Even in an industry used to brutal competition, the past two years have been a rough ride for Digital Equipment Corp. As part of its effort to return to profitability, the company has cut 21,446 U.S. jobs since late 1991. Yet at the same time it was aggressively downsizing, DEC was applying for more than 1,100 visas for foreign workers.
A DEC spokeswoman says that the computer maker requested the visas to speed transfers from its operations in India to the U.S. and that it actually brought only 50 foreigners stateside. But to unions and professional associations, this episode is worrisome--and all too common. They believe that U.S. corporations may be replacing thousands of American workers with often lower-paid foreign professionals--experts in everything from computer programming to developing blood substitutes. Imported workers are "putting American taxpaying citizens on the street," complains James L. Schneider, president of the Northern California chapter of the National Association of Computer Consultant Businesses.
That's why the Labor Dept. on Oct. 6 quietly proposed legislation to crack down on the H-1B visas used to bring skilled foreign labor into the U.S. The Administration's measure, which has not yet been introduced in Congress, would bar companies from laying off Americans in the occupations they want to fill with H-1B workers. It also would force employers to take steps toward training Americans for those jobs.
"MISGUIDED." Special skills visas have encountered controversy before. Under pressure from labor, the 1990 Immigration Act imposed an annual ceiling of 65,000 visas a year for "specialty occupations." The visas last a maximum of six years. And employers are supposed to pay the visa holders either the same as their U.S. workers or the regional norm, whichever is higher. During the past three years, more than 100,000 companies have requested papers--especially for physical therapists, civil engineers, and computer programmers (table).
But concern about stubbornly high unemployment has prompted Labor to beef up enforcement against program abusers. U.S. computer consultants, for instance, charge that foreign "job shops" violate the rules. These electronic sweatshops contract out programmers from India, China, the Philippines, and elsewhere at less-than-prevailing wages.
On Aug. 9, Labor hit Complete Business Solutions Inc., a Farmington Hills (Mich.)-based employment agency that places programmers from India, with $180,000 in penalties for failing to pay the required wage rate and for paperwork violations. Tim Manney, CBSI's chief financial officer, says the company denies wrongdoing and is negotiating to reduce the charges and penalties.
Companies gearing up to fight Labor's legislation argue that a few abuses shouldn't kill a program that helps U.S. competitiveness. American companies need to import specialists unavailable in the U.S. "It's important to get new blood into the organization," says Paul Elmer, international human resources director at Motorola Inc.
NEW JOBS. These foreign experts often allow companies to launch new operations that can employ more Americans. Australian software engineer Leonard A. Steinfeld, for instance, has been in the U.S. since 1990 training employees at Atlanta-based Masterpack Inc. to install and modify a software accounting package he designed in Sydney. Thanks to Steinfeld, "we are able to employ 15 people," says Masterpack President Sam Kaye. "We would not be able to get this product off the ground without him."
Business believes that the way out of the dilemma is to give Labor more power to ferret out abuses in the H-1B program. But U.S. workers want further curbs. With anti-immigration sentiment high, lawmakers will have a tough time crafting a compromise that satisfies business.
THE VISA MILL Employers granted approvals to hire foreigners for computer-related jobs in the U.S. from Oct. 1, 1991 to May 12, 1993 Jobs approved TATA CONSULTANCY SERVICES 1,255 DIGITAL EQUIPMENT 1,129 SYNTEL 930 BORLAND INTERNATIONAL 800 HCL AMERICA 700 COMPLETE BUSINESS SOLUTIONS 541 VSLI TECHNOLOGY 458 INTEL 316 TANDEM COMPUTERS 267 ORACLE 258 DATA: LABOR DEPT.