Add another 60,000 American jobs lost to foreign labor via L-1 visas.
Regular readers know I talk a lot about the H1-B visa program. Basically, H1-B visas allow companies to hire cheap temporary foreign workers who would otherwise be ineligible for immigration. Though some of the 195,000 available H1-B visas go unused, a conservative estimate is that more than 100,000 U.S. IT jobs every year are filled by temporary foreign workers, primarily from India. I have read estimates that put that number much higher. Because of changes to the law in 2002 that exclude university staff from H-1B, there could be as many as 240,000 new foreign IT workers in the United States, for a total of 400,000. I noted in a previous column that the U.S. Bureau of Labor Statistics estimates that more than 212,000 Americans with IT skills are out of work. And companies are showing a propensity to lay off American workers before H-1B holders, magnifying this trend.
The problem is further magnified by another temporary visa program. L-1 visas are designed to allow foreign-born workers who are hired by U.S. companies abroad to work on temporary projects in the states. Of course, the law is full of Enron-size loopholes. The biggest one relates to shadow subsidiaries. A U.S. company that wants to hire cheap foreign labor but does not want to use the H1-B program (H-1Bs take more time) can create an Indian subsidiary specifically for the purpose of bringing Indian talent here and contracting it out to companies in need of cheap talent. In some cases, visas are granted to companies based in India to transfer talent to the states. According to the INS, there are nearly 60,000 foreign-born L-1 visa holders working in the United States.
Companies and organizations, such as the Information Technology Association of America (ITAA), defend the visas on two grounds. First, they say there really is a need for new talent that can’t be filled by Americans. Tell that to the tens of thousands of new computer science graduates every year who can’t find work. Then tell it to the thousands of experienced IT workers who have been out of a job for more than six months. The other justification I’ve read is that American-trained IT personnel are not as skilled as those educated in India. I have a hard time believing that the birthplace of information technology’s cornerstone institutions can’t produce talent as good as those trained in India. In fact, the U.S. training and education system for IT workers is a decade or more ahead of those in India, China, or Russia. Both justifications ring hollow.
No, the real reason is cost. Americans expect to make better than cost-of-living wages for their 60-hour work weeks. And the mammoth IT companies don’t want to pay it. Actually, most of them want to pay it to get the best talent in the world. But they can’t afford American talent and still make their margins and satisfy their investors’ growth expectations. So they lay off American talent and hire Indian talent. Or they farm the whole programming business abroad to Russia or China.
That is why this recovery feels more like a recession than the official recession did, especially in IT. Labor statistics don’t lie–we are in a recovery at the expense of the American worker. Companies are satisfying their investors by consolidating, downsizing, and using every cost-cutting measure they can think of. I wonder what will happen when they can’t even afford Indian talent anymore. I’m sure their scouring the planet for huge populations of starving people with some mathematical aptitude. Brazil?
One connection here that I was unable to make without the help of a reader relates to my columns on unions in IT. He pointed out that if we had unions in IT, we would not have all these visa programs. Look at any unionized industry and you’ll see there is no tolerance for worker imports while union members are out of work. I do think it’s time for IT unions. Companies will continue to consolidate and cut costs in IT if this is the only place they can, because unions in other areas (shipping, manufacturing, etc.) won’t let them cut. If IT had unions, IT workers would be on level ground with workers in other areas of their companies and wouldn’t be the first to be shown the door to meet budgets. Unions just might be the only way IT workers can save their jobs.
James Mathewson is editor of ComputerUser magazine and ComputerUser.com