TESTIMONY ON HIGH TECH WORKER SHORTAGES
AND IMMIGRATION POLICY
before the
COMMITTEE ON THE JUDICIARY
United States Senate
by
JOHN R. REINERT, D.M.
President
INSTITUTE OF ELECTRICAL AND ELECTRONICS ENGINEERS -
UNITED STATES OF AMERICA
February 25, 1998
1. INTRODUCTORY REMARKS
Good morning, Mr. Chairman and Members of the Committee. I am John R. Reinert, the 1998 President of the Institute of Electrical and Electronics Engineers - United States of America (IEEE-USA).
I am employed as the director of ASIC (Application Specific Integrated Circuit) programs at UTMC Microelectronics Systems Corporation in Colorado Springs Colorado. I have extensive training and experience in the design and manufacture of integrated circuits and in total quality management. Before joining UTMC in 1985, I worked at Motorola , NCR and United Technologies Mostek. I hold bachelor's and master's degrees in electrical and electronics engineering and recently received a Doctorate in Management from Colorado Technical University.
Let me make it clear at the outset that my testimony here today represents the views of the
Institute of Electrical and Electronics Engineers - United States Activities and are not necessarily those of my employer.
On behalf of IEEE-USA, I want to thank the Chairman and the members of this committee for holding public hearings on these important and controversial topics. We look forward to working with you and with representatives from business, education and government to
find reasonable solutions that will enable American business to maintain its technological
competitiveness and create more high wage, high value-added jobs in the United States.
2. IEEE-USA's INTEREST IN HIGH TECH WORKFORCE AND IMMIGRATION POLICY ISSUES
The Institute of Electrical and Electronics Engineers is a transnational professional and technical society whose membership currently includes more than 320,000 electrical, electronics and computer engineers in 147 countries throughout the world. IEEE-USA promotes the technology policy and professional career issues of the 219,000 IEEE
members who live and work in the United States
Of IEEE-USA's employed members, nearly 70 percent work for private businesses; primarily in the aerospace and defense, bio-medical technology, computers and communications, electrical and electronics equipment manufacturing and electric utilities industries. Ten percent work for federal, state or local government agencies. Another 10 percent are deans, professors or instructors at post secondary educational institutions or work for non-profit research organizations. The remainder are self-employed and work as consultants to businesses and government. 15 percent or our U.S. members are retireed and/or unemployed.
Eighty-six percent of IEEE's U.S. members are citizens by birth; eight percent are naturalized citizens; five percent are permanent residents; and one percent are temporary residents.
IEEE's members are individual professionals who, by virtue of their education, experience and employment, are vitally concerned about public policies that affect opportunities to apply their specialized knowledge and skills to the solution of complex technological problems in an increasingly competitive global economy. IEEE-USA's perspectives on high tech workforce issues and industry demands that Congress relax existing controls on skills-based immigration have been shaped by our member's experience with historical booms and busts in domestic markets for engineers and scientists and 25 years of active participation in public policy debates on these controversial issues.
3. U.S. LABOR MARKETS FOR ENGINEERS AND COMPUTER SCIENTISTS
In less than four years, unemployment among engineers and computer specialists, including computer scientists, systems analysts and programmers, has fallen from a historical high of 4.3 percent in 1994 to less than 1 percent in 1997. At the same time, the total numbers of engineers and computer specialists employed in the United States grew to record highs in 1997 -- to more than 2 million in the case of engineers and 1.2 million computer scientists and systems analysts -- in spite of flat or declining degree trends in these disciplines at American colleges and universities.
Tight labor markets are being reported by providers of computer, communications and data processing services in many parts of the country. In spite of reduced defense spending and continuing cut-backs by public and private sector employers, new jobs for talented engineers, computer scientists and support personnel with specialized skills are being created at an unprecedented pace. Or are they?
Industry trade associations, including the American Electronics Association, the Information Technology Association of America and the National Software Alliance, contend that imbalances between supply and demand have reached crisis proportions and that worker shortages are bidding up the price of talented professional and support personnel with specialized skills in cutting edge technologies. But for middle-aged and older engineers and scientists, many of whom were laid-off, downsized, right-sized or otherwise dislocated in the early 1990's, industry alarms sound like deja-vu.
In the mid to late 1980's, during a similar period of sustained economic growth, the prestigious National Science Foundation issued a series of reports projecting imminent shortages of engineers and scientists based on flat or declining enrollment and degree trends for technical professionals at America's colleges and universities. In 1990, partly
in response to the NSF's claims and industry pleadings, Congress authorized substantial increases in employment based immigration to the United States. The Immigration Act of 1990 raised permanent employment-based admissions ceilings from 54,000 to 140,000 a
year, established new temporary visa categories for professional and skilled workers and
streamlined admissions procedures for foreign nationals coming to study, work and conduct business in the United States.
Then, as result of the breakup of the Soviet Union, defense spending was slashed and major employers began downsizing with a vengeance. Rather than the projected shortages, surpluses developed and unemployment among engineers, scientists and other white collar workers grew to unprecedented levels.
Current demand for engineers and scientists -- especially for computer engineers and scientists, systems analysts, data base administrators and support professionals -- is being driven by the rapid introduction of new information-based technologies, a growing world-wide demand for more and better products and services and increasing competition among providers in domestic and international markets. What are the dimensions and implications
of today's tight labor markets? The answers depend on who you talk to.
Based on a survey of 2,000 large and mid-sized companies, the Information Technology Association of America, determined that there were at least 190,000 vacancies for IT (information technology) workers at the end of 1996. That number has since been revised upward to at least 346,000 vacancies, based on a more extensive survey, including smaller, private sector employers. In the words of ITAA President Harris Miller, " the
shortage threatens not only the information technology industry, but the growth of the entire U.S. economy, our global competitiveness and the wage stability that is the bedrock of this country's low inflation."
It should be noted that the term information technology workers as used by the ITAA includes an extremely broad range of professions and occupations -- degreed and non-degreed -- many of whom can be trained to function effectively in a high technology work environment in a matter of weeks.
The ITAA, along with the U.S. Department of Commerce, the University of California at Berkeley and several corporate sponsors, organized a national convocation in January to focus national attention on and identify practical solutions to IT workforce problems. Among the results of the convocation are some very specific recommendations
on steps that businesses, educational institutions, government agencies and private organizations can and should be taking to improve the education, recruitment, training and utilization of the kinds of human resources America needs to continue to prosper in and increasingly competitive, technology-based global economy.
Encouraged by the nation's businesses, the Office of Technology Policy at the U.S. Department of Commerce prepared a report of it's own last September. Entitled "America's New Deficit: The Shortage of Information Technology Workers", the report focused on three core occupational classifications of IT workers - - computer engineers and scientists, systems analysts and computer programmers -- and used Department of
Education trend data and Bureau of Labor Statistics projections to assess current and future labor market conditions for these occupations.
After comparing educational degree awards in computer science between 1986 and 1994
with Bureau of Labor Statistics employment projections for these occupations from 1994 to 2005, the Commerce Department rather tentatively concluded that "the United States could face a growing shortage of information technology workers that would have severe consequences for U.S. competitiveness, economic growth and job creation" in the years
immediately ahead.
4. IS THERE AN IT SHORTAGE OR ISN'T THERE?
The US Department of Labor, on the other hand, has said that " if IT worker shortages do exist, the most reliable indicator of such shortages would be the extent to which IT wages are rising, relative to wage increases in other comparable occupations."
According to the Labor Department, "data collected by the Bureau of Labor Statistics for broad categories of computer-related occupations between 1988 and 1997 does not show the rapid growth in wages that would constitute evidence of widespread worker shortages. Rather, such data is consistent with a gradual tightening of labor markets for IT workers in 1996 and 1997 and possible worker shortages in some occupational specialties in some parts of the country, particularly for computer programmers."
While we agree that current demand for information technology workers, including computer engineers and scientists, systems analysts and programmers is strong and can reasonably be expected to continue to expand in the future, IEEE-USA contends that the supply of workers with knowledge, skills, aptitudes and interests available to help meet
the demands is much broader and deeper than is generally assumed. Claims that the nation faces widespread high tech worker shortages of crisis proportions based primarily on educational enrollment and degree trends in specific academic disciplines oversimplifies the nature and underestimates the flexibility of scientific, engineering and technical labor markets in the United States.
5. SOURCES OF AVAILABLE SUPPLY
Based on IEEE-USA's experience, the supply of scientific, engineering and technical personnel is made up of persons already trained and in the workforce with new additions and subtractions occurring constantly. Sources of new workers with knowledge, skills, aptitudes and interests that can be utilized to meet recent and projected increases in demand include: 1) new graduates from formal educational programs in computer engineering, computer and information sciences and closely related electrotechnological disciplines; 2) transfers into the computer engineering, computer science, systems
analysis and programming fields by persons with degrees in other technical and non-technical disciplines; 3) upgrading of non-degreed technicians into professional positions based on their aptitudes and experience; 4) re-entry of degreed and non-degreed personnel with applicable skills and experience, including older engineers and scientists, who have retired, been fired, or taken full or part-time positions in other fields, and ; 5) through the admission of immigrant and non-immigrant engineers, scientists and technically trained people from other countries.
New Graduates
Statistics from the U.S. Department of Education indicating a 42 percent decline in the numbers of bachelors degrees awarded in computer science between 1986 and 1994 are frequently cited as dramatic evidence of a serious "pipeline" problem that threatens to undermine the nation's leadership in cutting edge communications, computer and other information-based technologies. This finding overlooks the fact that well-qualified computer scientists enter that field with a wide variety of educational backgrounds.
And preliminary evidence from colleges and universities throughout the country indicate that there have already been significant increases in enrollments in computer engineering, computer science and information management education programs in recent years. These increases are due in part to evidence of a growing demand for talented "knowledge workers" in the form of steady increases in the volume of job advertising and the levels of compensation being offered to new graduates from high quality educational programs.
Transfers from Other Fields
Although enrollments and degree awards in various engineering and computer science disciplines have been flat or declining until very recently, the numbers of workers actually employed in these fields have been trending upward over the same period. This is due in part to the phenomenon of transfers from other fields.
Data from the National Science Foundation's Science and Engineering Statistics (SESTAT) system shows that in 1995, 19 percent of the people working as engineers of one kind or another had not been formally educated as engineers, i.e., had not received academic degrees in engineering. For people working as computer scientists, systems analysts and programmers, the disparity between formal educational preparation and
actual employment was (and presumably still is) even greater. The SESTAT data indicates that only 29 percent of the people working as computer scientists at professional levels in 1995 had degrees in computer science. Another 35 percent had degrees in engineering or natural science disciplines and fully 36 percent had degrees in the social sciences, business administration and other non-technical disciplines.
Upgrading of Non-Degreed Technicians
Another increasingly important source of the talent needed to fill job openings in computer science and information technology (many of which do not require a four year college degree) are the formal and informal instructional programs being set up by community colleges and other public and private institutions and organizations to provide the kinds of short-term, intensive training non-degreed technicians and other individuals may require to master new technological applications or learn the communications, interpersonal and team-building skills that are so important in the high tech sector of the nation's economy.
According to the Information Technology Training Association (ITTA), proprietary training in computer and other information technologies became a $7 billion a year business in 1997.
Re-employment of Retired, Underemployed and Unemployed Workers
There are two or three other sources of workers that can be tapped to help meet the increasing demand for people with the kinds of knowledge, skills, experience and aptitudes needed to help keep American businesses competitive in computer, communications and other information technologies. These include professional, technical and administrative personnel who are currently unemployed or underemployed (working full or part time in "low tech" jobs) as well as high tech workers who have recently retired (voluntarily or involuntarily) and who may need or wish to return to work on a full or a part-time basis.
In spite of increases in new job creation in the high tech and other product and services sectors, layoffs and downsizings -- which have become a fact of life in the 1990's --
are continuing with a vengeance. According to statistics from the Chicago-based outplacement firm Challenger, Gray and Christmas, more than 473,000 working Americans lost their jobs in 1997, up nearly 10 percent from 434,000 in 1996.
Assuming only 15 percent of recently downsized or early retired workers could be placed in or retrained for IT positions, a substantial number of current vacancies could easily be filled.
Immigrant and Non-Immigrant Workers
Foreign nationals who come to study or work in the United States represent another important source of the talent needed to ensure the continuing growth and profitability of public and private employers who buy or sell high tech products and services. The numbers of degrees in science and engineering awarded to foreign nationals, particularly at the masters and doctoral levels, has been trending upwards in recent years -- from an average of 13% of all degrees in 1986 to nearly 18% in 1996. IEEE membership reflects this trend.
According to statistics compiled for IEEE-USA by David North, the number of foreign engineers and computer scientists granted immigrant (permanent admission) status has increased gradually-- from a total of 9431 in 1986 to a high of 18,464 in 1993. The numbers of foreign engineers admitted to work temporarily in the United States on a variety of non-immigrant visas, on the other hand, has grown much more rapidly -- from 21,800 in 1986 to 79,400 ten years later.
It goes without saying that immigrant engineers and scientists make an enormous contribution to improvements in everyday life and living standards in the United States. And subject to appropriate safeguards for domestic employment opportunities, wages and working conditions, the temporary admission of foreign scientists and engineers, helps many high tech employers to meet short-term needs for talented workers.
6. IEEE-USA's PERSPECTIVES ON EMPLOYMENT-BASED IMMIGRATION
Job opportunities for engineers and computer scientists in the United States are affected by the permanent admission of foreign nationals under three of five current work-related visa preference programs. These include EB-1 (for individuals with extraordinary ability, outstanding researchers and certain multi-national executives), EB-2 (for professionals
with advanced degrees or exceptional ability) and EB-3 (for degreed professionals and skilled workers with at least two years of training or experience).
Engineering labor markets in the United States are also affected by the entry of foreign born professionals under several educational and employment-based admissions programs. These include the B-1 (visitor for business), F-1 (student), H-1B (specialty occupation), H-2B (temporary worker), H-3 (Trainee), J-1(exchange visitor), L-1 (intra-company transfer), O-1 (extraordinary ability), and the TC and TN (Canadian American and North American Free Trade Agreement) admissions programs.
The H-1B specialty occupation admissions program , which was subject to serious abuses in the early 1990's and characterized as a sham by the Department of Labor's own Inspector General in 1996, is in greatest need of reform.
The H-1B program as authorized by the Immigration Act of 1990 was specifically intended to help employers meet urgent short term needs for skilled workers who are not readily available in the United States. Instead it has been widely used by many employers to provide a probationary, try-out employment program for illegal (out of status) aliens, foreign students and foreign visitors to determine if they should be sponsored for permanent resident status. Unlike the individual labor certifications that are required for permanent admission under the EB-2 and EB-3 programs, there are no real safeguards
for job opportunities, wages and working conditions for American or for foreign workers
under the H-1B program.
IEEE-USA favors employment-based admissions policies that permit employers to hire foreign professionals, including engineers and computer specialists, based on a verifiable lack of appropriately skilled or easily trainable American workers -- not simply because it is easier or less expensive to hire foreign workers who may be willing to accept less than
prevailing wages in order to enter or remain in the United States.
A lack of effective investigatory and enforcement provisions under current law exacerbate the potential for abuses under the H-1B temporary admissions program. Although employers of H-1B visa holders are supposed to post notices indicating how many foreign workers they plan to hire and how much they will be paid, many never bother to do so. Others submit applications for scores of workers and include an identical wage or salary range for the entire group. With limited investigatory authority and resources, the Labor Department must wait for complaints from affected workers before they can take action against abusers. Displaced Americans are more than likely to be long gone before their foreign replacements show up for work. And foreign workers on temporary visas can hardly be expected to complain if their employers fail to live up to the limited attestations on their labor condition applications.
7. NEEDED REFORMS -TEMPORARY ADMISSIONS PROGRAMS
IEEE-USA agreed with the late Professor Barbara Jordan, who chaired the U.S. Commission on Immigration Reform until her untimely death in 1996, when she observed that a properly regulated system of legal immigration is needed to enhance the benefits of
immigration and protect against potential harms. With respect to employment-based immigration, we share the Commission's view that the nation's interest in helping U.S. businesses to compete in the global economy must be balanced by an equally compelling
need to develop and make more effective use of America's own human resources.
Employment-based immigration reforms are urgently needed -- not to create a bigger guest worker program for high technology companies -- but to balance the interests
of U.S. employers, including businesses and educational institutions, and IT workers,
including engineers and computer scientists. Employers occasionally need temporary access to limited numbers of foreign-born professionals in order to remain competitive
in global markets and create more jobs in the United States. U. S. workers need more adequate, easy to administer and easy to enforce safeguards against unfair competition for
jobs in domestic labor markets. In the absence of reasonable worker safeguards, law abiding companies are also vulnerable to unfair competition from corner-cutting rivals.
To achieve the necessary balance between the interests of employers and workers, IEEE-USA recommends that Congress maintain current ceilings on allowable H-1B admissions
and strengthen procedural safeguards for U.S. citizens and foreign nationals who have been legally admitted to study or work in the United States.
In order to strengthen worker safeguards, IEEE-USA makes the following recommendations:
Employers who wish to hire professionals, including engineers and computer scientists, under the temporary H-1B specialty occupations admissions program should be required to apply for authorization to do so with the U.S. Department of Labor. On their applications, petitioning employers should have to show proof of their need for foreign workers and to attest that 1) they have tried and failed, using industry-wide recruitment procedures, to fill vacancies with appropriately qualified American workers; 2) they will pay foreign workers prevailing labor market wages; and 3) they have not laid off and will not lay off or otherwise displace comparably qualified workers for 90 days before and 90 days after filing for an authorization to hire foreign workers.
To deter abuses involving job contractors, IEEE-USA also recommends that their clients also be required to subscribe to the no lay-off attestation.
Qualifying Employers should be expected to post copies of their applications, including their attestations, at locations where foreign workers will be employed and pay an appropriate application fee to cover the cost of expedited administration and improved enforcement.
Responsibility for administration and enforcement of all employment-based admissions programs, including the temporary H-1B specialty occupations program, should be centralized in the U.S. Department of Labor. The Department should be authorized to conduct routine audits and investigations to verify that employers comply with their
attestations. The agency should also be provided with the human and technological resources needed to administer the program efficiently and authorized to impose heavy fines on employers for non-compliance and to ban repeat offenders from further use
of foreign workers.
And finally, the duration of stays under temporary H-1B specialty occupation visas should be reduced from six to two or three years.
8. CONCLUSIONS
IEEE-USA believes that the domestic supply of workers needed to meet increasing demands for information technology workers, is much broader and deeper than is generally acknowledged. In addition, we question the wisdom of legislation that places too much emphasis on immigration to meet employer's needs for better educated and more highly skilled workers.
In conclusion, IEEE-USA recommends that immigration be viewed as a supplement to,
not as a substitute for, concerted public and private efforts -- involving shared responsibility among employers, government and workers -- to improve our nation's technological competitiveness through more effective education and training and through better management and utilization of America's workforce, including engineers and computer scientists, systems analysts and programmers.