MYTH: Offshore outsourcing and foreign visas have sunk U.S. tech employment, and wages have cratered. There's been huge disruption in the United States--26% fewer programming jobs since 2001, for example. But the tech job market is still robust. There have been corresponding jumps in management and software engineering jobs. Tech unemployment today is the same--2%--as it is for the broad management and professional category that includes 51 million people, according to an average of the last four quarterly surveys by the Bureau of Labor Statistics. At 3.58 million, tech employment is up 8% over the pit of 2004, and back up higher than the boom years of 2000 and 2001. Salaries show signs of growth again after stalling in recent years: The median IT manager compensation is $105,000, and staffer compensation is $78,000, according to this year's InformationWeek Salary Survey of 7,281 IT pros. The typical raise this year--5% for managers, 3.6% for staffers--was higher than it's been in years. FACT: The U.S. tech industry is having trouble attracting new blood. The technology industry points out that fewer Americans are enrolling in technology programs at the university level, and that increasingly large percentages of those emerging from graduate programs are foreign born. Almost 60% of engineering Ph.D. degrees awarded annually are earned by foreign nationals, according to the American Society for Engineering Education. To the industry, that's further evidence that more H-1B visas are needed. Yet critics see a self-fulfilling prophecy, as companies fail to retrain older workers and discourage younger workers from entering the field. "Due to both outsourcing and insourcing, many young people are concluding that technology is a bad place to invest their time," says Mark Thoma, a professor of economics at the University of Oregon in Eugene. MYTH: An employer needs to look for a U.S. worker before hiring on an H-1B visa. Employers do need to run ads checking for available U.S. workers before applying for automatic approval for a green card. FACT: When it comes to H-1Bs, most employers aren't required to prove they couldn't fill a job with a U.S. worker. The exception is H-1B-dependent companies--those that have more than 50 employees and have more than 15% of their U.S. workforce on H-1B visas, or companies that have been caught committing "willful failure or misrepresentation" on past H-1B forms. Those companies must attest that they've made "good-faith steps" to recruit U.S. workers for the job and that they've offered the job to any U.S. worker who applied that was at least as qualified as the H-1B candidate. MYTH: There are only 65,000 H-1B visas issued each year. The cap for unrestricted new H-1B visas is set at 65,000. But since 2004, there have been 20,000 more H-1B visas allocated annually to U.S.-educated foreign workers with advanced degrees. Also, educational institutions and nonprofits can bring 27,500 foreign workers into the United States each year above and beyond the cap (New York Public Schools is No. 22 on the list of biggest H-1B employers). Indeed, the U.S. Citizenship and Immigration Service approved 117,000 H-1B visas in 2005, according to data by the Government Accountability Office in a report to Congress in June 2006. People can work up to six years on H-1B visas, with renewals. FACT: H-1B visas are tougher to get these days. Last year it took almost two months to fill the 65,000 cap; this year, enough applications arrived in two days. One reason is that Indian-based outsourcing companies are applying for more visas to serve U.S. customers. But the appetite for foreign talent is growing among U.S. companies, too, and even the coolest companies don't get to jump the line. Google employed 328 H-1B visa holders in 2006, putting it at No. 53 on the list of recipients, according to congressional research. In June, Pablo Chavez, Google's policy counsel, wrote in a company blog post that the cap on H-1B visas "prevented more than 70 Google candidates from receiving H-1B visas."
MYTH: Nearly all the H-1B visas go to foreign outsourcers, whose workers take their U.S.-learned skills back to India. It's true that use by India-based outsourcers has exploded. But U.S.-based companies and universities in total are still the biggest users. Microsoft hired 3,117 in 2006, according to congressional research, making it the No. 3 employer of H-1B visa holders; IBM hired 1,130; Oracle 1,022; Cisco and Intel, both more than 800; Motorola, 760. About one-third of Microsoft's U.S. workforce is here under some visa assistance. These companies generally hire with the goal of getting the person a green card to work in the United States indefinitely. And much of their recruiting comes on college campuses. "Companies aren't bringing people over. That's very rare," says Rod Malpert, an immigration attorney at Littler Mendelson. "Typically, these people have already been here four to seven years at U.S. universities." FACT: The H-1B visa is the "outsourcing visa." At the same time, the major offshore outsourcing firms have become dependent on the H-1B visa--as have the U.S. companies that hire Indian-based outsourcers to do work for them. Seven of the top 10 employers of H-1B visa holders have most of their staffs in India, and those seven employed a total of 19,400 H-1B workers in 2006. That's 30% of the unrestricted cap. Tata Consultancy Services hired 3,046 H-1B workers last year, according to congressional research. A few will stay in the United States for two years or more, but most do project assignments lasting six to 12 months, says S. "Paddy" Padmanabhan, TCS's executive VP of global human resources development. "Ninety-nine percent go back to India," he says. Sens. Grassley and Durbin proposed legislation to limit that, alleging that such short-term use of H-1Bs only fuels offshoring of work by U.S. clients. Critics label it "insourcing" and consider it a distortion of H-1B's purpose. Yet Indian firms say they're using the visas exactly as intended--for short-term work. The H-1B visa isn't an immigration issue but rather a trade issue, says Kiran Karnik, president of Nasscom, a trade organization that represents Indian IT services and software companies. Nasscom supports different types of visas for short-term work and the indefinite, green card-bound employees at places like Microsoft. "There is no visa appropriate for the IT industry worldwide," Karnik says. MYTH: H-1B visas are a battle for the highest tier of talent--the world's best and brightest technologists. Most companies don't even make the case that they're chasing the most skilled people. A full 56% of visa requests in 2005 asked for H-1B workers at the lowest of the Labor Department's four-tier skill level--just 5% were for the highest level, 8% for the second-highest. Programmers Guild founder Miano says this shows that these workers either aren't contributing substantially to America's ability to compete, or employers are understating workers' skills to justify paying them less. The former assessment, however, ignores the possibility that having a good supply of lower-tier talent could be what companies need to compete. But Norman Matloff, a professor of computer science at the University of California at Davis who has studied the H-1B issue, sees the visa fundamentally as a way to hire cheaper foreigners or to avoid hiring older U.S. workers seen as more expensive. "This is about cheap labor, period," says Matloff. "H-1Bs are being exploited, even as U.S. workers are being displaced." FACT: The very best employers have other options. The premier U.S. tech employers still search the world for the very best people. And if they can't bring them here, they have every reason to do more development abroad. Microsoft recently said it plans to open a development center this fall in Vancouver, British Columbia--a two-hour drive from Microsoft's Washington headquarters--in part for people who can't get U.S. visas. Microsoft plans to hire 200 people there but will have room to expand. Says Cornell's Yale-Loehr, "At the very top end, for truly multinationals like Microsoft and Oracle, it really is a competition for the best and brightest."