Overall, James L. Schneider has seen his business, which contracts out computer engineers to design and develop software systems, explode since it was founded in 1988. But for the past five years, his San Francisco-based company, Professional Consulting Network, has been battling brokers who bring foreign software engineers into the U.S. to do similar work for as little as a third of the $65-an-hour fee he charges. As a result, "American citizens are out on the street," he says. "In the competitive world, it's difficult to bid against people who work at substantially lower rates."
Complaints such as Schneider's are fueling an increasingly heated debate over whether the many foreigners who come to work in America's high-tech sector are displacing U.S. workers. The large immigrant pool is also raising questions about whether America nurtures enough homegrown scientists and engineers. Immigration foes say lax visa rules and bargain-hunting U.S. companies are to blame. But corporations, universities, and pro-immigrant groups insist that the U.S. doesn't have enough high-level talent to fill all the jobs, and they point to deficiencies in education as a culprit. Even without conclusive evidence either way, say executives, limiting the flow of skilled workers could be dangerous. "We can cut off our immigration now, and blow away one of the best industries the U.S. has going for it," says David A. Pritchard, Microsoft Corp.'s recruiting director.
Congress may soon step in to settle the issue. To stem what many lawmakers see as a tide of foreigners, they are planning to cut the number of workers employers can sponsor. Proposals on the table by Senate Immigration Subcommittee Chairman Alan K. Simpson (R-Wyo.) chop the number to 75,000 from the current 140,000. Simpson, who is expected to introduce a bill in late October to restrict legal immigration, wants employers to pay extra for sponsoring immigrants. To get them permanent visas, companies would have to pay salaries 10% higher than those of U.S. workers. On top of that, they would have to kick in 30% of the new employee's annual compensation to a privately run fund for retraining Americans.
One problem is that few definitive studies exist. The Center for Immigration Studies, which wants limits on immigration, recently reported that 11.7% of America's scientists and engineers in 1990 were foreign-born professionals--naturalized U.S. citizens and foreign nationals. That's more than the total share of the U.S. population born abroad, at 7.9%. Moreover, the number of foreign science and engineering graduate students at U.S. universities has risen over the past decade--and many opt to stay here. The National Science Foundation, a neutral source, concurred, reporting that foreigners made up 49% of PhDs in computer science in 1993, up from 35.5% in 1983.
CUSTOM FIT. In theory, this explosion of foreign high-tech talent shouldn't be a threat to Americans. By law, employers can't petition for either temporary or permanent immigration visas for foreign workers if they can find a qualified U.S. citizen for the job. But it's widely known that employers often get Labor Dept. approval by tailoring job descriptions to a particular foreign candidate to make sure that no U.S. candidate can fill the slot. Bill E. Reed, president of the American Engineering Assn., cites a "help wanted" ad for someone with both a civil and an agricultural engineering degree, an unusual combination, "which only one person in the universe can fill," he says.
Despite anecdotal evidence of job displacement, it's still hard to pinpoint how widespread the problem is. The most well-documented abuses of the visa system occur in more routine software programming, where foreigners on so-called temporary H-1B visas clearly have undercut some U.S. engineers. In high-end research and development, however, foreigners with advanced degrees may be filling a niche that Americans can't.
It's no surprise that U.S. high-tech companies are in an uproar over efforts to limit the number of employer-sponsored immigrants. Executives at Microsoft, Intel, Sun Microsystems, and Texas Instruments say foreigners make up only 1% to 5% of their U.S. workforce. Often, foreigners are the only workers they can find at U.S. universities with the training for cutting-edge research. "One of the reasons Americans are not enrolling in science and technology programs is the weak preparation many students receive in math and science at the secondary level," says Todd M. Davis, research director at the Institute for International Education.
Pallab Chatterjee, who is the president of Texas Instruments Inc.'s calculator and personal notebook group, exemplifies the foreign-born high-tech success story. The 44-year-old electrical engineer, who was born in India, received a PhD from the University of Illinois at Champagne-Urbana, then joined TI's research unit in 1976. Chatterjee holds about 30 of TI's patents in microchip technology and in 1985 was elected a TI senior fellow. "We need to be able to compete with the best research minds in the world," says Chatterjee, who became a naturalized U.S. citizen on Oct. 13. "Our primary consideration is the capability of the researcher, not his country of origin."
NO LOVE FOR SCIENCE. For corporations, the more fundamental worry is Americans' seeming indifference toward higher education in science and engineering. Many Americans may not opt for graduate studies because they can get attractive salaries with just a bachelor's engineering degree or by going into law or business. And while there are companies that are investing in science and computer programs at all levels of schooling, "corporations alone aren't going to solve the problem," says Microsoft's Pritchard.
In the meantime, companies fear that if they don't hire foreign students, competitors in other countries will. Why not take advantage of America's strength as a magnet for talent? "If you want to contribute to the knowledge of computer design, there's only one country where it's leading-edge, and that's the U.S.," says Theo Omtzigt, a Dutch-born engineer at Intel Corp., who got his PhD from Yale University in 1992. With the ability to attract such experts, many U.S. high-tech companies have kept much of their workforce and R&D at home, while making about half their revenues abroad. The immigration debate may yet affect their easy access to scientific talent as the U.S. sorts out how its workers as well as its companies can compete in the global marketplace.
AVENUES OF ENTRY
How immigrants find work in the high-tech sector
Skilled workers can enter on H-1B visas for six-year maximum stays. The annual cap on such visas is 65,000. In fiscal year 1994, almost one-quarter of such visa requests were for computer-related workers.
Foreign students from U.S. graduate programs are hired by U.S. employers, which then request permanent residency for them. There's no ceiling on student visas, but only 140,000 permanent visas a year are allowed for employer-sponsored immigrants.
DIRECT HIRES FROM ABROAD
Companies can petition to bring in permanent employees directly from foreign countries after demonstrating to the Labor Dept. that no U.S. citizen can do the job.