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Let the H1-B visas flow: think tank

R S Shankar

The proposed increase in the number of H1-B visas -- from the current level of 115,000 to 195,000 -- has apparently not satisfied the high-tech industry. The increase is even less comfortin for one of America's major think tanks, the Cato Institute, which believes the smaller the government and the freer the trade, the more the prosperity.

A recent study by the Institute said the federal quota on H1-B visas is stifling American industry's huge demand for foreign-born highly skilled workers.

H1-B visa holders, particularly from India, provide an "instant" boost to the American economy, Cato Institute experts said, adding that the newcomers help generate stability by adding to the productivity and increasing America's revenues.

So the government should step out of the picture and stop fixing the quota system, the study said.

"Congress should return to US employers the ability to fill gaps in their workforce with qualified foreign national professionals rapidly," the report said, "subject to minimal regulation, and unhampered by artificially low numerical quotas.

"The quota is hampering output, especially in high-technology sectors, and forcing companies to consider moving production offshore," the study said.

Experts who believe that the high-tech industry has exaggerated the worker shortage in order to increase its profits believe the offshore moving threat is just that -- a threat. But Cato's experts assert the shortage shows no sign of abating.

"Demand for core information technology workers in the United States is expected to grow by 150,000 a year for the next eight years, a rate of growth that cannot be met by the domestic labor supply alone," the study said.

It was conducted by Suzette Brooks Masters, an attorney and a former project fellow at the Open Society Institute in New York, and a member of the Board of Directors of the National Immigration Forum.

Ted Ruthizer, a partner and the head of the Immigration Law Group at the New York law firm of Robinson Silverman Pearce Aronsohn & Berman, LLP, also joined the study. He teaches immigration law at Columbia Law School and is a former president and general counsel of the American Immigration Lawyers Association.

Fears that H-1B workers cause unemployment and depress wages are unfounded, it said. H-1B workers create jobs for Americans by enabling the creation of new products and spurring innovation, the report added.

High-tech industry executives estimate that every new H-1B engineer typically creates demand for an additional 3-5 American workers, the report said.

Responding to articles in major American publications about H1-B visa fraud and stories about high tech programmers being held as "indentured laborers", the report added that the accounts of systematic underpayment and fraud in the program are "false".

From 1991 through September 1999, the US department of labor had only 134 violations were found by the US Department of Labor, and only 7, or fewer than 1 per year, were found to be intentional, it said.

"The lack of widespread violations confirms that the vast majority of H-1B workers is being paid the legally required prevailing wage or more, undercutting charges that they are driving down wages for native workers," it continued.

"Wages are rising fastest and unemployment rates are lowest in industries in which H-1B workers are most prevalent," it said.

Founded in 1977, the Cato Institute is a non-partisan public policy research foundation headquartered in Washington, D.C. It undertakes an extensive publications program dealing with the complete spectrum of policy issues. Books, monographs, and shorter studies are commissioned to examine the federal budget, Social Security, monetary policy, natural resource policy, military spending, regulation, NATO, international trade, and other issues.

Since its founding in 1977 by Edward H. Crane, Cato has grown to be an internationally-recognized institution with its current budget at $ 13 million. It has about 75 employees, 55 adjunct scholars, and 14 fellows.

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