High Tech Worker Immigration Issues

Deepesh Joseph
Kristen Schmidt
Raja Sekhar Tunuguntla

August 9, 2007

High-Tech Worker Immigration Issues

Introduction

The United States has a long history of immigration, right from the time when the land was occupied by wanderers from Southeast Asia to the Vikings and later to the Europeans. Due to the peculiar nature of American history, even after independence, the U.S. has been following very favorable policies towards legal immigration. The first immigration law signed was the Naturalization Act of 1790, later replaced by United States Naturalization Act of 1795, which stated that “any alien, being a free white person, may be admitted to become a citizen of the United States” (EarlyAmerica.com, 2007). Various improvements were made to the original immigration polices, down the road, related to immigration from close borders (The U.S. Immigration Act of 1907); establishment and enforcement of Green Cards (Internal Security Act of 1950); modern day U.S. immigration system that sets quotas based on country, family relation, and special skills (Immigration and Nationality Act of 1952); and elimination of discrimination based on race, place of birth, sex, and religion (Immigration Act of 1968) (RapidImmigration.com, 2007). The Immigration Act of 1990, one of the major immigration legislation, increased the number of legal immigrants who are allowed into the U.S. each year from 500,000 to 700,000. It also authorized 40,000 permanent job visas and 65,000 temporary job or H-1B visas.

Favorable immigration legislation and a flourishing U.S. economy attract a number of immigrants to the U.S. every year for work and permanent residency. Studies show that “growth in the native population has been in decline since the 1970s, so immigrant workers have filled in, providing half of the growth in the U.S. labor force since 1990” (Anderson, 2006). Parallel with the increase in number of immigrants, the technological advancements in the field of Information Technology (IT) has given rise to an ever increasing need for workers who can create, apply, and use IT in industries such as manufacturing, health care, education, and government (Mitchel, n.d.). A recent survey of mid and large-size U.S. companies conducted by the Information Technology Association of America (ITAA) concluded that there are about 190,000 unfilled IT jobs in the US today due to a shortage of qualified high-tech workers. This is because the number of students graduating with four-year bachelor's degrees in Computer Science or Information Technology is significantly less than the annual requirement of high-tech jobs. Research indicates that the foreign born make the U.S. economy more diverse, productive, and innovative. This characterization is especially true in professional fields like science and engineering, where immigrants currently hold seven percent of Bachelor’s degrees, 29 percent of Master’s degrees, and 39 percent of Ph.D. degrees (IEEE-USA, June 15, 2007).

The problem we currently face is that U.S. Citizenship and Immigration Services (USCIS) has a huge backlog in provision of H-1B visas and Green Cards (NAFSA, May 24, 2007). This poses various restrictions for highly-skilled immigrants to come and work in the U.S. Various immigration reforms are being proposed with targets for improving the situation so as to reduce the H-1B backlog and provide better options for the immigrating high-tech workforce. S. 1639, a bill to provide for comprehensive immigration reform and for other purposes, was introduced on 06/18/2007 by Sen. Edward Kennedy (D-MA) to make major reforms to U.S. immigration laws. Regarding issues surrounding immigration of the hi-tech workers, section 419 ('H-1B streamlining and simplification') of the bill proposes to increase the number of H-1B visas available in the U.S. per year, and section 502 ('Increasing American Competitiveness Through a Merit-Based Evaluation System for Immigrants') imposes a point-based immigration system in the U.S. The new bill has raised various concerns regarding actual realization of reduction in H-1B visa and green card backlog, given various ambiguous clauses, a negative impact of a threat to the jobs of college-educated Americans, and efficacy of an untested merit-based immigration system.

Perspective

This group issue analysis is written considering thoughts of three diverse personalities coming from diverse backgrounds. One of the writers is a graduate student of Information Management who is relatively new to the IT field in terms of tangible experience. This group analysis is also written from the perspective of an employee with a great deal of experience in IT who has experienced the transitions of the field in the past few years. Finally, our group perspective is informed by a graduate student of Library and Information Science, who has a goal to become a public librarian and had cursory knowledge but a sympathetic view of immigrants before working on this project. The topic is considerably sensitive and controversial to some extent. We have written the analysis considering and inculcating most aspects and research based on various corporations, governments, and citizens. High-tech workforce and immigration is a very important matter which has to be handled carefully by the coming governments to make the U.S. a technology leader.

Issue Questions

While analyzing the issues, we will address the following questions:

1. What impact might there be on the U.S. economy by the potential increase in H-1B visas and green cards?
2. How might the institution of a point-based system for U.S. immigration impact the skill level and number of high-tech workers in the U.S.?
3. If S.1639 is not passed, how can the U.S. retain and/or further its technological innovation and meet its high-tech workforce needs, given the threat of outsourcing and relocation of U.S. companies?

What impact might there be on the U.S. economy by the potential increase in H-1B visas and green cards?

Economist Giovanni Peri explains, in a paper for the Washington, D.C.-based Immigration Policy Center, “The United States has the enormous international advantage of being able to attract talent in science, technology, and engineering from all over the world to its most prestigious institutions. The country is certainly better off by having the whole world as a potential supplier of highly talented individuals rather than only the native-born” (Peri, 2006).

Graduate students who come to the U.S. to study science or engineering certainly benefit the U.S. economy and education system. They are critical to America’s technological leadership in the world economy. “Foreign students, skilled immigrants, and doctorates in science and engineering play a major role in driving scientific innovation in the United States,” according to a study by Keith Maskus, an economist at the University of Colorado; Aaditya Mattoo, Lead Economist at the World Bank’s Development Economics Group; and Granaraj Chellaraj, a Consultant to the World Bank. For instance, according to their research, for every 100 international students who receive science or engineering Ph.D.s from U.S. universities, the nation gains 62 future patent applications (Chellaraj, 2005).

A policy toward immigration that increases the number of H-1B visas could carry implications beyond the immediate future. At the 2004 Intel Science Talent Search, the nation’s premier science competition for top high school students, Stuart Anderson, Executive Director, National Foundation for American Policy, conducted interviews to determine the immigration background of the 40 finalists. The results informed that two-thirds of the Intel Science Talent Search finalists were children of immigrants. And even though new H-1B visa holders each year represent only 0.03 percent of the U.S. population, it turns out more of the children (18) had parents who entered the country on H-1B visas than had parents born in the U.S. (16). (Anderson, 2006)

According to Chairman of Microsoft Corporation, Bill Gates, “American competitiveness also requires immigration reforms that reflect the importance of highly skilled foreign-born employees” (Gates, 2007). Gates thinks this issue has reached a crisis point: “Computer science employment is growing by nearly 100,000 jobs annually. But at the same time studies show that there is a dramatic decline in the number of students graduating with computer science degrees.” Demand for specialized technical skills has long exceeded the supply of native-born workers with advanced degrees, and scientists and engineers from other countries fill this gap. Yet the 65,000 temporary H-1B visas provided by the U.S. each year to make up this shortfall is not nearly enough to fill open technical positions. (Gates, 2007)

Permanent residency regulations compound this problem. Temporary employees wait five years or longer for a green card. During that time they can't change jobs. This limits opportunities to contribute to their employer's success and overall economic growth. Reforming the H-1B visa and green card programs is necessary to make it easier to retain highly skilled professionals. These employees are vital to U.S. competitiveness, and we should welcome their contribution to U.S. economic growth. (Gates, 2007)

Technological and scientific innovation is the acknowledged engine of U.S. economic growth, and human talent is the main input in generating this growth (Peri, 2006). During the past 30 years, U.S. innovation has been the catalyst for the digital information revolution. If the U.S. is to remain a global economic leader, we must foster an environment that enables a new generation to dream up innovations, regardless of where they were born.

How might the institution of a point-based system for U.S. immigration impact the skill level and number of hi-tech workers in the U.S.?

The focus of point-based immigration policy is to increase the number of highly-skilled immigrants based on the combination of attributes and skills they bring to the U.S. economy. Section 502 of the bill under consideration states that visas shall first be made available to “qualified immigrants” selected through a “merit-based evaluation system.” Qualification is based on whether an individual earns certain designated total points for the listed merits, and preference is for those with maximum points. Under the new system, a Software Developer who has a STEM (science, technology, engineering, math) based Master's degree, works in a STEM occupation, has employer endorsement, and who has solid English-speaking skills is more likely to be qualified than an individual who has less points on these items. This would eventually lead to an increase in the skill and creativity of the U.S.'s high-tech workforce.

Immigration methods will be less dependent on family ties, and the points-based system will give more power for the government to control and “socially engineer” its demography (Weiner E., May 24, 2007). The bill makes 247,000 green cards immediately available under the merit-based system, each year, for the first five years after enactment. This has a potential to increase the number of highly-skilled workers in the coming years. Under the new merit-based system, employees are not bound to the employers by any de-facto indentured servitude. This will give more freedom to workers to the extent of starting their own companies.

The new system will inherently replace the employment-based immigration system the U.S. has followed for decades. The merit-based immigrant system is not employer-driven and could fail to meet market demands from what we currently have: a one-to-one relationship (Schwartz E., June 5, 2007). Under the old system, an employer could recruit a particular person and sponsor them. Under the new system, there is no guarantee the person sponsored will get in. There is concern over the number of skilled immigrants getting improved, as the visa backlog will continue to increase since many predict the cap will be filled within the first day of filing.

A point-based system will remove the requirement of employers to verify that they will first fill in the position with U.S. workers, and this will fail the current labor market tests (Schwartz E. June 5, 2007). The new system will benefit the U.S. high-tech worker community in that it will reduce the ways in which the H-1B workers are exploited by cheap labor. The system will ensure that compensation is commensurate with skills, and this turns out favorable to U.S. programmers and engineers (Matloff, 2002). In general, the bill will lead to more high-skilled immigrants contributing more to scientific and technological innovation, paying more taxes, and utilizing fewer social welfare programs than less-skilled immigrants (Murphy, 2006).

Need for clear implementation methodology

Among the concerns raised against the new point-based system is that it is not tested and it lacks a methodology for implementation (NILC, June 25, 2007). There is no clear definition of hiring requirements, and many universities are concerned over how the limited time frame for hiring in campuses fits into the small pool of visas granted that is crunched by the huge backlogs. The numbers posted regarding the visas and points are not realistic and are not based on any thorough analysis or study (MPI, 2007). Evidently, there is a need to set up a “pass-mark” rather than maximum points to be attained, thus balancing formal and informal skills and education. Government should appoint agencies such as MPI (Migration Policy Institute) to revisit the system and ensure it is tested appropriately.

Balancing immigrants' flow

One major question that the new immigration reform bill raises is whether immigrants should be allowed into the U.S. on the basis of family ties or on basis of skills they can provide to the U.S. economy. The U.S. claims to be a pro-family nation. Efforts should be made to clear the family-visa backlogs so that long waiting U.S. citizens can reunite with their family members (Murphy K., 2006). In order to clear the huge backlog of immigrants belonging to other categories (such as those based on family ties), the legislation needs to be modified to fix the point-based immigration count. Even though a vague projection of how the immigrant backlog will be removed is available, it is not clear whether this is achievable with prior test data. This points to further research to be done on the present condition and breakdown of backlogs. This will lead to more reliable numbers which then can be allocated for the new system. As a point-based system is prone to bureaucracy and paper work, an effort should be made to reduce those aspects.

Creating a flexible point-based system based on economic & employer needs

Legislation should be modified to include a provision to tweak the point-based system according to changing needs of the employers. There should be a provision to pilot test the system for one year or more and then modify it with lessons learned. There is concern that, as the native-born labor force becomes older and educated, the new system will shrink the pool of native workers in industries such as agriculture, construction, and services, which might negatively affect long-term economic stability and growth (Murphy K., 2006). Efforts should be made to link the point-based system to the local labor markets and increased employment needs, thus serving as a complimentary system that supports current employment needs and economic stability. The desired qualifications and skills of immigrants will vary in the coming decades, so the ability to review the points system and revise as needed is crucial (MPI, 2007).

How can the U.S. retain and/or further its technological innovation and meet its high-tech workforce needs, given the threat of outsourcing and relocation of U.S. companies?

Technology is changing rapidly, and the U.S. is among the most influential nations in the world to keep pace with this change. The U.S. is the leading provider for software- and other technology-based products around the world. Studies show there is a tremendous requirement for a high-tech workforce in coming years. Most IT companies including Microsoft are lobbying for an unlimited number of H-1B visas to retain the U.S. as technology leader of the world. If the numbers of U.S. H-1B visas are restricted, companies based in other countries, especially South Asian countries, can innovate and pose a big challenge to the U.S. with their greater access to technology, improved economy, and technology infrastructure.

Companies are under tremendous pressure to perform, show results, and reduce costs and are outsourcing their jobs to countries like India. The Microsoft Hyderabad development center campus is the corporation's biggest facility outside the U.S. and the first one in India. Microsoft Chairman Bill Gates addressed senators at Capitol Hill regarding the improvements in the U.S. education system and an “infinite” number of H-1B visas. Gates said, “Open our doors to highly talented scientists and engineers who want to live, work, and pay taxes here. [The] nation will find it infinitely more difficult to maintain its technological leadership if it shuts out the very people who are most able to help us compete” (Gates, 2007).

The proposed bill is a switch from an immigration system based upon family ties to one based on a "merit system" that gives greater weight to educational level, jobs skills, and English proficiency. Some sections of people who oppose the plan claim it's a high-risk, large-scale social experimentation that would have adverse effects on families and disregards a fundamental principle of American immigration policy and of real family values. The U.S. government should adopt the following steps to retain its technological innovation. (Migration Matters, 2007)

Improve U.S. education system to induce students into math and sciences

The current U.S. education system is considered to be one of the strongest and most effective in terms of the wide range of research areas it explores. However, most children adopt fields of interest other than math and science at an early age. This can be overcome by increasing the number of math and science teachers at schools, to convey to children the importance of these fields at early ages. Steps should be taken to increase number of graduates in engineering, science, and math in the coming years. To truly overcome the high-tech workforce deficit, parents and citizens should also encourage young students to take up these career professions.
The U.S. Department of Education estimates that over 60 percent of all jobs in coming years will require technical competency. As students, the IT worker shortage is an opportunity and a challenge. Computer Science graduates await opportunities and challenges. Students should prepare for a Computer Science-oriented career since the technical skills are in demand in the coming years. The lack of a sufficient number of qualified Computer Science graduates remains a sizable problem for prospective employers in both private industry and the public sector. There are still too many unfilled high-tech positions in industry and government, too few students available to attend graduate school, and numerous unfilled Computer Science/Engineering faculty positions in colleges and universities. (Herman D. Hughes, 2006)

Increase university research funding

Government should provide adequate research funding in the engineering field for all universities. Undergraduate students should be provided increased scholarships to encourage them to take up engineering fields. This is a great way to motivate students. Scholarships should be increased on a year-to- year basis, which can lead to increased enrollment among young students in the universities.

Corporate – government - university collaboration

Many large corporations currently collaborate with universities to provide world-class research labs to innovate and provide opportunities for students. Government should take appropriate steps to understand the requirements of the corporate world and universities. Based on the requirements, governments should analyze and provide all facilities to students and universities to innovate. Local governments can prop up students to make them utilize the state of art facilities and provide more funding to increase such collaborations.

Provide opportunities to qualified professionals

As part of retaining technological innovation, the U.S. should provide opportunities and retain talent from other countries. Most of the high-tech workers in the U.S. have good experience to take up high pressure and responsible jobs. If the U.S. restricts their entry, there is danger that many of these companies will change their strategies to meet requirements. They can move most of their innovative technology jobs outside the U.S., which can be a major blow. The current immigration bill's reliance on a merit system has its advantages. It is a useful strategy to retain U.S. technology advancements. The bill can be honored with suggestions from stakeholders, namely corporations, students, universities, citizens, and immigrants.

Conclusion

Supporters of expanding the H-1B visa cap claim the goal of the H-1B program is to help the U.S. economy by allowing companies to hire needed "foreign" workers. Those in opposition believe too many H-1B visas are being used to facilitate the outsourcing of U.S. jobs to other countries. (Ribeiro, 2007) Our stance is that, as immigrants increase specialization in the U.S. economy, they enhance the nation’s productive capacity, and aid innovation in the U.S. The best evidence suggests that immigrants improve their own lot and that of their children by coming to America and exert little adverse impact on natives. (Anderson, 2006) U.S. policymakers would be smart to increase the number of H-1B visas and merit-based permanent visas, contributing to the vitality of technology in the U.S. and lending strength to the U.S. economy.


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