Building Careers and Shaping Public Policy

A Pre-Hearing Statement on The Impact of L-1 Visas
on America's Interests in the 21st Century Global Economy

29 July 2003

The Institute of Electrical and Electronics Engineers - United States of America (IEEE-USA) commends Chairman Chambliss and the other members of the Immigration and Border Security Subcommittee of the Senate Committee on the Judiciary for holding this very timely hearing on the L-1 (Intra-Company Transfer) visa program and its impact on America's interests in the 21st Century global economy.

The ongoing economic downturn in the high tech sector of the nation's economy is causing widespread unemployment among electrical, electronic, computer and software engineers in the United States. The unemployment problem is made much worse by the continuing admission of foreign engineers and other information technology professionals on temporary work visas and the steady increase in the outsourcing of high tech and other white-collar jobs to lower-cost overseas locations. Indeed, IEEE-USA believes that there is a link between industry's reliance on temporary work visa programs and overseas outsourcing that has very significant implications - not only for the continuing employability of U.S. high tech professionals - but for America's future technological competitiveness and economic security.

These are tough times for U.S. high tech professionals. After climbing to an unprecedented 7.0% in the first quarter of 2003, the unemployment rate among electrical engineers remains at 6.4%, which is twice the rate for all managers and professionals (3.1%). The jobless rate has also reached unusually high levels for computer software engineers (4.1%), computer hardware engineers (5.7%), computer scientists and systems analysts (5.6%) and computer programmers (7.5%). And in those areas where unemployment rates for technical professionals appear to be leveling off, there has also been a disturbing reduction in the size of the employed workforce.

The picture painted by these statistics is one of the worst employment markets for electrical and electronics engineers, ever - worse even than during major recessions in the 1970's, 1980's and early 1990's.

IEEE's U.S. members are understandably concerned about such high levels of unemployment among U.S. engineers, computer scientists and other high tech professionals. Many contend that the unemployment problem is exacerbated by the continuing admission of substantial numbers of foreign professionals on temporary work visas. Most are outraged when they learn that some employers have taken advantage of loopholes in the nation's immigration laws to replace U.S. citizens and legal permanent residents with cheaper foreign workers on temporary visas, including H-1B (specialty occupation) and L-1 (intra-company transfer) visas.

Although H-1B visas have received a good deal of attention in Congress and the news media, much less is known about the uses and abuses of the L-1 visa program. Until WKMG - TV6 in Orlando and Business Week publicized an egregious example of the displacement of American workers by foreign nationals on L-1 visas at Siemens ICN in Lake Mary, Florida - in which U.S workers had to train their replacements in order to qualify for severance benefits - there had been no reason to question the integrity of the intra-company transfer visa program.

IEEE-USA supports the L-1 visa program as originally conceived by Congress, which was to enable multi-national corporations to periodically relocate executives, managers and workers with specialized knowledge of their employer's products and services to work temporarily in the United States. We don't believe Congress intended - or could have anticipated - that the L-1 visa program would be used by some multi-nationals to import substantial numbers of rank and file technologists for the explicit purpose of using them to provide technical services under contract to other employers.

We urge Congress to take appropriate remedial action to end this abuse of the L-1 visa program.

An even more formidable challenge facing U.S. engineers and IT professionals is posed by the outsourcing of work, including research and design, as well as development and manufacturing functions, to lower cost, overseas locations. A recent report by Gartner Inc. predicts that 500,000 U.S. IT professionals will be displaced in the next 18 months as their jobs move overseas. This is in addition to the 500,000 IT professionals estimated by the Bureau of Labor Statistics to have lost their jobs in the United States since 2001.

IEEE-USA will provide more detail on links between industry's continuing dependence on skilled guest workers, obtained through the H-1B, L-1 and other temporary visa programs, and its growing emphasis on the overseas outsourcing in a statement to be submitted for inclusion in the hearing record later this week.

We firmly believe that reliance by employers on temporary guest-workers and increased outsourcing of professional work to lower cost, offshore locations, will have very significant implications, not only for the future employability of U.S. high tech professionals, but for the long-term economic security and technological competitiveness of the United States.

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IEEE-USA is an organizational unit of The Institute of Electrical and Electronics Engineers, Inc., created in 1973 to advance the public good, while promoting the professional careers and public-policy interests of more than 235,000 electrical, electronics, computer and software engineers who are U.S. members of the IEEE. The IEEE is the world's largest technical professional society. For more information, go to http://www.ieeeusa.org.