Saturday, April 7, 2007

Rebuttal to H1B Shortage Claims

Revised 4/17/07
Perhaps there is a need for the H1B "Highly Skilled Worker" visa for some under-served vocations, never the less, there is also a need to evaluate possible abuses in a H1B category that had a 14.6 to 1 approval ratio in 2005.

For 2005, in the "Computer Systems Design & Related Services" category, the average number of (initial and continuing) non Computer related H1B approvals were 5,857 approvals while 85,552 approvals were granted to the "Computer Systems Design & Related Services" category.

As a point of reference, the 2005, "Computer Systems Design & Related Services" H1B category, exceeded 35.2% of all H1B approvals granted; the two nearest competing categories were "Other Industries" at 17.85%, and the cap-exempt, "Colleges, Universities, & Professional Schools" category at 11.30%. Source: "H-1B Petitions Approved by Detailed Industry and Type of Petition", "Characteristics of Specialty Occupation Workers (H-1B):October 2004 to September 2005"

Examination of the BLS SOC occupation codes, shows the number of computer relevant payroll jobs was 2,855,320 in May, 2005. The SOC code groups include "Computer Scientists" at the high-end of the scale through, "Computer Specialists" at the lower occupational level.

"Computer-related occupations" is the Major H-1B Occupational Group, which is not an endless supply of job growth in the U.S. The H-1B petition approvals for computer related occupations in 2005 exceeded 43% of all petitions approved.

In addition to the H-1B visa, the Intracompany Transfer (L-1) visa also adversely affects the "Computer-related occupations" category. The L-1A visa can be extended to seven years and the L-1B visa duration can be five years. Our government doesn't seem to publish the number of L-1 yearly petition approvals, but the number of L-1 admissions is published. L-1 worker total admissions for the years 2000 through 2005 equals 1,861,589.

The 2006 OIG report on the Intracompany Transfer (L-1) visa states, "From 1999 to 2004, nine of the ten firms that petitioned for the most L-1 workers were computer and IT related outsourcing service firms..."

We have another immigration category to consider, this is the EB or Employment Based Preference visa, these visas are for the workers on a greencard path to citizenship. The EB-2 and EB-3 visas are five year exceptional-skill visas. The EB-2 and EB-3 category immigrants also directly impact the Computer-related occupations concerning domestic workers.

The EB visa should be the preferred method for utilizing the services of the foreign-born because the EB employee is (eventually) immune to immigration-status coercion.

Data observed from the EB category, defies the industry claims to a skilled worker and/or a skilled worker visa shortage. One would think that businesses, desperate for H-1B visas, would be exhausting this category with initial visas, but this is not the case. It appears that employers don't want to consider the Employment Based category's path to citizenship for importing foreign workers.

With 840,000 EB visas available for the years 2000-2005, only 184,436 Employment Based entrance Visas were granted. Additionally, the unused portion of these visas can be reclaimed from the prior year.

It's not as if these Employment Based Preference immigration caps are not met. Employment Based Legal Permanent Residence status was granted to 943,093, 2000-2005 petitioners, my math shows that 758,657 of the EB petitioners entered the United States under a visa other than the Employment Based Preference category.

Conclusion that the data will support:
Taking an average of the H1B approvals for the years 2000 - 2005, there were 739,197 computer-related H-1B petitions approved in a six year period. These H1B computer-related workers represent 25.89% of the 2,855,320 computer-related payroll positions, the number of departing first term H-1B computer-related workers reduces the percentage to 24.85%. (Payroll is required for all H-1B visas.)

Originally, I posted some computer-related market-share numbers based upon USCIS admission data, a friend pointed out that the admission data is not reliable because there is no straight forward method to accurately determine the number of re-entries from this data. (Thanks JGO) Since that time I’ve found entrance visa data from and have reworked my impact estimate to exclude re-entries and subtract the continuing employment approvals from the actual visas issued instead of subtracting from the H-1B initial employment approvals.

The INCORRECT Computer-related market-share estimate:
Percentage of Computer-related Payroll labor force:

H1B visa holders 25.89%
L-1 visa holders 30.27%
EB visa holders 6.69%
U.S. Citizens 37.15%

Immigration related impact $ 98,702,314,102.69 ($98.7Billion)

The CORRECTED Computer-related market-share estimate:
Percentage of Computer-related Payroll labor force:
H-1B = 24.85%
L-1 = 21.91%
EB-2 & EB-3 using E visas = 1.09%
Non EB entrance visa on EB-2 & EB-3 LPR = 4.56%
2005 Percentage of Computer Related foriegn workers: = 52.416%
Immigration related impact = $ 82,315,252,278.80 ($82.3Billion)

The six year percentage, of Computer-related H1B approvals is 46.43%, the 2005 H-1B median salary was $55,000 for all H-1B workers.

See the following document for methodology and data:
Project: Guestworker Impact on U.S. Computer-related occupations 2000-2005

Here’s a quote that defies the "shortage of skilled workers" claim – maybe these workers are too skilled? Maybe too street smart?

"Cap Exempt Petitions. As directed by the H1B Visa Reform Act of 2004, USCIS treats as exempt from the cap for any fiscal year the first 20,000 H1B petitions reflecting an alien beneficiary with a US-earned masters or higher degree. For FY2005 and 2006 USCIS has now received approximately 10,000 and 8,000 of such petitions, respectively."

I wonder why Bill Gates doesn’t want to hire these really smart graduates?

Only fifty-four percent of H1B employment approvals held a Masters degree or higher in 2005. Of the total 117,536 initial employment petitions for 2005 "Highly Skilled Worker" visas, only 63469.44 had completed a postgraduate degree according to the 54% statistic. If the educational requirement for Highly Skilled Worker visa had been a postgraduate degree in 2005, there would have been a visa for every applicant . The 20,000 H1B for postgraduates of American colleges exemptions would not have been tapped.

One method to make sure there are enough H1B visas available to "Highly Skilled Essential Workers" is to make sure all approvals are Highly Skilled. Raising the educational requirement to postgraduate degree and adjudicating visa applications in the order of highest salary offers first, will help ensure that guestworker candidates truly are the brightest and the best.

Data Sources:

OIG L-1 Visa:
Review of Vulnerabilities and Potential Abuses of the L-1 Visa Program

Report on Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2000
Report on Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2001
Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2002
Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2003
Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2004
Characteristics of Specialty Occupation Workers (H-1B): Fiscal Year 2005

Office of Immigration Statistics Annual Flow Report(s)
Nonimmigrant Admissions (I-94 Only) by Class of Admission: Fiscal Years 2000 to 2005

BLS Occupational Data (SOC codes)
Computer and Information Scientists, Research(151011)
Computer Programmers(151021)
Computer Software Engineers, Applications(151031)
Computer Software Engineers, Systems Software(151032)
Computer Support Specialists(151041)
Computer Systems Analysts(151051)
Database Administrators(151061)
Network and Computer Systems Administrators(151071)
Network Systems and Data Communications Analysts(151081)
Computer Specialists, All Other(151099)


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