Study: H-1Bs Visas Go With Job Creation

For every H-1B position requested, tech companies listed on the S&P 500 stock index increased their employment by five workers in an analysis of 2002 to 2005, according to a study by the National Foundation for American Policy (NFAP).

For tech firms with fewer than 5,000 employees, each H-1B request corresponded with an average increase of 7.5 workers, the group said.

In addition, NFAP looked at the number of job openings at tech firms and defense contractors and found 140,000 job openings at S&P 500 firms in January, including more than 4,000 job openings at Microsoft, more than 1,600 openings at both IBM and CSC, and more than 1,500 openings at Cisco Systems. After Microsoft, the company with the most job openings, were defense contractors Northrup Grumman and Lockheed Martin, each with more than 3,900 job openings, according to a second study by NFAP.

Tech companies in particular are seeing huge shortages of qualified workers, said Christopher Hansen, president and CEO of the American Electronics Association (AEA), a large trade group. "The reality is that this nation is today the leader in technology and the technology industries," he said. "To be able to maintain that lead, our companies need access to a highly educated workforce."

These job shortages could continue without a change in the U.S. government's H-1B visa policy, added Stuart Anderson, NFAP's executive director. Currently, the yearly cap on H-1Bs is 65,000, not including an additional 20,000 set aside for foreign students with advanced degrees at U.S. universities, and in recent years, the yearly cap has been filled within days after applications are available.

"We don't see these types of job openings as a temporary phenomenon," Anderson said. "They really should be seen as a longer term trend ... of U.S. skill level stagnating, particularly relative to many other countries in the world."

The studies come out as Microsoft Chairman Bill Gates heads to Washington, D.C. Gates is scheduled to testify about innovation and competitiveness before the House of Representatives Science and Technology Committee Wednesday, and the H-1B issue is likely to come up.

But the NFAP studies ignore the fact that many H-1B visas are taken by offshore outsourcing firms, said Ron Hira, a public policy professor at the Rochester Institute of Technology and vice president for career activities at the Institute of Electrical and Electronics Engineers-USA (IEEE-USA). Eight of the top H-1B recipients in 2007 were offshore outsourcing firms, according to figures from the U.S. Citizenship and Immigration Service.

"These firms hire almost no Americans and their entire business model rests on shifting as many American jobs overseas as fast as possible," he said. "When eight of the top 10 H-1B recipients are the who's who of offshoring then I think it's an understatement to say the program is worse than a complete failure."

Infosys, the Indian outsourcing company, received more than 4,500 H-1B visas in 2007, about 40 times the number Oracle received and 18 times the number Google received, Hira said.

Hira also questioned the NFAP study suggesting companies receiving H-1B visas hired additional workers. "The reports take fanciful leaps of logic to draw strong conclusions from weak or non-existent models," he said.

The NFAP didn't examine most of the top H-1B recipients in its reports, because only three of the top recipients in 2007, Intel, Microsoft and Cognizant, are in the S&P 500, Hira said.

Worldwide Hiring

The job creation study also looked at worldwide hiring, not U.S. hiring, when H-1Bs would most closely affect U.S. hiring Hira said. Many major tech companies in the U.S., including top-10 H-1B recipient Intel, have been cutting their workforce, Hira added. "So in Intel's case the numbers would be negative," Hira said. "Few technology companies are growing their workforce rapidly."

Asked if the job creation study looked at whether the tech companies were hiring high-paying tech workers in addition to filling H-1B visa, Anderson said the study looked at total jobs, not just tech jobs.

But AEA's Hansen dismissed criticism that many H-1Bs go to outsourcing companies. NFAP surveyed members of three tech trade groups, and 65 percent of respondents said they have hired people outside of the U.S. because of a lack of H-1B visas, he said. NFAP found nearly 19,000 job openings among 29 members of the TechNet trade group.

"There is a huge, huge demand for these kinds of jobs, and there's a huge competition for them," Hansen said. "There's going to be a major push [for more visas] because there has to be. You have companies that are simply trying to operate, and they need this talent pool to be able to operate."

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