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Before the U.S. House of Representatives Judiciary Committee

Subcommittee on Immigration and Claims

Frank Brehm

Northwest Regional Coordinator

The Programmer's Guild

Presented May 25, 2000

Mr. Chairman and Members of the Committee:

As the Northwest Regional Coordinator of The Programmer's Guild, I thank you for the privilege of addressing this hearing.

Ten years ago the high-tech lobby approached Congress with a request to create a special class of visas for foreign programmers, healthcare workers, and engineers to compensate for what was ostensibly a shortage of suitable American workers. According to the Department of Labor, there is no credible evidence of a shortage of high-technology workers. Congress has, nonetheless, become convinced that it needs to act as America's largest temporary help agency and intervene in the supply and demand mechanisms of the United States labor market. Resulting H1-B legislation has been passed into law without the implementation of adequate safeguards for American high-tech workers.

No other workforce in history has faced the antagonism inherent in Congressional attempts to weaken the position of high-tech workers in American society. It is imperative that our representatives avoid any further action on H1-B legislation until such time as the worker protections and information gathering provisions in the American Competitiveness and Workforce Improvement Act of 1998 have been implemented by the Administration.

Congressional attempts to manipulate the supply of labor on behalf of business interests have the potential to yield disastrous consequences. The H1-B legislation contains ominous parallels to the ongoing failing attempts by Congress to manipulate the availability and price of agricultural labor for the benefit of agribusiness. Politicians use immigration legislation to influence labor markets as surely as the Federal Reserve uses monetary policy to influence the capital markets.

There is a saying popular on Wall Street among stock traders that "The market doesn't lie." In might add, "the labor market doesn't lie," and it will naturally produce high-tech workers according to the actual needs of the economy, not to the dictates of high-tech Political Action Committees.

Contrary to the promises of high-tech industry, as it becomes increasingly divorced from the realities of the U.S. labor market, it will continue to insist upon ever-larger labor entitlements of foreign high-tech professionals. Unless you, our representatives, gain the courage to wean high-tech CEO's from government dependence, America's software specialists will suffer the same unfortunate fate of U.S. agricultural and manufacturing workers.

Without the Documentation of U.S. Worker Recruitment provision in the American Competitiveness and Workforce Improvement Act of 1998, American high-tech workers will continue to be denied opportunities which rightfully belong to them.

My first exposure to the disingenuous H1-B process occurred during the mid-1990's when a manager handed me a paper with a listing of the names of French citizens. A co-worker and I were instructed to pick a name from the list of someone who was to become a programmer at our company. My protests to the effect that our firm seemed to have no difficulty finding American candidates, nor did we have any list of qualifications with which to make a rational selection, fell upon deaf ears.

Finally, in an effort to correct an under-representation of women in the department, my co-worker pointed to what appeared to be a female name and handed the list back to the manager. A few weeks later the new employee arrived, and attesting to our lack of understanding of French names, "she" was in reality a "he." The company received a worker at less than market wages who was legally bound to the firm for many years. The domestic candidates who had submitted resumes for ordinary "C" language programming duties, were suddenly found to be "unqualified." Without worker protections and recruitment documentation, such H1-B abuses will continue with alarming regularity.

Many in the business community say that the Documentation of Non-Displacement of U.S. Workers provision places an unnecessary burden upon employers. This provision, far from being an encompassing worker safeguard, is a diluted substitute for the type of protections which technical workers deserve. The clause rightfully prevents an employer from uttering the infamous and often false sentence "your position has been eliminated," in order to quickly offer the same position to a foreign laborer.

Unfortunately, this provision offers no protection against a more subtle and perhaps larger form of displacement called "offshoring." When a corporation "offshores" workers, the firm brings on-site one or more H1-B representatives from a foreign programming business, sometimes referred to as a "job shop." After the foreign programmer achieves competence, he or she begins to channel programming projects to his overseas co-workers at the parent firm. The U.S. corporation is then able to layoff what may be an entire department of American technical specialists. It is unconscionable that the Non-Displacement rule, inadequate as it is, has yet to become implemented as rule of law.

Congress, in its H1-B haste to provide the private sector with an artificially high number of technical personnel vis-a-vis the market, has been proceeding from the assumption that the dynamics of a knowledge-based industry are similar to that of the commodity producing sector. Complex software is not a commodity, as it requires continuos updates after being sold.

Since 1991, H1-B legislation and its accompanying "offshoring" has led to a significant reduction in the cost to software firms of remedying software defects. Where once every software bug was fixed by a highly-paid American programmer, today many of the same defects are handled by low-paid Asian programmers. In the year 2000, software defects in a product are far less injurious to a firm's return on investment (ROI) than was the case 15 years ago. The consumer suffers accordingly. Where once society feared the proverbial four horseman of pestilence, plague, famine, and war, today we've added a fifth called new software, or the dreaded "dot oh" release. Increasing H1-B quotas are fast taking us from the digital age to the age of unexpected consequences.

At the same time that U.S. high-tech employers allege a shortage of available skilled workers, this country has amassed a surprising surplus of programmers over the age of 40 who are no longer practicing their craft. The requirement of a Report on Older Workers in the Information Technology Field will help to focus Congressional attention on the reasons why workers have left what would otherwise appear to be well-paying jobs. As a nation we need to determine where these skilled workers have gone, and whether they left the profession voluntarily, or under the duress of age discrimination. We have available to us many credible studies documenting age discrimination in the software industry. The solution to the problem of age discrimination is fewer, not more, H1-B workers.

Recently, while enrolled in a programming class at a local college, I saw first-hand the difficulties American high-tech college students face when attempting to gain the necessary education for access to information technology careers. Many students were denied admission because a great many seats had been claimed by foreign students who were in our country on student or H1-B visas. The requirement in the American Competitiveness and Workforce Improvement Act for a Report on High Technology Labor Market Needs includes an analysis of the "needs of United States students." It is no secret that American colleges encourage large foreign enrollments in science, engineering, and computer disciplines. Our universities often deny American students admission to computer science study in favor of non-citizens, only to have industry subsequently claim "Americans don't want to work in high-tech!"

It is clear that American high-technology students and workers face a "triple threat" from the H1-B program. First, foreign students, many of whom receive a taxpayer-subsidized education at our finest universities, provide low-paid labor as teaching assistants, and arrive on our shores with the full intention of converting their student visas to H1-B visas upon graduation. Their presence in our universities, regardless of their academic aptitude, adds an extra burden to American students attempting to gain access to high-tech degree programs and classes.

Second, in violation of the intent of Congress, H1-B personnel compete directly with domestic workers for entry-level and advanced positions in high-technology companies.

Third, the process of using H1-B employees as Trojan horses to "offshore" jobs is no different than the process which has devastated American manufacturing industries. "Offshoring" took years to decimate the American manufacturing industry. Thanks to the H1-B program, "offshoring" has the potential to happen with much greater speed in the high-technology field.

Before we unknowingly surrender our prosperity and jobs in the high-tech industry, it is vital that our elected representatives ensure the worker protections in the American Competitiveness and Workforce Improvement Act become implemented as law.

Thank you for allowing me to participate on today's panel.