Employment: Federal Program May Handcuff Local High-Tech Firms
San Diego companies using foreign-born nationals to fill highly skilled positions may have to look in their own back yard or leave those positions unfilled now that a national cap for the special visa program was enacted last month.
Although the federal Immigration and Naturalization Service said the maximum number of H-1B visas allocated for the year, 115,000, wasn’t officially filled yet, the agency is no longer accepting applications.
Mario Villarreal, an INS spokesman in San Diego, said as of the end of February, 74,300 H-1B applications have been approved, but with more than 45,000 applications pending, the cap for this fiscal year has already been reached.
Villarreal provided national numbers, and said local figures were not available, but knowledgeable sources say the program has been used by some of the area’s largest high-tech and biotech employers.
Stephen Dahms, an SDSU professor and chairman of a work force committee for Biocom, said a survey of the biotech industry last fall found 6.5 percent of all local workers in the field had H-1B visas.
Dahms said these firms that didn’t make their requests earlier will be unable to fill openings through the program this year.
‘Out Of The Running’
“If the companies haven’t had their requests in from the first part of fiscal year (beginning Oct. 1), they’re out of the running,” he said.
Qualcomm, Inc., the area’s largest high-tech employer, has employed foreign nationals for years, but the company declined to reveal how many staffers have the visas.
Diana Baldwin, a Qualcomm spokeswoman, said the company does not break down the number of its 7,000 work force that way.
Qualcomm supports legislation to increase the current visa cap, but beyond that it declines to comment, Baldwin said.
But in 1998, Dan Sullivan, Qualcomm’s senior vice president, testified in Congress that since the company’s founding, it employed 572 workers on visas of all types, including 476 through the H-1B program. Sixty percent of those hires were recent graduates from U.S. colleges, Sullivan told a congressional committee.
Erik Bruvold, director of government affairs for the San Diego Regional Economic Development Corp., said the use of the H-1B program locally is prevalent both in the area’s high-tech and biotech industries, and by larger and smaller firms.
Short-Term Needs
“Companies cannot meet their work force needs with the available labor pool we have here,” Bruvold said. “This program is designed to meet some of the short-term, almost crisis, needs of companies in San Diego.”
Without the program, companies like Qualcomm and many other high-tech firms that have created thousands of jobs in recent years couldn’t achieve that type of success, which has benefits for the entire economy, Bruvold said.
Thom Stohler, director of work force policy for the American Electronics Association in Washington, D.C., said the fact the visa cap has been reached earlier than last year is proof the cap needs to be raised. He said his trade association is supporting legislation in Congress this year to increase the cap to at least 195,000 annually.
While many in the high-tech industry say the visa program needs expansion, some charge companies are using the program as a source of cheap labor since the firms do not have to pay the same wages as is paid to U.S. citizens.
Jerry Butkiewiez, secretary-treasurer for the San Diego-Imperial Counties Labor Council, said while there may be some need for a limited number of skilled workers by the area’s expanding technology companies, the biggest reason companies are using the visa program is to control wages for its current and future staffers.
Driving Down Wages?
“I sincerely believe employers use the H-1B visas to drive down the wages of our children who are graduating from universities with degrees,” Butkiewiez said. “Just the fact that they have this program helps put a cap on wages.”
Bruvold and others supporting the visa program deny companies are bypassing qualified U.S. workers to keep their labor costs down.
“Given the craziness of the job market and how much companies are spending on work force recruitment, that clearly doesn’t jibe with the experience of most people in this economy,” he said.
Bruvold said the current unemployment rate for jobs as engineers and information technology workers is so low and are in such high demand, these workers are commanding escalating salaries, big bonuses, and other perks.
BMW Benefits
To illustrate the level of competition for these workers, he heard of one Silicon Valley firm offering new software engineers a paid three-year lease on a new BMW Z3, a two-door sports convertible, as part of its employment package.
Also, as part of the law governing the visas, the foreign workers must be paid salaries that are above the national average for the position, Bruvold said.
The basic law of supply and demand is forcing U.S. firms to look outside of the domestic labor market to fill jobs, said AEA’s Stohler.
“If there was a massive pool of American workers out there, believe me, American companies would be hiring them,” he said.
The problem for growing high-tech companies in recent years is the dwindling numbers of degreed professionals in these fields.
He cited figures from the U.S. Department of Education for the 10 years between 1987 and 1997 that show the number of graduates in electronic engineering decreased 45 percent and those receiving computer science degrees dropped 37 percent.
Added to this is the fact foreign students make up a significant portion of those studying in the sciences and math fields, Stohler said.
About a third of bachelor degrees in math and sciences awarded in recent years go to foreign students, while this group receives almost half the doctoral degrees awarded, he said.
Improve Education
The AEA and other high-tech trade associations support improving the nation’s elementary and secondary school systems as the long-term solution to the problem of the shortage of trained high-tech professionals.
Bruvold said locally EDC is attempting to address the problem by supporting efforts to improve local schools. The EDC is a sponsor for High Tech High, a charter school geared to math and sciences scheduled to open this fall.
The EDC is also fostering a continuing dialogue among local teachers, students and administrators to determine what the “best practices,” or what are the most effective ways of teaching math and sciences in the area’s schools, he said.
