Foreign workers fill hundreds of Sacramento-area IT jobs

It's nearly 8 p.m., and inside a state office building two dozen computer experts design and troubleshoot a system that will take and process millions of unemployment claims each year.

It's a $200 million Employment Development Department project, but with the exception of two managers, everyone inside the office is from outside of the U.S. They are employed by Deloitte, a major U.S. IT company hired by the state to create and manage its Unemployment Insurance Modernization project. The mostly Indian nationals are allowed to work here under a visa program called H-1B.

Tech companies like Microsoft, Intel, Google and Facebook say they need hundreds of thousands of foreign workers to fill jobs here because American colleges can't crank out computer science grads fast enough. In 2013, the industry lobbied Congress on the issue to the tune of almost $14 million.

Those companies, who need workers with highly specialized knowledge like computer expertise, are awarded the visas through a lottery process. It's allowed under the Immigration and Nationality Act and administered by the U.S. Department of Labor. The visas can be valid as long as six years.

News10 reached out to several H-1B workers over the past three months, and they all declined to comment for this story.

"The program is going unfettered, unchecked, without bounds, and it's all in the interest of profit," Computer Database Administrator Chris Brown said. He said was displaced by one of the special visa workers in 1996, and he has been following the issue for the past 18 years.

Hewlett Packard laid off Brown from its Roseville plant during the height of the H-1B program, when as many as 300,000 of the workers were allowed to take jobs in the U.S. The cap for H-1B visas today is 85,000 after federal audits showed there were abuses in the program. There's an effort on Capitol Hill to raise the ceiling again to levels last seen in the mid 1990s. And, during a recent presidential trip to India, Prime Minister Narendra Modi asked President Obama to help loosen the restrictions on the H-1B program. India's tech outsourcing industry makes billions of dollars every year sending programmers and engineers overseas to work for U.S. companies.

Brown is watching those new developments with interest. When he lost his job in 1996, it was just two weeks before Christmas. He says he's afraid more Americans will be replaced by foreign-born workers.

"I'm a single income, so on that particular day, as a direct result of this program, we were unable to provide Christmas presents and I kept telling my kids that day that Santa might not show up," Brown said.

A spokesperson for Hewlett Packard said he would not comment on layoffs that happened 18 years and three CEOs ago, but he defended the visas as a needed resource for HP and the industry as a whole.

U.S. Department of Labor data shows more than 1,100 H-1B visas were certified for workers in the Sacramento area in 2014. The largest number was for Accenture, an IT company that is currently holding state contracts totaling more than $1 billion. It has 125 H-1B visa holders in Sacramento. Deloitte has another 28, and there are four dozen of them filling positions in state offices in the Capital City.

There's no way to say exactly how many of the visa holders are doing work directly or indirectly with the state. Hundreds of the local H-1B visa holders were awarded to third-party contractors known as "body shops." Body shops apply for the visas and then farm them out to larger IT companies looking to hire more foreign workers.

Accenture spokesman Mark Bonacci said while the company doesn't disclose the number of employees it has by city, state or region within the U.S., "the vast majority of our people working in the U.S. are U.S. citizens and residents."

"Only a very small percentage of Accenture's employees in the U.S. are H-1B visa holders," he said.

In an email, Deloitte spokesperson Courtney Flaherty said, "Our primary focus is hiring U.S. workers, including experienced California professionals and graduates.

"Our use of U.S. work permits is entirely consistent with the intent of the Federal Government's immigration program to complement our domestic workforce with highly-skilled professionals," she added.

The H-1B visas help fill a very limited number of hyper-technical and specialized positions, according to the California Department of Human Resources.

" … these employees represent a very small fraction of the nearly 220,000 state employees. We continue to focus on finding and hiring the most qualified people to serve the state," CalHR Communications Director Pat McConahay said.

The philosophical fight over the program is largely being fought by two researchers on the University of California, Davis campus.

H1-B visas have been around for 25 years, and UC Davis economist Giovanni Peri says the IT industry has thrived because of the foreign workers. He has published three recent studies on the H-1B visas. His research suggests foreign workers bring innovations with them which lead to new inventions, more jobs and higher wages.

"There is a huge demand for these workers," Peri said. "Over and over again, you find this strong correlation, very strong, between more skilled immigration, more growth and better working conditions for American workers as well."

In a classroom across campus, Professor of Computer Science Norm Matloff trains the next generation of IT professionals. Some of them are U.S.-born, and others are foreign-born students who one day may need a visa to work in the U.S.

Matloff, like Peri, is seen as one of the leading national experts on H-1B visas. Congress has repeatedly called upon the expertise of both men as it wrestles with the dilemma of deciding between restricting or releasing the flow of foreign workers into the IT workforce.

Matloff has been studying the cause and effect dynamics of the visa program since the 1990s. He said big IT companies are gobbling up the visas, not because they can't find Americans to fill the positions, but the H-1B visa holders allow them to layoff expensive and experienced U.S. employees and hire younger and cheaper foreign workers.

"Hiring younger H-1Bs instead of older Americans means you save money," he said.

"It doesn't matter whether an H-1B takes the job here that you would have taken or, on the other hand, if the job is sent overseas. Either way, you as an American programmer or engineer, doesn't have that job," Matloff said, comparing the visas to the controversial practice of outsourcing American jobs to other countries.

"It's not any different than what illegal aliens have done to construction workers," said Kim Berry, the webmaster of two sites that almost exclusively address the influx of foreign workers in the U.S. IT job market. "Why hire an American to do the roofing when you can have a truckload of illegals do it for $30 per day each?"

Berry's Programmers Guild and Hire Americans First websites are filled with the comments of people who say they lost their jobs and were replaced by the holders of H-1B visas. News10 found Chris Brown at Hire Americans First. Berry and Brown said they worked side-by-side with very talented H-1B workers but, for the most part, they said their foreign counterparts were not as qualified as the U.S. employees they replaced.

Both men said they refuse to be silent on the issue, but feel like their voices are muffled by the lobbying dollars of America's richest billionaires.

"Who is the lobbyist for the unemployed American?" Berry said.

Brown added, "Americans will continue to suffer at the expense of this program, and lobbyists and senators will continue to get more wealthy."


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