H1-B Fact Sheet
Why S. 2045 Should Be Defeated
[Legislation passed by Congress in 2000 to increase the H-1B caps]

Demand — Labor Market Conditions

FACT: The U.S. Department of Labor (DOL) estimates that over the next eight years an average of 204,000 job opportunities will be created annually in the high tech industry. Yet, S. 2045 would allow into the U.S. upwards of 250,000 guest workers per year for the next three years once the various sector exemptions contained within the legislation are factored in. This represents more than a doubling of the current 115,000 annual cap on such visas and would exceed the total number of jobs being created each year as projected by DOL.

FACT: At present, there is estimated to be over 400,00 H-1B guest workers already in the U.S. Even as some of them return to their native countries, with the near quarter million yearly increases allowed for by S. 2045 by 2003 the likelihood is that over one million guest workers will be in the U.S.

FACT: At the same time, DOL estimates that job openings in all the professional specialty occupations in the near future will average only 920,000 per year. In other words, S. 2045 will in effect allow for approximately 25% or more of these job openings to be filled by H-1B workers. Since the legislation does not limit the entry of high skilled workers under other current immigration programs, the 25% probably underestimates the full impact on U.S. professional-specialty occupations.

FACT: The justification for a massive expansion of the H-1B program is industry claims of widespread and pervasive shortages of qualified workers. Yet there exists no independent, unbiased, statistical evidence that substantiates their claims. If such shortages existed, IT wages should have escalated sharply over the last few years. In point of fact, they haven't.

FACT: From 1997-2000 the median wages for computer systems analysts and scientists increased from $918 per week to $1,009 — an increase of only 9.9%. This represents a net increase of just .4% after an inflation rate of 9.5% for these four years is factored in.

FACT: For computer operations and systems researchers and analysts — an occupational category that was 45.5% female in 2000 — the wage picture is even worse. From 1997–2000 their median wages increased by $24 or 2.7% from $867 weekly to $891. Once inflation is factored in, these workers actually suffered a 6.8%decrease in their earnings. For women, the situation was far worse. Their wages actually decreased before inflation from $826 down to $817. With inflation factored in, their wages fell by 10%!

FACT: For computer programmers, while they fared better with average weekly wage moving up by 12.4%, this was a net increase of only 2.9% over inflation for that same period of time.

FACT: In a candid moment, Roger Cooker, director of staffing at Texas Instruments Company — one of the nation’s largest high tech firms — told U.S. News and World Report (August 30, 1999) that H-1B workers are part of their strategy to keep down the wages of engineers and other high tech workers.

FACT: In a Congressionally-mandated study released soon after the Congress had passed S 2045, the National Research Council — the principal operating arm of the National Academy of Sciences and the National Academy of Engineering — found that "the current size of the H-1B workforce relative to the overall number of IT professionals is large enough to keep wages from rising as fast as might be expected in a tight labor market." Further, it also found "no analytical basis on which to set the proper level of H-1B visas, and that decisions to reduce or increase the cap on such visas are fundamentally political."

Supply—The Educational Pipeline

FACT: According to information available from the U.S. Department of Education and the Computing Research Association, U.S. Colleges and Universities are graduating some 300,000 students each year with bachelors, masters or PhDs in the core disciplines that are critical to this industry — computer/information science, math and engineering. At current graduating rates, the supply of graduates will exceed the DOL’s projections of average yearly high tech job creation over the next eight years.

FACT: These graduation statistics do not include any of the tens of thousands of community college students who either: 1) graduate with two-year, Associate degrees in IT disciplines (out of the 500,000 who yearly complete their studies), or; 2) are enrolling in IT-certification courses as well as other continuing education curricula designed to help them transition into high tech careers. Both of these talent pools would certainly seem to qualify for employment in a significant number of professional, entry-level high tech jobs, they appear to be largely ignored by the industry. To illustrate: In Virginia — one of the nation’s high tech hotbeds — the final 1999 report of the Governor’s Commission on Information Technology, which was composed of many industry leaders, took the Commonwealth’s IT industry to task for not fully utilizing this source of qualified IT workers.

FACT: The supply of U.S. graduates qualified to work in high tech will increase significantly over current levels in the next five years. Over the past three years enrollments in collegiate IT programs have skyrocketed. According to Computerworld magazine, enrollment in computer science programs increased by 30% in 1996–7 and by nearly 40% in 1997–98. According to David Weldon, its editor for IT careers, "…by last year [1999] enrollments had doubled or tripled at most leading IT programs." To illustrate, the Washington Post reported last September that IT course enrollments at Virginia Tech and the University of Maryland increased by over 25% in just one year while the number of those majoring in computer engineering at Maryland had more than tripled since 1997.

FACT: A 1998 GAO analysis of workforce supply and demand issues referred to a 1993 National Science Foundation finding that only about 25% of those in computer and information science jobs at that time actually had degrees in these two core disciplines. The remainder had degrees in such areas as business, social science, education, economics, psychology, math and engineering. Even if the 25% has doubled in the last seven years, a large percentage of future IT workers broadly defined should be available from among the remaining 1.3 million students who annually receive Bachelors, Masters or PhDs in fields other than computer and information science, math and engineering.

FACT: These statistics indicate that the current supply of college graduates is sufficient to satisfy future high tech industry needs if they are truly interested in hiring our citizens for their jobs. Moreover, as the increased number of course enrollments in IT–related disciplines skyrockets, there would appear to be the potential for a serious supply of available talent within the educational pipeline for years to come. The potential addition of hundreds of thousands of foreign guest workers to our labor market for the next six years will exacerbate the oversupply thus adversely affecting the wages and working conditions in this industry. If allowed to persist this will, in short order, discourage potential students and workers from entering the field. Ironically, the end result of all this would be to create a sustained and serious skill and/or worker shortage for years to come.

Supply—Incumbent Workers

FACT: Evidence of age discrimination against older high tech workers led Congress to insist that the National Academy of Science look into this matter as part of its pending study of IT workforce needs. For example, 1998 Census Department data showed that unemployment rates for IT workers over the age of 40 were more than five times greater than that for other workers in the same age group. The July 5th edition of Information Week Online reported that, according to a survey it conducted of some 200 IT managers that "only 2% of the managers said they would most likely hire a worker with 10 or more years’ experience." Norm Matloff, professor of computer science at the University of California at Davis has pointed out that 81% of IT graduates leave the field within 20 years after graduation. It appears that the older the I.T. worker, the more likely that person is to be unemployed. These statistics support the allegations of older IT workers that they lose their jobs to younger, cheaper H-1B workers and that once displaced, they face a seemingly insurmountable task of finding other employment in the industry.

FACT: This industry has an abysmal record of hiring minority workers. Presently, this industry employs a paltry 3.5% of Hispanic Americans — less than one-third their rate of total employment in the U.S. economy — and only 7% of African Americans. A floodtide of foreign guest workers will only worsen the current situation and make it even more difficult for minority families to more fully share not only in the economic rewards of the new economy but in many other professions as well since S. 2045 is not targeted to the high tech industry

FACT: From October 1998 through August 2000 about 102,000 people were laid off from various high tech, IT and dot.com companies. Over that 22-month span, these layoffs averaged some 4,600 displacements per month. On a twelve-month basis, these trends seem to indicate that at present layoff rates over 50,000 workers will become available each year to fill a variety of high tech job vacancies. This pool of experienced workers would seem to be a ready-made source for re-employment.

FACT: The high turnover caused by the industry’s extensive use of short-term personnel requires workers to constantly move from job to job. This churning in the work force creates reports of job openings that are cited as proof of shortages. But most of these reported job opportunities remain open for only short periods of time before they are filled.

H-1B—A Program in Bad Need of Repair and Reform

FACT: In 1999 the INS lost count of the number of H-1B visas it had issued and had to contract with an outside auditing firm to determine the size of the problem. Now we have learned that the agency issued more than 22,000 visas beyond the legal limit of 115,000 set by Congress in 1998. In addition, the agency is unable to provide reliable data about how the program is operating particularly with regard to employer utilization of H-1B visas.

FACT: Since 1998 there have also been several media reports, government studies and congressional hearings detailing systematic visa fraud, replacement of American workers and abuse and mistreatment of guest workers. Many of these problems and issues, which have been part of the history of guest worker programs generally, are detailed in the House Report accompanying HR 4227 — legislation that would increase the number of H-1B workers while also including important, new worker protection and anti-fraud measures. S. 2045 contains no such recommendations.

FACT: Systemic H-1B visa fraud appears to be a major problem in India, which according to INS data, is the largest supplier — nearly 50% — of guest workers under this program. The 7/12/99 edition of the Wall Street Journal, reported on a joint INS investigation with the U.S. Consular office in Chennai (formerly Madras). Among its findings: "of the 3,217 cases from India referred to the consulate’s anti-fraud unit, 21% of the work experience claims made to the INS were definitely not true and another 29% were either probably or possibly fraudulent."

FACT: A just published GAO report entitled H1B Foreign Workers, Better Controls Needed to Help Employers and Protect Workers came to the following conclusions about the H-1B program:

• "Labor’s [U.S. Department of Labor] limited legal authority to enforce the program’s requirements and weakness in INS’ program administration leave the program vulnerable to abuse. Under the law, in certifying employers’ initial requests for H-1B workers, Labor is limited to ensuring that the employer’s application form has no obvious errors or omissions. It does not have the authority to verify whether information provided by employers on labor conditions, such as wages is correct."
• There is not sufficient assurance that INS reviews are adequate for detecting program noncompliance or abuse."
• "However, as the program currently operates, the goals of preventing abuse of the program … are not being achieved. Limited by law, Labor’s review of the LCA [labor certification application] is perfunctory and adds little assurance that the labor conditions employers’ attest to actually exist. Expanding Labor’s authority to question information on the LCA would provide additional assurance that labor conditions are being met.

FACT: The Thursday 9/21/00 issue of the San Francisco Chronicle disclosed that both the INS and the Department of Labor have begun investigations into visa fraud and abuse of the H-1B program. The article states that the INS is "…looking into assertions that H-1B applicants are falsifying academic and work credentials, and that U.S. employers…are exploiting workers." The newspaper quotes Bill Yates, a senior INS official, as indicating that their investigation includes some of the biggest names in the U.S. tech industry.

FACT: Obviously the H-1B program is out of control and unmanageable. Yet S. 2045 recommends no program reforms, no management improvements and no additional protections for the thousands of American workers who may be displaced by the flood of guest workers that will result from the legislation. In the absence of the ability of the INS to even manage the existing program, it makes absolutely no sense to us to exponentially expand H-1B and further jeopardize the ability of our government to control U.S. immigration policy and programs.