May 7, 2005
Flip a coin. The way you call it says a lot about how you see the threats to an IT-intensive U.S. economy. Heads, and the risk is a looming shortfall of talent, as Microsoft founder Bill Gates and many industry leaders contend, and the country needs to import expertise or expand abroad to find it. Tails, and the risk is underestimating the U.S. workforce, leaving veteran tech pros unemployed or underemployed while companies hire foreign nationals to save on salaries, thus discouraging people from entering the field. In this debate, there's little chance of the coin landing on its edge.
This week, the government starts accepting applications to let 20,000 additional foreigners with graduate degrees from U.S. schools work in the country under the H-1B visa program. The government already granted 65,000 visas this year to workers who employers deem "high skill," about one-third of whom are employed in computer-related fields.
Information Builders Inc., a 30-year-old New York software company, has 50 to 60 H-1B employees, mostly programmers, among its 1,750 employees. CEO Gerald Cohen is a strong proponent of H-1B visas, saying sending work offshore damages U.S. workers more than the H-1B program, because wages paid abroad are far lower than those offered here. The company offshores some quality-assurance work to save money, Cohen says, but pays its H-1B employees prevailing U.S. wages. With IT unemployment this past year dipping below 4%, most pros who look hard--and are willing to update their skills or perhaps relocate--should be able to find well-paying jobs, he contends. And Cohen believes employers should be able to hire whomever they find best qualified for the job, regardless of nationality, if they pay market salaries. "Anytime you can get the best people with the brightest minds, why not let them emigrate to the United States?" he asks.
Late last month at a gathering at the Library of Congress, Gates said Microsoft isn't finding an adequate labor pool in the United States. "Anyone who's got the education and the experience, they're not out there unemployed," he said. That kind of pressure from business leaders convinced Congress to add 20,000 jobs to the 65,000 annual H-1B visa cap. Aggravating the situation, proponents of H-1B assert, is a sharp decline in enrollment in college and university IT programs. Enrollment in these programs has declined by more than 50% in the past five years, according to the Society for Information Management.
The enrollment decrease means there are fewer younger IT pros to hire, and H-1B helps fill the void: 65% of H-1B visa holders are between 25 and 34. And employers appear to be paying them well. An 18- to 30-year-old systems analyst/programmer from overseas earned a median salary of $54,500, a 2003 Government Accountability Office study found--$10,000 more than an American counterpart. Forty-two percent of H-1B visa recipients came from countries not associated with low wages: European Union countries, Canada, Japan, Australia, and Israel, according to 2003 data, the most recent available. India accounted for 27%.
Yet critics contend that the H-1B program lets employers pursue younger workers who'll work for less at the expense of qualified, older U.S. workers. An American systems analyst/programmer, age 31 to 50, holding an advanced degree earned a median salary of $87,000 a year--40% more than that younger H-1B worker, the same GAO study found.
Ken Jinks feels caught in that pinch. The Huntsville, Ala., software engineer considers himself underemployed and blames the H-1B visa program. Jobless for a year in the late 1990s, the 47-year-old father of two took a job six years ago with a local company, where he still works, at 80% of his former salary. In the meantime, he says, the company has hired at least three younger foreign workers through the H-1B program for higher-ranking software architecture posts for which he thinks he and other Americans were qualified. "That does make it difficult for someone like me, in this business for 21 years," he says.
On average over the past four quarters ended in March, 131,000 people who consider themselves computer professionals--3.7% of the workforce--were unemployed, according to the Bureau of Labor Statistics.
Would those workers find jobs if the federal government issued fewer H-1B visas? U.S. citizens compete to some extent with foreign workers, whether on U.S. soil through H-1B visas or through offshore offices. Developing nations such as China and India will be a source of skilled technology talent, whether through immigration or offshore outsourcing, concludes a study of the fastest-growing IT companies around the world, released last week by consulting firm Deloitte Touche Tohmatsu. "Business leaders will press their national governments to loosen restrictions on foreign immigration," according to the study, "while continuing to shift more and more work offshore."
Employers worry about having enough talent, and that the best and brightest won't see the United States as the place to work. Employees worry about driving down U.S. wages. As the coin spins in the air, the question again comes down to how you call it. Do you worry more about the foreign workers who come here--or the ones who stay home?
Photo by Sacha Lecca
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