H 1B workers shortage exaggerated

As the wrangling over immigration reform intensifies in the US Congress, the tech industry is lobbying hard to raise the limit on H-1B visas, which allow non-US citizens with advanced skills and degrees in "specialty occupations" to work in the country for up to six years. 

Demand is so great that the annual cap of 65,000 was hit last week, just days after the application period opened. Technology companies support raising the H-1B quota almost five-fold, to 3,00,000, arguing universities are just not turning out enough American math and science graduates and they need to cast their net abroad to stay competitive. 

Yet some US tech workers and academics say that the shortage of talent is exaggerated, that many of the jobs could go to out-of-work computer professionals in the United States, and that the programme serves mainly as a source of cheap labour. 

The 2,00,000-member US chapter of the Institute of Electrical and Electronics Engineers rejects the claim of a broad shortage of tech workers and opposes more H-1Bs. 

"What these companies are doing is to replace Americans with lower-cost foreign workers," says Russ Harrison, senior legislative representative at the IEEE. 

Rather than more H-1B visas, the group favours giving foreign workers permanent residency, which Harrison said would help boost wages and increase job mobility for newcomers. 

In Silicon Valley, stories of ferocious competition for engineering workers and a lack of qualified job-seekers abound. 

Tech companies point to an unemployment rate of around 3.5 percent for those with advanced computer and math experience, less than half the national rate, though in line with other professional occupations. 

But wages in the tech industry are rising more slowly than those in the economy as a whole. For example, pay for applications software developers, a specialty in high demand, have risen just 8.9 percent in the five years through mid-2012, compared with a 12.5 percent increase for all occupations in the US economy. 

"It is extraordinarily unlikely for a severe shortage to happen in a way that doesn't result in very large wage increases," said Kirk Doran, an economist at the University of Notre Dame who studies immigration and labour. 

"We know what a labour shortage looks like: there should be both much lower unemployment than other professions and much higher wage growth. If either of these are not present, then I don't buy the shortage hypothesis." 

Others say that when industries grow fast, wage growth can be stifled because of an influx of relatively inexperienced and lower-paid workers. 

"Even if you look at data from one year to the next, it may not tell you what you think," said Stuart Anderson, executive director of the National Foundation for American Policy, a think tank backed by the pro-entrepreneurship Kauffman Foundation and others. He says sub-industries sometimes move from one category to another one, and that industries are growing more specialised, complicating the data.