Simple Analysis of the AeA Cyberstates Report

The High-tech occupations have high concentrations of male wage-earners, historical employment to population ratios for men (65 and under) indicate that over-all job growth is not maintaining pace with population growth.

Unemployment statistics have no historical relevance in monitoring the economic health of the Nation.
(The current job market for men is still below 1992 recession levels.)

In 2003, the employment to population ratio (Men 65 and under,) dipped below the 1983 recession levels. Additionally, these employment to population levels have not recovered to the 1992 recession lows and the duration of the 2001 recession has lasted 4 years, twice as long as the prior 2 recessions. Combining the Employed and Unemployed to population (men under 66) ratios together, denotes a declining trend in employment that must be abated.

Of course, women in predominantly male occupations will experience the same employment difficulties as men.

Simple Analysis of the AeA Cyberstates Report.
(April, 29, 2007)

A lobbying agency, called the AeA, is attempting to paint a positive picture on the disastrous over-subscription of "Computer-related occupations" sector in the H-1B guestworker visa program. As usual, the pro-guestworker camps are having problems proving the claim, "the H-1B is a job retention and creation tool." The meager improvements noted in AeA report is being touted as evidence that an increase in H-1B visas is justifiable.

After a quick bit of research, I found some interesting facts that would indicate a reduction in H-1B visas is required.

AeA Background:

AeA provides lobbying and advocacy services for our member companies before State, Federal, and International governments. AeA is the only high-tech trade association with public policy professionals working at every level of government to help our members achieve their operational and strategic business goals. http://www.aeanet.org/governmentaffairs/governmentstart.asp

Excerpt of the 2007 AeA Cyberstates press release:

The report shows that in 2006, the high-tech industry continued growing, adding nearly 150,000 net jobs for a total of 5.8 million in the United States. This growth is faster than the 87,400 jobs added in 2005. These two years of growth represent an increase of four percent. http://www.aeanet.org/PressRoom/prjj_cs2007_US1.asp

Fortunately, the AeA Cyberstates report has some historical data for comparison:

The total number of employees in the U.S. high-tech sector totaled 5.6 million in 2001, up just 1 percent from 5.5 million in 2000, the report says. http://www.pcworld.com/article/id,102329-page,1/article.html

Assuming the Cyberstates basis-data has not changed over the years, we had 5.6 million jobs in the high-tech industry for 2001 and the "Cyberstates" sector has grown to 5.8 million jobs 2006. The five year growth equals 200,000 jobs for an average of 40,000 jobs per year.

I thought that it might be interesting to compare the Cyberstates data, with the H-1B initial employment approval data (2001 through 2005) in just the computer-related occupations sector. The Cyberstates report covers a far greater number of occupations than just the "Computer-related" occupational group.

The job data used by the AeA for its Cyberstates is from the U.S. Bureau of Labor Statistics, and is the most recent data from the agency. It encompasses 45 market segments related to the technology industry based on categories defined by the BLS, such as manufacturing, communications services, software, and computer related services. http://www.pcworld.com/article/id,102329-page,1/article.html

H-1B guestworkers approved for initial employment in 2001, immigrated and began working in late 2001, the average continuing employment approvals for expiring H-1Bs approved from 2000 to 2002 was 126%. The upside-down continuing approval rate is most likely due to single year continuances of H-1B visa, beyond the 6 year limit of the H-1B, while applicants waited for EB greencard visas.

Computer-related occupations (03)
USCIS H-1B Initial Employment Approvals
2001 = 110713
2002 = 25637
2003 = 28879
2004 = 56559
2005 = 52352
Total = 274,140

(Computer-related occupations represent 41.7% of all 2001-2005 initial employment H-1B approvals. Computer-Related payroll occupations represents 3.09% of the 2005 Full-Time wage and salary earners.)

Again, the H-1B figures of 274,140 initial employment approvals, only represent "Computer-related occupations." The AeA would have us believe that the growth of 200,000 jobs is good news even though a partial representation of H-1B guestworkers exceeds the five year job growth figure by 74,140 guestworkers.

The invasion of conscript workers has affected hiring practices, full-time salaried and wage-earner employment for the foreign-born (16.53% of the population), enjoyed 39.10% of job growth in 2006. (Due to differening data collection methods historical data is not comprarble to 2005-2006 data.)

It is understandable, that foreign-born will the recommend foreign-born for employment, but the underlying truth is that a large percentage of these 895,000 jobs are now held by guestworkers.

The following graph, indicates that increases in pathways to citizenship (ICRA and EB visas) improve male employment to population ratios, while increases in guestworker programs are detrimental to male employment to population ratios.

Click image to enlarge

Citizenship programs tend to instill hope and optimism, while guestworker programs enable labor arbitrage and instill pessimism. As a member of the "computer-related occupations" category, I can predict with confidence that future guestworker programs will be abused and mismanged and the U.S. economy will continue to be looted by Corporate Global Citizens.

Source data for H-1B employment approvals can be found in the yearly DHS reports:
Characteristics of Specialty Occupation Workers (H-1B):
Table 8A. H-1B Petitions Approved by Major Occupation Group of Beneficiary and
Type of Petition (Number):

Project: Guestworker Impact on U.S. Computer-related occupations 2000-2005

4/16/2007

revised 4/20/2007

revised 12/3/2008

Background:
After several years of research, I cannot find (H-1B and L-1) guestworker impact studies on my former career in Computer Information Systems. I have never come across a study, or publication that examines the monetary impact of the H-1B, L-1 guestworker, and the subsequent Employment based (EB-2 & EB-3) green card programs have had on Computer-related occupations.

Assumptions:
The H-1B, L-1 (intracompany) guestworker and the EB-2, EB-3, green card programs are similar in the fact that they are all employment based. The various government reporting formats are diverse, direct comparison of the data is difficult; I infer that it is reasonable to assume that statistical averages taken from one category will be relevant to each of these similar categories unless government documents indicate otherwise -- as is the case with the L-1 intracompany visa.

From the H-1B visa data, I found a 6 year average for continuing employment approvals, my assumption is that L-1 continuing employment approvals will mirror the H-1B continuing employment approval rate. This assumption is required because the 2000 - 2005 continuing employment approval data is not readily available for L-1 visa-holders.

The Employment Based Preference (EB) visa data is reported with spouses and children included in the totals; the L-1 (workers) and L-2 (spouses and children) categories are used to determine an average population of spouses and children. The averages of spouses and children are applied to the EB-2 and EB-3 green card LPR data to determine the number of workers in the EB program .

Finally, the duration of the three foreign worker programs are similar. The H-1B visa is a 3 year visa with a single 3 year extension, the L-1B visa (worker) is a 3 year visa with a single 2 year extension and the L-1A (supervisor) is a 3 year visa with two 2 year extensions allowed. The L-1 visa usage is reported to be about 50/50 (See "L-1B overtakes L-1A" in the OIG L-1 report.) so I've averaged the two visas at six years ((7+5)/2)=6 years.

The employment based, EB-2 and EB-3 legal permanent resident programs require a 5 year LPR probation status before granting the green card. Many non-immigrants, who are adjusting status to the EB visa, are granted numerous single year extensions beyond the H-1b and L-1 duration limits while awaiting a "priority date." I've allowed this "fuzzy" sixth year between the non-immigrant and EB visa in the study to maintain parity with the 2000 - 2005 six year sample.

Note: This study separates Employment based EB-2 and EB-3 "new arrivals" from those who are "adjusting status" from another visa category. Published studies demonstrate that employment based non-immigrant visa programs have caused a backlog of 500,000 workers in the EB PERM program; many of the truly "brightest and best" cannot migrate directly into the green card program and will not subject themselves to non-immigrant indenture.

Assertions:

Continuing Employment (H-1B factor): 97.52%

The H-1B continuing employment approvals over actual H-1B visas issued. Visa counts offer a more accurate representation of H-1B guestworkers in the population than H-1B Initial employment approvals.)

(Continuing employment H-1B approvals \ H1-B visas issued)

Non-Continuing Employment (H-1B factor): -2.48%

The percentage of initial H-1B visas which are not renewed.

-1*(1- (Continuing employment H-1B approvals \ H1-B visas issued))

L-2 Spouses/Children factor: -49.07%

The "L-2 Spouses/Children factor:" is used to subtract a proportionate number of spouses/children from other categories where the raw data does not differentiate workers from spouses/children.

(The L visa category is reported as L-1 (Workers) and L-2 (Spouses and children), the six year average of the L category is used to determine the rate (ratio) of immigrating workers to spouses/children.)

-1*(L-2 spouses&children / (L-1 workers+ L-2 spouses&children))

H-1B Computer-related approvals: 46.43%

The six year average (2000-2005) of continuing employment petition approvals for the H-1B, "Computer-related occupations" category.

(Computer-related H-1B approvals \ H-1B approvals)

L-1 Computer-related statistic: 90%

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 that specialize in labor from India.

End Assertions:

Excel Workbook Rollup worksheet:

2005 BLS Computer Related Payroll Jobs = 2,855,320

H-1B Guestworkers & continuances:

H-1B 2000-2005 initial approval visas issued = 783,546
Non-Continuing Employment (H-1B factor): = (-19,432 )
H-1B 2000-2005 Continuing Employment Approvals = 764,084
Total H-1B visa 6 year accumulation = 1,528,198

L-1 (Intracompany) visas & continuances:

L-1 2000-2005 Visas Issued = 356,471
The Non-Continuing Employment (H-1B factor): = (-8,854)
Continuing Employment (H-1B factor): = 347,617
Total L-1 visa 6 year accumulation = 695,234

Employment Based Preference EB-2 & EB-3 new arrivals:

Total visas issued 2000 - 2005 = 131,875
L-2 Spouses/Children factor: (49.07%) = (-64,704)
Total EB-2 & EB-3 visa 6 year accumulation (new arrivals) = 67,171

Legal Permanent Residence EB-2 & EB-3:

Total LPR granted EB-2 & EB-3 (2000-2005) = 682,550
Subtract EB-2 & EB3 visas new arrivals (2000-2005) = (-131,875)
EB category LPRs granted to other than EB entrance visas = 550,675
L-2 Spouses/Children factor: (49.07%) = (-270,216)

Total EB-2 & EB-3 visa 6 year accumulation (non entrance visa) = 280,459

Computer-related immigrant workers in Workforce:

H-1B approvals 2000-2005 (46.43% of 1,528,198) = 709,527
OIG report L-1 petitions Computer related (90% of 695,234) = 625,710
Employment Based Preference new arrivals (46.43% of 67,171) = 31,187
Adjusted status EB-2 & EB-3 - LPR (46.43% of 280,459) = 130,217
Total Computer-related immigrant workers = 1,496,641

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 E entrance visa on EB-2 & EB-3 LPR = 4.56%

2005 Percentage of Computer Related non-citizen workers: = 52.416%
Salaries @ $55,000.00 (H-1B 2005 median): = $ 82,315,252,278.80 per yr.

Resources:

H-1B Visa:
http://www.uscis.gov/files/nativedocuments/H1B_FY05_Characteristics.pdf
http://www.uscis.gov/files/article/FY2001Charact.pdf
http://www.travel.state.gov/pdf/FY05tableXVIb.pdf
http://www.travel.state.gov/pdf/FY04tableXVIb.pdf

L-1 & L-2 Visa:
http://www.dhs.gov/xoig/assets/katovrsght/OIG_06-22_Jan06.pdf
http://www.travel.state.gov/pdf/FY05tableXVIb.pdf
http://www.travel.state.gov/pdf/FY04tableXVIb.pdf

Non E visa vs Legal Permanent Resident EB-2 & EB-3:
http://www.dhs.gov/xlibrary/assets/statistics/yearbook/2005/OIS_2005_Yearbook.pdf

There are various classifications for entrance visas in the Employment based preference. This report separates Employment based, new arrivals and LPRs granted to display that the EB visa is no longer primarily used as the entrance visa -- the majority of EB visas are adjustments of status from non-immigrant categories.

BLS Computer Related Payroll report: (May 2005)
Occupation (SOC code)
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)

Additional H-1B program information:
USCIS Approval of H-1B Petitions Exceeded 65,000 Cap in Fiscal Year 2005
www.dhs.gov/xoig/assets/mgmtrpts/OIG_05-49_Sep05.pdf

Additional Employment Based Preference: http://travel.state.gov/visa/immigrants/types/types_1323.html
http://www.travel.state.gov/pdf/FY05tableII.pdf
http://www.travel.state.gov/pdf/FY04tableII.pdf

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. http://travel.state.gov/visa/immigrants/types/types_1323.html

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 travel.state.gov 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
http://immigration-weaver.blogspot.com/2007/04/project-guestworker-impact-on-us.html

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."
http://www.immigration-lawyer.com/visa/H1B/h1b_numbers.htm#06-cap

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

USCIS
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)

H1B Petitions Traditionally Exceed Caps

"Characteristics of Specialty Occupation Workers
(H-1B):Fiscal Year 2005"

In 2005, 117,536 H1B initial employment petitions were filed, of those petitions, 116,927 were approved for initial employment; the H1B approval rate for 2005 was 99.48%.

In 2004, 163,549 H1B initial employment petitions were filed, with 130,497 H1B initial approvals, but the approval rate was a more realistic 79.79%

===========================================

Initial H1B Petitions_Initial H1B Approvals__Approval rating
2002 __ 109,576 _____ 103,584 _________ 94.53%
2003 __ 108,526 _____ 105,314 _________ 97.04%
2004 __ 163,549 _____ 130,497 _________ 79.79%
2005 __ 117,536 _____ 116,927 _________ 99.48%
===========================================
Total __ 499,187 _____ 456,322 __________ 91.41%_

Top 20 - 2005 Initial and Continuing H1B Approvals:

Computer Systems Design & Related Services 32%
Other industries 17%
Colleges, Universities, & Professional Schools 10%
Industry unknown 7%
Architectural, Engineering, & Related Services 4%
Management, Scientific, & Technical Consulting Services 4%
Scientific Research and Development Services 3%
Elementary and Secondary Schools 2%
Accounting, Tax Preparation, Bookkeeping, & Payroll Services 2%
General Medical and Surgical Hospitals 2%
Securities & Commodity Contracts Intermediation & Brokerage 2%
Semiconductor & Other Electronic Component Manufacturing 2%
Telecommunications 1%
Offices of Physicians 1%
Computer and Peripheral Equipment Manufacturing 1%
Other Financial Investment Activities 1%
Pharmaceutical and Medicine Manufacturing 1%
Other Professional, Scientific, & Technical Services 1%
Health and Personal Care Stores 1%
Professional, Scientific, and Technical Services 1%

The H1B numbers 2002 through 2005:
Initial Approvals 2002 – 2005 = 499,187
2005 Median Salary = $55,000
Economic Salary Impact = $25,097,710,000.00
Average number of H1B initial petitions = 124,796.75
Average number of H1B initial approvals = 114,081
Average H1B approval rate = 91.41%

Continuing Employment Approvals 2002 – 2005 = 513,104
2005 Median Salary = $55,000
Economic Salary Impact = $28,220,720,000.00
Average number of H1B continuing petitions = 131426.75
Average number of H1B continuing approvals = 128276
Average H1B continuing employment approval rate = 91.41%

(Yes, that total is, $53 billion annually for only four years of economic immigration.)

One might also note that 116,927 H1B initial approvals in 2005 exceeded the stated cap.

"For example, approved petitions for initial employment are exempt from the cap if the sponsors are institutions of higher education or nonprofit organizations affiliated with institutions of higher education; the sponsors are nonprofit research organizations or governmental research organizations; or a beneficiary has a U.S. advanced degree."

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.

One way to address the Highly Skilled Worker visa shortage is to raise the educational requirements to "Highly Skilled" (AKA postgraduate educational levels.) Additionally, petition approvals should be graded on the basis of the employment offer; long-term, full salaried employment offers are the best indicators of a genuine need for guestworker expertise.

If the minimum educational requirement for an H1B visa had been postgraduate degree in 2005, every qualified applicant would have received a visa. The recent addition of 20,000 postgraduate exemptions would not have been tapped.