Bill Gates on Immigration and Outsourcing

Some very interesting comments from Bill Gates this week, testifying before Congress on the H-1B visa.  For those of you who don’t know what that is, its a visa designed to bring specialized workers to the United States.  Businesses must prove first that no American (who applied) was qualified for the job, and second, that they are paying the foreign national the same rate or more than an American citizen would be paid.  The Visa is for a maximum of 6 years.  Congress has placed strict annual caps on the visas.  Read more below:

Tight US immigration forces outsourcing: Bill Gates

WASHINGTON (AFP) — US high-tech firms are forced to outsource jobs overseas because of immigration restrictions, Microsoft chairman Bill Gates said Wednesday as Congress debated a visa program for skilled workers.

Gates, echoing a longstanding complaint from the technology sector, told a congressional panel that the US immigration system “makes attracting and retaining high-skilled immigrants exceptionally challenging for US firms.”

“Congress’s failure to pass high-skilled immigration reform has exacerbated an already grave situation,” Gates said in remarks prepared for delivery to a hearing of the House of Representatives Science and Technology Committee.

“As a result, many US firms, including Microsoft, have been forced to locate staff in countries that welcome skilled foreign workers to do work that could otherwise have been done in the United States, if it were not for our counterproductive immigration policies.”

Gates said the limits on so-called H-1B visas aimed at highly skilled professionals are far too low for the rapidly growing tech sector.

He said the current cap of 65,000 H-1B visas “is arbitrarily set and bears no relation to the US economy’s demand for skilled professionals.”

The Microsoft founder noted that all the 65,000 visas for the current fiscal year were snapped up in one day last April and that employers are now waiting to apply for visas for fiscal 2009, starting in October.

“Last year, for example, Microsoft was unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that we wanted to hire,” Gates said.

“If we increase the number of H-1B visas that are available to US companies, employment of US nationals would likely grow as well. For instance, Microsoft has found that for every H-1B hire we make, we add on average four additional employees to support them in various capacities.”

Launched in 1990, the H-1B visa program allows foreign scientists, engineers and technologists to be employed for up to six years, at the end of which they must obtain a permanent residency or return home. A large number come from Asia, especially India.

Although the tech industry has long pressed to ease visa limits, some labor advocates and other analysts argue the program depresses wages for the sector and that the worker shortage may be exaggerated.

Gates argued that the US economy benefits from these skilled immigrants. He cited a study that found that one quarter of all start-up US engineering and technology firms created between 1995 and 2005 had at least one foreign-born founder.

“The United States will find it far more difficult to maintain its competitive edge over the next 50 years if it excludes those who are able and willing to help us compete,” Gates said.

“Other nations are benefiting from our misguided policies. They are revising their immigration policies to attract highly talented students and professionals who would otherwise study, live, and work in the United States for at least part of their careers.”

Earlier this week, Republican Senator Charles Grassley of Iowa said the H-1B program was riddled with abuses and fraud and that he would vote for an increase only if it were accompanied by better enforcement.

“The fact is most H-1B visas are going to foreign based companies,” Grassley said in a letter to the Department of Homeland Security.

“Businesses that need highly skilled workers are getting the short end of the stick. Americans are seeing ruthless tactics by some companies to bring in foreign workers, pay them less, and increase their bottom line.”

Grassley added, “Despite continued fraud and abuse in the H-1B program, I have yet to see one thing from the administration to address the problem.”