[We asked Bill Archey, chief executive of the American Electronics Association, to tell us how well high-tech interests are being represented in Washington. The AeA is the nation's largest trade group representing the electronics and information technology industry. Bill knows Washington inside-out, and his reports in some senses are depressing. It is shocking to hear his stories of how little our members of Conress know about technology. We'll be hearing more from him going forward.]
Congress may have adjourned its latest session, but there’s still so much pending business, especially appropriations bills, that Congress will return after the election for a lame duck session beginning on November 13.
It is fair to say that the high-tech industry is not doing well
Our most important priorities were deferred until the lame duck session or until at least when the 110th Congress begins, perhaps under new leadership. The demise (or perhaps deferred demise) of the high-tech agenda also demonstrates how dysfunctional Congress has become.
The high-tech industry had two very important priorities. The first was the competitiveness initiative which called for (1) an increase in basic R&D funding, (2) a new initiative to increase the number of kids taking math and science and an emphasis on producing more qualified teachers in these subject matters, and (3) visa reform—which doesn’t just increase the quota of H-1B visas but also reforms the process for obtaining those visas along with a reform of the green card program.
The second major priority was to make permanent, or at least to extend for a lengthy period of time, the R&D tax credit. This credit expired on December 31, 2005. Many AeA member companies are losing important tax advantages of the tax credit or, at best, are unable to plan certain R&D expenditures pending the result of the extension of the R&D credit.
Addressing the problem of American competitiveness has been a priority of AeA since February 2005 when we issued our paper entitled “Losing the Competitive Advantage” The challenge has been to get members of Congress to acknowledge that we have a problem.
Over time, Congress came to realize that despite America’s technological prowess we had some problems. The President’s “American Competitiveness Initiative” in his State of the Union address in January helped. But nothing has happened — despite the fact that the Democrats issued its innovation agenda (a rather comprehensive response to the problems of competitiveness) and despite the Republic Summit, a full day program on competitiveness held by the House Science Committee.
Despite true bipartisan agreement, the lack of any decisive legislation was in part because of that agreement: The issue lacked the “partisan juice,” or benefit to either party and especially to the Republicans, for use as a wedge issue against the other party In fact, the House Republican leadership failed to support its own members on the House Science Committee who came up with some very thoughtful legislative proposals to address competitiveness.
The R&D tax credit died also because of politics. The R&D tax credit was part of a tax extenders bill which was not controversial and indeed had overwhelming bipartisan support. But the R&D credit was included in a “Trifecta” bill which included an increase in the minimum wage and the virtual elimination of the estate tax. So if you wanted to extend the R&D tax credit, which it seemed everyone in Congress wanted to do, you also had to vote for an increase in the minimum wage and the end of the estate tax, which everyone did not want to do. What will happen in the lame duck session on the R&D tax credit is very much up in the air.
Not only is the high-tech agenda tied up in the virulent partisanship in Washington, it is also suffering now and will in the future from the fact that most members of the Congress do not understand high-tech, either the technology or the issues. But that’s for another time.
11 Comments
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gjrama said:
Dear Sir,
I read your piece on how Washington doesn’t understand high-tech, and I agree with most of your points. However, I completely and respectfully disagree with your statement regarding H-1B visas. As far as I can tell, we certainly don’t need an increase in the quota of these visas. As the owner of one of those high -tech companies I’m continuely surprised at the number of talented american engineers who can’t seem to find employment in this country. Its very odd how engineers, software developers and technicians from India, China and other countries can come to the US and find jobs, but we seem to be unwilling to hire our own engineers, software developers and technicians. Very often we just aren’t willing to take the risk. Why is it riskier to hire an american instead of someone from India? Time and again I have observed highly educated and talented americans working far, far below their educational levels. When I’ve asked these individuals why they are working their current jobs, almost to a person they tell me about discrimination: sometimes its age discrimination, sometimes its ethnic and sometimes its racial. Strangely, it wasn’t difficult at all to find examples of underemployed people in Maryland. I know of half a dozen within a mile of my home, and I know of others in other states. I believe we business owners owe it to the country that gave us the freedoms to be in business to help support this country as best we can. I think that a greater effort on the part of business leaders to end all forms of discrimination in hiring and promotions would go a long way to improving the climate of american business and this could all be done without the heavy hand of government regulations.
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Steav said:
Today,IT and software Engineers are in great demand in the US. Some folks are arguing that H1B program is supressing the wages of Americans and Americans are replaced by forign based H1B holders. I don’t agree with these fear. I seen most of the H1B holders are resonably paid. New legal immigrants are not taking away jobs but they creat new jobs. If H1B/EB based green card program is not adressed soon, USA will have much damaged due to outsoursing and other developed country will take benefit of US trained skilled labor.
I am a witness that one skilled forign born research engineer saved job of atleast 25 US citizen by developing new products, otherwise company would have filled bankrupcy. -
Raj said:
It is true that some of Indian/Chinese H1B holders are working less and working Hard putting a more number of hrs comparitive to their American counter parts just because of delays in the green card process.
It is not necessary to increase number of H1 visas. BUT IT IS ESSENTIAL to increse the number of green cards available to Chinese and Indians and DELAYS in processing Employment based GREEN CARDS should be minimized..
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Randall said:
Over 50% of graduate students (MS & PhD) in US Universities are foreign students. The only way they can work here after graduation is via H1b visa. These visas are gone before they graduate so they end up working in Europe for US rivals.
Even if they manage to get a H1b visa sponsored, it would take them 5-8 years to get a Greencard, forgot about innovation/entrepreneurship, these graduates have to do the same job with no significant pay hike for 5-8 years else the Greencard process starts all over again.
An article on the Internet making rounds states ‘2 US educated Indian Engineers moved back to India to start a venture since they could not accept venture capitalist money or start a business while on H1b visa and the wait for Greencard was to long for them postpone their ideas’!
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TC said:
To be honest, I really don’t get it when Americans said they lost their job to H1-B workers. Most jobs on job search Web sites such as dice.com require only citizen or permanent resident status. So why can’t they find a job if their job skills/qualifications are actually good match ???. It’s only fair and no discrimination, companies have right to hire anyone who’s the best regardless of status, Americans or not. That’s how America HAS BECOME the best nation in economy due to big pool of talents to choose from, well but not this year since the US economic rank dropped to number six. Guess what why, very obvious, numbers of talent folks have been reduced substantially. While there are still lots of IT jobs available but yet they cannot be filled. Where are Americans to apply?
I am against H1-B abuse myself because it gives opportunity for some Americans to address bad things about H1-B as a WHOLE, which obviously we are all know they are not all bad and most of them are genuine. When really think about it, we, Americans and foreign skilled workers, are victims of the broken system. I am not saying we should increase H1-B visas substantially but rather increase some to meet the market needs and for sure fix the Green Card processing system and speed up the process so that skilled workers can utilize knowledge at their best such as becoming an entrepreneur and create more jobs. That is the fact.
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immigration related said:
Thanks for the article. this site has all the information about the high skilled immigrants. http://www.immigrationvoice.org I request you to cover the issues raised by immigrationvoice in your next article. this immigrant group has been neglected in the larger immigration debate and polictics
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LegalImmigrant said:
I came to this country as an international student and and can tell you for a fact that most companies will sponsor an H1-B only as a last resort. The companies that attended my college career fair refused to even accept resumes from international students requiring H1-B sponsorship. One prospective employer even turned me down after inviting me for an interview when he found out I needed an H1-B. Understandably,employers are highly particular about the skillsets they are looking for, hence end up hiring foreign workers on H1-Bs but to say H1-Bs have a comparative advantage over US citizens is a gross misrepresentation of the truth. And as for H1-Bs being lowly paid, my current manager does not even know my visa status. Once hired, managers in corporate america give raises based on performance, not on superflous things like visa status and nationality. This country is a meritocracy at the end of the day and thats what makes it great.
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gene said:
Good article. This issue ought to be looked at from many perspectives. In america, there is rightly a premium placed on high skilled labour. When one looks at the divergence over the last 30 yrs of the earning power of well educated versus the low skilled population it is quite alarming.
H1b visas are perhaps marginally harmful to indigenous high skilled american workers(I say marginally since the current unemployment rate in that field is quoted at 2%, so I can’t really imagine the situation is that bad). In reality what is perhaps more harmful to those folks is having such a vulnerable labour force at the mercy of exploitative corporate employers.
All that argument aside, it is most definitely to the benefit of the “other” 80% of americans who do not possess a college degree. Since the more of these jobs here the more the demand for local goods and services which improves their lot. If corporate america senses any shortage of talent, it can and will in todays global economy outsource those jobs, with the knock on effect to the rest of the economy.
These issues require more than cursory discourse and emotive decisions which appear to be the modus operandi of our lawmakers these days. -
posmd said:
H1b visas are not the purvue of the high tech industry alone. Theya re used by a multitude of institutions. These visas are issued to amongst other people, physicians, petroleum engineers, material engineers etc. Perhaps the real issue that ought to be discussed is the monopolisation of the H1b visa system by certain industries.
I am a doctor working in an underserved medical area taking care of hundreds and probably thousands of rural and sometimes underpriviledged/uninsured americans. The discussion ought to consider the diversity of this program. -
Vivek said:
I just came across this post. Great one. And Randall, you brought out an interesting comment too. Guess what, I am a foreign studnet graduating with a masters in business from a top 15 school and my major is Entrepreneurship. Yes, I have been hired on campus for by an IT company by virtue of my previous exp with a Fortune 5 company .But you know I came here with the dream of building an enterprise, the very reason for pursuing an E’ship major. Now the law tells me I have to work for 8 - 10 years, then get a green card and start a business. Goodbye America, I am leaving this June. I hope there is someone out there who can atleast take this msg to the lawmakers’ ears.
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