Study: H-1Bs go with job creation

by Grant Gross

March 10, 2008 —

U.S. companies that apply for controversial H-1B visas create additional jobs
beyond the positions filled by foreign workers, according to a study released
Monday by a pro-immigration think tank.

For every H-1B position requested, tech companies listed on the S&P 500
stock index increased their employment by five workers in an analysis of 2002
to 2005, according to a study
by the National Foundation for American Policy (NFAP). For tech firms with
fewer than 5,000 employees, each H-1B request corresponded with an average increase
of 7.5 workers, the group said.

In addition, NFAP looked at the number of job openings at tech firms and defense
contractors and found 140,000 job openings at S&P 500 firms in January,
including more than 4,000 job openings at Microsoft, more than 1,600 openings
at both IBM and CSC, and more than 1,500 openings at Cisco Systems. After Microsoft,
the company with the most job openings, were defense contractors Northrup Grumman
and Lockheed Martin, each with more than 3,900 job openings, according to a
second
study by NFAP.

Tech companies in particular are seeing huge shortages of qualified workers,
said Christopher Hansen, president and CEO of the American Electronics Association
(AEA), a large trade group. "The reality is that this nation is today the
leader in technology and the technology industries," he said. "To
be able to maintain that lead, our companies need access to a highly educated
workforce."

These job shortages could continue without a change in the U.S. government's
H-1B visa policy, added Stuart Anderson, NFAP's executive director. Currently,
the yearly cap on H-1Bs is 65,000, not including an additional 20,000 set aside
for foreign students with advanced degrees at U.S. universities, and in recent
years, the yearly cap has been filled within days after applications are available.

"We don't see these types of job openings as a temporary phenomenon,"
Anderson said. "They really should be seen as a longer term trend ... of
U.S. skill level stagnating, particularly relative to many other countries in
the world."

The studies come out as Microsoft Chairman Bill Gates heads to Washington,
D.C. Gates is scheduled to testify about innovation and competitiveness before
the House of Representatives Science and Technology Committee Wednesday, and
the H-1B issue is likely to come up.

But the NFAP studies ignore the fact that many H-1B visas are taken by offshore
outsourcing firms, said Ron Hira, a public policy professor at the Rochester
Institute of Technology and vice president for career activities at the Institute
of Electrical and Electronics Engineers-USA (IEEE-USA). Eight of the top H-1B
recipients in 2007 were offshore outsourcing firms, according to figures from
the U.S. Citizenship and Immigration Service.

"These firms hire almost no Americans and their entire business model
rests on shifting as many American jobs overseas as fast as possible,"
he said. "When eight of the top 10 H-1B recipients are the who's who of
offshoring then I think it's an understatement to say the program is worse than
a complete failure."

Infosys, the Indian outsourcing company, received more than 4,500 H-1B visas
in 2007, about 40 times the number Oracle received and 18 times the number Google
received, Hira said.

Hira also questioned the NFAP study suggesting companies receiving H-1B visas
hired additional workers. "The reports take fanciful leaps of logic to
draw strong conclusions from weak or non-existent models," he said.

The NFAP didn't examine most of the top H-1B recipients in its reports, because
only three of the top recipients in 2007, Intel, Microsoft and Cognizant, are
in the S&P 500, Hira said.

The job creation study also looked at worldwide hiring, not U.S. hiring, when
H-1Bs would most closely affect U.S. hiring Hira said. Many major tech companies
in the U.S., including top-10 H-1B recipient Intel, have been cutting their
workforce, Hira added. "So in Intel's case the numbers would be negative,"
Hira said. "Few technology companies are growing their workforce rapidly."

Asked if the job creation study looked at whether the tech companies were hiring
high-paying tech workers in addition to filling H-1B visa, Anderson said the
study looked at total jobs, not just tech jobs.

But AEA's Hansen dismissed criticism that many H-1Bs go to outsourcing companies.
NFAP surveyed members of three tech trade groups, and 65 percent of respondents
said they have hired people outside of the U.S. because of a lack of H-1B visas,
he said. NFAP found nearly 19,000 job openings among 29 members of the TechNet
trade group.

"There is a huge, huge demand for these kinds of jobs, and there's a huge
competition for them," Hansen said. "There's going to be a major push
[for more visas] because there has to be. You have companies that are simply
trying to operate, and they need this talent pool to be able to operate."

IDG News Service