U.S. Tech Industry Pleads for Fewer Restrictions on Foreign Workers

Indian outsourcing firms, Microsoft, Google and others speak out on the restrictions on hiring foreign help

The pervasiveness of the Internet allows for a new definition of a “global market,” opening doors not only for businesses, but also labor forces. While a corporation may cater its products and services to a worldwide audience, it must adhere to strict rules with it comes to their human resources.

One such regulation by the U.S. government is the H1-B non-immigrant visa, which allows employers to seek temporary help (six years per visa) from skilled foreigners who have the equivalent U.S. Bachelor's Degree education. The most well known example of H1-B visa holders are workers from India providing IT duties to large Indian outsourcing firms and U.S. corporations. Out of the top 10 companies receiving workers thanks to H1-B visas, seven of them are Indian outsourcing firms, while the remaining three are Microsoft, IBM and Oracle.

In the early 1990s, the quota on the number of H1-B visas issued was rarely met, but in the last few years, all H1-Bs were snapped up in just a matter of months. Companies who are unable to acquire adequate number of visas will have to wait until the next fiscal year before refilling their applications. For the fiscal year 2008, the entire quota was exhausted before the end of the first day on which applications were accepted.

The U.S. government caps the number of H1-B visas at 65,000, with provisions for more workers with foreign graduate degrees and when the quotas are met. In May of this year, the Senate voted to increase H1-B visa fees from $1,500 to $5,000. Proceeds from the fees are used to fund U.S. educational programs.

Senator Bernie Sanders (I-VT), a strong supporter of the bill who originally sought for a greater fee increase to $8,500, explained his reasons for the increase to the Senate: "What many of us have come to understand is that these H-1B visas are not being used to supplement the American workforce where we have shortages but, rather, H1-B visas are being used to replace American workers with lower cost foreign workers."

The National Association of Software and Service Companies (NASSCOM), a group that represents a collection of Indian companies, was quick to refute the Senators’ claim, citing information that says there is no link between U.S. job losses. "These two do not seem to go hand in hand as exhibited through the 2006 survey by Money Magazine," NASSCOM said regarding Sander’s statement.

The group also pointed out that U.S. firms also benefit from its relationship with Indian companies. "India is a major buyer of a whole host of US goods and services, including aircraft, wheat, branded garments and accessories etc... An overwhelming majority of the computers and software used by India's IT industry as also other sectors of the economy are those produced by US companies like HP, Dell, Microsoft and Oracle," it said.

The Information Technology Association of America (ITAA) also opposes the recent changes in the H1-B bill because it "seems to give short shrift to innovation and the competitiveness of America’s high tech industries." The ITAA expressed its concerns (PDF) in a letter to Senate leaders (PDF) on both sides of the aisle as well as the negotiators of the compromise measure.

"America’s economy is strong and vibrant, but the country’s future competitiveness rests on the ability of firms to recruit globally. As you know, the H1-B cap for FY `08 was reached in April, shutting out US employers from recruiting highly skilled foreign nationals who are graduating from US institutions with degrees in computer science, engineering, mathematics and other scientific and technical fields. Vacancies go unfilled and highly valued workers are forced to leave the country," the letter read.

The letter later concludes, "There is no doubt that immigration reform is needed that is tough and protects our border. But we have the opportunity to pass a law that is fair, practical and strengthens our economy. Most importantly, we need to have workplace enforcement that is effective, and uses the best available technology."

Regardless of job loss statistics, Sanders believes that large corporations like Microsoft should divert some of its off-shore spending back home. "To win favor in China, Microsoft has pledged to spend more than $750 million on cooperative research, technology for schools and other investments," Sanders believed. "If Microsoft and other corporations have billions of dollars to invest in technology…in China, these same companies should have enough money to provide scholarships for middle-class kids in the United States of America."

This shortage of visas is an issue that many tech firms have been wrestling with for a number of years. Bill Gates said in his congressional testimony in 2005, "You can't imagine how tough it is to plan as a company where we say, 'let's have this engineering group and staff it' ... we'll have Canadians waiting at the border until some bureaucratic thing happens where a few more [visa spots] get opened up. That's just wounding us in this global competition." Gates was hoping to convince politicians to remove the caps on H1-B visas.

Although it is not in the top 10 companies receiving H1-B visas, Google strongly urged the U.S. government to raise the quota on H1-B visas. Google Vice-President of People Operations, Laszlo Bock, made pointed out in his congressional testimony that the Internet giant was built on the foundation of foreigners, citing Google co-founder Sergey Brin’s Soviet Union family origins.

"We opened our doors to Sergey's parents – a mathematician and an economist," said Bock. "Our educational system served Sergey well – he attended the University of Maryland and Stanford University. Our free market economy supported Sergey and Larry's entrepreneurship and rewarded it when they proved that they could turn their idea into a successful business."

Bock also said that Google’s principal scientist and one of the chief creators of Google News, Krishna Bharat, was born in India and is a direct addition to the company through the H1-B visa. About eight percent of Google’s U.S. workforce is on a six-year H1-B visa.

Bock wasn’t campaigning only for his company’s interests, but rather of the entire IT industry. "In fact, Google is just the most recent story for immigrants in Silicon Valley. Intel, eBay, Yahoo, Sun Microsystems, and many other companies were all founded by immigrants who were welcomed by America," he said. "We are not the only ones recruiting talented engineers, scientists and mathematicians. We are in a fierce worldwide competition for top talent unlike ever before. As companies in India, China and other countries step up efforts to attract highly skilled employees, the U.S. must continue to focus on attracting and retaining these great minds."

Reference:Marcus Yam,dailytech