U.S. Firms Lament Cutback in Visas for Foreign Talent

For Rockwell Scientific Co., hiring the best talent is a matter of corporate survival.

Chief Executive Derek Cheung says he simply can’t find enough professionals in the United States with the highly specialized skills to produce the sophisticated sensors and other high-technology products the Thousand Oaks company makes. And he says changes to a foreign worker visa program threaten the ability of Rockwell Scientific and other U.S. technology firms, schools and hospitals to bring in employees from abroad -- just when they are needed most.

The H-1B visa program, designed to allow U.S. companies to hire foreign professionals on a temporary basis, was scaled back last year because of the sluggish U.S. technology job market and a political backlash in Washington over the importing of foreign labor. Now, with the economy healing, companies are scrambling to get foreign hires approved before this year’s allocation of H-1B visas is exhausted.

Pulling up the welcome mat to foreign talent when corporate America is gearing up for a turnaround poses a threat to America’s global competitiveness, Cheung and other executives said recently. They predicted that a shortage of H-1B visas would force them to pass over promising foreign-born scientists, leave crucial jobs unfilled or delay projects that require special talents that can’t be found in this country.

“These are the best minds in the world,” said Cheung, an American citizen who grew up in Hong Kong and received two of his degrees from Purdue and Stanford universities. “They are really helping this country.”

Immigration attorneys predict the cap on H-1Bs -- set at 65,000 this year, down from 195,000 in 2003 -- could be reached within the next few weeks. U.S. immigration authorities had approved 43,000 of the visas as of the end of December. Once the ceiling is reached, no new visas will be given out until Oct. 1, the start of the next fiscal year.

“Come March, you’re going to have companies feeling it very urgently,” said Judith Golub, a senior director with the American Immigration Lawyers Assn. in Washington.

Rockwell Scientific has applications pending for 10 visas, including one for a 30-year-old specialist in high-speed electronics who Cheung persuaded to leave his government job in Asia and move to the United States.

Russ Knocke, a spokesman for U.S. Citizenship and Immigration Services, confirmed last week that his agency was “on pace to reach the cap in the near future.”

It isn’t just Japanese electronics experts, Chinese physicists or Indian computer programmers who could get caught in the H-1B crunch but also African fashion models, European game designers, Pakistani doctors and Filipino occupational therapists. Even accounting firms use the visa program to beef up their staffs during their peak season, noted Bernard Wolfsdorf, a Los Angeles immigration attorney.

“This is going to provide enormous disruption for certain crucial industries,” he said.

Finding a sympathetic ear on Capitol Hill isn’t easy these days. Signs of improvement in the overall economy are overshadowed by worries about the lack of job growth. The threat posed by the outsourcing of increasingly higher-skilled jobs to India and China has become a presidential campaign issue, with Democrats accusing the Bush administration of doing too little to protect American workers.

“The anti-immigrant mood and the anti-globalization mood inside Washington is as negative as I’ve seen it in my 25 years working in this field,” said Harris Miller, president of the Information Technology Assn. of America, which is lobbying for less-restrictive immigration measures.

The H-1B program, established in 1952, has ebbed and flowed with the economy. Initially there was no cap on visas. In 1990, Congress imposed a yearly ceiling of 65,000 visas, though some occupations such as university employees were exempt. Under pressure from high-tech employers, the ceiling was raised in 1999 and again in 2001, staying at 195,000 for three years. Applications plummeted, however, after the tech-sector bust. Last year, under pressure from anti-immigration forces, Congress reduced the cap to its original level.

To apply for an H-1B visa, a U.S. firm must demonstrate that it is unable to find a qualified American citizen for the job and agree to pay the foreign worker a wage comparable to what a U.S. worker would earn, in addition to benefits. The visa is good for a maximum of six years.

Critics argue that firms are using the program to replace U.S. citizens with lower-cost foreign workers. Pete Bennett, who launched the website www.no

moreh1b.com, said he didn’t oppose bringing in foreign workers with special talents when there was a genuine shortage. But, he said, the program is being abused. He pointed to the thousands of attorneys, accountants and teachers brought into the United States each year under the program.

“There are plenty of qualified Americans who are dying to take these jobs,” said Bennett, who opened a cabinetry shop in Danville, Calif., last fall after working more than 15 years as a computer programmer and website designer.

Employers say they try to fill jobs with U.S. citizens but can’t always find qualified candidates, particularly in math and science. In engineering, for example, 43% of the master’s degrees and 54% of the doctoral degrees awarded by U.S. universities go to foreign-born students.

Nearly half of the people hired on H-1B visas have graduate degrees, while only 5% of the U.S. population has the same level of education, said Thom Stohler, vice president for workforce policy for the American Electronics Assn.

Hospitals, especially in rural areas, face a shortage of physicians and specialized healthcare workers such as occupational and physical therapists. And school officials can’t find enough teachers in math, science and foreign languages.

Stohler warned that a restriction on foreign workers could backfire, resulting in companies setting up research operations overseas where they don’t face restrictions on hiring.

“Companies might decide if they can’t get this visa, they’ll hire them there and keep them there,” he said. “Now this person is creating intellectual property in another country.”

Belkis Muldoon, director of global immigration services for Schaumberg, Ill.-based Motorola Inc., said the cap on H-1B visas could create an “extremely difficult” situation for her firm, which employs about 90,000 people around the world. She said some foreign-born graduates of U.S. universities initially hired while on student visas needed to shift to H-1B status to stay in the country.

“Many of the students hired by Motorola -- or other companies -- would face being sent home or terminated if unable to have their legal immigration status changed,” she said.

Groups such as the American Electronics Assn. and the Information Technology Assn. of America are asking Congress for relief. One proposed remedy would remove from the cap foreign graduates of U.S. universities holding master’s degrees or doctorates. Presently, H-1B visa holders working for institutions of higher education or nonprofit groups are not counted against the ceiling.

For Rockwell Scientific, keeping the door open to foreign talent is just part of the answer to staying ahead of competitors. Cheung said the United States must improve its K-12 educational system and find ways to encourage more young Americans to study math and science, or risk losing the competitive edge to countries such as China and India that are investing heavily in these areas. In 1999, the U.S. granted only 61,000 bachelor-level engineering degrees compared with more than 103,000 in Japan, 134,000 in Europe and 195,000 in China, according to a study by the Computer Systems Policy Project, a Washington-based group of high-tech chief executives. They have urged the Bush administration to approve new tax credits on research and development spending, allocate more funds for university research and improve education, particularly in math and science.

The education gap is of particular concern to Rockwell Scientific, which depends on defense-related contracts for 70% of its revenue. With few exceptions, only U.S. citizens are allowed to work on those jobs.

“In military defense, we have a clear superiority,” Cheung said. “But can we maintain it with the number of graduates we are turning out?”