What will an H-1B cap hike bring to U.S.?

Leading critic warns of 'internal (U.S.) brain drain' as foreign competition rises for American tech jobs

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The most recent full-year data, 2011, found Cognizant, a New Jersey-based firm is that major offshore provider, atop the list with 5,715 H-1B approvals. It was followed by year-earlier leader Infosys, an India-based outsourcer, at 4,024. Other India-based firms, Wipro, Tata Consultancy Services, Larsen & Toubro, were among the top 10 users of the H-1B visa, according to data provided by the U.S. Citizenship and Immigration Service.

Microsoft, IBM and Google are also among the top H-1B users, and it is those companies, and not the Indian firms, that shape the visa debate in Washington.

The visas may increase offshoring, argues Ron Hira, a public policy professor at the Rochester Institute of Technology.

"Since the offshore outsourcing industry is the biggest beneficiary of the H-1B, we know there will be more offshoring of high-wage, high-tech jobs," he said.

The conclusions of his examination of the temp visa programs is included in a 2010 2010 report.

The H-1B visa now has two caps, a 65,000 cap and a 20,000 cap for advanced degree STEM grads of U.S. universities. The bill that would allow up to 300,000 H-1B visas, the Immigration Innovation (I2) Act, exempts advanced degree STEM grads from any cap.

The H-1B provisions I2 Act is seen by experts as an industry "ask" or a "marker," or better yet a wish list untouched by potential opponents. It doesn't include, for instance, a restriction to limit the number of visas that offshore firms may use to 50% of their U.S. workforce.

Sen. Dick Durbin (D-Ill.), who is part of a separate group of eight senators working on a comprehensive immigration bill, has long favored such a restriction. He said this week that he would continue to seek it.

That threat of a visa restriction prompted one Indian-based firm, Wipro, to suggest, in comments two years ago, that it might accelerate U.S. hiring to decrease reliance on the cap.

The I2 bill includes automatic escalators that are intended to be market-based, allowing the H-1B cap to gradually rise with demand, by as much as 20,000 annually. If demand for H-1B visas fall in any year, the cap declines under the proposal.

Lindsay Lowell, director of policy studies at the Student of International Migration at Georgetown University, points out that "demand for H-1Bs' is not the same as 'market based demand based on shortages,' which is to say we graduate somewhere between 1.4 and 2 times as many domestic STEM students as the BLS (Bureau of Labor Statistics) projects we'll need over the coming decade."

"Whatever is driving that makes it likely that escalation triggered by petitions in excess of an annual cap will lead to increasing H-1Bs, maybe all the way to 300,000. Why do we need that?" said Lowell.

Hira says that "American engineers and IT workers will be undercut in both wages and working conditions as they compete with guest-workers who can legally be paid below-market wages and who are essentially indentured servants."

It isn't just the H-1B increases that concern Matloff, but the liberalization of the STEM green cards. Those visas user would have a heavy impact on older students, people who come back for graduate study after years in the industry.

"It's already bad for students in this category. [The I2 bill] "would make things far worse," said Matloff in an email to Computerworld.

"It's also a shame that there is almost no attention being paid to what I regard as the absolutely core problem with H-1B and green cards: They are causing an internal brain drain, in which America's own best and brightest realize that the tech field is just into a good long-term route for those who have good problem-solving ability, quantitative skills and so on," said Matloff.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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