To H-1B Or Not To H-1B? - InformationWeek

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7/10/2007
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To H-1B Or Not To H-1B?

Are we facing an IT shortage of crisis proportions, or systematically destroying a skilled and capable homegrown workforce?

Another myth, according to advocates for keeping the H-1B cap in place, is that both H-1B workers and U.S. workers are protected because the law mandates that H-1Bs are paid the prevailing wage. Because this safeguard is in place, employers can't exploit H-1Bs by paying them less, and U.S. workers' chances of employment -- and salaries " aren't being undermined, according to the employers.

Yet the prevailing wage argument is rife with loopholes, said John Miano, founder of the Programmer's Guild, a professional society that acts as an advocate for the software programming community. First of all, "prevailing wage" is a legal term and isn't synonymous with market wage. Statistically, it's also very easy to manipulate, he said.

Under most government regulations, prevailing wage is the median wage for all U.S. workers working at a given occupation at a given location based on information provided by an external source of wage information. If no such information is available, an average wage of an employer's current workers is considered valid. Or an employer can use the Department of Labor's own skills-based prevailing wage system that sets wages based upon skill levels 1 to 4. Most employers applying for H-1B visas claim that they need workers at level 1, which means they get paid wages at the 15th to 20th percentile. "Statistically, between all these measures, you usually have enough leeway to take $20,000 to $30,000 off the market wage without breaking the law in any detectible manner," said Miano.

Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology (currently on leave) and a research associate at the Economic Policy Institute, pointed to USCIS's most recent report to Congress, which shows that the medium wage in 2005 for new H-1B computing professionals was just $50,000 -- even lower than the entry-level wages that a newly graduated tech worker with a bachelor's degree and no experience would command.

According to data from the Bureau of Labor Statistics' Occupational Employment Statistics (OES) as the measurement of U.S. wages, and the H-1B LCA disclosure data to measure H-1B wages, 90% of H-1B employers' prevailing wage claims for programmers were below the median U.S. wage for that occupation and location, with 62% of them falling in the bottom 25th percentile of U.S. wages, said Miano.

"Because U.S. firms simply can't compete if they don't use H-1B workers, in effect our economy is becoming addicted to these workers," said Jessica Vaughan, a senior policy analyst at the Center for Immigration Studies, which generally advocates limiting immigration but extending a warmer welcome to those who are allowed in.

Brian Sullivan considers himself one of the lucky ones. A 45-year-old IT open-source programmer working for a Detroit-based Fortune 500 utility company, he's always had a job. He earned a dual bachelor's degree in accounting and MIS from Oakland College and an MBA from Wayne State University, and began working in IT in 1986 for Chrysler right out of college. After 10 years, he moved to EDS and then, during the tech boom of the late 1990s, went into contracting because the pay was so good. He also teaches IT classes at Oakland "so I have a vested interest in this subject," he said.

Over the course of his career, he has seen ample evidence that the H-1B visa program results in gross economic iniquities, for both U.S. workers and H-1B holders. "Say that I pay you $30,000 annually to come over and do some Java work," Sullivan said. "After a year of that, you're now doing a job that a U.S. worker would charge $100,000 for. Yet because you're tied to your sponsoring employer, you can't quit. And U.S. workers with similar -- or even better -- skills can't compete with you."

Likewise, Bob Hannah is appalled at what employers are offering to pay experienced technology workers in his area. A 56-year-old network administrator in Bettendorf, Iowa, Hannah was let go from his longtime job at a Midwestern bank after it was acquired by a larger financial institution and the entire IT department was outsourced. Out of work for more than a year, he has applied for more than 100 jobs but rarely gets a call or e-mail back. "Even if I did, none of the salaries touch what I was making at the bank," he said. Currently, he's is working part time as a contractor repairing Dell computers.

Back in the 1990s, working as a Y2K consultant in Chicago, Hannah remembers the large numbers of H-1B workers brought in because they were considerably cheaper than Americans. "They were incredibly nice people and hard workers, and deserved better," he said. That's still the case, but now he's feeling the impact of what he considers unfair wage competition. "Back then, there was plenty of work to go around. Now there isn't."

"If this is truly about jobs that we can't fill with Americans, then make it truly competitive and pay us all equally," Sullivan agreed. "Otherwise, it's simply not a level playing field."

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