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Perspective: Taking the easy way out on H-1B

Immigration law attorney Ronald A. Zisman writes that when the chips are down, foreign technology workers get unfairly blamed for the industry's wider ills.

The ongoing debate about whether each new generation of immigrants constitutes a threat to or a positive development for our economy and culture has existed since the days of the founding fathers.

The H-1B is a nonimmigrant visa category that limits the total period of stay for a foreign worker to six years. The general requirement is that the beneficiary be employed in a profession in which having a university degree is a minimum requirement. Presumably, a majority of H-1B nonimmigrants obtain lawful permanent residency, either through employment or family sponsorship, and thus are absorbed into the permanent work force.

A brief review of recent U.S. immigration statistics reveals that immigration policy places a low priority on attracting educated immigrants. Annual legal immigration represents less than four-tenths of a percent (0.4 percent) of the U.S. population of 290 million. Currently, immigrants make up just 8 percent of the U.S. population, the lowest percentage in nearly 80 years.

According to the Immigration and Naturalization Service's annual report, in fiscal year 2001 some 1,064,318 people were granted permanent residence. About 17 percent, or 179,195, of those immigrants were admitted under employment-based preferences. This group includes people whose occupations ranged from chicken sexers (those who determine a chick's sex) to CEOs. In the employment-based preference group, only 84,421, or 7.9 percent, of total U.S. immigration involved people who qualified under a category requiring a bachelor degree or higher.

The European Economic Commission has developed a program specifically designed to attract immigrants who have required IT skills. The U.S. should develop similar programs.

By negatively focusing on a relatively small percentage of highly educated workers, such as those on H-1B classification, critics fail to acknowledge a significant structural business change that's transforming the technology industry: the global outsourcing of software development. The impact on the domestic labor force remains to be fully appreciated.

The initial growth of information technology labor on H-1B status stemmed from the IT boom in the 1990s. The gap created by a shortage of skilled IT professionals was in part filled by "bodyshopping," which has been defined as "the transportation of software staff to work overseas at the client site."

But bodyshopping is abating as U.S. and European companies are establishing their own in-house offshore sites or contracting to third parties at offshore sites.

India, Ireland and Israel are generally considered first-tier offshore sites, with each country developing its own areas of expertise in software design, data management tools, security software or other products or services. Global software outsourcing spending by U.S. companies was expected to reach $7 billion in 2002; spending was $5.5 billion in 2000. The growth rate exceeds 10 percent per annum. General Electric, Intel and Ford are shifting significant amounts of IT work abroad.

This transition is a direct result of the growth of educated workers abroad, combined with the ease of transfer of modular technology via the Internet and the lower cost of producing products. Not having to deal with U.S. immigration issues also plays a role. Research has shown that lower costs are not the leading cause for the exodus, but a factor in it.

Foreign workers have uniformly brought to the U.S. incredible energy and know-how.

From a nation-building point of view, a national immigration policy should attract H-1B workers for their education, entrepreneurial skills and economic earning power. The European Economic Commission has developed a program specifically designed to attract immigrants who have required IT skills. The U.S. should develop similar programs.

My own experience representing high-tech companies and skilled workers over 20 years is that foreign workers have uniformly brought to the U.S. incredible energy and know-how. Well-educated first-generation workers who instill a strong work ethic in their children and also have a potential to earn high incomes should be a major part of our immigration policy. In a tight labor market, such as was seen in the mid- to late 1990s, a decision to hire foreign workers was principally based on two factors: demand and skills. In today's soft labor market, the utilization of H-1B visas has dropped dramatically as the pool of skilled local workers has grown.

If you have any doubts about the contribution of foreign workers to the U.S. economy, let me mention a few names: Andy Grove, Les Vadasz, Dov Frohman, Federico Faggin, Masatoshi Shima, Jean-Claude Cornet, Vinod Dham and Avtar Saini. Citizens from Hungary, Israel, Italy, Japan, France and India, all were instrumental in creating a $20-billion-dollar company. I'm sure you can guess the name.