Congress, Hooked on Foreign IT Workers, Slips Deal into Huge Spending Bill

Congress recently added a cynical deal brokered in a back room to its massive spending bill. The agreement gives 20,000 more foreign workers a job in the high-tech field at American workers??¢â???¬â???¢ expense.

Executives of high-tech firms such as Microsoft, Intel, Hewlett-Packard and Oracle, joined by several universities, breathlessly told Congress in a Nov. 10 letter that they needed a fix of the foreign worker narcotic. ??¢â???¬?????Essentially, U.S. companies will have no ability to hire highly educated foreign nationals for one full year,??¢â???¬  they claimed.

Evidently, going cold turkey on foreign workers and letting the labor market work wasn??¢â???¬â???¢t an option.

Multinationals in this sector have become so addicted to cheap foreign labor that they exhausted the entire fiscal year??¢â???¬â???¢s quota of 65,000 H1B visas on the first day of the fiscal year, Oct. 1. ??¢â???¬?????While only a small percentage of our workforce is on H1-B visas, we believe these talented individuals are critical to our organization’s ability to compete and succeed,??¢â???¬  the addicts claimed.

Their timing betrayed their true motivation. The Washington Post ran a front-page story Nov. 9 documenting the plight of American tech workers. The subheadline read, ??¢â???¬?????IT Unemployment Now Exceeds Overall Jobless Rate.??¢â???¬  Common sense tells you that it doesn??¢â???¬â???¢t benefit skilled, unemployed Americans to bring in more foreign workers to fill jobs they could do.

The truth is these companies want to displace or overlook qualified American technology workers for cheap foreign labor. These are the same perpetrators of exporting American jobs via ??¢â???¬?????offshoring??¢â???¬  that CNN??¢â???¬â???¢s Lou Dobbs exposes night after night.

Legislators reached a back-room deal that exempted 20,000 foreign workers holding U.S. graduate degrees from the H1B cap.

They included a measure Sen. Ted Kennedy insisted on for manipulating the way ??¢â???¬?????prevailing wage??¢â???¬  is calculated; it allows corporations to drive down tech-sector pay so fewer Americans can afford to take those jobs. The deal also contained a figleaf provision to reduce one of the many abuses of L-1, or intracompany transfer, visas.

Because there were no H1B hearings, special interests didn??¢â???¬â???¢t have to prove that a real need exists. So what are the facts? Are more H1Bs needed? The short answer: No.

The U.S. IT workforce declined to 5.93 million in 2003, falling successively each year from the peak in 2000 of 6.47 million. Even an industry flack told the Washington Post, ??¢â???¬?????[D]emand for IT workers has dropped significantly.??¢â???¬  Consulting firm Challenger Gray & Christmas said 16 percent of all U.S. jobs cut this year were with high-tech firms.

Hundreds of thousands of qualified Americans are available, according to University of California at Davis computer science Professor Norman Matloff. ??¢â???¬?????There is no ??¢â???¬????shortage??¢â???¬â???¢ of U.S. citizens and permanent residents with graduate degrees,??¢â???¬  he says.

??¢â???¬?????On the contrary, those same employers who claim such a ??¢â???¬????shortage??¢â???¬â???¢ are laying off programmers and engineers with graduate degrees in droves,??¢â???¬  says Matloff. ??¢â???¬?????Meanwhile, in the last few years, the terrible job market has resulted in university graduate programs in the tech areas being inundated with domestic applicants.??¢â???¬ 

Adding more foreign workers to the already flooded IT labor pool forces down wages. Harvard economist George Borjas has found, ??¢â???¬?????[T]he immigrant influx of the 1980s and 1990s lowered the wages of most native workers, particularly those workers at the bottom and top of the education distribution. The wage fell by . . . 3.6 percent for college graduates. . . . [In 2000] the typical male college graduate earned $73,000, implying that immigration reduced this worker??¢â???¬â???¢s wage by nearly $2,600??¢â???¬  (Italics added).

Political manipulation of the labor market through government intervention artificially drives down wages. It feeds the corporate appetite for foreign labor over Americans. Conservative economist Thomas Sowell has written, ??¢â???¬?????The argument that immigrants ??¢â???¬????take jobs that other Americans don??¢â???¬â???¢t want??¢â???¬â???¢ leaves out the crucial factor of pay.??¢â???¬ 

The early exhaustion of H1B visas this fiscal year only proves the popularity of using foreign workers, who are always cheaper, over hiring Americans. Contrary to the assertions, these aren??¢â???¬â???¢t the world??¢â???¬â???¢s ??¢â???¬?????brightest and best.??¢â???¬ 

And having an advanced degree is far from essential to an IT career. ??¢â???¬?????[M]ost holders of U.S. graduate degrees, whether foreign or domestic, end up doing work which does not require such a degree,??¢â???¬  Matloff says.

The real policy choice is between a balanced approach that takes Americans and America??¢â???¬â???¢s national interests into account or shameless pandering to the ??¢â???¬?????dot bomb??¢â???¬  segment of Corporate America.