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Originally published Saturday, November 24, 2012 at 4:50 PM

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Microsoft push for worker visas raises concerns, exposes loopholes

Microsoft intended to jump start stalled immigration reform — and help fill thousands of job vacancies — when it offered to pay the government a bounty for extra visas to hire more foreign workers. But the offer has stirred up new concerns about the federal guest-worker program

Seattle Times Washington bureau

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WASHINGTON — Microsoft is so eager to find qualified engineers and programmers for its thousands of vacancies that it has offered to pay a bounty to the government in exchange for extra visas in order to import more foreign workers.

The proposal, which also would raise fees on other corporations seeking to tap the additional visas, was intended to help jump start immigration reform that had stalled in Congress. But the tactic may have backfired.

Microsoft's proposal has sparked concerns — both old and new — about the visa program that has allowed companies to recruit hundreds of thousands of well-educated foreign nationals to fill U.S. jobs.

Researchers claim that some companies use the visas to bypass older, more expensive American job seekers. And some economists question contentions by Microsoft and other technology firms about a dearth of domestic high-tech talent.

But most troubling to critics is the fact many employers need not prove they are unable to find qualified Americans before turning to foreign hires.

Microsoft rejects those claims. The company says its dilemma is simple math: The Redmond-based software giant has more than 3,400 openings for researchers, engineers and developers, and new jobs are cropping up faster than new hires.

"The biggest myth people have is that a company like Microsoft somehow looks to foreign workers as an easy supply to displace American workers," said Karen Jones, Microsoft's deputy general counsel for human resources. "We simply cannot find qualified Americans to fill these jobs."

Still, skepticism about the program could hinder attempts by Microsoft and its allies to persuade Congress to grant 20,000 extra H-1B visas annually for jobs in science, technology, engineering and mathematics (STEM). Brad Smith, Microsoft executive vice president and general counsel, unveiled that proposal during a speech in Washington, D.C., in September, calling the skilled-labor shortage an economic crisis.

Immigration reform

What's more, President Obama's re-election — heavily supported by Latinos — has elevated comprehensive immigration reform into a second-term priority. That could complicate efforts at piecemeal legislation lifting the quota only for skilled guest workers, something the backers of a half dozen bipartisan bills attempted to do without success in the current Congress.

Even experts who believe the visas are needed say they're rife with loopholes that bump Americans out of jobs. And they urge closer scrutiny for a program that — for all its image as a tool for recruiting the world's best and brightest — requires for entry nothing more than a bachelor's degree.

Four federal agencies share responsibilities for the visa program, resulting in fragmented oversight. A 2011 examination by the Government Accountability Office (GAO) found the total number of H-1B visa workers in the United States at any given moment is unknown. The GAO also warned about inadequate safeguards to prevent American workers from being shut out of jobs they could fill.

Norm Matloff, professor of computer science at the University of California, Davis who has analyzed H-1B visas, argues the guest workers should command premium salaries given their presumed sought-after skills. Yet according to Matloff's research, the foreigners as a group are underpaid compared to American citizens and permanent residents with comparable experience.

"The fundamental motivation is cheap labor," Matloff said.

Young and educated

Congress created the H-1B visa program in 1990 particularly to shore up hiring in science-related fields.

The annual cap on visas is 65,000, but has fluctuated over the years to as high as 195,000. People hired by universities and nonprofit organizations are exempt from the cap, as are 20,000 guest workers admitted each year who hold at least a master's degree from an American college or university.

The H-1B hires, recruited from overseas as well as from U.S. campuses, are well educated. Virtually all of them hold a bachelor's degree, and 42 percent also have a master's degree while 11 percent have earned a doctorate. They also are young. Of those whose visas were approved in fiscal 2011, 75 percent were under age 34. Forty percent were in their 20s or younger, according to the U.S. Citizenship and Immigration Services. Nearly 60 percent of applicants were from India. An additional 9 percent were from China and 3.5 percent from Canada.

Several hundred Washington employers rely on the visas, many of which hire just one foreigner. But others, including Amazon, T-Mobile, Expedia and Nordstrom, have dozens of H-1B workers on their payrolls.

Microsoft is among the nation's heaviest corporate users of H-1B visas, accounting for 10 percent of its U.S. workforce of 57,400. The company said it applied for an average of 850 visas each year between 2010 and 2011 for new employees on their first H-1B visa.

In addition to raising the visa cap, Microsoft wants Congress to free up 20,000 extra green cards a year so more temporary foreign hires could become permanent U.S. residents. Without a green card, visa holders can stay three years with a chance to renew for three more.

Though Congress conceived the H-1B visa program as a stopgap solution for select labor shortages, Microsoft routinely seeks permanent status for all its foreign employees in the United States. Jones said such policy attests to the quality of its hires.

In fiscal 2011, Microsoft sponsored more than 4,700 H-1B workers for green cards. But the company said 2011 was an aberration and that its green-card applications typically average about 2,000 a year.

In making the case for lifting the cap on visas, Microsoft notes the unemployment rate in computer-related occupations is below the 4 percent it says indicates full employment.

In addition, Americans are earning too few computer science and engineering degrees to keep pace with demand, while nearly half of graduate degrees awarded by U.S. schools in those fields go to foreign students. Smith earlier warned that if Microsoft can't bring foreigners to fill the jobs, the jobs would migrate to foreign countries.

Two-prong solution

Microsoft is pushing a two-prong solution for the federal government to raise $500 million a year by tacking an extra $10,000 fee for each newly created H-1B visa and $15,000 for each green card and use the money to bolster STEM education for Americans. But not everyone is convinced employers have exhausted the domestic hiring pool.

Ron Hira, associate professor of public policy at Rochester Institute of Technology, said computer and math occupations have not run out of American applicants. Unemployment rate for that sector has dipped to as low as 2.1 percent in 2007 — below 3.4 percent currently.

A report earlier this month from the Economic Policy Institute, a nonpartisan think tank in Washington, D.C., accused Microsoft of exaggerating future worker shortages for computer-related occupations by implying that all such jobs require a computer-science degree. In reality, the report said, that's true for fewer than half of the current workers the field.

Peter Cappelli, an economist at the University of Pennsylvania, contends a labor shortage is a self-created problem by employers who won't make the investment needed to attract talent.

"What companies like Microsoft seem to want is employees with quite specific skills who don't need any training and ramp-up time," Cappelli said. "If you scour the world, you can find enough without having to train here" and paying higher wages.

Most hires not advanced

A sense of Microsoft's foreign hires can be gleaned from an analysis of its fiscal 2011 green-card applications: 25 percent of them were in jobs classified by the Labor Department as entry level. Another 61 percent were one step up at Level II, including marketing managers or software engineers, handling "moderately complex tasks" requiring limited judgment.

And though the vast majority of Microsoft's visa workers held technical jobs, some were hired as a public relations manager, paralegal or graphic designer, the green-card data show.

Microsoft executives have said newly minted graduates command $100,000-plus salaries with signing bonuses. But a majority of its foreign workers actually earn below six figures, although a small fraction pull down $120,000 or more.

Jones contends the job labels are "misleading" because the Labor Department's definitions reflect experience, not skill levels. Someone classified as a legal assistant, the company said, may actually be a lawyer in his or her home country.

Nonetheless, even critics like Hira say the influx of educated foreigners can only benefit the U.S. economy. Studies have shown that as a group, H-1B workers are exceptionally entrepreneurial and inventive, accounting for disproportionate share of patents and startup firms.

And making their stay permanent, Hira said, would right the power imbalance between foreign nationals and companies that hold the temporary visas.

Jacob Kirkegaard, research fellow at the Peterson Institute for International Economics in Washington, D.C., said companies like Microsoft resort to foreign workers because it's expensive to leave jobs unfilled and have projects delayed when qualified Americans can't be had. H-1B visas, he said, are an expedient way to pick from an international crop of top graduates.

"They want people with the newest skills," Kirkegaard said. "If you came out of software development eight years ago, by definition you would know nothing about how to write programming for an iPhone app."

Jones, of Microsoft, said the company's focus is to cultivate future Microsofties at home. Investing in and reforming STEM education in the United States is a key part of that.

"If we can find American workers, that's always going to be our first choice," she said.

Seattle Times reporter Justin Mayo contributed to this report. Kyung Song: 202-383-6108 or ksong@seattletimes.com

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