House Immigration Subcommittee Examines H1B Visas

(August 8, 1999) The House Immigration Subcommittee held a hearing on Thursday afternoon, August 5, on H1B visas. The Immigration and Naturalization Service recently announced that the annual quota for 1999 for these temporary visas, which are used by skilled high tech workers, has been filled.

The Immigration and Naturalization Service (INS) recently reported that the annual cap on H1B visas for 1999 was reached in June. Austin Fragomen, who testified for the American Council on International Personnel (ACIP), an organization which represents entities hiring H1B workers, testified that the INS has made "gross errors" in calculating H1B statistics, and has released "misleading and inaccurate data". He questioned whether the INS conclusion that the cap has been reached can be relied upon.

In 1998, the shortage of skilled high tech professionals caused the annual cap of 65,000 to be reached early in the year. High tech companies clamored for a temporary increase in the annual limit. The Congress complied late last year by passing legislation that increased the cap from 65,000 to 115,000 for Fiscal Years 1999 and 2000, and to 107,500 in 2001. Now, high tech companies are seeking a further increase in the cap.

Rep. Lamar Smith (R-TX), Chairman of the House Immigration Subcommittee

Rep. Lamar Smith (R-TX) said in his opening statement that "Even after almost doubling the number of H1-b visas, the INS reported that the new cap of 115,000 visas would be reached well before the end of fiscal year 1999. In fact, we reached the cap earlier with 115,000 visas than we did the year before when 65,000 visas were available. One of the purposes of today's hearing is to evaluate why, contrary to expectations, so many H-1B petitions were submitted since the passage of the bill. A related question is whether established users of the H-1B program have increased the number of aliens they petition for, or whether there is a new universe of users."

Another member of the Subcommittee, Rep. Ed Pease (R-IN), was disturbed, and uncharacteristically critical. "Mr. Chairman, I appreciate you holding this hearing. However, I don't appreciate the fact that I have to revisit an issue that I thought -- I think we all thought -- was resolved a year ago, and were assured by the various parties that it was resolved a year ago. Nevertheless, here we are."

The first witness, Austin Fragomen, attacked the INS in his opening statement. He said that "we are skeptical about their ability to provide accurate information. INS recently released a list of the top 20 corporate users of H-1B visas for FY98. Part of this widely circulated list was published in the Wall Street Journal. A number of the so-called "top 20 users" are ACIP members so we had the opportunity to compare INS' data to the companies' own records. The results were disturbing. INS grossly overstated usage in all cases; by up to 600 percent in some cases. For example, INS reported that Intel accounted for two percent of the visas when, in fact, they had only 297 new H-1B approvals last year."

"Most immigration experts believe INS continues to inappropriately allocate petitions against the cap," said Fragomen.

"Because we cannot rely on INS for data, we have tried to piece together our own usage statistics. ACIP has conducted telephone interviews with our members in a variety of industries across the country about their H-1B usage. We found that most of our members are using only a few more H-1B visas than in previous years."

Crystal Neiswonger, an immigration specialist for TRW who testified on behalf of the National Association of Manufacturers (NAM), offered similar comments.

"The INS never seems to know exactly what its numbers are. I find it unacceptable that it took them one and one half months to inform their constituents that the H-1B numbers for 1999 had been exhausted."

Both Fragomen and Neiswonger testified that there is a shortage of U.S. high tech professionals, and the H1B visas are needed to enable U.S. corporations to hire foreign workers.

The subcommittee next heard from, David Smith, who spoke on behalf of the AFL-CIO. He stated that "there is no substantial proof of a widespread worker shortage as claimed by the information technology industry," and that it is "premature to even consider another increase in the number of H-1B visas."

He leveled a number of other charges. He said that the H1B visa program creates a disincentive for Americans students to go into high tech fields. He also said that the H1B visa program contributes to discrimination against older workers. He said that "the unemployment rate for IT workers over age 40 is more than 5 times that of other workers in the same age group."

He concluded that "the answer is making the investment in education."

The subcommittee also heard from Gene Nelson, a 47 year old, previously unemployed high tech worker, who spoke bitterly about the H1B program. He described the high tech worker shortage as a "false claim" perpetrated by companies in order to "depress wages" and layoff older workers. He also called H1B workers "indentured servants" who pose a "national security threat."

Both Smith and Nelson emphasized recent layoffs by high tech companies. This led Rep. Zoe Lofgren (D-CA) to point out that "there is layoffs, and there is hirings. The layoffs always get front page coverage, but the hirings do not."

Rep. Lofgren introduced a bill on August 3 to create a new visa category -- the T visa -- for aliens with student visas who have just received a post secondary degree in the U.S. in math, science, engineering, or computer science who have a job lined up paying $60,000 or more. See, HR 2687 IH, the Bringing Resources from Academia to the Industry of Our Nation (BRAIN) Act.

Rep. Lofgren also suggested that the INS statistics might be overstated because "there are lawyers for companies filing a lot more petitions than the companies need." This can be to rush applications into the pipeline. Also, multiple companies can file applications for a single job applicant.

Rep. Lee

Rep. Sheila Jackson Lee (D-TX), the Ranking Minority Member of the Subcommittee, spoke about the importance of recruiting high tech workers from minority colleges. She said that while she voted for the H1B bill last year, she "has concerns," and wants to see "increased commitment to training U.S. workers."

"Not one Silicon Valley firm recruited during the 1998 conference of the National Council of Black Scientists and Engineers in Oakland, California," she said in her opening statement. "Only two Silicon Valley firms fund scholarships through the National Action Council for Minorities in Engineering, which provides assistance to ten percent of all under represented group students in engineering. And the National Society of Black Engineers of Silicon Valley has only four corporate sponsors."

"We need to approach the H1-B visa specialty program with two eyes wide open. One eye focused on looking out for our American workers to ensure proper training, and the other eye focused on the under representation of minorities and women in the high tech industry who currently comprise our American workforce." She concluded that she is "retaining an open mind" on the H1B issue.

Rep. David Dreier (R-CA) is not a member of the Immigration Subcommittee, and did not participate in the hearing. However, he submitted a statement for the record.

Rep. Dreier is the Chairman of the House Rules Committee. He is also the sponsor of HR 2698, a bill introduced on August 4, which would increase the annual cap on H1B visas. It is the companion bill to S 1440 IS, introduced by Sen. Phil Gramm (R-TX) late last month.

"While our economy is strong, we must recognize that if cutting edge technology companies do not have access to growing numbers of highly skilled personnel, it will threaten our nation's ability to maintain robust economic growth and expanding opportunities. Already this shortage of skilled workers is threatening to undermine our prosperity by forcing companies to cancel job-creating projects," said Rep. Dreier. "That is why I introduced the New Workers for Economic Growth Act of 1999 as the House companion for S. 1440, introduced by Senator Phil Gramm."

Rep. Dreier continued that "half of the students graduating from American universities with doctorates in science, math and computer programming are foreign-born students. The lack of investment in educating Americans in these critical subject areas is a serious long-term problem that must be addressed. In the meantime, we must at least capitalize on the education being provided to foreign nationals here in the United States by enabling U.S. companies to hire these graduates. It simply makes no sense to educate these workers in the U.S. and then send them to work for our global competitors."

The Subcommittee did not invite anyone from the INS or Department of Labor to testify. Nor did the Subcommittee call Charles Parrish to testify, or discuss his actions.

The members of the Subcommittee who participated in the hearing were Lamar Smith, Sheila Lee, Zoe Lofgren, and Ed Pease.