H-1B Visas: Stealing American Jobs Or A Solution To A Tech Shortage?

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Shoeb Mogal, 30, got addicted to computers when he was a kid back in India.

"I always liked the idea of developing games, I like developing websites," he said.

So a few years ago he came to Boston to study computer science at Northeastern University. When he graduated, his skills were in demand.

"At a point, in a week, I was giving like 20 interviews," he said.

Within two weeks, Mogal had three job offers. He now works as a software engineer for EverQuote in Kendall Square making over six figures.

Shoeb Mogal, 30, began working on H1-B visa for a tech company in Kendall Square after graduating from Northeastern. (JAsma Khalid/WBUR)
Shoeb Mogal, 30, began working on H1-B visa for a tech company in Kendall Square after graduating from Northeastern. (Asma Khalid/WBUR)

Mogal said local tech firms are struggling to find talent. And so they hire foreigners like him and try to get them an H-1B visa. These are the visas that allow companies to hire high-skilled tech workers from abroad.

It's a popular program in the high-tech community. Last year, there were more than a quarter of a million applications. For years, the tech community has been lobbying Congress to increase the number of annual visas, which are capped at 85,000.

But expanding the program seems unlikely at this political moment.

During the presidential campaign, Donald Trump criticized the H-1B program for taking jobs away from qualified Americans. Last month a draft executive order from the Trump administration began circling online. There are also three different pieces of legislation that have already been introduced in Congress — all with the goal of overhauling the H-1B program.

The crux of the H-1B debate is this: On one side tech companies insist there's a shortage of talent, but on the other side, some Americans insist H-1B workers are taking away their jobs.

Can both of these arguments be true at the same time?

It's a complicated argument that differs depending on where you live.

In Cambridge, Mogal said there aren't enough American engineers and computer programmers. And his own experience is proof. He added he can easily think of more than 100 friends on H-1B visas hired by local companies.

Mogal said employers are not hiring foreigners because it's a financially smart decision; hiring an H-1B worker over an American can be pricey. Companies have to pay lawyer fees, and, in some cases, H-1B transfer fees.

"If I was running a business, I wouldn't hire myself in theory," Mogal said with a laugh.

"Companies do not do that because they like paying that much more. It’s just because of the scarcity of developers that we have here," Mogal said.

Tech CEOs Say Visa Program Brings Talent

In Massachusetts, MathWorks, a computing software company in Natick, is near the top of the list when it comes to companies pursuing H-1B workers, according to publicly available data from the Labor Department.

"There’s always been a shortage in the full history of the company’s existence. It’s always been hard to find talented programmers," said Jack Little, co-founder and president of MathWorks. (Full disclosure: MathWorks is a WBUR underwriter.)

The unemployment rate in Massachusetts is 2.8 percent. And so Little said it's a particularly competitive market.

"Very often, people get four, five offers," he said. "They'll have offers from California, they’ll have offers from all over the country."

Little said MathWorks uses the H-1B visa program mostly for hiring students with masters and Ph.D.s out of American universities.

But each year, only a finite number of visas (again, 85,000 nationally) are issued — and the selection system is a lottery.

"We’ve had to send people back to their countries, because they didn’t get picked," said Little. "It’s just crazy to have to send people back, somebody that’s worked at your company for several years. They’re trained, they’re up to speed. They’re delivering things, and they can’t get permission to stay in the U.S."

Visa-Holders May Cut Costs, But Workers Are Cut Loose

But, nationally, some of the biggest beneficiaries of H-1B visas are not high-tech firms. They're outsourcing companies, like Infosys and Tata Consulting, who essentially hire entry-level IT workers, and import them from India to do the jobs Americans are already doing.

Craig Diangelo from New Britain, Connecticut, worked for Northeast Utilities, now known as Eversource, for 11 years.

Diangelo is a straight-talker, a slim guy with a full head of white hair. He used to make $130,000 a year  (with his bonus) working in the IT department.

But in June 2014, he was let go and replaced by someone from Infosys. Infosys declined to comment for this story.

Craig Diangelo inside his home in New Britain, Conn. He used to work in IT for Northeast Utilities (now Eversource) before he was replaced by someone working on an H1-B visa. (Asma Khalid/WBUR)
Craig Diangelo inside his home in New Britain, Conn. He used to work in IT for Northeast Utilities (now Eversource) before he was replaced by an employee on an H1-B visa from the outsourcing firm Infosys. (Asma Khalid/WBUR)

Diangelo said he had never heard of the H-1B program, but one of his higher-ups told him "global workers can adjust to change a lot faster than the American worker can."

Via email, a spokesman for Eversource described the Infosys relationship as a reorganization decision following its merger with NSTAR: "Our transition to a new model for Information Technology services was one of many important steps in transforming our companies following our merger into one that would deliver superior service, value and savings for our customers."

Diangelo said he had to train his replacement or risk losing his severance.

"The individual that came over from India, he started what they call 'shadowing.' So he would shadow me for the day, and I would show him what I was doing," said Diangelo. "He sat next to me the whole time. He had a chair in my cubicle."

In total, nearly 200 IT workers at Northern Utilities were affected and either lost their jobs or took early retirement. Diangelo eventually found a new IT gig making less money, but he considers himself lucky.

"If the H-1B companies, like an Infosys and a Tata, see that they have to pay the going salary, the market-rate salary, I think it may help the American worker."

Craig Diangelo

He sat near the fireplace in his living room sipping on a glass of wine as he explained that some of his friends weren't so lucky.

"One of my coworkers is working at a supermarket. Another one of my coworkers was working as a part-time secretary at a church, three days a week, making a little more than minimum wage," he said.

Judy Konopka worked in the same IT department as Diangelo. She used to make $90,000; now, she gets by on $30,000 by selling photos on Etsy and books on Amazon.

She said she has no desire to find a new IT job.

"I don’t want to work in the IT field cause this is continuing to happen. It’s sad," Konopka said. "If you’re a company, I guess, and you’re answering to Wall Street, I guess you want to get the cheapest resources you can. And that’s what these CEOs are doing."

Konopka and Diangelo both say there's no sign of a tech shortage here in Connecticut.

"If you rounded up all of the people that were let go and you said, 'OK, how many of you are out of work now?' I would say, 65 percent would raise their hands ... to this day – and that’s three years later," said Diangelo.

He echoed the idea that some companies use the H-1B visa program as a way to import cheap labor, and he's not sure how to fix that. However, Diangelo voted for President Trump and is optimistic the Trump administration will be able to tackle this issue.

Diangelo said he would love to see a temporary freeze on all H-1B visas. But, he also thinks forcing outsourcing companies to pay their workers more would help.

One of the ideas floating around Congress would change the parameters for companies that rely on at least 15 percent of their total U.S. workforce coming from H-1B visas. Under current law, if one of these H-1B-dependent companies agrees to pay their employees $60,000 or more, they’re exempt from fulfilling additional promises of not displacing American workers. However, Ron Hira, a professor at Howard University who has looked at data for individual companies, says this rule isn’t enforced. A bill by Republican Rep. Darrell Issa, of California, suggests raising the so-called wage threshold to $100,000.

"If the H-1B companies, like an Infosys and a Tata, see that they have to pay the going salary, the market-rate salary, I think it may help the American worker," said Diangelo. "I’m hoping it will.

"It's too late for me."

Fixing A Flawed System 

Back in Massachusetts, Diangelo's optimism is more a sense of apprehension.

Jack Little with Mathworks wants reform too, but he definitely doesn't want a halt to the program. In fact, he, like many tech CEOs, wants an expansion of the number of visas. But Little agrees there are some bad apples that are abusing the visa system.

"It’s a source of frustration, because the [visa program] is being used in a way that’s opposite to how high-tech companies want to use it," he said.

Little said he doesn't want to "name names," but there are some outsourcing companies that are "gaming the system," and flooding the annual visa pool. He said they use up a large number of the available visas each year; in fact, that might explain why some of his own employees haven't received visas.

Little sees the problem, but he isn't sure what the solution is.

"It’s very difficult, I’ve thought about that before," he said. "The salary thing is actually a pretty good idea. I think raising the salary would actually solve the problem for us."

But Little is not sure that a $100,000 salary is economically feasible for tech companies in different geographic areas across the U.S.

Still what's interesting is that in this moment of political division, high-tech Boston CEOs and laid-off IT workers actually want the same thing. They both see a flawed system and want a program where outsourcing companies can't eat up all the visas.

"... If I knew that it was a political issue, I wouldn’t have dared to apply for [a visa]."

Shoeb Mogal

Back in Kendall Square, Shoeb Mogal — the worker stuck in the middle of this debate — he just feels like a pawn in an immigration chess game where he has no control.

"Before coming here, if I knew that it was a political issue, I wouldn’t have dared to apply for [a visa]," Mogal said. "I mean it's my career, and I don't want it to be based on fluctuations in a country that I do not belong to."

Ultimately, Mogal said, if he doesn't feel welcome, he'll go back to India. He said he's not worried about a job, because an executive order, in theory, would restrict people coming in, but it won't restrict work from going out.

Companies, he said, will find workers overseas if they can't find them in the U.S.

Clarification: An earlier version of this story mischaracterized the wage threshold for so-called H1-B-dependent companies. We've clarified that section.

This article was originally published on February 23, 2017.

This segment aired on February 23, 2017.


Headshot of Asma Khalid

Asma Khalid Reporter
Asma Khalid formerly led WBUR's BostonomiX, a biz/tech team covering the innovation economy.



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