Building a Workforce for the Information Economy (2001) / Chapter Skim
Currently Skimming:
Foreign Workers in the IT Workforce
Foreign Workers in the IT Workforce
Pages 152-187
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 152... ...
firms. Among the reasons for using foreign workers is the fact that the United States does not have a monopoly on productive, knowledgeable, and motivated individuals; rather, such workers are found all over the world.
|
From page 153... ...
.2 · To the extent that companies need individuals with adequate formal training in computer science, they may well turn to foreign workers who have the necessary formal training if they are unable to find domestic workers with such training.
|
From page 155... ...
the foreign workers may displace the domestic workers and (b) the presence of the foreign workers may hold down wages in those jobs.5 Wages may be depressed even if all employers paid temporary nonimmigrant workers the wages prevailing for the jobs for which these nonimmigrant workers are hired.
|
From page 156... ...
firms, who then use these temporary placements as a way of trying out these workers and possibly selecting them for permanent hires. Flows of foreign workers into the United States have remained roughly constant over the last decade, though the mix of permanent immigrants and temporary nonimmigrant workers has varied.
|
From page 157... ...
and temporary nonimmigrant workers are an essential nuance of the policy debate over the use of foreign talent in the United States, the next two subsections address these programs in more detail. Permanent Residents A permanent resident of the United States is a noncitizen who is entitled to remain and work in the United States indefinitely.
|
From page 158... ...
While the PLC application is pending, the employer cannot materially change the job duties of the applicant, even if the applicant is already working in the job (e.g., on an H-1B visa) , because INS rules require the applicant to be performing the job duties described in the approved labor certification at the time he or she applies for adjustment of status.
|
From page 159... ...
. The immigrant visa petition establishes that both the job in question and the sponsored worker meet the relevant definitions for experience and/or education as well as any job requirements specified in the labor certification.
|
From page 160... ...
/2 to 1 year; · Adjustment of status, 1 to 1~/2 years; and · Delays due to per-country limits, O to 3 years. Temporary Nonimmigrant Workers The United States allows those on temporary visas to enter the United States for periods of limited, but varying, duration for a number of purposes, including employment, study, and tourism.
|
From page 161... ...
allow for a significant reduction in the H-1B workforce in 3 years (to 65,000 admitted per year, or a total of 390,000 H-1B visa holders in the steady state) , assuming a concurrent decision to refrain from converting H-lBs to permanent residency.l6 Thus, in principle though perhaps not in practice, the program has a degree of built-in flexibility that policymakers can use to respond to serious recessions, during which labor markets tend to slacken.
|
From page 162... ...
H-1B visa holders in systems analysis and programming received a median wage, not including bonuses or benefits, of $47,000 (Table 5.1~. Nearly half of all H-1B visa holders (47.5 percent)
|
From page 163... ...
FOREIGN WORKERS IN THE IT WORKFORCE 163 60 percent of H-1B visa holders originated outside the United States, while 22.9 percent represented conversions from F-1 student visas.l8 The committee's best estimate of the number of H-1B workers in the Category 1 IT workforce is about 255,000, or about 10 percent of the Cat18Note, however, that the data do not allow the determination of the share of "new" H-1B applicants who had previously studied in the United States, but had returned home prior to applying for an H-1B visa.
|
From page 164... ...
Available online at |
From page 165... ...
, on which they must attest that the H-1B worker will be paid the higher of the actual wage at the employer's work site or the prevailing wage for the particular position in the geographic area, that the working conditions of U.S. workers similarly employed will not be adversely affected, and that there is no strike or lockout.
|
From page 168... ...
of the American Competitiveness and Workforce Improvement Act of 1998; 28.2 percent is for National Science Foundation scholarships aimed at lowincome students enrolled in a program of study leading to a degree in mathematics, engineering, or computer science; 4 percent is for National Science Foundation grants for programs that provide opportunities for enrollment in year-round academic enrichment courses in mathematics, engineering, or science; 4 percent is for National Science Foundation systemic reform activities; 1.5 percent is for DOT actions to decrease the processing
|
From page 169... ...
Upon receipt, the consulate reviews the final application for the H-1B visa and time for petitions made for nonimmigrants; and 6 percent is for DOL action in reducing processing times for various applications related to the use of foreign labor in the United States.
|
From page 170... ...
06-96-002-03-321~. This report concluded that the permanent labor certification (for permanent residents)
|
From page 171... ...
Partly for these reasons, employers, foreign nationals, and many advocates for domestic labor dislike the labor certification program. Employers dislike it because the labor certification processing is inefficient, inconsistent, overly bureaucratic, and in some instances fails to reflect real-world recruitment and hiring practices.
|
From page 172... ...
universities in applicant pools consisting primarily of domestic workers with bachelor's degrees. Despite these advantages to hiring foreign workers through the H-1B program, employers especially smaller employers also argue that hiring foreign workers entails substantial costs, such as fees for lawyers, visa fees, higher relocation costs, and associated difficulties with "visa maintenance." These costs are often better managed by larger companies that are able to create procedures and expertise to minimize such overhead.28 Further, employers argue that the H-1B application process entails delays and uncertainties that are not present when a domestic worker is hired.
|
From page 173... ...
(Unfortunately, there are no data available on the extent to which H-1B visa holders change employers.) Because of these impediments to mobility, an employer may have greater latitude in its treatment of these individuals than it would have in dealing with domestic workers, and thus may well prefer to hire such individuals when there is a choice.
|
From page 175... ...
credentials than do their domestic counterparts, the foreign applicant has a natural advantage. Fourth, critics assert that without a ready supply of foreign workers, employers would be forced to make greater use of the existing domestic labor pool by increasing salaries, training opportunities, and over aspects of job compensation and "attractiveness." This argument has been especially focused on the available pool of older IT workers.32 Discussion As should be clear from the two perspectives on the program, a key question in the debate is whether employers have a financial incentive to employ H-1B workers rather than domestic workers.
|
From page 176... ...
However, employers may also turn to outside personnel service firms such as those described in Box 5.4 to meet needs for temporary labor. And firms providing temporary labor have strong economic incentives to pay any given worker a lower salary than s/he might otherwise receive, while charging the client firm a rate more reflective of that individual's true skills and abilities.
|
From page 177... ...
Without such a basis, decisions to reduce or increase the cap on H-1B visas are fundamentally political, and outcomes in such a process depend primarily on political balances of power. That said, the committee notes that an increased number of H-1B visas will likely result in future additional pressure on the already beleaguered permanent immigration program unless Congress also adjusts the various numerical limits on permanent residents.
|
From page 178... ...
· Dampens wage growth for employees Sends potentially wrong messages to workers and educational establishments In case of recession, could lead to unemployment and repatriation problems Increases demand for permanent visas 5.3.1 Competition for Foreign Workers The United States is not the only nation with a strong IT sector, and demand for overseas IT workers is expected to increase as other developed countries face tightness problems in their IT labor markets. Germany has established an allocation of 10,000 "green cards" for highly qualified immigrants from outside the European Union as part of its efforts to relax restrictions on the use of nonindigenous IT talent.37 Japan plans to hire Up to 10,000 Indian software engineers to meet a shortage of qualified IT workers.38 In the United Kingdom, the government is looking to initiate a new immigration policy to help end skill shortages in the U.K.
|
From page 179... ...
firms to use foreign IT talent is to locate work abroad. One approach is for a U.S.
|
From page 180... ...
For U.S. employers that wish to take advantage of lower foreign labor costs (which may be lower by factors of 3 and 4 in certain Asian countries)
|
From page 184... ...
Available online at |
From page 185... ...
company serving as interface are likely to be foreign workers from the country in which the work performer is located and they are most likely to be brought to the United States on H-1B or L-1 visas.47 This arrangement puts pressure on wages for domestic workers, but for an entirely different reason than that offered by most H-1B critics. Compared to domestic work performers who could do the same job, it can take advantage of a lower wage structure (i.e., that of certain foreign nations such as India or Taiwan)
|
From page 186... ...
. 5.5 RECAP For purposes of this report, foreign workers are foreign-born individuals who are either temporary nonimmigrant workers or permanent residents of the United States.
|
From page 187... ...
For example, while H-1B visa holders are far from the dominant influence on the IT workforce, their number is large enough that without these workers there would likely be a slowdown in the rate of growth in the IT sector. At the same time, economic theory implies that an increase in the supply of IT workers, including temporary nonimmigrant workers, will cause the corresponding IT wage rates to be lower than they otherwise would have been.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.