H-1B program hurts small US businesses, New Jersey entrepreneur says

May 25, 2006

The H-1B program hurts small U.S. high-tech business' ability to compete, engineer and entrepreneur Oscar McKee said in recent visits to Capitol Hill.

McKee is owner and president of O-MC Signal Research in Bloomfield, N.J., a company that specializes in wireless communication and the research, design and development of high-speed Internet and local area networks. He met with Rep. Bill Pascrell (D-N.J.) and a member of Sen. Robert Menendez's (D-N.J.) staff during IEEE-USA's Career Fly-In on 3 May.

McKee, a 37-year IEEE member, said it is difficult for his company to compete against other U.S. companies that use large numbers of H-1B visa engineers. Because these firms often pay H-1B holders less than the market wage for U.S. engineers, they are able to bid lower on the same projects as O-MC.

"We have found that we are at a distinct competitive disadvantage when bidding against companies that use H-1Bs," said McKee, who served for 20 years in the U.S. Air Force and retired as a captain. "We have been told a number of times that our bids must be lowered if we want a certain contract, yet we find that impossible to do using American engineers."

The H-1B program is supposed to help U.S. companies fill positions when no qualified U.S. technical professionals are available. However, very few companies have to comply with this requirement, and the government leaves it to them to determine the "prevailing wage." The latter makes it possible for companies to pay H-1B holders less than what they would have to pay a similarly skilled U.S. citizen. Rep. Pascrell has proposed a bill, which IEEE-USA supports, that would correct many of the flaws in the H-1B program and strengthen essential safeguards for foreign and domestic workers.

"The misuse of the H-1B program's intent dilutes the salaries of American engineers and injures their ability to support their families," said McKee, whose story was featured on a May 22 episode of CNN's Lou Dobbs Tonight (http://transcripts.cnn.com/TRANSCRIPTS/0605/22/ldt.01.html).

McKee also warned that when the economy inevitably takes a downturn, it is the higher-wage, U.S. workers who are more likely to be laid off, not their lower-paid, foreign co-workers. In a quick review of some companies employing large numbers of H-1B radio frequency engineers, McKee found that his competitors were paying their H-1B workers 17 to 31 percent less than he has to pay to hire U.S. engineers.

"The lack of meaningful scrutiny of the H-1B program places my company at a decided competitive disadvantage in the marketplace," McKee said. "Congress should adopt reforms that allow small companies like mine -- that employ U.S. engineers -- to compete fairly with companies that don't. Under current law, it is extremely difficult for me to stay in business and keep Americans employed."
IEEE-USA advances the public good and promotes the careers and public policy interests of more than 220,000 engineers, scientists and allied professionals who are U.S. members of the IEEE. IEEE-USA is part of the IEEE, the world's largest technical professional society with 360,000 members in 150 countries. For more information, go to http://www.ieeeusa.org.

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