Importance of the Global Market

By Don E. Sears  |  Posted 2010-05-21 Print this article Print

eWEEK: While this study dispels many ideas on the exploitation of foreign visa worker salaries, why would U.S. companies want to take on foreign workers if they are more expensive?

To serve global markets more effectively. The growth rates in some of the emerging economies far exceed that at home. Foreign workers can also help coordinate U.S. operations with overseas subsidiaries. Though they may not be the norm, there have been cases of fraud, abuse and exploitation of H-1B visa holders. What do you say to them and to the loopholes in the laws that allowed this thing to occur?

There is a need to fix loopholes and deal with fraud and abuse in an appropriate manner commensurate with the extent and degree of abuse. However, the immigration policy should be designed to allow the U.S. economy to have access to the best talent available to create new companies and jobs here for everyone's benefit. Foreign workers can help to grow U.S. economy and create jobs here by contributing their complementary skills and efforts.

eWEEK: For U.S. workers struggling to find a job in IT in 2009 and 2010, is there something to be learned from this study?

The good news is that firms are beginning to hire IT workers to help grow their business, U.S. workers should continue to make investments in keeping their managerial and technical skills relevant and up-to-date and also acquire global experience to make them more attractive.

eWEEK: Your report uses data from a five-year study (2000 to 2005) from a joint Information Week-Hewlett Associates report. This was before the recession of 2008/2009 and the economic effects of recession on IT hiring. What is applicable about the use of this data in 2010?

We have seen recession before (e.g., in 2001-2002) and part of the data for our study comes from that period so findings have continued relevance. The findings on H-1B visa caps are also important in 2010. They are associated with an increase in the premium paid to foreign IT workers and they encourage companies to hire talented foreign workers and locate them in other countries when they might prefer to employ them in the U.S.

eWEEK: Do you support an increase in the annual H-1B visa cap? If so, by how much and how should it be determined?

In 2001-2003 we had a quota of 195,000 that was not fully utilized because the economy then did not need as many workers and yet we observe some salary premium in that time period. The current quota of 85,000 may be too low because it is almost always fully utilized. We argue in the paper that setting the quota too low may be more harmful than setting it too high because if economy does not need workers, the quote will go unfilled as has happened before.

eWEEK: Does a larger pool of American workers after major technology layoffs and mergers in the past two years mean that there is less of a need for foreign workers?

If foreign workers are complements (not substitutes) of American workers than U.S. firms will still need them.



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