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Another perspective on H-1B reform

As is widely know, the White House is considering making sweeping changes to the H-1B visa program. These changes could make it far more difficult for companies to bring foreign workers over to the US, perhaps by making it too costly to do so.

There’s no question about it. The H-1B program is quite controversial. Those opposed to it say it takes American jobs away; those in favor feel it helps deal with a shortage of American workers in particular fields, including software development.

Several weeks ago I wrote a story that suggested any changes to the H-1B program really aren’t the problem but that automation might be the much bigger issue.

Now a new survey is out from Spiceworks showing that a majority are in favor of changes to the H-1B law. A total of 429 IT professionals participated and a sizeable majority — 67% — said they favor changing the H-1B law. Their reasons? The current rules favor large employers, respondents said, and the way the law is written makes it too easy for employers to abuse the rules. And there was certainly a concern that bringing relatively lower-paid workers in had the potential to get in the way of American-born employees seeking those same opportunities.

But this was most interesting…71% of those surveyed said the H-1B visa situation didn’t affect their organizations at all.

So it’s a little hard to know what to think about all of this. Will tightening the rules really help Americans? But what about the very real software developer’s shortage? As our story suggested, it can be hard for many companies to find skilled IT professionals today.

Where do you stand? Let me know.

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The only thing particularly interesting about 71% is that 29% of organizations might consider or do use the visa.  Most small and mid-sized organizations do very little factoring in of the visa and those that do, don't want to hassle with it so their "factoring" is "no".  Changes, especially ones further constraining it, won't impact that at all.

What is surprising is that there is even pretense of a question of whether or not there is impact to domestic workers.  The economic theory, myriad anecdotes and data all tell us there must be.  Add supply and price goes down.  For every Disney, PG&E, ToysRUs or SoCal Edison that gets a little notice for removing workers and replacing them with H-1B (and/or L1 or B1) anchored workers there are hundreds most Americans have never heard of.  And there are simply way too many foreign workers getting paid just above the $60K threshold to deny there's no undercutting going on.

This visa is a good idea, gone (or led) terribly, horribly wrong.

Go read "SOLD OUT" by Michelle Malkin and John Miano. Excellent level of detail, excellent footnotes and references to back-up their statements. Copyright 2015.
"Very real software developer shortage"? Really? What do you base this on?

While lobbying Congress for more H-1B visas, H-1B workers are "the best and brightest". Come payday, however, they're entry-level workers.

The GAO put out a report on the H-1B visa that discusses at some length the fact that the vast majority of H-1B workers are hired into entry-level positions. In fact, most are at "Level I", which is officially defined by the Dept. of Labor as those who have a “basic understanding of duties and perform routine tasks requiring limited judgment". Moreover, the GAO found that a mere 6% of H-1B workers are at "Level IV", which is officially defined by the Dept. of Labor as those who are "fully competent" [1]. This belies the industry lobbyists’ claims that H-1B workers are hired because they're experts that can’t be found among the U.S. workforce.

So this means one of two things: either companies are looking for entry-level workers (in which case, their rhetoric about needing "the best and brightest" is meaningless), or they're looking for more experienced workers but only paying them at the Level I, entry-level pay scale. In my opinion, companies are using the H-1B visa to engage in legalized age discrimination, as the vast majority of H-1B workers are under the age of 35 [2], especially those at the Level I and Level II categories.

Any way you slice it, it amounts to H-1B visa abuse, all facilitated and with the blessings of the US government.

The National Association of Colleges and Employers (NACE) has never shown a sharp upward trend of Computer Science graduate starting salaries, which would indicate a labor shortage (remember - the vast majority of H-1B visas are granted for computer-related positions). In fact, according to their survey for Fall 2015, starting salaries for CS grads went down by 4% from the prior year. This is particularly interesting in that salaries overall rose 5.2% [3][4].

[1] GAO-11-26: H-1B VISA PROGRAM - Reforms Are Needed to Minimize the Risks and Costs of Current Program
[2] Characteristics of H-1B Specialty Occupation Workers Fiscal Year 2014 Annual Report to Congress October 1, 2013 – September 30, 2014
[3] NACE Fall 2015 Salary Survey
[4] NACE Salary Survey - September 2014 Executive Summary