In the midst of one of the largest tech layoffs in history, U.S. firms obtained government approval to bring in a record 163,200 foreign workers under a controversial program that critics say is being abused to hire cheaper overseas talent.
Although the number of approved visas under the H-1B program fell short of the 195,000 allowed annually, the hiring binge in the fiscal year ended Sept. 30 has still caused a furor in an industry that has experienced over 600,000 layoffs over the past 10 months.
"At a time when hundreds of thousands of Americans are out of work, many employers are rubbing salt in the wound by hiring foreign workers," said Dan Stein, executive director of the Federation for American Immigration Reform, a Washington group critical of the H-1B visa program.
The record applications for foreign workers--the majority of whom take jobs in the high tech industry--comes more than a year after Silicon Valley mounted a multimillion dollar lobbying effort to convince Congress to expand the program to satisfy skyrocketing demand for highly skilled workers.
Executives from companies such as Sun Microsystems Inc., Intel Corp. and Motorola Inc. successfully argued that if the New Economy were to continue to boom, it was crucial for the government to admit more engineers and other skilled workers from overseas.
But by the time Congress raised the H-1B visa limits from 115,000 to 195,000 last October, the tech boom was already waning.
Industry officials say they are eager to hire Americans. But they contend that even with this year's layoffs, the number of U.S. workers with technical skills isn't large enough to fill all the job vacancies.
"The dot-com boom maybe over but we are still in the middle of a skills shortage," said Theresa Cardinal Brown, manager of labor and immigration policy at the U.S. Chamber of Commerce in Washington. "Every organization in the country has a need for information technology workers," including those in areas "that are still growing like manufacturing, finance and health care."
The surge in worker visas over the last 12 months is in part due to pent up demand for engineers of all types as U.S. colleges and universities have graduated fewer of them. In addition, companies rushed to hire more foreigners last year before a $500 visa application fee increase was imposed by the INS in December 2000.
Murali Krishna Devarakonda, a software engineer and board member of the Immigrants Support Network, a Budd Lake, N.J.-based group that assists H-1B visa holders, added that the INS's statistics are also misleading.
He said the INS data only indicate the number of approved visa applications, not the number of foreign workers who actually come to the U.S. He also speculated that "most of the petitions were filled before this (current) economic slump started."
But demand has remained robust through the economic downturn. Besides the surge of applications this summer, the INS still has 29,000 applications pending which it has shifted into the current fiscal year.
Daniel M. Larson, director of government relations for Texas Instruments Inc., where H-1B workers number 800 and make up about 3% of the work force, said the market for electrical engineers is still extremely competitive.
"We are dependent on H-1B workers and consider them a valuable part of our company," said Larson, whose company has laid off 2,500 workers in the last year. He did not have figures on whether any H-1B workers were apart of the layoffs.
For some technology workers laid low by the current economic slump, the explanations provide little consolation.
"The level of anger over this program in the technology industry just keeps rising," said John Miano, chairman of the Programmer's Guild, a Summit, N.J. trade group that represents software engineers.
Gene Nelson, a divorced father of two girls, alleged that most all the H-1B visa holders hired at Boston-based Genuity Inc. kept their positions while he and 500 workers lost their jobs at the Internet infrastructure services provider this summer.
"Big companies basically want a work force of independent contractors . . . they can pay low wages to," said Nelson, who made $49,000 a year. If it wasn't for the H-1B program, Nelson said he would still "have a job and be making more money."
Genuity did not return calls seeking comment.
The rancor has spilled over to Congress where at least one lawmaker has introduced legislation that would scale back the controversial program.
"I never believed for a moment these companies really were unable to find a citizen who wanted the job," said Rep. Tom Tancredo, (R-Colo.), who has introduced a bill that would slash the number of H-1B visa holders to pre-1998 levels of 65,000 annually. "Now, having seen these numbers, I am positive of it."
The H-1B visa program was created by the Immigration Act of 1990. It allowed companies to hire foreign workers with hard-to-find technical skills. Those include not just engineers, but fashion models, physicians food chefs and others with specialized talents.
Still, roughly 60% of the H-1B visa holders are in computer programming and other information technology fields, according to a report released last year by the General Accounting Office last year.
Workers get a visa to remain in the U.S. for up to six years and are supposed to earn the same salary and benefits as their American-born counterparts.
Amid the tight job market, there are concerns about abuses of the H-1B visa holders themselves. A few immigrants have even begun campaigning for reform of the program, citing instances of employers paying low wages and threatening to seek the deportation of foreign worker who complain.
The GAO--which found that foreigners were offered a median starting salary of $45,000 annually last year--said there is little policing of the H-1B program.
"INS staff conducting these reviews continue to lack easy access to specific, case-related information that would help them assess the merit of employers' requests . . . As a result, there is not sufficient assurance that INS reviews are adequate for detecting program noncompliance or abuse," the GAO said.
Devarakonda, of the Immigrants Support Network, agreed with the GAO's assessment. "The current system is certainly flawed," he said. "The government doesn't have the resources to police" H-1B.