Austin Businesses Lobby for More H-1B Visas

By Marissa Barnett
For Reporting Texas

More than half the 2,034 graduate students in the University of Texas at Austin’s engineering program were born outside of the United States. Experience suggests that 30 percent will leave the country within two years of graduation because they can’t get a work visa, according to the Austin Chamber of Commerce.

Austin companies call that wasted potential—and bad for business. That’s why local business representatives are lobbying Congress to ease restrictions on hiring high-skilled foreign workers by passing immigration reform.

“In Central Texas, the business community is very pro high-skilled immigration reform,” said Drew Scheberle, Austin Chamber of Commerce vice president of education and talent development.

Scheberle traveled to Washington, D.C., in October to urge congressional leaders to raise the cap for H-1B visas, which stands at 65,000 a year and allows for an additional 20,000 visas for certain advanced degree holders. Employers use H-1Bs to hire foreign workers who have at least a bachelor’s degree for up to six years. If the employer sponsors a worker for a green card, the H-1B may be renewed on a yearly basis after the six-year mark.

Increasing the H-1B cap hinges on passing immigration reform in the House, which is focused on more controversial issues such as border security and a pathway to citizenship for undocumented people. In June, the Senate passed a comprehensive immigration bill that would allow between 115,000 and 180,000 H-1B visas per year, depending on unemployment and market demand data.

Meanwhile, some call the tech industry’s claim of a shortage of highly skilled workers an exaggeration and the program an excuse for companies to undercut wages for workers, harming more experienced and expensive American workers.

“You look at any STEM field, and wages are pretty much flat,” University of California at Davis computer science professor Norman Matloff said. “If we had a shortage, you would see wages skyrocketing, and they’re not.

“Industry makes these claims, and they don’t back it up with numbers,” he said.

The Republican-dominated House opposes any comprehensive approach to immigration reform. It has offered some piecemeal reforms. In May, Rep. Lamar Smith, a San Antonio Republican, cosponsored the House SKILLS Visa Act, which would, among other things, increase the H-1B visa cap to 155,000. The bill passed in the House Judiciary Committee but hasn’t had a floor vote yet.

In 2013, national visa filings reached the current caps in less than a week, a first since 2008, according to U.S. Citizenship and Immigration Services. A Brookings Institute report found that Austin ranked 12th in H-1B visa requests in 2012 with 3,087 employer-filed petitions. Austin is the 11th largest city in the U.S.

Scheberle said area tech companies face increasing challenges with recruitment and want to employ foreign-born science, technology, engineering and math students after they graduate.

“These companies see talent graduating—about 56 percent of STEM graduates in Texas are foreign born—but they can’t be hired locally to foster growth, so they go home and compete with our businesses,” Scheberle said.

Foreign-born students with degrees from U.S. institutions are eligible for an occupational training visa, commonly called OPT. This allows them to stay in the U.S. and work in a field related to their degree for between one year and 29 months, depending on the field. When the OPT expires, most graduates must have an employer willing to sponsor an H-1B visa. Then it’s up to U.S. Citizenship and Immigration Services to approve the application.

Robert Loughran, an attorney at Austin immigration law firm FosterQuan, said he has had more employers coming to him with visa requests this year and expects those numbers to grow in 2014. He would like to see the H-1B cap increased.

“Demand has certainly heated up,” Loughran said. “Tech companies, the larger chip companies and the larger design companies are all picking up in demand after the recession.”

Cirrus Logic spokesman Bill Schnell said tech firms are “experiencing limited candidate pools due to H-1B shortages.”

While businesses, and particularly tech companies, call for more H-1B visas, critics say that the temporary worker program is about cheaper labor that’s locked into a job and can’t leave for better pay.

The program requires employers to pay H-1B workers the same wage as Americans hired for similar jobs. But a 2011 U.S. Government Accountability Office report found that the equal-pay provision is poorly enforced.

“The biggest loophole is prevailing wage,” UC-Davis professor Matloff said.

For each type of work, the law sets four tiers of prevailing wage based on location and skill set. Matloff said the prevailing wage does not consider the market value of special skills.

“In the open market, employers have to pay a premium for a skill like Android [programming],” he said. “But they don’t have to pay the premium for an H-1B because the H-1B says you can pay the average wage.”

Matloff argued in a February Economic Policy Institute paper titled “Are Foreign Students the ‘Best and the Brightest’?” that H-1B visas create age discrimination, among other things.

“The age issue is absolutely key,” he said. “Younger people are cheaper than older people. It’s not just in salary, but in benefits.”

Matloff said people 35 and older face discrimination in part because their benefits are more expensive. Health care costs go up after 40, and people in their 30s are more likely to have families, which adds costs to employers.

The Economic Policy Institute describes itself as a nonpartisan think tank dedicated to the interests of low- and middle-income workers.

Visa abuse allegations have further raised concern. In March, federal authorities indicted Dibon Solutions, an IT staffing firm in Carrollton, on six counts of H-1B visa fraud. Federal authorities accused the company of falsifying sponsorship papers that claimed workers would have full-time employment and annual salaries, as required by U.S. immigration law.

Dibon contracted the H-1B workers to other companies, which created a “labor pool of inexpensive, skilled foreign workers who could be used on an as-needed basis,” according to court documents. A trial for the case is scheduled for December.

In Washington, the likelihood of passing comprehensive immigration reform before the end of the year is slim. Piecemeal reforms to increase the number of H-1B visas could see a vote in the House but face opposition in the Senate.

“I don’t see Democrats letting that pass,” Rice University political scientist Mark Jones said. “There’s some consensus there, but if Democrats let the Republicans pass easier reform measures—like the visas—then the pressure to pass a comprehensive bill diminishes.”