Priority Issues – H-1B, L-1 & Offshore Outsourcing

1. Priority Issues – H-1B, L-1 & Offshore Outsourcing Ron Hira, Ph.D., P.E., ChairCareer & Workforce Policy Committee IEEE-USA Leadership Workshop19 March 2004

2. Guest-Worker Visas – H-1Bs & L-1s • What is the issue? • Programs are being used outside intent of law and they need to be reformed • Lobbyists (Immigration Lawyers & Industry) do not want reform, in fact they want to expand the programs exposing them to more misuse • What IEEE-USA would like: • Reform the H-1B & L-1

3. Guest-Worker Visas – H-1B Problems • H-1Bs • Intent of Law: • When an American worker cannot be found for a particular position, companies can petition to hire a foreign national on a temporary non-immigrant visa • Protection of American workers through ‘prevailing wages’ and other safeguards • Cap on maximum number of H-1Bs in a particular year • Problem With Law • Companies can and do prefer foreign workers over US workers • Protections don’t protect • Sneaking in expansion in Free Trade Agreements

4. Guest-Worker Visas – L-1 Problems • L-1s – ‘Intra-company’ Transfer • Intent of Law: • Multinational Companies can bring their foreign workers to the US for up to 5 years • Only workers with ‘specialized’ knowledge can come • knowledge specific to the company, • not generic skills like a common programming language • Problems With Law • Companies, such as Tata, bring rank-and-file workers in to work at a customer’s site essentially as a contract workers • NO Protections for US Workers – e.g., no prevailing wage • NO Cap • Sneaking in expansion in Free Trade Agreements

5. H-1B Examples That Meet Intent of Law Source: R. Hira Analysis US Dept of Labor LCA Database: www.flcdatacenter.com

6. H-1B Examples Stretch Intent of LawOffshore Outsourcing Companies Use Is Order(s) of Magnitude Greater Source: R. Hira Analysis US Dept of Labor LCA Database: www.flcdatacenter.com

7. Offshore Outsourcing Companies Pay Low Wages to H-1Bs Source: R. Hira Analysis US Dept of Labor LCA Database: www.flcdatacenter.com

8. Offshoring Definitions • Outsourcing – Classic Make or Buy Decision • Procter & Gamble contracts with HP for IT services • Offshore Outsourcing • Sending work to outsourcers who operate overseas • Offshore Sourcing aka Off-shoring • Daimler Chrysler has an R&D center in Bangalore • On-site Offshore Outsourcing • Tata Consultancy Services, Infosys, Wipro, Satyam • Blended Sourcing Near Shore, Best Shore, etc

9. Why Do Companies Utilize Overseas Technology Talent? • Cost • Exceptional Talent? • Shortage of U.S. workers? Ph.D.’s? • Politics & Access to the Local Market • Trade, e.g., China & Russia – Boeing engineers • Developing Countries’ Strategy • Tax Holidays & Incentives • 24/7 Capabilities • Collaborative Engineering Technology • Companies Aware Of Possibility & Believe It Helps Their Performance

10. Overseas Engineers Can Afford To Be Paid Less

11. How Much Engineering Work Has Moved Offshore? • No One Knows • No one in government is collecting data • Commerce Department has pilot study underway - $300k • Companies are reluctant to reveal their plans • US workers unwittingly training their replacements • Many believe it is only ‘low-level’ work • No data to support or refute this claim • Estimates Abound from Self-Interested Research Firms • The Forrester Report is most-cited but also dated • Completed in November, 2002

12. Domestic IT Labor Market RecordUnemployment(source: IEEE-USA from BLS)

13. 1983-03 Tech Unemployment Rates

14. Jobs Moving OverseasPredicted Impacts • Job Dislocation • Creates immediate problems for US engineers who are displaced • Job market is still soft so displacement generally leads to un(der)employment • Not creating jobs • No one knows why • Change in Mix of Domestic Occupations • Longer term questions on whether we will have a healthy technology workforce in the US

15. Job Dislocation During Low Job Creation

16. Offshoring Policies • Need to get an objective count of nature and scale of jobs moving offshore • Reform H-1B & L-1 visa programs • accelerating off-shore outsourcing • No coincidence major offshore outsourcers are heavy users of H-1B & L-1 • Cognizant, Tata, Wipro, Infosys, Satyam, IGate, etc. • Help displaced workers • Ensure healthy US technology workforce • Begin open & sober dialogue about implications of off-shoring • Dialogue has been rife with misinformation

17. What IEEE-USA Can Do • Continue to engage congressional staff by providing them objective information • formally (hearing testimonies) and informally (staffer to staffer) • Engage the press and provide objective information • Facilitate IEEE members’ engagement in the policy process

18. What You Can Do • Meet with your Congressperson in the district office • Go to IEEE-USA’s Legislative Action Center website and write to your legislators • Respond to ‘Action Alerts’ • Russ Harrison, IEEE-USA staffer, can help • Write to state legislators

19. What You Can Do • Enlist members of Regions/Sections/ Chapters/PACE • To be effective, we need large numbers • Spread the word amongst colleagues, family and friends • Provide IEEE-USA with individual stories • We want to better understand the situation of members • Back up the statistics with individualized stories to get an effective message out