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6/9/2006
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In Depth: Why We Need The H-1B

The U.S. IT industry needs a free flow of talent--probably more free than we have. That'll take addressing the abuse, fear, and retraining problems that stand in the way.

Many American IT pros won't want to hear this, but importing tech workers into the United States isn't just an economic necessity; it might be critical to saving their jobs.

Congress is giving its most serious consideration in years to increasing the number of people who can work in the United States each year under H-1B visas. Two main proposals remain on the table: Leave the cap at 65,000, or raise it to 115,000. That's a difference of only 50,000 jobs in an economy that employs about 144 million people, yet advocates maintain that the country's technological leadership hangs in the balance.

Think the United States is the only place to work? Think again, Huang says.

Think the United States is the only place to work? Think again, Huang says.

Photo by Eric Millette
Set the visa number too low, and tech-driven U.S. companies won't get the people they need (at least not at the salaries they and their shareholders increasingly demand), so they'll be more likely to relocate those positions abroad. Set the number too high, critics maintain, and U.S. IT organizations will become glorified sweat shops, driving down salaries for all tech pros and discouraging young Americans from entering the field.

The U.S. Citizenship and Immigration Services already has enough applications for the 65,000 H-1B visas it will issue for the fiscal year that starts Oct. 1--the fourth straight fiscal year the cap will be reached. And with the U.S. tech unemployment rate hovering around 3%, near its record low, and tech employment above 3.4 million, near its all-time high, expect H-1B visa demand to far exceed supply unless the cap is raised. For those U.S. employers turned away, offshoring the work to India, China, and other counties remains an attractive option, despite recent salary inflation in those countries. There's no arguing with the economics.

The H-1B cap has been moved three times since it was first set at 65,000 in 1992: up to 115,000 in 1999, up to 195,000 in 2001, and down to 65,000 in 2004. History suggests the demand for such visas isn't insatiable--the 195,000 cap was never hit, even in the boom of 2001, when companies snatched 163,600. In 2003, when U.S. IT employment bottomed out amid widespread cost-cutting, companies grabbed 78,000 H-1B visas, leaving 117,000 on the table.

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There isn't an exact count of how many of the country's 3.6 million available tech workers are on H-1Bs. The visas can go to any industry, but IT companies are by far the biggest users. According to the National Foundation for American Policy, a nonprofit that advocates raising the cap, as many as 450,000 H-1B visa holders across industries may be in the United States waiting for green cards.

While the immediate point of debate is 65,000 versus 115,000, some proposals go further. One would raise the cap annually by 20% if the previous year's quota is met, and another would simplify the green-card process, making it easier for temporary foreign workers to work permanently in the United States.

While some argue passionately that these additional H-1B workers will only take jobs away from American tech workers, the opposing view is that the increase will actually create jobs. Smart foreign-born overachievers allowed to work--and perhaps stay--in the United States could help provide new ideas and expertise to drive technology innovation in this country, creating more jobs for the future. Those new jobs might require different skills than are needed today, but that's just the point: Technology is evolving, and the U.S. workforce needs to make sure it can keep up with changing demands.

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