More Skilled Foreign Workers Shun U.S.
The weak dollar and tough immigration rules are taking a toll on the ability of U.S. firms to lure and keep proficient workers from abroad.
By Andrew C. Schneider, Associate Editor, The Kiplinger Letter
Richard Sammon, Senior Associate Editor, The Kiplinger Letter
April 29, 2008
- Comments
- Email This Article
- Print This Article
- Order a Reprint
Advertisement
Skilled foreign workers are increasingly bypassing the U.S. for brighter opportunities in Canada, Australia, the U.K. and other nations. As a result, American employers face growing shortages of engineers, IT professionals, doctors, nurses and other talented technicians.
Blame some of it on the weak dollar. The greenback's declines mean many workers can do better earning other currencies, which are worth more when they send part of their paychecks home to their families.
Tight visa caps are also a deterrent. The 65,000 annual quota for H-1B visas for skilled workers is usually filled in a day, and political pressure has prevented Congress from boosting it. Canada, Australia and the U.K., in turn, have adopted a far more attractive system that awards points toward citizenship for higher education and work experience. That is a potent draw for migrants from South Asia and the Philippines. Meanwhile, Spain, Portugal and Italy are opening their doors wider to trained migrants from Latin America, building on cultural ties.
Still other foreign workers are heading home, drawn by better prospects in their own economies, which are growing rapidly. Many Indian professionals began the trek while the boom was still on, as the Indian economy blossomed and new opportunities developed there. Now, similar attractions are luring Brazilian immigrants away, drawn by the strong real and propelled by the loss of U.S. building jobs.
On the other side of the ledger, the weak dollar and another visa category are helping attract foreign investors. Congress this year will expand a program allowing visas and a fast-track path to permanent residency and ultimately citizenship for foreign investors willing to open their wallet.
The cap on EB-5, or investor, visas will be raised from 10,000 to 15,000 per year. They are awarded to foreigners who invest at least $1 million in a new or existing venture and create a minimum of 10 direct or indirect jobs as a result. The minimum investment drops to $500,000 if the investment is in an underemployed or distressed area or in an existing business, such as a restaurant or manufacturing firm, which has reduced its workforce due to economic conditions.
The low dollar makes this a good deal for those who invest in businesses that have a lot of exports. The investor visa program, also known as an "employment creation" visa, was started after Canada created similar visas in the 1990s. These visas were aimed at investors from Hong Kong looking to set up shop in Canada as China was preparing to regain control of Hong Kong from Great Britain.
For weekly updates on topics to improve your business decisionmaking, click here.
- Comments
- RSS
Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy
Reader Comments (13)
Posted by: ITProf at 04/29/2008 09:30:18 AM
Finally, a little good news for U.S. Citizens who are in the IT Industry. With the weaker dollar,maybe offshoring jobs won't look so tempting to greedy employers. Also, the bringing in of foreign IT workers not only has brought down IT salaries, but the whole Green card process has trapped these workers into working at low rates as indentured servants to nickel and dime contracting outfits that have imported them.
Posted by: Honinbo at 04/29/2008 11:17:12 AM
Yea right. Stupid article. I have a PH.D and an MBA and I can't even get an interview in the USA. Over the last 2 years I have applied to over 600 positions.
Posted by: DMZ at 04/29/2008 12:31:43 PM
I read another article last week that discussed the problems a California company was having in importing engineers familiar with the European cell phone model. Are these US companies working with US universities on curriculum, etc. to get the skilled people they need? Are we as a society (parents, schools) encouraging kids to get into the fields that are growing? I guess cherry picking is easier than cultivation (the second needs leadership and a brain for planning).
Posted by: Ed at 04/29/2008 12:45:58 PM
I've always seen this program as nothing more than a scam for U.S. companies to get around paying the going rate for U.S. workers and as a way for foreign workers to move here and never go back home. Bottom line: The companies that are working to get more of these workers would like to hire all of their employees on the cheap and not have to have any Americans on the payroll.
Posted by: Usrika at 04/29/2008 04:38:41 PM
I think this article is inaccurate. The 65,000 H1 visa cap was exhausted this year as well within 2 weeks. The biggest culprits are the Indian consultant companies that are abusing the system. Now they will ask for the quota to be raised so that they can displace more US citizens.
Posted by: Steve at 04/29/2008 08:58:46 PM
I recently received the resume of an American, formerly employed in hi-tech. This African-American lady, has a degree from Princeton and a Master's from Northwestern. She is out of work. I worked with her and know her to be an excellent employee. We should hire Americans first, but because of H1B, we don't. H1B workers (despite the rules) are hired at a lower wage - therefore this good individual goes unemployed. India takes care of its own - we don't.
Posted by: Nomen at 04/29/2008 09:36:53 PM
Large multinational companies in my area will not even give interviews to recent American engineering and computer graduates while at the same time they testify before Congress that they need more H-1B visas to fill jobs. One company even went so far as to demote many of their American technical people to low rate factory jobs in an attempt to get them to quit and then contracted the work to far less qualified and lower paid replacements. This unbridled lust to drive down skilled wages will eventually destroy our country.
Posted by: Parrott at 04/30/2008 12:57:39 PM
There are thousands of highly skilled Americans that were fired from jobs after they trained the visa holding foreigner that replaced them. Corporations will not hire Americans. They are too cheap to pay a decent salary. This has nothing to do with talent, skills or availability. It has everything to do with Corporate greed.
Posted by: Engineer at 04/30/2008 01:12:50 PM
Yet another one of these propaganda pieces from Korporate AmeriKa [sic]! Can you handle the truth on Job Destruction? Go to: www.eng-i.com/E-Newsletters.htm Might be a real eye-opener and then there's is this little gem "How NOT to hire an American worker" www.youtube.com/programmersguild
Posted by: Jerome at 04/30/2008 03:13:51 PM
This is an outright lie. I have a BS in CS and an MBA and MS in math with 10 years of experience. I received numerous awards at work and am a member of Mensa. My entire group was demoted last year and I can't even get an interview for a "promotion" back to my old level. I blame a lot of this on greedy upper management and the most incompetent group in any company, HR. I've also been looking for a job outside the company and can't even get an interview. Can they please list all these companies that are having trouble finding skilled workers?
Posted by: BrucedeleVega at 04/30/2008 06:08:24 PM
1. visa "limits" are excessive & overly elastic. The annual "limit" on H-1B visas, such as it is, is over 85K, not 65K. Reporting it as 65K would be misleading. It is broken down as follows, according to information on the USCIS web site: 1,400 nationals of Chile; 5,400 nationals of Singapore; 20,000 with master's and doctor's degrees from US colleges and universities; 58,200 with "bachelor's degrees or equivalent experience" from any hole-in-the-wall in the world; unlimited visas for those employed by non-profit research outfits; unlimited visas for those employed for local, state and federal research; unlimited visas for those employed by US colleges & universities. But the numbers of applications approved each year exceed those numbers, according the the USCIS annual report "Characteristics of Specialty Occupation Workers (H-1B)": year Initial renewed+extended total 1999 134,411 na na 2000 136,787 120,853 257,640 2001 201,079 130,127 331,206 2002 103,584 93,953 197,537 2003 105,314 112,026 217,340 2004 130,497 156,921 287,418 2005 116,927 150,204 267,131 year Initial renewed+extended total The numbers of visas actually issued, OTOH, is what matters. These numbers are available in the State Department's annual reports: 1996 58,327 1997 80,547 1998 91,360 1999 116,513 2000 133,290 2001 161,643 2002 118,352 2003 107,196 2004 138,977 2005 124,374 2006 135,861 2007 154,690 There are usually a few thousand unclaimed visas each year, primarily from the sub-categories set aside for Chile and Singapore. USCIS says they roll these over, adding them to the 58,200 general allotment for the next year. Hundreds of H-1B visas go to people without the equivalent of a US high school diploma, and thousands to those without the equivalent of a US bachelor's degree.
Posted by: Samir at 05/01/2008 07:54:19 PM
While I completely understand feelings of Americans, I hope you guys be a little considerate of people coming in and doing the job. There is a trend of calling anyone and everyone on H1 visa "cheap labor". How about also mentioning in the same breath at the least skilled labor? Surely, if they are unskilled labor they would not be hired even for free!!! Many people keep getting confused between outsourced work and work performed by people on H1. Sure, outsourcing is way cheaper for companies but not necessarily be H1. No one will hire a guy on H1 visa if he is not skilled (for less or more money). So, at least accept that they are skilled, even if you don't like it. I am on H1 visa and I earn salary close to 110k/year and I am under 30 in age. Don't tell me those on H1 are all cheap labor. Besides, H1s are also hired full time by employers and their salary cap is same as any other fellow Americans. I challenge anyone if they can prove this wrong. Then there is question of contract jobs - which is where the disparity is. In contract jobs many companies are paying the billing rate that they would pay for any American's service as well. HOWEVER, it is the consulting firm which is biggest culprit that sometimes pay lesser salary and keeps a bigger chunk. Again, not the end client but the consulting firm. On one end, outsourcing has robbed some very intelligent and efficient folks of their jobs, which is very sad. On the other end, there were (and are) a bunch of inefficient people in companies who always used to hide behind the wall of their knowledge as an excuse to never co-operate in new initiatives or challenges as they knew the companies are too dependent on them to do anything about it. That situation is no more, and many are finding it tough to accept.
Posted by: Expat at 05/18/2008 12:38:05 AM
Well, I am an American and just migrated overseas, because I am expanding my IT company and found, here in South America, not only way-much-more-skilled workers than back there in the USA, but also found easy government financing, easier Foreign trade policy (which makes it easier for me to market my products in Europe and Asia) and government support through tax exemption and government funded qualification programs for my prospective workers. So, while the Hillbillies, back there in the US, keep trying to burn the poor immigrants on crosses and blame on them their own incompetency and the bankruptcy of our own educational system, the other countries are growing way much faster than our old United States (I am not only talking about China with their steady 15% GDP growth every year during the last decade, or India with almost the same pace, but I am talking about, for example, this South American country I am in, this region of the country has raised its GDP in more that 27% last year!) Seems like that, after we won the cold war and we exported the Democracy and the Capitalism for the whole world, we forgot how to do both. Our Democracy has became a Worldwide joke, and our Economy has just done the same. I praise God that I am not investing in the US anymore! I am really glad as I finally found a country without a failed educational system, a pathetic immigration policy, and no support whatsoever for fast growing and high profitable technology businesses. Better for DC to listen to the companies claims or we will just move overseas...