If you open the Sunday paper and search the classified ads, you will find numerous job openings in the IT field, spanning every skill level and area of expertise. Since there are so many available positions, finding a job should be easy. Right? IT applicants will tell you that employers have become extremely selective, and fierce competition in the labor market exists for these positions. What group comprises a growing portion of the competition? In some cases, foreign workers holding H-1B visas.

The H-1B visa program has its roots in the Karen Walter Act of 1952. Then, as now, the law aided companies looking overseas to fill vacant skilled positions. As the high- tech industry vacillated in the late 1980s, companies wanted to expand the scope of their labor options. As a result, the current H-1B program was initiated in 1990. Under current rules, a company must demonstrate that a U.S. worker cannot be found to fill a position. If need is proven, an employer may sponsor skilled workers from other countries. The foreign workers must possess a college degree in a technical field such as mathematics, science, engineering, or computer programming, and the position they are filling must require that degree. Once the application for H-1B status is approved, a worker may be employed in this country for three years. Visas may be renewed indefinitely in three-year increments, and during that time the foreign worker may apply for U.S. citizenship.

A Hot Political Topic

Corporate America is lining the halls of the nation’s capitol, lobbying to expand the H-1B visa quota. The expansion proponents argue that there is a shortage of skilled workers for high-tech jobs, mandating an increase of the annual visa quota for the next three years. Opponents of quota expansion argue that the program is being used to replace existing American workers with cheaper H1-B workers.

The H-1B program is growing in popularity. In 1997, the annual limit of 65,000 visas was reached before the end of the year. High-tech companies successfully lobbied to have the limit raised. In 1998, the quota was more than doubled to 115,000 visas. As of April 2000, the program calls for 107,500 visas in 2001. As Figure 1 shows, the quota is due to be lowered back to 65,000 visas in 2002.

Is there truly a labor shortage? In testimony to the U.S. House Judiciary Committee, Subcommittee on Immigration, Dr. Norman Matloff of the University of California at Davis addressed what he calls a labor shortage myth. “There is no shortage of ‘bodies,’ i.e., there is no shortage of experienced computer programmers. The problem is that employers are not willing to hire them.”

Major employers will tell you that they have a difficult time finding programmers with the desired skill sets. Opponents contend the shortage is not a question of the number of applicants. During the first year of the H-1B visa program, America was still feeling the effects of the recession of the late 1980s. Mergers and layoffs threw thousands of IT workers into the marketplace, creating a large supply. With a greater number of applicants available, employers can be selective. According to Dr. Matloff, companies rarely hire more than two percent of applicants.

“Note also that many older programmers work as independent programming contractors, either by preference or because they cannot find salaried work,” Matloff says. “Many of these contractors are not getting as many contracts as they would like to have.” Dr. Matloff made those remarks in April of 1998. Assuming these claims still hold true after the Y2K boom of the last two years, a growing number of independent consultants or contractors between assignments would also skew unemployment statistics. Some older programmers claim the competition is increasingly difficult. Many may lack the hottest, trendiest skill sets.

Relief from Washington

For opponents of the program, the trend of the last two years is distressing. In 1999, the quota of available H1-B visas ran out by June 15. In 2000, the visas were gone by mid- March. For employers dependent upon H-1B labor, this quota represents a barrier to their continued growth.

As of the first quarter of 2000, there are three H1-B-related bills active in Washington. Each would raise the limit on available visas just as the ceiling is about to be lowered. While this is cause for panic among detractors, it is welcome relief for companies struggling to fill open IT positions.

H-1B expansion opponents claim that other options exist to fill the vacant IT positions. Matloff cites three groups as primary labor pools for employers. The first group is college graduates. They possess the hottest skills but are not always willing to work for the lower pay that entry-level positions dictate. Paul Hostek, president of IEEE USA, in New York, was quoted in a February 8, 1999, InfoWorld.com article by Cate T. Corcoran: “Quite honestly, most students coming out of college expect to do design work and a sustaining-type job doesn’t interest them.” Corcoran emphasizes that increases in available labor endangers salary levels. What college students lack is real-world experience with their skills. The cost benefits of hiring younger staff may be eroded by their lack of business knowledge.

The second group consists of those people with highly specialized skill sets. People who have skills not easily acquired in college (ironically, that frequently includes AS/400 skills) are valuable. And the third group is the older programmers who have experience in legacy technologies but may lack experience, education, or training with newer technologies such as Java.

H-1B opponents claim that any future modifications to immigration law, including the bills currently before Congress, should include provisions to help reduce the future need to rely on foreign help. Current regulations dictate that H-1B visa labor must be paid on a par with American labor. Some H-1B opponents claim there are enough loopholes, however, that the market pay requirements are difficult to enforce. Several of the proposed amendments to the H-1B program allocate additional fees and resources for better enforcement of pay standards. The current proposed legislation does shed some light on a related problem: the retraining of the American worker.

If there is a technical labor shortage, then are there disincentives to training existing native workers?

How Does This Affect the AS/400 Community?

The AS/400 market is acutely aware of the labor shortage problem. Few colleges provide comprehensive training for AS/400 programmers. IBM began its Partners in Education program to entice schools to provide AS/400 education and supply the AS/400 community with an ever-valuable commodity: the young, entry-level programmer. While the United States is still the undisputed leader in AS/400 education, the accessibility of AS/400-based training programs in foreign countries is growing rapidly, as shown in Figure 2. Currently, there are more schools offering AS/400 curricula in Belgium and India, for example, than there are in California. This disparity will help maintain the supply of foreign-trained AS/400 programmers. As trends in systems and applications shift toward client/server and Internet technologies, younger programmers fresh out of college will have the skills needed to fill these positions. Older programmers may need additional training, and those not interested in obtaining the required skills have traditionally followed the pattern of moving either to management or to another career. This migration leaves a void that is not easily filled, which may legitimize some H1-B hiring.

Another issue is the direction of the industry. With the onslaught of e-solution initiatives, the basic skill set required of AS/400 professionals is becoming more generic. While it is still desirable to be proficient in some version of RPG, one can make the case that knowing Java means having potential as a good AS/400 candidate for hire. Other general skills that are very marketable include SQL and TCP/IP knowledge. Training in these technologies is available on the Internet and at most junior colleges and universities. American workers must avail themselves of these opportunities to compete in the IT marketplace.

Does a more basic set of requirements make it even easier to find cheaper labor? Perhaps, but critics of the H1-B visa point to the talent level of many foreign national laborers. The program was designed to recruit the “best” and the “brightest.” Foreign national engineers and scientists frequently fall into this category.

H-1B: A Solution or Problem?

While many deny that xenophobia is present in the IT industry, the H1-B debate suggests otherwise. The debate surrounding the H1-B program inevitably invokes political views and beliefs, which cloud the analysis.

Some American workers simply resent the presence of foreign workers in the economy. Their justifications for this resentment often include the language barrier, the fear that American jobs are being taken away, and ignorance. Companies are not beholden to the worker, however, and the ability to find a staff capable of supporting quality services must be maintained.

The existence of any competition for labor can present a risk for those already employed in the AS/400 market. Increasing the availability of H1-B labor can heighten that risk. The debate over the H1-B visa program is a very complex, political issue. IT shops must appreciate this and consider the consequences of using the program. The H1-B labor pool is effective for finding qualified personnel but is by no means the only market. Shops have other labor options to consider when filling IT vacancies, including internal candidates, internships, mentor programs, and lateral hiring.

REFERENCES AND RELATED MATERIALS

• “H1-B Visa Program Brings Workers, Debate,” Cate T. Corcoran, InfoWorld.com, February 8, 1999 (Volume 21, Issue 6)

• Professor Norm Matloff’s Debunking the Myth of a Desperate Software Labor Shortage Web page: http://heather.cs.ucdavis.edu/itaa.html

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1997 1999 2001 Annual H1-B Quota (Source: INS)

Figure 1: H1-B quotas have risen in the past year.

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Figure 2: A number of schools worldwide offer AS/400 training.