Why the IT Industry Doesn't Need More H-1B Workers

October 2002

The Department of Labor’s Bureau of Labor Statistics (BLS) has projected job growth in Core IT (Information Technology) Jobs of 110,000 a year through 2006; it also estimates that about 35,000 degrees in IT per se are earned a year.¹ That sounds at first blush like the formula for a worker shortage in IT. A closer look at the situation, however, suggests otherwise.

The supply of workers is not limited to new graduates in IT fields.

If the only people who could work in Core IT Jobs were those with IT degrees, there might be a labor shortage. But, due to the largely technical nature of the field, many IT workers don’t need degrees and don’t have them. In fact, only half of those already working in Core IT Jobs actually have IT degrees or minors.²

Many IT workers receive their training in other ways than four-year college degree programs. 23 percent of computer systems analysts, engineers, and scientists had less than a bachelor’s degree, and 32 percent of computer programmers. Furthermore, the number of associate (as well as masters and doctoral) degrees in IT and related disciplines has been on the rise since the 1980s.³

If there were a shortage, IT unemployment rates would not be rising.

Increased levels of unemployment in IT fields do not suggest a shortage of IT workers. In fact, according to the BLS, unemployment among experienced IT workers has been rising since 1997—the same time IT industry has been crying for increases in the number of temporary foreign workers it can import.⁴

If there were a shortage, IT wages would be rising unusually fast; they’re not.

According to the BLS, changes in the earnings of Core IT Professionals have been similar to those for all professionals and only marginally higher than those for the entire civilian labor force.⁵

There is evidence, in part, that the “labor shortage” has been created by the IT industry itself in its attempts to maximize profits: “The supposed emergence of an IT worker shortage—to the extent that there is one—is partly induced by the stinginess of wage offers from 1948 to 1994. In fact, only recently has the alleged shortage of IT workers had a positive effect (from the workers’ perspective) on wages. Interestingly, offers to computer science grads have followed the same pattern as those for business majors, indicating that there does not seem to be anything special about the situation in the information technologies workforce.”⁶

In some areas of the country, computer scientists make less than secondary school teachers. As one expert noted, “if computer companies’ response to difficulty in hiring at the existing wage is just to put out ads and not to raise salaries, then it is not surprising that they perceive some sort of shortage.”⁷

The supply is already keeping up with demand.

The reports from the Information Technology Association of America (ITAA) implied that one in every twelve positions (8.4 percent) in IT was vacant.⁸ But the BLS found that from 1996, the number of Core IT jobs would increase by about 10 percent a year through 2006.⁹ So over that period, one would expect one in ten jobs to be vacant if only because it’s a new job. Clearly, if the job vacancy rate is lower than the rate of growth in an industry, then supply is more than keeping up with demand.

Potential supplies of native IT workers are being neglected.

There is large supply of experienced IT workers the IT Industry won’t trouble to recruit. A third of those with college-level IT credentials have had to find jobs outside of the IT field. Even less use is being made of graduates with IT minors.

Age discrimination in the IT industry is a well-known commonplace.¹⁰ By insisting on new workers whom they can pay lower wages, IT firms can maximize their profits, while they justify not hiring experienced workers by claiming they haven’t learned that year’s latest programming language.¹¹ Among workers with IT degrees, less than 40 percent of 55-year-olds are in Core IT jobs, compared to 75 percent of 20-year-olds.

Native supply is about to increase.

Enrollment in computer-related programs in American colleges is skyrocketing. Bachelor’s degree enrollments in the computer science / computer engineering programs more than doubled between 1996 and 1998.¹² As a result of this upswing, in a year or two, the supply of graduates in IT fields will rise dramatically.

In addition, more and more money is being invested in training American workers for IT fields. In 2000, the Department of Labor awarded $52.4 million in grants to train Americans to do the jobs now being given to foreign workers.¹³

IT firms are addicted to the quick fix of foreign talent.

It’s easier and faster for IT firms to bring in temporary foreign workers than invest in their own people, so that’s what they do. “Evidence exists that companies, because of short product-life and product development cycles in IT-intensive industries, have been pursuing a ‘buy’ (from the external labor market) rather than a ‘make’ (by training employees within the firm) employment strategy.”¹⁴

Foreign workers themselves are the victims of the IT Industry’s addiction.

Even among foreign workers, the IT Industry prefers cheap, disposable temporary workers to experienced, permanent ones. “The whole program is out of control and there’s a lot abuse,” reports a software engineer who came to the U.S. as a temporary worker in 1991. “A lot of Indians are working for body shops they can’t leave, and have trouble finding work once they get their green card.”¹⁵ Experts agree: “The H-1B program is not a satisfactory approach to the expansion of supply because it brings people in on a temporary basis and ties them to their employer to get a continuing or possible a permanent visa.”¹⁶

Statistics support this allegation: of the employment-based permanent visas available in the 1990s, only 7 percent were given to petitioners for work at scientific or technical jobs (which includes all scientific and technical fields, not just IT).¹⁷