“The hidden blessing in the current high-demand market for certain technical specialties is that it should encourage us to retrain workers, attract under-represented women and minorities, better educate our young people, and recommission willing and able older workers who have been forced out of the field,” Reinert said at immigration hearings held by the Senate Judiciary Committee in February.
Getting Past the Jargon
One gray area of the dispute comes in defining exactly who is an information technology worker. The American Engineering Association President Bill Reed says, “The ITAA and the Senate Judiciary Committee are going into the hearings without a definition of a high-tech worker. How can they say we are in a shortage when they don’t even know who the high-tech worker is?”
For the Department of Commerce report, IT workers include those involved in the study, design, development, implementation, support, or management of computer-based information systems, particularly software applications and computer hardware. That’s also the ITAA definition.
But the Commerce report also quotes Stanford University claims that those developing software embedded in cars, cellular phones, aircraft, and consumer electronics are likely to be mechanical engineers or electrical engineers, rather than trained software professionals. Also the report analyzes data from the Bureau of Labor Statistics which classifies IT professionals as computer scientists and engineers, systems analysts, and computer programmers.