Cap On, Cap Off

Date: Saturday, December 21, 2002 12:33 PM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

The NACCB says that, "despite the recent economic downturn, the future
demand for highly-skilled IT professionals is projected to continue to
outstrip the supply of qualified U.S. workers."

These articles are following a familiar pattern. Dire shortage articles are
followed by a bill to Congress increase the H-1B limit. H-1B advocates are
using a slightly different argument than they did in 1998 and 2000 to
increase the visa cap. In the past they argued that H-1B was needed for
immediate shortages, now they are arguing that H-1B is needed for imminent
shortages.

Shortages never existed and they are definitely are not imminent.
Corporations want to pre-empt the labor market by always having a supply of
H-1Bs to lower labor costs. Why are corporations so afraid fo the free
market system?

http://www.cio.com/archive/010103/40_content.html

IN 1998 AND 2000, when high-tech companies asked Congress to raise the cap
on H-1B visas (temporary permits that allow qualified foreigners to work in
the United States), nary a legislator blinked. The economy was strong,
dotcoms were going concerns, and the cap rose—to 115,000 in 1998 and to
195,000 at the end of 2000. The cap, however, is slated to shrink to its
original level of 65,000 in October 2003.

As that date approaches, high-tech trade groups will argue that their need
to compete requires top-notch skills only available abroad. American
workers' groups will charge that companies use the H-1B program to hire
cheap foreign labor. (While the U.S. IT unemployment rate hangs at more than
5 percent, those out-of-work American IT laborers find an Information
Technology Association of America (ITAA) report that the United States lacks
500,000 qualified information technology professionals hard to swallow.)

Arlington, Va.-based ITAA and the Oakbrook Terrace, Ill.-based Computing
Technology Industry Association say they will begin lobbying in the spring
to boost the number of visas. They won't yet make their position public, but
most expect the introduction of a bill that will either keep the cap high or
eliminate it altogether.

Grassroots efforts are under way on the other side, though with smaller war
chests. Alliance@IBM, a union of IBM workers in Armonk, N.Y., is looking for
evidence that Big Blue laid off local workers while retaining H-1B visa
holders with the same skills, and the Seattle-based Washington Alliance of
Technology Workers is working to see if it's possible to get state tax
breaks for companies that abstain from H-1B hiring.

The U.S. General Accounting Office is even getting involved, looking into
whether companies have shown a preference for H-1B workers. The study is due
out sometime in 2003.

One thing is clear: The economy will dictate the outcome in Congress. "If
unemployment continues, Congress will be more attentive," says Vin O'Neill,
senior legislative representative for the Institute of Electrical and
Electronics Engineers, a Washington, D.C.-based professional group whose
235,000 members lobbied Congress to study the effects of H-1Bs and offshore
outsourcing.

In the middle are American CIOs like Fairchild Semiconductor's senior vice
president and CIO, John Watkins, who employs 40 H-1B visa holders. "I'm not
sure I wouldn't feel the same way [as laid-off IT workers] if I were them,"
Watkins says. "But if you look at why we put this in place in the first
place, it was simply because corporate America couldn't get its hands on
enough qualified man power. Over the last two years, that problem has been
reduced. But I don't think it's a good idea to stop the program. You never
know when the economy is going to come back."
—Stephanie Overby

http://www.naccb.org/govaffairs/immigration.htm

Immigration - H-1B Visa Cap
IMMIGRATION - NACCB POLICY POSITION 02-2
Last Updated 12/19/02
National Association of Computer Consultant Businesses

THE H-1B VISA CAP SHOULD BE LINKED TO AN APPROPRIATE LABOR INDEX REFLECTING
DEMAND FOR IT PROFESSIONALS

NEED FOR ACTION.

Despite the recent economic downturn, the future demand for highly-skilled
IT professionals is projected to continue to outstrip the supply of
qualified U.S. workers. While we strongly support the long-term development
of the U.S. IT workforce, access to a sufficient number of IT professionals
remains critical for the IT community and the economy as a whole. Absent
Congressional action, the annual H-1B visa cap will decrease by 67%
effective October 1, 2003. In light of the importance of this issue to the
long-term vitality of the U.S. economy, Congress should pass legislation
linking the H-1B visa cap to an appropriate measure of demand for IT
professionals.

BACKGROUND ON H-1B VISA CAP LEGISLATION.

In 2000, Congress passed the American Competitiveness in the 21st Century
Act of 2000, raising the H-1B visa cap to 195,000, through the end of Fiscal
Year 2003. Beginning with Fiscal Year 2004 (starting October 1, 2003), the
H-1B visa cap recedes to 65,000---a number that is wholly insufficient to
meet the existing need for IT workers.

THE H-1B VISA CAP SHOULD FLUCTUATE WITH DEMAND.

Under immigration legislation passed in 1998, the Fiscal Year 1999 and
Fiscal Year 2000 H-1B visa cap was set at 115,000. However, given the demand
for IT professionals during that time frame, the number of visas allotted
was wholly insufficient to meet the needs of the growing economy. For
example, in Fiscal Year 2000, the H-1B visa cap was reached in March
2000---a full six months before the end of the fiscal year. Conversely, in
light of the economic downturn that occurred during Fiscal Year 2001, only
163,200 H-1B visas out 195,000 available were used. In light of the
difficulty in setting the level of H-1B visas necessary to meet demand
several years in advance and the resources expended in legislative efforts
to adjust the visa cap every few years, a mechanism should be established to
peg the visa cap to an appropriate measure of the state of demand for IT
professionals.

THE H-1B VISA CAP SHOULD BE INDEXED TO REFLECT THE STATE OF DEMAND FOR IT
WORKERS.

Given the variable nature of demand for IT professionals, the H-1B visa cap
should be indexed and adjusted on an annual basis. An appropriate floor and
ceiling on the variable visa cap should also be established.

NOW IS THE TIME TO ACT.

While the H-1B visa cap does not recede to 65,000 until October 1, 2003, now
is the time to act. We urge member of the U.S. Senate and U.S. House of
Representatives to introduce legislation incorporating this innovative and
balanced approach.

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