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Press Release

    A Beacon for High Tech

    09/18/1999

    Technical graduates of Stanford or Cal in the late '50s and early '60s were deluged with job offers from aerospace and defense companies working on Cold War missile systems and the Apollo program aimed at putting people on the moon. Graduates without citizenship, however, did not qualify for the aerospace jobs and, as a result, found their way to commercial companies such as Fairchild Semiconductor, where I worked. At Fairchild these engineers and scientists, speaking with many different dialects, were laying the foundation for what we know today as Silicon Valley, the technological capital of the world, a capital built by people of many different nationalities.

    The magnitude of the revolution started nearly 40 years ago is hard to overstate. In 1998, the Internet economy generated more than $300 billion in revenues for American companies and employed 1.2 million American workers. According to the University of Texas, the sector ``already rivals century-old industries like energy ($223 billion), automobiles ($350 billion), and telecommunications ($270 billion).'' And most estimates suggest high-tech companies are responsible for between 25 percent and 33 percent of the growth in U.S. gross domestic product over the last five years.

    Sustainable growth, however, presents many challenges. The realm of technological and enterprise possibilities is expanding at such an astounding rate that America has more ideas than it has workers to implement them.

    The Information Technology Association of America says there are nearly 350,000 skilled information technology (IT) positions unfilled in the United States. More than 70 percent of companies surveyed by the ITAA identify this gap as the leading barrier to their growth and competitiveness.

    Concerned with today's shortage of highly skilled laborers, high-tech firms are among the most enthusiastic backers of education reforms that would help better prepare young Americans for the coming Internet century. High-tech companies spend hundreds of millions of dollars each year on training and professional development.

    As important as these factors are to the long-term health of America's modern labor force, it will take time for serious changes in education and the ripple effects of competitive labor markets to ready enough Americans for top-level engineering and computer science jobs. What are high-tech companies to do in the meantime -- tomorrow or next month -- without enough workers to get the job done?

    Many companies secure skilled labor from non-U.S. citizens as was done by Fairchild in the '60s. Today, the vehicle is the Immigration and Naturalization Service's H-1B visa program. Unfortunately, there are not enough visas to fill demand. This year's allotted 115,000 H-1B visas were given out by June 15, in only the eighth month of fiscal 1999. More than 42,000 applications are still pending before the INS, but absent legislation, not one more visa can be issued until the new fiscal year begins in October.

    More important, there is a mysterious lack of data at the INS regarding H-1B visa applicants, frustrating researchers and policy makers alike. Alan Krueger, former chief economist at the U.S. Department of Labor and current professor at Princeton University, recently said his team could not locate statistics for where workers who receive H-1B visas are employed, specific skills of immigrants, the number of Americans with similar skills, and wages of each applicant when employed in the United States.

    This information must be provided and integrated into policy decisions. We also need validated comparisons of compensation for citizens and non-citizens. An investment in accurate research now will save time in pointless, baseless political battles later. A malfunctioning bureaucracy should not prevent our ability to hire employees we need.

    Accurate labor-market statistics will clearly illustrate the shortage already apparent in the eyes of employers, immigrants and even the Clinton administration's Department of Commerce. Sustaining high growth rates in IT requires the capacity to quickly fill new positions -- positions that demand skills often met by workers who are graduates of American universities, but who are not necessarily U.S. citizens.

    Computer science undergraduates from U.S. universities are as likely to be citizens of foreign states as they are to be American. The National Science Foundation also reports that 32 percent of all master's degrees and 45 percent of all doctoral degrees in high-tech fields are awarded to foreign nationals. And rather than take advantage of this pool of well-educated talent, the U.S. government has decided to limit the number of students who can stay and work in America upon graduation.

    The executive branch appears to recognize the problem but can't seem to design a practical solution. A Commerce Department report released last month notes that demand for computer scientists and systems analysts has increased at an annual rate of 16.4 percent in recent years. Further, the report projects that from 1996 to 2006 the United States will require more than 1.3 million new highly skilled IT workers in these occupations.

    Secretary of Commerce Bill Daley and his department conclude, however, that the United States should not seek immigrants for these positions but should work with Americans to bring them up to speed. Among Daley's ideas: Hire a Hollywood production studio to create public service announcements to change the image of the computer science major from geek to chic.

    Let's call that Plan B. Plan A should be to allow companies to hire the best skilled workers available to innovate and grow American companies when they need them -- which is now.

    Of course, it is important to continue the goals of educating native-born Americans. U.S. firms are required to pay $500 for each H-1B visa granted to fund training and scholarship programs for American students and workers. And while some have suggested that there may be fraud in issuing H-1Bs, the poor measurement performance of the INS makes this claim difficult to verify. In the meantime, growth of American companies is hindered.

    Sen. Phil Gramm, R-Texas., has introduced a bill to increase the H-1B visa limit to 200,000 immediately; Rep. Zoe Lofgren, D-San Jose, has written a bill calling for an unlimited number of visas for technical graduates of U.S. universities but does not address the availability of qualified graduates of foreign universities.

    In either of these scenarios or other alternatives, raising the cap to obtain the services of these highly trained personnel is the best way to ensure continued growth and expansion in the high-tech industry -- a sector that innovates and improves the quality of life for everyone living in America.

    Immigrants who are fortunate enough to receive an H-1B visa contribute in extraordinary ways to the U.S. economy. According to a new study by Anna Lee Saxenian of the Public Policy Institute of California, ethnic Chinese and Indian immigrants run one out of every four high-tech companies started in Silicon Valley since 1980. The 2,775 immigrant-run companies had total sales of $16.8 billion and more than 58,000 employees in 1998.

    Moral and economic reason dictate that the U.S. government raise the cap for issuing H-1B visas and invite the best and the brightest from around the world to help grow the American economy. Protectionist ideals rooted in a xenophobic insecurity complex have been proven over time to fail the economies they intend to protect. If America really wants to protect our competitive advantage in the Internet century, we should not stifle the growth of companies facing labor shortages. Rather, we should empower them to continue to innovate and create new technologies that benefit us all.