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Visas vs. jobs
Many U.S. tech workers hate the H-1B program, but studies raise questions about its full impact.
September 11, 2003: 3:28 PM EDT
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - A U.S. visa program that allows foreigners to temporarily work in technology and other high-paying industries is often blamed for taking American jobs and pushing wages lower. But two recent studies raise some questions about just how damaging this program is.

The H-1B visa program allows U.S. employers to hire non-citizens for up to six years, as long as those workers have the appropriate experience and training, and are paid the same wages U.S. workers get.

H-1B workers by occupation
Most H-1B holders work in computer-related jobs
OccupationPercentage of H-1B workers
Computer-related57.8
Architecture, engineering12.2
Administrative7.2
Education5.3
Management3.8
Health3.4
Life sciences2
Social sciences1.9
Math, physical sciences1.7
* Data are from 2001
Source:INS, Atlanta Fed

Though the number of H-1B visas is limited by law to 195,000 per year -- a number that will drop to 65,000 in 2004 -- amounting to just 0.13 percent of the total U.S. labor force, the programs have their greatest impact on high-tech jobs, which are among the best-paying in the economy.

Labor groups, lobbyists and legions of unemployed tech workers have taken to the Internet and the airwaves to protest what they see as employer abuse of the visa system. They say the program keeps a lid on wage growth, subjects non-citizen workers to substandard working conditions and keeps U.S. citizens unemployed.

"At a time of high unemployment, the high-tech industry is flooding the labor market by importing workers who are willing to work more cheaply than American high-tech workers," the Federation for American Immigration Reform, a Washington lobbying group, wrote in an August report called "Deleting American Workers."

In response to the pressure, and in light of a lack of job growth in the broader economy, House Democrats and Republicans have proposed a bill to repeal the H-1B program.

But a study published this week by Atlanta Federal Reserve Bank economist Madeline Zavodny said the effect of the H-1B visa program on wages was difficult to measure.

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In fact, Zavodny said that in 2001, the latest data available, H-1B workers with bachelor's degrees were paid more, on average, than U.S. citizens with bachelor's degrees. In that sense, then, it would seem that H-1B competition could actually put upward pressure on wages.

"Study results provide little support for claims that the H-1B program has a negative impact on wages," Zavodny wrote.

However, Zavodny also said that there was an apparent connection between the number of applications for visas and unemployment in the information technology industry a year later.

A separate report released this week by the American Immigration Law Foundation, a Washington think tank and lobbying group, pointed out that H-1B visa issuance has fallen as the economy has weakened -- just 79,100 visas were issued in 2002, compared with 164,000 in 2001. The group also said visa processing fees have raised $692 million in the past five years, which has been used to train and educate thousands of U.S. workers.

"Curtailing legal immigration to the United States or further impeding the flow of skilled foreign professionals to America will hurt the nation's competitiveness and its leadership in the world," the AILF said in a statement. "Such actions would slow U.S. labor-force growth, inhibit innovation inside the United States, reduce job growth, and encourage increased efforts to outsource and place overseas high-technology jobs and centers for research and development."

The AILF also said an immigration specialist for ChevronTexaco suggested that delays in H-1B visa application processing could encourage U.S. companies to simply move jobs offshore.

But that process is already well under way in many of the same white-collar industries served by the H-1B program, and critics of the visa system say it only gives overseas labor sources, such as India and China, a greater supply of well-trained workers to take more American jobs.

In her study, Fed economist Zavodny also pointed out that a growing number of employers are turning to the L-1 visa program, which allows companies to rotate overseas employees into U.S. positions for up to a year, and the visas are renewable for up to seven years for high-level executives.

The L-1 program has no mandated limit, and employers aren't required to pay "prevailing" wages to L-1 workers. The State Department will likely issue about 60,000 L-1 visas in 2003, according to an August study by the Information Technology Association of America, a worker lobbying group.

Zavodny said the impact of the L-1 program on wages was still unknown and could "possibly merit analysis."

Legislation that would limit the number of L-1 visas issued every year to 35,000 and place other restrictions on the program is pending in a House subcommittee.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.