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Perspective: Time to revisit the H-1B

CNET News.com's Charles Cooper says the federal government needs to rethink its support for increasing foreign work permits at a time when the U.S. tech recession shows little sign of rapid improvement.

After seven years of working at Alltel, Karl Sak became an unemployment statistic when a corporate cutback claimed his job.

The 34-year-old Sak, who couldn't find work in his profession as a network administrator, was ultimately willing to settle for any kind of computer-related employment. That's when he came in for a second shock.

"They think that as soon as I find another job that pays better I'll leave. Imagine that!" Sak wrote in an e-mail. "With the economy the way it is, I would consider myself lucky just to have a job. The last thing I'll be thinking of is jumping ship after six months. I'm too worried about how to pay the mortgage."

Tens of thousands of folks find themselves in similar straits. After the most brutal recession in the history of the technology business, the employment picture remains, at best, bleak. Even in the absence of another economic or geopolitical crisis--hardly a safe bet these days--industry leaders project only a modest recovery this year.

I have a modest proposal: Besides waiting around for the business cycle to kick in, why doesn't the federal government immediately cut the number of H-1B visa levels handed out to foreign workers?

If past is prologue, count on technology industry lobbyists to block that from happening.

Besides waiting around for the business cycle to kick in, why doesn't the federal government immediately cut the number of H-1B visa levels handed out to foreign workers?

The H-1B provision lets foreigners work in the United States for up to six years. Although not all H-1B visas go to technology workers, the program is especially dear to Silicon Valley, whose lobbyists helped convince Congress to increase the number of annual H-1B visas to 115,000 in 1999 and then to 195,000 through fiscal year 2003. (The U.S. fiscal year ends Sept. 30.)

With the maximum number of H-1B visas granted in a year set to fall to 65,000 in fiscal 2004, the tech industry is preparing for a fight with opponents like the AFL-CIO and the Communications Workers of America.

The Information Technology Association of America, a trade association representing information technology companies, has not settled on a target number, according to Jeff Lande, a vice president with the ITAA. "We will be driven by the needs of our members and the availability of talent," he said. "We have a responsibility to ensure that the industry gets the ability to innovate."

But the ITAA, TechNet and the other technology lobbying groups are going to have a tougher time convincing Congress to hold the line on H-1Bs. Three years ago, companies were so hard up for talent they were hiring anyone with a pulse. At the time, I thought their proposal to raise the number of H-1B permits made perfect sense. However it's time to take a second look.

A more cynical view would suggest that the barons of the industry want to maintain H-1B levels as high as possible to help keep downward pressure on wages.

You can argue that things are less bad than they once were. For example, 844,000 tech workers were dismissed between October 2001 and October 2002, compared with 2,619,000 between January 2001 and January 2002. In fact, there was a net gain of 147,000 IT jobs in the third quarter. Still, that's not exactly the equivalent of Fat City.

A more cynical view would suggest that the barons of the industry want to maintain H-1B levels as high as possible to help keep downward pressure on wages. Or that employers prefer to exploit the skills issue as a pretext for hiring cheap H-1B programmers instead of more veteran (read "expensive") older programmers.

I think the truth falls somewhere in between. What's clear is that clinging to the conventional wisdom that passed muster three years ago would be a big mistake.

As for Sak, he's had to dumb down his resume so as not to scare away potential employers. If that doesn't work, he says he's thinking about moving into a different profession.