Software group: U.S. needs foreign workers
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The U.S. software industry is larger than the food processing industry in terms of revenue, according to an IT trade group that wants Congress to&#160;raise the annual cap on H-1B visas,&#160;give permanent residency to foreign nationals who graduate from U.S. colleges, and back trade policies that give companies unfettered access to global markets.
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WASHINGTON -- American technology companies will lose highly skilled foreign workers to Indian and Chinese rivals if the country's work-visa program is not fixed, a Google executive warned Congress on Wednesday.
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The Story: Silicon Valley businesses have long argued that changes in the immigration laws are needed to ensure a continuing supply of highly skilled workers. The current limit of 65,000 under the standard H1-B visas is not enough, they say. (The quota was filled in less than a month in 2007.)[ Slideshow: 2007's top underreported tech stories ]                                                    But that number obscures an important fact: The real total of visas issued to highly skilled workers is closer to 400,000 annually, according to the federal Citizenship and Immigration Services (CIS) agency. And that, say some critics, may mean that the law is being abused.There are two reasons the number is so large.First, the H1-B visa cap has a built-in exemption that allows an additional 20,000 workers who have graduated from U.S. universities with an advanced degree (master?s or higher) to enter every year.Second ? and the biggest reason ? is the use of L-1 visas, which are granted to executives and workers with specialized skills employed by multinational companies. Because there is no cap on L-1 visas issued each year, the numbers have soared. In the last three years, an average of 315,000 L-1 visas have been issued each year.Unlike the H-1B visas, the L-1 visas are not intended to be a springboard to possible permanent residency and a coveted green card. In essence, the L-1s are intended to allow multinational companies to rotate staff across national borders, so they can transfer foreign managers and specialists within the company to U.S. offices for a limited period of time.But the vast number of workers admitted with L-1 visas has critics suspecting that companies ? Indian outsourcing firms in particular ?are using them as a back door to bring in lower-paid workers to do jobs that could be performed by Americans, rather than for the intended purposes of staff rotation."It's clear that foreign outsourcing firms are abusing the system, and we can't let that continue," Sen. Richard Durbin (D-Ill.) said earlier this year as Congress debated immigration reform. Here?s what upset him: According to immigration records, 14 of 20 companies whose employees were granted the most L-1 visas were offshore outsourcing firms, including Tata Consultancy, Satyam Computer Services, Wipro, and Infosys Technologies.Tata Consultancy obtained 4,887 L-1s in fiscal 2006 ? the most of any company ? and 3,601 in fiscal 2007, second only to Cognizant (4,869), a U.S.-based outsourcer with a major presence in India. "I find it hard to believe that any one company has that many individuals ? legitimately being transferred within a single year," Durbin said in Congress. (Tata declined to comment to InfoWorld, but a spokesman told BusinessWeek, "We're complying with the law and with the regulations. We want to work with Congress to address any issues they may have.")Infosys, Wipro, Satyam, Tata, and Cognizant also appear on the CIS?s top 10 list of companies obtaining H-1B visas for employees in fiscal 2007, along with Microsoft, Cisco, IBM, Motorola, and Intel. Those facts further raise critics? suspicions.Bob Meltzer, who heads the VisaNow firm that helps applicants obtain visas, says there?s a growing belief that the L-1s are being abused today, though he can?t tell if that belief is justified. He does note that the L-1s had been abused in the early 1990s in the manner that critics suspect is happening today.The Bottom Line: Immigration is a tough issue. And it?s even tougher when we don?t have all the facts, as is the case on employers? claims of labor shortages requiring more foreign hires and employees? claims of being replaced by foreign workers by companies looking to save a buck. When you?ve figured out the right balance, let the pols know what you think.Complete list of 2007's underreported stories: 1.? Java is becoming the new Cobol 2.? Sun Microsystems is back in the game 3.? Hackers take aim at Mac OS X 4.? There are some threats you can worry less about 5.? Companies may have found a way around H-1B visa limits 6.? Open source?s new commercial strategy 7.? End-to-end Ethernet finally arrives 8.? Blade servers arrive for the masses 9.? BI is dead; long live BI 10. Balance of power shifts to software buyers
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Shortage of IT skills and inadequate Internet service may lead Indian companies to look to U.S. and other countries for outsourcing.
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MONTERREY, Mexico -- If a quarry needs a migrant worker who can haul 50-pound loads of rock out of a mine, or a big landscaper wants to hire a man who'll mow grass from sunup to sundown for $8 an hour without overstaying his visa, Jeffrey West scrolls through his computer, clicks the mouse and fi...
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Foreign Internet service and applications providers would be required to base inside the country the servers they use for U.S. customers, under a proposal from the U.S. Department of Justice (DOJ).
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(InfoWorld) - Up against competition for markets and for hiring staff, Indian software outsourcers are focusing on building reusable software that automates specific business processes. These software components can in turn be used across a number of clients, saving costs, and time. Top Indian outsourcers such as Infosys Technologies Ltd. and HCL Technologies Ltd. for example, have developed a variety of components including an RFID (radio frequency ID) component for supply chain applications, according to Forrester Research Inc. senior analyst Sudin Apte. Currently, outsourcers' business models are largely based on a cost-plus model where they add more staff to a project to get more revenue. "They are trying to break out of this linearity and dependence on low-cost staff alone," Apte said. Midsize outsourcers are also investing in creating reusable components, consisting of business applications or middleware. "If you look at the applications we develop, about 30 to 35 percent are common across various applications, so there is an opportunity to make them reusable," said Bala Variyam, vice president for IT delivery at iGate Global Solutions Ltd., an outsourcing company in Bangalore. The company develops prebuilt components that can be used across a variety of industries, as well as business components for banking and financial services that are quickly configured and deployed for customers, Variyam said. Besides developing components in-house, iGate is also looking at open-source components. "We are looking, for example, at an open-source trading platform that can be used for capital markets and investment banking applications," Variyam said. Among multinational services companies, IBM Corp., for example, set up last year in India a Global Business Solutions Center as the company's global hub for the management and creation of reusable software components. IBM also set up last year development centers in Beijing, China, and Pune, India, that focus on developing industry-specific SOA (service-oriented architecture) services that are reusable across various customers. In the short term, this strategy will require Indian companies to invest in top quality staff to understand the business problem and the technology and develop the software. Most Indian companies like Infosys and HCL that are developing reusable components have large teams that are not immediately billable, so they don't earn direct revenue for their companies, Apte said. In the long term, though, these companies could probably have less demand for new staff as they reuse software across a large number of customers, according to Apte. IGate is already seeing dramatic time savings of up to 30 percent on applications development, though time taken on the design and testing phases does not change, Variyam said. Customers are also demanding components that have already been proven across other deployments, Variyam added.
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Organized labor is starting to track companies that ship U.S. jobs overseas and will make the information available to the public in a database.
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Universities are relying on foreign student to prop up key subjects like science and engineering, a report says.
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(InfoWorld) - Alumni of a major Indian university want the U.S. Congress to take separate action to passÂ H-1B visaÂ legislation that went down with the immigration reform bill thatÂ failed in CongressÂ last week. Members of the Indian Institute of Technology (IIT) alumni association, meeting for a three-day conference in Santa Clara, California, said Friday that they are hoping to get a separate vote on an immigration bill provision that would increase the number of visas granted to highly skilled engineers coming from abroad to work at U.S. technology companies. "Almost as soon as the bill died, there was talk of piecemeal moves to get parts of that bill passed," said Umang Gupta, chairman and CEO of Keynote Systems, a company that measures the technical performance of Web sites. He's also chairman of the board of PAN IIT, the alumni group hosting the conference, which has drawn close to 4,000 people. The legislation would increase the limit of H-1B visas to be granted every year to 115,000 from 65,000 today. Backers say the extra visas are needed because there aren't enough qualified U.S. engineers to do the work U.S. companies need done. Opponents say the visas just make it possible for U.S. companies to hire foreigners at lower wages than they would have to pay U.S. hires. The legislation would also continue to allow 20,000 visas per year to applicants who have advanced degrees from U.S. colleges and universities. Today, about half of the graduates of U.S. engineering schools are non-Americans, many of whom have to return to their home countries to find work when they should be allowed to work here and contribute to U.S. economic growth, said Pradeep Khosla, dean of the Department of Electrical and Computer Engineering at Carnegie Mellon University in Pennsylvania. "The day this country limits the free flow of skilled immigrants coming into this country, that's the day we start going downhill," said Khosla. Another IIT alum, Yogen Dalal, managing director at Mayfield Fund, a venture capital firm, noted that in the early 1990s, some in Silicon Valley thought they would be overcome by the Japanese. But the success of valley companies like Google and Apple, which introduced its iPhone a week ago, shows it remains a center for innovation. "Wealth is being created by innovation right here in [Silicon Valley]. Economic value is being created here. The work force is just being redistributed," Dalal said. The H1-B discussion is happening against the backdrop of the loss of thousands of jobs in recent years, particularly in Silicon Valley, as companies outsourced work to lower-wage markets in countries like India. But as more work is done in India,Â wage inflationÂ has begun to narrow the pay gap between India and the U.S. And in some cases, Indian companies have begun moving jobs to the U.S., said Arjun Malhotra, chairman and CEO of Headstrong, an outsourcing consulting firm. "If you look at the issue today, it's not outsourcing, it's global sourcing. You go to wherever the best resources are available to do that job," said Malhotra. The Indian Institute of Technology was created in 1950, three years after India gained its independence from Great Britain. It has about 100,000 alumni, 25,000 of whom live and work in the U.S.
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Cheap labor isn't the only reason for offshoring.
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Microsoft Chairman Bill Gates told Congress on Wednesday that overhauls of the nation's schools and immigration laws are urgently needed to keep jobs from going overseas. "The U.S. cannot maintain its economic leadership unless our work force consists of people who have the knowledge and skills needed to drive innovation," Gates told the Senate committee that oversees labor and education issues.
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(InfoWorld) - That explosive H-1B YouTube video offering advice on how to hire foreign workers instead of Americans has gotten the attention of U.S. Sen. Charles Grassley (R-Iowa) and Rep. Lamar Smith (R-Texas), who called it evidence of abuse of the visa program. Both men want a federal investigation and are seeking answers from the law firm that posted the original video on YouTube. In a letter to U.S. Department of Labor Secretary Elaine Chao, Grassley and Smith characterized the video as "exposing the blatant disregard for American workers and deliberate attempt to bring in cheaper foreign workers through the H-1B program." They also want the labor secretary to review the video and investigate "the law firm's unethical procedures and advice to clients." In the video, a person identified as Lawrence Lebowitz, an attorney at the firm Cohen & Grigsby PC in Pittsburgh, Penn., explains how U.S. companies can avoid hiring U.S. workers. "Our goal is clearly not to find a qualified and interested U.S. worker," said Lebowitz in the video. "And that, in a sense, sounds funny, but it's what we are trying to do here." Grassley and Smith also wrote Cohen & Grigsby, noting that "your firm's video advises employers how to hire only foreign labor, while making it nearly impossible for a qualified American worker to get the job.... While many companies insist that they are not participating in fraud, many are finding loopholes around government rules and regulations in order to bring in cheaper foreign workers. These loopholes lead to abuse that ultimately displace qualified Americans. The abuse is evident thanks to a video produced by your firm...." They also noted that the video "advises potential employers that they can fulfill" Labor Department hiring requirements "by advertising the position in places where they will not find the most qualified applicants. Your firm asserts that an employer can advertise in regional publications with limited circulation, while internally listing the job for a foreign worker. We would like you to please explain how this practice does not constitute outright discrimination based on nationality and why your firm so blatantly promotes this type of behavior." The law firm had taped a seminar on immigration law it held in May and then posted the video on YouTube, possibly for training purposes. The firm has not responded to repeated requests for comment this week. The two letters, dated today, were initially posted online at the University of California, Davis by Norman Matloff, a professor of computer science at the school and one of the longest-standing critics of the H-1B program. Matloff, in an e-mail said, "This 'YouTube-Gate' incident should be an eye opener for people in the press and in Congress who have been taking the industry lobbyists at face value all these years." The tape was brought to light by the Programmers Guild, a Summit, N.J.-based professional association after guild president Kim Berry said he was alerted to it by activists. He made a copy of an excerpt, added in some subtitles to annotate the tape, mixed in some music for dramatic effect, and posted the new version on YouTube. "My hope is that this proof on video will open some eyes to this sham," said Berry.
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A union group on Thursday unveiled a  Web site that lets users identify more than 200,000 U.S.-based  companies it says have exported American jobs or lost them  because they were hurt by foreign trade.
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Can a piece of software make a difference in the lives of factory workers in the Far East?
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(InfoWorld) - The U.S. government needs to do a better job of supporting and training IT and other workers who have lost jobs to offshore outsourcing, two economists on the opposite side of the offshoring debate said Tuesday. Many other countries have better benefits and retraining programs, Alan Blinder, an economist from Princeton University, told the U.S. House of Representatives Science and Technology Committee. "The U.S. government now offers disgracefully little help for workers who are displaced from their jobs," he said. "I'm talking about stingy unemployment insurance ... the prospect of losing your health insurance, your pension rights, and so on. I can't believe our country can't do better than that." Blinder, who has suggested that 30 million to 40 million U.S. jobs could potentially be replaced by offshoring, found support for stronger worker benefits from Martin Baily, senior academic advisor at the McKinsey Global Institute and a defender of global outsourcing. "We do very little with the training of workers," he said. But the witnesses at the hearing on the impact of offshoring U.S. research and development found little other common ground. Baily suggested the benefits of a global economy to the U.S. far outweigh the downsides. About 80 percent of the available investments in the global economy is coming into the U.S., instead of it flowing outside the country, he said. Globalization has "brought tremendous benefits to the United States," said Baily, chairman of the Council of Economic Advisers during President Bill Clinton's administration. "It's made the U.S. much more competitive. We've had access to better technology." More than a quarter of the people with doctorate degrees in the U.S. are foreign born, he added. "We're actually benefiting from the education that's being provided to people overseas," he said. The U.S. also benefits from computer hardware and software made overseas, he added. "At some level, we have to embrace the fact that science and technology is a global endeavor," he said. But Blinder and Ralph Gomory, president of the Alfred P. Sloan Foundation, suggested there are significant downsides to offshore outsources. Under current U.S. policies, there's a "large-scale occupational migration" on the way, and the U.S. government needs to prepare for it, Blinder said. While many U.S. lawmakers support free trade, globalization is different, added Gomory, former senior vice president for science and technology at IBM Corp. Typically, free trade involves countries migrating to create the goods they are most efficient at producing, then trade with other countries that produce other goods, he said. But in globalization, the U.S. is moving much of its important production capability overseas, he added. "When the U.S. trades semiconductors for Asian sneakers ... that is trade," he said. "This type of exchange clearly benefits both countries." But U.S. companies build semiconductor plants in other countries instead of the U.S., that's not free trade, he said. "Neither economic theory nor common sense asserts that shift is automatically good for the United States," Gomory added. Lawmakers said they will consider the testimony as they look at ways to address offshoring. "What we want to do is make sure that companies find that U.S. scientists, engineers and students are the best in the world," said Representative Bart Gordon, a Tennessee Democrat and chairman of the committee. "We want to make sure we enact policies that keep us from having to offshore our future."
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(InfoWorld) - India's chief outsourcing association has admitted there may be instances of U.S.Â visa abuse by Indian companies, but said the problems are confined to "small, fly-by-night operators." Most of the Indian companies that sponsor large numbers of U.S. visas are "publicly listed and ethically managed," the National Association of Software and Service Companies (NASSCOM) said on Thursday. Any abuse of U.S. visas at such companies would tend to be less than at smaller operations, it added. However, NASSCOM admitted in its statement that small companies are "an area that may need more attention." The association's comments come after further allegations of U.S. visa abuse by two U.S. senators this week. Following their complaints last month aboutÂ alleged misuse of H-1B visas by Indian outsourcers, U.S. Senators Chuck Grassley, a Republican from Iowa, and Dick Durbin, a Democrat from Illinois, this weekÂ questioned the use of large numbers of L visasÂ by Indian outsourcers. Information from the U.S. Bureau of Citizenship and Immigration Services (BCIS) indicated that the companies using the most H-1B visas are the same firms that use the most L visas, the senators said. That made them suspect that companies are using L visas to circumvent worker protections required under the H-1B program. The allegations come as the U.S. Senate attempts to revive an immigration reform bill which includes a provision for increasing the number of H-1B visas available. Earlier this month, Patni Computer SystemsÂ reached an agreement with the U.S. Department of Labor to pay back-wages to employees brought to the U.S. under the H-1B visa program, who then worked at lower salaries than U.S. workers would get for similar work. Patni is among the top 10 users of H-1B and L-1 visas from India. The senators wrote letters toÂ nine Indian companiesÂ in May, asking them for details on their use of H-1B visas. Among the companies were top Indian outsourcers including Tata Consultancy Services, Infosys Technologies, and Wipro. The nine companies together account for close to 20,000 visas, the senators said. Companies appear to be increasingly using H-1B visas to displace qualified American workers, Grassley said in May. India's Minister for Commerce and Industry Kamal Nath warned at the time that the complaints could have repercussions at the ongoing World Trade Organization (WTO) negotiations, since the issue of work permits is a trade issue. Those negotiations fell through this month, not due to work permits but on account of differences over subsidies and tariffs on agriculture products. NASSCOM replied to the two senators in May but has yet to receive any acknowledgement, the association said on Thursday. It said it looks forward to a positive engagement that will address the politicians' concerns withoutÂ disrupting the growing two-way tradeÂ between India and the U.S. The H-1B visa is an employer-sponsored, non-immigrant visa that allows a foreign worker to come to the U.S. temporarily to perform services in a specialty occupation. The L-1 visa, a popular type of L visa, is a non-immigrant visa that allows companies in the U.S. or abroad to transfer certain classes of employee from their foreign operations to a U.S. operation. L visas are designed to give multinational companies the freedom to transfer managers and specialists within the company to their U.S. offices, Durbin said on Tuesday. But some of these companies have hundreds, and, in some cases, thousands of L visa workers, he said. "I find it hard to believe that any one company has that many individuals that are legitimately being transferred within a single year," Durbin said. "I find it even harder to believe that these L visas are being used appropriately when many of the same companies are some of the largest employers of H1-B workers." TCS of Mumbai was the largest user of L visas in 2006, with 4,887, according to a list of the top 20 L users posted by the two senators on their Web sites Tuesday. The list also includes the names of multinational companies such as IBM and Intel. Â