Rutgers expert warns on guest-worker visas

Posted: April 26, 2013

There's a constant clamor that the United States is falling behind in science, technology, engineering, and mathematics (STEM) capabilities, but that's not really the problem, says a Rutgers University professor who is weighing in on the immigration debate now taking place in Washington.

The problem, he said, is that various work visas are bringing in so many STEM workers from other countries who are willing to work for lower wages that U.S. STEM graduates either can't command the pay they expected or can't find jobs in their fields.

The situation will only get worse, he said, if Congress increases the number of available H-1B visas for highly skilled professionals, as proposed in federal immigration legislation.

"It's Econ 101," said public policy professor Hal Salzman, a senior fellow at the school's John J. Heldrich Center for Workforce Development in New Brunswick.

Employers "generally don't pay more than what they have to pay as long as they can get what they need without paying for it," Salzman said. "If you can increase supply, you can hold down wages."

There's no shortage of homegrown talent, Salzman said, but there is a lack of willingness to pay for it.

On Wednesday, Salzman and others released a study analyzing the impact of high-skilled guest workers on the U.S. labor market.

The study, conducted by the Economic Policy Institute, a liberal-leaning Washington think tank, has particular relevance in New Jersey, where the largest 2012 petitioner for H-1B visas - Cognizant Technology Solutions Corp. - has its headquarters.

"There is a large offshoring industry in New Jersey," Salzman said, "and the offshoring industry in New Jersey is heavily dependent on these guest-worker visas."

Companies that offer to help U.S. businesses lower costs by moving their information technology functions and jobs abroad often circulate H-1B guest workers into their U.S. offices to help them understand American clients and work in quality control, he said.

One of those companies is Cognizant, headquartered in Teaneck. It asked for more than 9,000 H-1B visas in fiscal 2012.

Salzman's study comes a day after the Senate Judiciary Committee finished two days of hearings on a sweeping legislative overhaul to the nation's immigration policy.

In those hearings, Brad Smith, general counsel for Microsoft Corp., said foreign guest workers are a necessity.

"Put simply," he said, "our economy is producing more high-skilled jobs than there are high-skilled workers to fill them."

His company alone, he testified, has 3,300 open positions in core research, engineering, and development, part of the 10,000 open high-skilled positions reported by top tech employers - IBM, Oracle, Intel, and Qualcomm.

That's why Smith backs provisions of the Border Security, Economic Opportunity, and Immigration Modernization Act that would increase the annual cap on H-1B visas from 65,000 to 180,000 over time.

On April 5, the government agency controlling H-1B visas said it had received 124,000 petitions for 65,000 H-1B slots in the first week of the filing period.

"As a threshold matter, it is important to understand that we are not dealing with a choice between hiring U.S. workers and hiring foreign workers," Smith said. "The talent shortage is so acute that we need both to address today's workforce needs."

Salzman and the coauthors of the study aren't buying the shortage theory.

For example, he said, in 2009, two-thirds of computer science graduates worked in their field. Of the one-third that didn't, three in 10 said they couldn't find a job. Five in 10 said they chose another field due to better pay, promotions, and working conditions, according to their research, based on government data.

"The story keeps coming back to wages," Salzman said. "They go elsewhere where the pay is better."

If there were truly shortages, Salzman said, the market would push up wages for workers, providing an incentive for more people to enter the field.

But, he said, pay has stayed flat in technology corridors throughout the nation, including one in the Trenton area.

Meanwhile, he said, the number of guest workers has increased. While there are caps on the H-1B visas, other related visas, the L-1, L-2, and Optional Practical Training visas, are not as regulated, he said.

Salzman said that companies don't have to prove that they have searched for a U.S. worker before filling the spot with a foreign worker, although the proposed legislation would change that.

Smith said in his testimony that "if employers really wanted only to hire cheaper workers, it would not [be] a difficult thing to do."

"Instead, companies would be moving additional jobs outside the United States and putting them in countries where labor costs are significantly lower. Our industry has come to Washington specifically because it wants to create more jobs in this country."

Ross Eisenbrey, a vice president at the Economic Policy Institute, said Wednesday that allowing an expanding cadre of STEM workers from abroad would ultimately hurt job development in the U.S.

"When wages are falling, [graduates] don't go into the field," he said. "You have a self-fulfilling prophecy.

"You discourage these workers, and then you'll get more guest workers until finally, you've killed the supply of U.S. students and workers," he said. "That is not the recipe for a healthy economy."


Contact Jane M. Von Bergen at jvonbergen@phillynews.com, @JaneVonBergen on Twitter, or at 215-854-2769. Read her workplace blog at www.philly.com/jobbing .

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