TCS Daily

TCS Host Jim Glassman speaks with Rep. Dreier

By James K. Glassman - June 26, 2000 12:00 AM

Who is free trade's best friend in Washington? Well, you'd have a hard time finding a better candidate than Rep. David Dreier, a Republican from California's 28th District. A big fan of technology and free markets, Congressman Dreier is now fighting to allow tech companies to bring in more skilled workers from around the world. TCS Host Jim Glassman recently spoke with Rep. Dreier about Silicon Valley's labor shortage and the visa program, known as H1-B, that currently limits the number of techies who can move to the U.S. to work.

Jim Glassman: Congressman Dreier, Silicon Valley has complained of a shortage of high-tech workers for several years and it has called for the lifting of the visa immigration cap for foreign workers with special skills, known as H1-B workers. Can you just describe the extent of the labor shortage among high-tech companies?

Rep. Dreier: The extent of the high-tech shortage really is extraordinary and it is growing. Right now, there are 300,000 jobs that are going unfilled. Why? Because we do not have the expertise here in the United States to meet that demand. Companies have been trying for years and years to find qualified college and post-graduate students to fill them. In fact, I remember a couple of years ago, IBM was on the beach in Ft. Lauderdale at spring break, looking for people to fill these jobs and they have been unable to do it. The main reason is that we just have not educated them.

And so the number one priority that we have got to have for the big picture is to improve the level of education so that we have that expertise. Until we have developed that in the United States, we need to be very careful to ensure that we don't see companies fleeing our borders and going to other spots in the world. Now, for example, Singapore and Ireland are doing everything that they possibly can, providing tax incentives and saying that all the skilled expertise that companies need will be readily available in those countries if these businesses will move overseas and set up their operations offshore. That would be a terrible blow to the U.S. economy.

Forty-five percent of our gross domestic product growth in the last several years has come from the technology sector of our economy. We have created jobs, improved the quality of life here in the United States because of this technology industry. Now I feel it is incumbent upon those of us who recognize that the growth has come from the technology sector -- we've got to do everything possible to keep government constraints from limiting their potential for growth... making sure that the government does not through immigration policies stand in the way of their ability to fill those 300,000 jobs.

Glassman: In a way, immigration is like saying, we open our borders to trade in a certain kind of labor because that helps the economy. Is that right?

Dreier: Absolutely. Our economy is strengthened. In fact, one of the things that I've said for the past several years is, when we in the United States educate very bright and capable East Indians, Pakistanis, Chinese, people who are from other parts of the world, we should staple a green card to their diplomas -- rather than educating them here with our higher education and then sending them overseas.

Now, obviously, the issue of immigration is a very sensitive one. I come from Southern California where illegal immigration is a tough problem with which we regularly have to deal. But we're going about making sure that we keep this economy growing in the United States and we're not talking about subsidization in any way. We're simply talking about allowing the expertise that is needed to be readily available.

Glassman: Let's talk about some of the specifics. Where is the current cap on H1-B visas?

Dreier: Right now, it's 115,000. And the legislation which I have introduced, which by the way is bipartisan -- I introduced it with a colleague of mine who actually represents the Silicon Valley, Congresswoman Zoe Lofgren -- calls for lifting the cap from 115,000 to 200,000. And basically that's a very, very bold and important step that needs to be made as we're continuing to focus on education.

It's critical that we increase the fees that exist. Right now, the fee for an H1-B visa is $500. And in the legislation that I introduced, we doubled that to $1,000. Now, those resources go toward a big picture, which is education.

Glassman: So, the $200 million--

Dreier: So, the $200 million would be on education now. We have yet to settle exactly how that would be expended and obviously it needs to be [incorporated] into a block grant structure that's in place, and at the K to 12 level focus on math and science education, which is the wave of the future and critically important to ensuring the continued success of the tech industry.

Glassman: So, what are the chances that we will see an increase in the cap this year?

Dreier: I think that they are good. We have, frankly a number of problems that have come to the forefront, just in the last few weeks. Obviously, the issue of immigration is a contentious one, and I am the first to admit that. I don't call this bill an immigration bill, I call it a skilled workforce bill. And in that position, it is very, very important for us to realize that there are other issues that need to be addressed on immigration. The fact that there were some inequities that took place pre-1986 on the amnesty program was addressed in the Simpson-Mazzoli legislation. There are problems with Central Americans, who were from the war in El Salvador who were here and spent their entire lives here. That needs to be addressed.

I am sympathetic to addressing those concerns, but unfortunately the White House and a number of my Democratic colleagues have made an attempt to tie this other extraneous legislation dealing with those two very important problems to the skilled workforce bill. And I think that that's unfortunate. But it's really up to them.

I am still trying to work as hard as I can on a bipartisan way to make sure that we address this very important need. I think that we can come to an agreement and I am hoping that we will be able to do it sometime this summer.

Glassman: Before the recess.

Dreier: I am hopeful.

Glassman: Now, tech workers themselves are not unionized, but many labor groups oppose immigration programs like this one. They say that these foreign workers are taking jobs that would otherwise to go to Americans. Is there any truth to that?

Dreier: No truth at all. And again, an argument has been made that these businesses are trying to hire people from overseas because they will pay a lower wage rate. They can't do that. If they are doing it, they are violating the law. There is a prevailing wage requirement that anyone who is hired under the H1-B program must be compensated at the same level as an American. So, this view that we've got people who are in their 50s who are being thrown out of work and instead they are hiring 22-year-olds who are East Indians is just a non-starter. Obviously it's something that we want to make sure does not happen, but in current law, they can't do it.

Glassman: For investors in technology companies, is there a way right now to quantify the harm that's being done to these companies, if the companies are not allowed to attract these workers?

Dreier: I meet regularly with the CEOs of top companies, and just in the last couple of weeks, just to throw out some names, I've sat where I am right now meeting with Andy Grove of Intel and Craig Barrett who is the CEO of Intel right now and Scott McNeally of Sun Microsystems, and I've talked to Bill Gates and many other people, Eric Schmidt, who is the head of Novell. So, I've met with the CEOs of these companies and they have made it clear that obviously they're doing well. They have faced a lot of challenges, but clearly, one of their toughest problems is finding skilled expertise.

To quantify it is a tough thing... If we immediately fill those 300,000 jobs, it's obvious that we would have greater technological changes. I mean, obviously, tech changes have been a positive for us as a society. And it seems to me that if they have the expertise to fill these jobs, then it would even be better that it is right now. And those investors in those tech companies would be doing even better.

Glassman: So, if the cap stays at its current low level, are we going to see --

Dreier: ... which we have already exceeded, by the way.

Glassman: Which we have already exceeded?

Dreier: Right.

Glassman: How can we exceed it?

Dreier: Well, I mean, we're basically there.

Glassman: Okay, so, unless we raise the cap, let's put it that way, are we going to see tech firms moving out of the U.S.?

Dreier: Well, that's my fear. There are a wide range of things that include H1-Bs that could lead them to again move to Singapore and Ireland. Those are the two countries that have over the past few years been trying to provide the greatest incentives for them to move. Now, I will tell you that no company has said to me, "If you don't increase the H1-B visa level, we're going to move our entire operation offshore."

Glassman: But clearly, some of them are already moving.

Dreier: Some of them are. Of course, of course. Obviously, the whole globalization issue has to do with, you know, our making sure that they find the best quality help in other spots of the world. Maybe it's not as highly skilled as that work which has been done here. So, companies are setting up operations all over the world. That's a good thing for us to see developing nations have an opportunity to grow. And that's one of the reasons why I feel so passionately about ensuring that we don't impose constraints on membership on the World Trade Organization so that developing nations don't have an opportunity to succeed.

Don't get me wrong. I think that that's a good thing. But at the same time, we should not see them forced to make that kind of decision because of the inability to have the expertise that's needed to do things here. There should be other factors that play a role in that decision rather than this one.

Glassman: So, you're saying though, that Singapore and Ireland are two countries that are competing for tech firms and this could be---

Dreier: This is one further incentive. When they provide tax incentives and a wide range of other things, this is one further incentive for [U.S. companies] to move offshore. And I think we have a responsibility to step up and say, "I don't want to play a role in interfering with your decision-making process, but I also want to make sure that you have the best quality workforce to address the needs that you want to address here in the United States."

Glassman: What is the Administration's position on this and could this become an issue in the election between Bush and Gore?

Dreier: Well, I will admit that this is not overall seen as a winner when it comes to the issue because immigration is a tough one. And that view out there, which you touched on, that somehow we're hiring foreigners somehow at the expense of U.S. workers is one that has been rather pervasive. And so, it is a tough political issue.

Glassman: Although on the other hand, you have both candidates who want to appeal to Silicon Valley, at least for contributions if not for votes.

Dreier: Right.

Glassman: What is the position of the Administration?

Dreier: Well, the Administration has frankly, as has often been the case, really moved around on this. I work closely with Gene Sperling, the President's economic policy adviser, and he is trying to work with us. Again, I'm reaching out. I was sorry again we worked for months and months to put together this bipartisan package, to have them what I call the eleventh hour -- because we're close to getting this done -- to have them pop up with this new provision on amnesty and all, is something that is --

Glassman: The problem is that they are basically killer amendments.

Dreier: I don't know if I'd call them killer amendments. What I'm saying is that we worked in good faith, putting together a skilled workforce package and what we've done is we now have them, again at the eleventh hour, coming in with very important legislation. I mean, I don't discount the importance of it and I want us to address it because I'm pro-immigration, I'm for legal immigration. But at the same time, I think that it really brings into question the commitment that the Administration and my Democratic colleagues have to our specific goal of increasing the skilled workforce level.

Glassman: Let's finish on the bright side. How will it affect the average American if our companies are able to bring in world-class talented workers to America?

Dreier: Let's look at it this way. Most every American acknowledges that the existence of the Internet has improved the quality of life of people in this country: access to information, the free flow of goods and services that we've been able to see over the Internet. Those things have improved our standard of living. We have the highest standard of living on the face of the earth. The world has access to our consumer market. The tie between trade and technology is inextricable and because of that we have the potential to see further growth.

Now, there are so many people who feel so sanguine about the level of economic growth that we have, that they think, "Hey, you know, we don't really need to do things." I believe that we have a responsibility to take every step that we can to continue to encourage economic growth so this boom that we are enjoying does not slow down and create economic problems. So I think that this issue is just one of many that will be very important to maintaining and expanding the quality of life and the standard of living that the American people enjoy.

Glassman: Good. Well, thank you, Congressman Dreier.

Dreier: My pleasure.

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