Today's Immigrant - Tomorrow's Victim

Date: Friday, July 05, 2002 12:33 AM

*** H-1B NEWSLETTER ***

Get the Facts on H-1B at
www.ZaZona.com

Richard Tax of the American Engineering Association wrote a paper called
"Today’s Immigrant - Tomorrow’s Victim" that can be seen at
http://www.aea.org/Documents/TODAY's%20Immigrant.pdf. Dasigi, an Indian
woman who came to the U.S. on an H-1B visa and then got permanent residency
status, if a perfect example of what Tax was talking about. She can't get a
job because of the flood of H-1Bs coming into the US.

This article has a good debate between Harris Miller of the ITAA, Norman
Matloff, and Peter Cappelli, director of Wharton’s Center for Human
Resources. Miller uses his "blame the victim" argument when he says that
American IT workers need to retool their skills. Cappelli has a great
come-back saying that "The ITAA’s study itself ought to be retooled".

Pay particular attention when Miller says that he would personally like to
see the cap on H-1Bs eliminated entirely. That is his ultimate goal and he
is spending a lot of time lobbying for it.

http://knowledge.wharton.upenn.edu/articles.cfm?catid=10&articleid=581&homepage=yes

Debate over Scarcity – and Skills – of IT Workers

Software coder Soujanya Dasigi has a hard time believing the latest report
on the technology job market from the Information Technology Association of
America (ITAA).

According to the trade group’s May study, "Bouncing Back: Jobs, Skills and
the Continuing Demand for IT Workers," U.S. companies will be short nearly
600,000 qualified IT professionals over the next 12 months. Dasigi lost her
job at software firm Compuware in April 2001, and has fruitlessly applied to
between 200 and 250 jobs since then. To the San Jose, Calif. resident, life
in the IT trenches and often-grim economic news suggest the ITAA is way off
base. "I don’t believe there is any kind of dearth of qualified candidates,"
she says. "I don’t think this economy is going to change anytime soon."

With its "Bouncing Back" report, the ITAA has rekindled the debate over the
supply of programmers, electrical engineers and the like in the United
States. Labor leaders, tech advocates and some scholars argue the U.S.
produces enough technology workers, while tech firms and industry
associations complain skilled employees are typically hard to find.

The “Bouncing Back” study also raises a related question: What role should
immigrant workers play, if any, in filling U.S. tech jobs? The H-1B visa
program, which was expanded in 1998 and again in 2000, shrinks from a cap of
195,000 to 65,000 workers next year. "Bouncing Back" is effectively the
first salvo in what is likely to be another bruising battle over the need
for immigrant tech workers. Stakes are high for both techies and employers.
More than 500,000 IT workers were laid off in the U.S. in the past year, by
the ITAA’s own admission. An army of unemployed domestic tech workers is
eager to land new jobs without the added competition of candidates from
abroad. Employers, meanwhile, are still struggling to recover from the
recession. They say they need access to the top tech talent, including guest
workers.

In the past year, though, employers have been busier firing than hiring.
"Bouncing Back" concludes the IT workforce shrunk by 528,496 from early 2001
to early 2002 – a 5% reduction to 9.9 million workers.

But the study, which was based on interviews with 532 hiring managers at IT
and non-IT companies, says better times are on the way. Employers will be
looking to fill about 1,150,000 tech jobs in the next 12 months, the ITAA
predicts. The study also ranked the hottest tech skills these days. Based on
30,000 technical job postings on the Dice.com job board, the C++ programming
language is the skill most in demand, followed by Oracle, SQL, Java and
Windows NT technologies.

Hiring managers don’t expect to find all the people they need, according to
the study. It predicts that about half the projected openings, or 578,711 IT
jobs, will go unfilled due to a "lack of qualified workers." That "gap" in
supply has remained roughly 50% of demand since the ITAA began counting it
three years ago.

The size of the gap this year surprised ITAA President Harris Miller, who
expected the wave of layoffs to result in a smaller projected worker
shortage. But he speculated IT bosses are seeing the wrong skills on
resumes, and advised IT job-seekers to learn the skills most needed today.
"The marketplace is speaking," Miller said. "All I can suggest is get
yourself retooled."

The ITAA’s study itself ought to be retooled, suggests Peter Cappelli,
director of Wharton’s Center for Human Resources. To Cappelli, the study’s
projected shortage stems from managers who set overly high expectations for
job candidates and who are unwilling to cough up higher salaries for
so-called qualified workers. "It’s very misleading," says Cappelli, who
analyzed the IT labor market in a paper published in 2000. "If I can’t find
a chef at the wage I’d like, it doesn’t mean there’s a shortage of chefs."

Although ITAA studies have found shortages in qualified IT workers for the
past three years, the claim repeatedly has been challenged. In September
2000, for example, a U.S. General Accounting Office report about the H-1B
visa program concluded that existing labor market studies "do not permit a
conclusion as to the extent of any IT skill shortage."

The "Bouncing Back" section on critical IT skills – in conjunction with its
labor shortage projection – also has raised eyebrows. Patricia Keefe,
editorial director of trade publication Computerworld, pointed out that C++,
Oracle, SQL, Java and Windows NT "aren’t exactly spanking-new technologies,
so you’d think there would be a match with many of our IT unemployed."

Dasigi has about four years of experience coding in C++ language. What’s
more, she boasts a master’s degree in computer science from an Indian
university and an MBA earned in the United States. And she has used her time
without a job to take classes in networking technology and in the Linux and
Unix operating systems. "It hasn’t helped so far," says Dasigi, who came to
the U.S. on an H-1B visa but has obtained permanent residency status.

With the annual limit on H-1B visa workers set to return to 65,000 in 2003,
Congress is likely to consider tinkering with the visas again. The
conclusions in the “Bouncing Back” study could be used to justify another
expansion.

The H-1B program works like this: Skilled foreign workers – typically those
with a bachelor’s degree or higher – are allowed into the United States for
a period of up to six years. Most of them come for tech jobs. In a report on
the program two years ago, the Immigration and Naturalization Services said
47% of those entering on the visa were systems analysts or programmers and
an additional 5% were electrical or electronics engineers. The report found
people born in India reaped the lion’s share of H-1B visas - nearly 43%.

The H-1B program has enraged techies and their advocates during the dot-com
collapse and overall business slump. To critics, guest workers have no place
here when domestic coders are looking for work.

Computer chip giant Intel cut its staff by 5,000 last year to 83,000 yet
still hired a few H-1Bs. But those H-1B hires were crucial, said Intel
spokeswoman Gail Dundas. The guest workers were highly skilled, often
possessing Ph.D. or master’s degrees, she says. "Those are the folks we need
to keep us number one."

The ITAA has been a steady backer of the guest visas. Miller insists his
organization is focusing on other lobbying issues now, but says he would
personally like to see the cap on H-1Bs eliminated entirely.

H-1B critics, on the other hand, would like to scrap the program. They point
to studies finding visa fraud and outright exploitation of visa holders, who
have been dependent on an employer as they seek a permanent residency "green
card." The legislation expanding the cap in 2000 meant to fix some of the
program’s problems.

But U.C. Davis computer science professor Norm Matloff argues the system
still allows employers to take advantage of guest workers. Matloff, who has
opposed the visa program since the early 1990s, says an employer sponsoring
a guest worker for a green card can foot-drag in the initial stages of the
process. And even without foot-dragging, foreign workers are still
effectively beholden to a firm for at least three to four years, he
estimates.

Visa critics and supporters have divergent views of what would happen
without the program. If U.S. companies can’t find employees with the right
skills and be able to hire them at reasonable wage levels, the firms will be
forced to send IT work overseas, Miller says. With increasingly skilled
operations in lower-wage regions like Asia, Eastern Europe and Latin
America, the U.S. must adapt, he adds – which includes ensuring a healthy IT
labor supply to keep wages from skyrocketing. "You can’t just raise the
salaries to an infinite level and still be competitive."

In Asia, countries like Singapore, the Philippines and Malaysia have begun
to attract IT projects that were once executed in the U.S. and other Western
countries. Another hot market for back-office projects is India, which has a
large, English-speaking workforce. NASSCOM, India’s main association for
software and IT service companies, said in a report issued on June 10, 2002
that India will employ 4 million people and earn $30 billion from IT
services exports by 2008.” The Economist of London last year cited a study
by the Electronics and Computer Software Export Promotion Council in India
which “sees the industry’s exports to the U.S growing from $264 million in
2000 to over $4 billion in 2005.”

Already, outsourcing is becoming more common. According to “Bouncing Back,”
outsourcing of IT work grew 17% among non-IT companies last year as a way to
cope with a lack of skilled workers. Cappelli, though, doubts a major chunk
of IT work would sail overseas without H-1Bs. He suggests collaboration
tools like the Internet already make shifting work to other countries
possible, yet it’s not widely done. H-1B visas, he thinks, are little more
than pork for employers. "The industry (shouldn’t) expect the broader
society and the government to solve all of its labor problems," he said. "No
other industry expects that."

TIAA’s Miller counters that the guest worker program has served a real need.
The numbers of visas used in recent years show as much, he says. During the
tech boom years of 1999 and 2000, employers hit the visa cap of 115,000. But
during last year’s slump, the expanded limit of 195,000 was not reached.
What’s more, for the first half of the 2002 fiscal year, just 44,500 H-1B
visas were granted that count against the cap of 195,000. (H-1B visas
approved for institutions of higher education, non-profit groups affiliated
with them and non-profit or government research organizations don’t count
against the expanded cap.) "It’s a program that employers use when they need
it," Miller says. "It’s not a cheap labor program."

Matloff sees a very different story in the statistics. He notes that in
2001, the total number of H-1B visas given out was 202,000 thanks to visas
given to exempted organizations. In other words, amid massive tech layoffs,
U.S. employers brought in nearly twice the number of guest workers than the
previous two years. And he argues that even if this year’s final tally is
90,000, it will be close to the boom-time H-1B allowance of 115,000 workers.
"You don’t have to be a rocket economist to see that the H-1B program is
being overused," he says.

Underpinning this debate are questions about the U.S. education system,
workplace training and the fate of older technical workers. Industry leaders
say U.S. colleges don’t turn out enough tech grads, while H-1B visa critics
claim tech enrollments have risen in response to demand. The two sides also
spar over whether IT employers provide enough training for tech workers.

On the older worker topic, Miller says IT professionals remain in the field
as they age but go into management positions. Matloff argues that a large
population of older workers is forced out or quits the field in frustration.
By studying a database of college graduate surveys, he found that only 19%
of computer science grads are still in that field 20 years later – compared
with 52% of civil engineers. Civil engineers become managers too, Matloff
says, and seem to do so at a higher rate than computer science engineers.
Data from the national survey he examined show that among those who have
been out of school 16 years or more, 13% of computer science graduates were
managers, while 18% of the civil engineering graduates held management
positions.

Cappelli has cited Matloff’s research on IT attrition, and argues that
employers are largely to blame for the problem. The industry has managed
technology professionals woefully, Cappelli says, adding that IT work is
often broken up into small, disconnected projects that result in a lousy
work experience. "This approach to work organization violates basic
principles of job design by creating narrow tasks where workers cannot tell
what the overall goal is," he wrote in his paper.

The “Bouncing Back” study itself points to a culture of poor techie
retention. Surveyed companies said the "average acceptable time to retain
their IT workers is just over two years," which is down from an acceptable
tenure of 33 months the year before. ITAA’s Miller concedes job churn is a
problem but says companies began pushing to improve their IT employee
retention a few years ago.

For laid-off workers such as Dasigi, though, retention efforts don’t mean
much. And this former H-1B visa holder has her own criticism of the guest
worker program. Dasigi wishes the standards were raised for obtaining an
H-1B visa. Conceivably, that could prevent foreigners with low skills from
entering the U.S. job market and dragging down both wages and the quality of
work done here.

For now, Dasigi is as likely as any other permanent U.S. resident or citizen
in the tech field to be affected by a glut of H-1Bs. During her long job
drought, the possibility of abandoning coding for teaching or retail sales
has crossed her mind. But so far she’s toughing it out in technology. "I’ve
been a programmer," she says. "And hopefully I’ll be a programmer in the
future."

Help to Keep ZaZona.com Online

Donate to the Cause at
http://www.zazona.com/Donations.htm

Back to archives