H-1B professional visas creating jobs in US: Study

WASHINGTON: American businesses are finding it hard to fill skilled positions even as H-1B visas that bring in foreign professionals, including a large number from India, are creating jobs in the US, shows a new US study.

Confirming Microsoft Chairman Bill Gates' contention that an arbitrary cap on H-1B visas is forcing them to outsource jobs, the study shows major US technology companies today average more than 470 job openings for skilled positions in the US while defence companies have more than 1,265 each.

A second complementary study by the National Foundation for American Policy (NFAP) found after examining H-1B filings and year-by-year job totals for the technology companies in the Standard & Poor (S&P) 500 that hiring skilled foreign nationals on H-1B visas is associated with increases in employment at US technology companies.

The data collected by the Arlington, Virginia-based policy research group, on 'H-1B Visas and Job Creation' show that for every H-1B position requested with the Department of Labour, US technology companies increase their employment by five workers.

For technology firms with less than 5,000 employees, each H-1B position requested in labour condition applications was associated with an increase of employment of 7.5 workers.

This is particularly remarkable since the actual number of people hired on H-1B visas is likely to be much lower than the total number of applications filed with the Department of Labour, said NFAP, focussing on trade, immigration and related issues.

"Combined, these two studies show that US employers continue to need skilled labour, including individuals not born in the United States who, the empirical evidence indicates, are creating new opportunities for US workers," said NFAP Executive Director Stuart Anderson.

"While every H-1B hired may not necessarily lead to five to seven Americans being hired, the data does strongly imply, at minimum, that new H-1B professionals are complementing other US hires, rather than displacing them, as critics allege."

According to "Talent Search: Job Openings and the Need For Skilled Labour in the US Economy", a number of companies have thousands of skilled positions open, with this level of openings persisting for a year or more.

This is part of a longer-term trend that threatens to harm America's economic future, with US companies lacking access to the skilled professionals needed to grow and innovate inside the US.

More than 140,000 job openings for skilled positions are available today in the 500 companies that make up the S&P 500. S&P 500 companies employ only about 14 percent of individuals working in the US, so the overall demand for skilled labour in the US economy is much greater.

The Department of Labour's JOLTS survey indicates that there are approximately four million job openings in the US every month at all skill levels.

The S&P 500 companies with the most job openings as of January 2008 are Microsoft (4,005), Northrup Grumman (3,925), Lockheed Martin (3,901), General Electric (3,078), Countrywide Financial (2,415), JPMorganChase (2,164), Tenet Healthcare (2,050), United Health Group (1,927), Raytheon (1,694), IBM (1,670), Computer Sciences Corp. (1,666), Cintas (1,664), L-3 Communications (1,618), Bank of America (1,600), US Bancorp (1,562) and Cisco Systems (1,504).

These are openings for jobs in the US requiring a BA, professional degree or higher. The NFAP study also found that even employers that reduced employment reduced it less if they had filed for H-1Bs visas.

Examining companies in the sample that had layoffs, the regression results found for every H-1B position requested on a labour condition application, total employment is estimated to be two workers more than it otherwise would have been.

Data were used on total employment and H-1B labour condition applications between 2001 and 2005, allowing calculation of employment growth for 2002-2005.

An NFAP survey of 120 major US technology companies, with a 22 percent response rate, indicates preventing companies from hiring foreign nationals by maintaining a low limit on H-1B visas is likely to produce the unintended consequence of pushing more work to other countries.

Sixty-five percent of technology companies responding to the NFAP survey said in response to the lack of H-1B visas they had "hired more people (or outsourced work) outside the United States".

This is significant in that even if those companies responding to the survey are heavier users of H-1B visas, it means that these are the firms most likely to hire outside the US in response to an insufficient supply of skilled visas for foreign nationals.

Fifty-two percent of companies believed that for every H-1B professional they hired, it created one or more complementary jobs at their firms or in the US economy. Twenty-two percent thought the hiring of an H-1B visa holder created 10 or more jobs.

Seventy-four percent of company respondents said an inability to fill positions because of the lack of H-1B visas has potentially affected their "company's competitiveness against foreign competitors or in international markets".

"The research showing H-1B visa holders are associated with increased hiring at US technology companies is further evidence that current restrictions on high skill immigration are counterproductive and the result of legislative inertia, rather than legitimate concerns," said Anderson.

"The survey results indicate that when H-1B visa restrictions block cutting-edge companies from hiring foreign nationals in America, companies are likely to place more of their human resources outside the United States."

Urging the US Congress to let more foreign engineers work in the US as immigration restrictions were forcing US high-tech firms to outsource jobs overseas, Bill Gates too made the point that the current cap of 65,000 H-1B visas aimed at highly skilled professionals "is arbitrarily set and bears no relation to the US economy's demand for skilled professionals".

The NFAP advisory board members include Columbia University economist Jagdish Bhagwati and Ohio University economist Richard Vedder.