The H-1B application process starts today and it will end today. Last year, by April 2, the numbers of applications received were nearly double the available H-1B visas and the ‘lucky’ 65,000 applications were to be chosen using a random selection process. Therefore, this year one can expect quite a stampede at the visa processing centers. And FedEx is sure to have a very busy day.

The H-1B issue is an important one in the context of the IT industry because it sits squarely between two important industries: the domestic IT staffing industry and the global IT services industry.  These industries solely depend on this fresh supply of 65,000 people with H-1B visas every year to scale up their businesses. The high technology industry, which includes software, semiconductors, and hardware, relies on separate quota of 20,000 professionals who graduate with a master’s degree from a U.S. institution. The hitech industry uses H-1B professionals to augment its research and technical consulting activities. 

In other words, the visas are used for either for growth ( in the case of IT staffing and IT services) or for innovation (in the case of high technology).  The underlying assumption is that foreign professionals are required because not enough Americans are available every year to take up these jobs. This is where the contention begins. Interest groups like the Programmer’s Guild opine that enough Americans are available and that the visa in effect displaces them, while proponents like Bill Gates, Scott McNealy, and the Indian outsourcing vendors believe otherwise.

Curiously, accurate facts about the exact demand and supply are not available. There is no single agreed upon way in which this can be measured. Or there is no single entity who is interested in measuring it. Therefore, an indirect measure would be to look at how many H-1B visa holders are under active employment. Actually, all of them. Because by definition, an H-1B is tied to a company and an H-1B employee is working for a company that has sponsored his visa and pays him minimum stipulated wages.

This means that there is an existent demand, in theory. How does this system displace American workers? It happens when H-1B employees are ready to work for far lesser salaries than Americans, assuming that enough Americans with the required educational qualifications and experience are available and are ready to be employed. If not, the argument about the displacement is not valid.

By far, it’s a known fact that the supply pool of American tech professionals is not enough to meet the demand. We are talking about programmers, software engineers, analysts, testers, and administrators – people who would have got their degrees three-four years back. A forty year old American with hard core technical skills and two decades of experience may remain out of job because companies are not willing to pay the price for his specialized skills ( which might have even gone rusty). Neither would he be willing to work as a programmer. Such a person would blame the immigrant workers for his woes.

My arguments till now seemed to suggest that the H-1B system works well and the quota needs to be increased. But the truth is that there is blatant misuse of the system and the cap on the H-1B numbers only encourages it.
So called IT consulting companies (read staffing agencies or staff augmentation companies) engage in importing professionals, primarily from India, and file for H-1B visas and place them on projects using cooked-up resumes. Even the large Indian outsourcing companies apply for large blocks of H-1B visas and ‘park’ them for future use. For thousands, the H-1B is a passport to America and a crash course in IT coupled with some deft resume-making would land them the first project. While they are on H-1B, the next dream stop is the Green Card ( which does not have a cap). In effect, an H-1B guarantees a Green Card, which in turn guarantees a secure future in the U.S.

Thus the original intent of H-1B: a foreign worker with highly specialized skills on a non-immigrant visa to work on positions where American talent is scarce, is rarely met. The whole H-1B program makes a travesty of immigration law.