The Immigration Squeeze

Each day that Congress fails to act on reforming immigration policy, employers at both ends of the talent spectrum say they are suffering.

    Political tension surrounding the issue has spiked following the collapse last year of a broad Senate bill that would have strengthened border security and workplace enforcement while creating a path toward citizenship for the approximately 12 million undocumented workers currently in the country.

    Not only is a complete overhaul of immigration law a remote possibility this year, but prospects are dim for narrow legislation that addresses specific needs for both high-skill and low-skill workers.

    On April 8, the government announced that the 65,000 cap had been exceeded on H-1B visas, which allow foreign nationals with the equivalent of a bachelor’s degree or higher to work in the country for seven years. In addition, the 20,000 ceiling on visas for people with advanced degrees also was reached.

    In the last fiscal year, companies sent in 123,000 applications for the 65,000 H-1B visas. For fiscal year 2009, which begins in October, the U.S. Citizenship and Immigration Service received 163,000 applications between the April 1 deadline and April 7. On April 14, it conducted a lottery to determine which firms would receive H-1B visas.

    As a way to ease the pain for employers, especially in the high-tech sector, where employers say they desperately need foreign talent, the Department of Homeland Security issued a preliminary regulation that extends the time that foreign graduates in science, technology, engineering or mathematics can work for a U.S. company on a student visa.

    The agency increased from 12 to 29 months the Optional Practical Training Program, giving students more time to wait for an H-1B visa. Microsoft chairman Bill Gates called for such a reform in congressional testimony in March, arguing that hiring and retaining foreign-national graduates of U.S. universities is critical to helping technology companies innovate.

    The expansion of the training program “is a good first step,” says Robert Hoffman, vice president of government and public affairs for Oracle and co-chair of Compete America, a coalition of technology companies.

    “The administration has clearly recognized through this action that there is a severe skills shortage in the economy,” Hoffman says.

    There are 140,000 openings at S&P 500 companies for engineers, scientists and other highly skilled professionals, according to Hoffman.

    Smaller companies also have openings that they say they can’t fill. Erica Denninger, human resources manager at ATMI, a Danbury, Connecticut, technology firm, says that she can’t find enough computer programmers who are fluent in the Oracle programming language, which runs the company‘s customer ordering and product control systems.

    Even after posting job ads extensively in newspapers and on the Internet, Denninger says she comes up empty. “The candidate pool does not exist,” she says.

    She can find an ample supply of U.S. network engineers to work on the company’s servers and technology infrastructure. But for programmers, she turns to H-1B visa holders who transfer to ATMI from other companies. She depends on a Web-based product from Visanow, an immigration processing company, to navigate the process. “It’s very complex,” she says.

    H-1B critics, however, contend that companies don’t have to go through all that trouble, because there are plenty of U.S. applicants available. Opponents say that the H-1B program displaces U.S. workers and depresses wages. They also assert that technology companies are looking for niche skills rather than hiring qualified Americans and then training them in the specialties the companies need.

    Expanding the hiring program for recent foreign-national graduates is stoking their ire. “It’s completely unnecessary,” says John Miano, a Summit, New Jersey, lawyer and computer consultant who founded the Programmers Guild. “Student visas are not supposed to be the gateway to immigration, but they’re being transformed into that.”

    Miano also anticipates a court challenge to the training initiative enhancement. “I’m curious what authority [DHS] has to do that.”

    But H-1B proponents argue that the move alone will not be enough to shore up the talent deficit. They say that Congress must increase the number of H-1B and permanent work visas, or green cards. Bills to do so are mired in a political stalemate on immigration reform.

    If Congress doesn’t act, “you’re going to create one heck of a bottleneck,” says Hoffman, Oracle’s VP of government and public affairs. “You’re going to find that many more highly skilled individuals are forced to leave the country.” In which case, Oracle will establish operations in countries that will accept foreign-national workers, he says.

    U.S. industries that depend on low-skill labor don’t have as much flexibility to roll with the immigration punches. Rep. Charles Boustany Jr., R-Louisiana, says construction firms and rice, sugar and shellfish producers are hurting.

    “They can’t find the workforce,” Boustany said at a Capitol Hill press conference. “They depended on H-2B visas over the years to meet these needs. This is good policy that’s being held hostage by politics.”

    Boustany introduced a “discharge petition” in early April that would send directly to the House floor a bill written by Rep. Bart Stupak, D-Michigan, that would almost double the number of workers who can enter the country on temporary H-2B visas.

    The 66,000 limit for H-2B visas was hit in early January. Last year, a total of 120,000 workers entered the country because those returning to their jobs didn’t count against the 66,000 cap. That provision expired this year.

    Stupak’s bill would restore the returning-worker rule. It has 146 bipartisan co-sponsors but has been stalled by tensions surrounding immigration policy.

    Stupak won’t sign Boustany’s petition. “My discussions with House leadership continue and I remain hopeful that they will lead to the quick action needed for seasonal businesses in northern Michigan and across the country,” Stupak said in a statement.

    Vacation regions of the country are also feeling the pinch. Resorts in the Florida panhandle can’t fill jobs without the young Europeans they usually bring over on summer contracts, according to Rebecca Wolever, COO of Signature Worldwide, a training company.

    “There aren’t enough American teenagers or 20-somethings to fill those service jobs,” she says.

    This is forcing hotels to try new approaches on recruiting and retention. For instance, some have partnered with ski resorts to swap staff during their respective off-seasons.

    “They’re having to get real creative,” Wolever says. “It’s all about retaining and training the staff they have.”

    Some foreign workers who have come to the U.S. on H-2B visas, however, contend that the program exploits them by luring them here on false promises of good jobs.

    In a meeting with about 80 congressional staff in early April, a group of such workers said that employers have H-2B workers under their thumbs because the visas are for a short duration—only about six to 10 months. During that time, the workers have no freedom to leave a bad employer, live under constant threat of deportation and lack access to lawyers, they said.

    The workers say they have been subject to overcrowded living conditions, low-quality food and verbal abuse.

    “The H-2B visa as it is structured now is an instrument to create servitude and modern-day slavery,” said Daniel Castellanos, a Peruvian H-2B worker and a leader of the Alliance for Guest Worker Dignity.

    The workers could have an ally in Rep. George Miller, D-California and chairman of the House Education and Labor Committee. Miller has introduced a bill that would increase the transparency of H-2B jobs, make employers jointly liable for the actions of recruiters and impose heavy fines for misconduct.

    Miller’s H-2B skepticism is an obstacle to raising the H-2B program caps. He is a close ally of House Speaker Nancy Pelosi, D-California, which means that his stance likely will influence how Pelosi schedules House time for the issue.

    It’s one more example of the complicated Capitol Hill politics that may prevent not only substantial but also targeted immigration reform this year.