Patrick Thibodeau

 

June 25, 2004

H-1B increase faces stiff resistance

The jobless rate for computer scientists and systems analysts in the U.S. hit 6.7% in Q1

 

The political attack against offshoring isn't letting up. Bills that could affect offshore IT work have been introduced in 37 states, and efforts to increase the federal H-1B visa cap aren't making headway.

 

Indeed, Phil Bond, undersecretary for technology at the U.S. Department of Commerce, this week said H-1B supporters will need to make a strong case for an increase, particularly in light of the record levels of unemployment that engineers are facing.

 

"The need is going to have to be real," Bond said at this week's conference.

 

In May, the Institute of Electrical and Electronics Engineers-USA said the jobless rate for computer scientists and systems analysts in the U.S. went from 5.4% in the fourth quarter of 2003 to an all-time high of 6.7% in this year's first quarter.

 

The number of people employed in the field averaged 722,000 in 2003; the first-quarter figure this year was down to 672,000, the IEEE-USA said.

 

This year's cap of 65,000 H-1B visas was reached in February, and companies have already begun submitting applications for the fiscal year that begins Oct. 1.

 

High-tech companies are urging passage of a bill introduced by U.S. Rep. Lamar Smith (R-Texas) that could boost the cap by 20,000 visas by exempting U.S. university graduates with a master's degree or higher from the limits.

 

"In this atmosphere, doing anything on immigration is difficult," said Lynn Shotwell, director of government relations at the Washington-based American Council on International Personnel, which backs Smith's bill. Shotwell said many companies planned ahead and were able to meet their H-1B needs for the current fiscal year. But, she added, "next year might be a different situation."

 

Among the states, one bill that's gaining support is a California measure authored by state legislator Carol Liu, a Democrat from South Pasadena. The bill, AB 1829, would prohibit government agencies in the state from contracting with IT services firms that use foreign labor to fulfill contracts -- work would have to be performed exclusively in the U.S.

 

That bill was recently approved by the state assembly and now is in the state senate.

 

Such antioffshoring measures could have a big effect on state governments as their IT workforces age. For example, Connecticut CIO Rock Regan said that up to 35% of his state's IT workers will reach retirement age in the next five years. Many other states face similar problems, said Regan, a former head of the National Association of State CIOs.

 

"I think it's going to force states to look at different alternatives," he said. "Whether that's offshore or not, I don't know if I can predict that."

 

The California measure worries regulatory opponents. "California tends to be a bellwether on business regulatory issues," said Stuart Anderson, executive director of the recently formed National Foundation for American Policy in Arlington, Va.