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Testimony
United States Senate Committee on the
Judiciary Examining the Importance of the H-1B Visa to the
American Economy.
September 16, 2003
Mr. Patrick Duffy
Human Resources Attorney, Intel Corporation
Testimony of Patrick J. Duffy, Human Resources Attorney for
Intel Corporation Senate Judiciary Committee September 16,
2003
Thank you, Mr. Chairman and Members of the Judiciary Committee,
for holding this important hearing about the role H-1B workers
play in our industry. I am very happy to be here today to
offer Intel's perspective on the important role that business
immigration plays in creating jobs and expanding economic
growth.
Introduction to Intel
Intel Corporation is an American engineering Company. Intel
designs, manufactures and markets microcomputer components
and related products. The Company's products include microprocessors,
microcontrollers, memory chips, computer modules, motherboards,
network and communication hardware and software products,
personal conferencing software, and parallel supercomputers.
Intel is the technological leader in the semiconductor industry.
We have developed the semiconductor technology on which the
entire personal computer industry has been built, and our
products have continually revolutionized the industry and
redefined the role of the computer in our everyday lives.
Intel is a U.S. based company with global operations. We
have major sites in Costa Rica, Ireland, Israel, Malaysia,
and the Philippines, and an increasing presence in our fastest
growing markets such as China, India and Russia. Seventy percent
of our revenue comes from outside the U.S. The majority of
Intel's research and development work occurs within the U.S.,
and four of our five most advanced 300 millimeter manufacturing
plants that are either completed or under construction are
located in the U.S. representing an investment of more that
$8 billion in Intel's U.S. manufacturing capability.
The benefits to the U.S. economy of multinational corporations
like Intel are enormous. Intel currently employs close to
80,000 individuals worldwide, with revenues for fiscal year
2002 of US$26.8 billion and net profit of US$3.1 billion.
If we grow, jobs grow.
We know the key to growth. To be number one and to stay number
one in the high technology industry requires an understanding
that human capital, sheer brilliance in the underlying science
of computer technology, is the key. We are an international
leader because we have been able to locate, hire and retain
the world's best engineering talent who in turn develop innovative
products that generates demand and spurs growth.
Our immigration philosophy
We view the employment-based immigration system from two
distinct perspectives: Our ability to fill critical skill
gaps in the U.S. through sponsorship of foreign workers, and
our ability to move employees globally for temporary assignments
to facilitate technology development and ramp our global factories
to the high volume manufacturing of our products. Multinational
companies must be able to transfer their top executives and
managers and specialists among their worldwide offices and
into the United States just as much as they must be able to
recruit and hire new talent that brings cutting edge education
in these complex scientific fields. The two needs, which reflect
the two major temporary worker visa categories, H-1B and L-1s,
are closely linked in our business, and should be considered
together by any legislators reviewing the use of critical
skilled or highly educated temporary foreign workers.
Intel's philosophy in regard to hiring foreign employees
is clear. Whenever there is a U.S. position to be filled,
Intel's philosophy is to seek U.S. workers first. Our U.S.
Visa Sponsorship Guideline is an example of this philosophy.
Our guideline requires that, prior to extending an offer to
an individual requiring temporary worker sponsorship, a business
group must demonstrate that there is a shortage of U.S. workers
with the skills required for the particular job and that the
business has made good faith efforts to source qualified U.S.
workers. We know that this guideline goes above and beyond
what is required by law, but we think it is an essential part
of our commitment to the United States.
As a result of our visa sponsorship guideline, our H-1B employee
population in the U.S. is less than five percent of our U.S.
workforce. That small percentage is comprised of individuals
possessing unique and difficult to find skills which can only
be acquired through advanced, university level education.
Access to the best educated engineering talent around the
world is critical to the company's future success. To demonstrate
this point, a review of the bios of the Intel Fellows on our
external company website (http://www.intel.com/pressroom/ExecBios.htm)
is helpful. The title of Intel Fellow signifies tremendous
technical achievement within the company and the industry
as a whole. Intel Fellows provide strategic technical leadership
and guidance to Intel and represent the company at a variety
of industry events and forums. There are currently 45 Intel
Fellows, 13 of whom were born outside of the U.S. and many
of whom immigrated to the U.S. under our employment-based
immigration system. All but one of the foreign-born Intel
Fellows currently work for Intel in the U.S.; the one who
works for Intel outside of the U.S. has himself entered the
U.S. in L-1 status for a temporary assignment requiring his
unique experience. All of these individuals have achieved
outstanding academic success, and none of them could have
acquired their remarkable knowledge and skills outside the
rigor and discipline of a university program.
Intel's use of the H-1B visa category
Intel's overall external hiring has decreased dramatically
since the beginning of the economic slowdown in 2001 and so
has our hiring of employees who require sponsorship for H-1B
status. We do, however, continue to hire a limited number
of employees requiring sponsorship for those positions where
we cannot find enough qualified U.S. workers with the advanced
education, skills and expertise we need to compete in this
global economy. These positions include Design Engineers at
the Master's and Ph.D. levels in fields such as Electrical
and Computer Engineering, as well as Process Engineers at
the Master's and Ph.D. levels in fields such as Chemical or
Materials Engineering. The vast majority of the H-1B workers
we sponsor are educated at U.S. universities.
We expect that we will continue to sponsor H-1B employees
in the future for the simple reason that we cannot find enough
U.S. workers with the advanced education, skills, and expertise
we need. Both the problem and the solution are found in U.S.
university graduation statistics. Today, about half of the
graduate students in the physical sciences in U.S. universities
are foreign nationals, and that percentage increases the higher
the degree and the more prestigious the school. The percentage
is greatest at the Ph.D. and post-doctorate level, and Intel
needs engineers operating at those rarefied levels of knowledge.
U.S. companies and the U.S. government collectively contribute
billions of dollars to universities to support cutting edge
research. Much of that work is done by graduate students,
many of whom are foreign nationals. In order for these gifted
students, who have been trained at our finest universities
and have excelled at our most demanding programs, to remain
in the United States, they must have H-1B status.
There are U.S. employers eager to hire them, but if the H-1B
program is burdened by fewer numbers, more bureaucracy and
delays in processing and a pejorative enforcement climate,
employers will not have the H-1B option and the gifted students
will leave the U.S. Economically, intellectually and culturally,
the United States loses if its policies force these students
to leave, bringing their skills to other countries and companies
that are competing with U.S. companies such as Intel. Because
U.S. workers with the same education and skills are simply
not available in sufficient numbers to satisfy the demand,
hiring such talent through the H-1B program does not displace
any U.S. worker. Quite the contrary is true. Hiring this level
talent is the way Intel invents new products, ensures quality
and efficiency in production and grows the company both in
revenue and jobs.
Those arguing in favor of severe restrictions - or even abolishment
- of the H-1B category quote U.S. unemployment statistics
to prove that H-1B workers are not necessary in this down
economy. For example, we repeatedly hear opponents of the
H-1B program state that the unemployment rate for electrical
engineers is approximately 7%. There is a serious flaw with
this argument, however. Not all electrical engineers are the
same, and their disciplines are not interchangeable. For instance,
many "electrical engineers" direct and coordinate operation,
maintenance, and repair of equipment at customer sites. This
is quite different than the type of electrical engineer that
Intel hires who requires H-1B sponsorship. Intel's H-1B electrical
engineers are primarily Component Design Engineers with Master's
degrees or Ph.D.'s, who have highly specialized skills in
VLSI (very large scale integrated) circuit design, CMOS (complementary
metal oxide semiconductors), and device physics. Engineers
with such education remain in short supply in the U.S. workforce.
Engineers without such education cannot acquire it by On The
Job Training, or by a short course in a vocational setting.
The skills can only be acquired in the course of a structured
academic program that, in turn, relies upon the engineer-to-be
already having the requisite math and physics academic building
blocks. Access to these highly educated engineers is critical
to the development of our future generation of products and
technology and to our ability to maintain our position as
the global leader in our industry.
Clearly, the real issue here is the lack of highly-educated
U.S. candidates for the jobs for which we experience shortages.
We are so convinced that academic training is where both the
problem and the solution lay that Intel contributes over $100
million per year to improve teaching and learning - more than
the amount collected through the $1,000 assessment for H-1B
visa applications in all of 2000. (See Baldwin, Stephen E.,
"An Early Review of the H-1B Skills Training Grant Program"
submitted to the Employment and Training Administration of
the Department of Labor dated August 2001. The report notes
that the H-1B assessment generated about $95 million in the
year 2000.) Among the many education programs Intel sponsors
are: Intel® Innovation in Education, Intel ® Teach to the
Future, Intel Computer Clubhouse, Intel International Science
and Engineering Fair, and Intel Science Talent Search. Postsecondary
education also receives significant support from Intel. The
corporation provides equipment and research grants, scholarships
and fellowships, and lectures by senior-level Intel technologists
to colleges and universities around the country. The goal
of Intel's educational philanthropy is designed to spark interest
in the hard sciences and engineering among U.S. students in
order to generate highly educated U.S. engineers. In our opinion,
and in our industry, emphasizing academics in the hard sciences
and engineering is the only way to build a U.S. workforce
that eliminates reliance on foreign nationals. We also know
that it is a long term process since the requisite education
must begin in elementary school and continue through an advanced
university curriculum if it is to meet our industry's needs.
Intel's use of the L-1 visa category
I recognize that the focus of this hearing is on the H-1B
program; however, I think it is important to briefly address
how Intel uses the L-1 program for intra-company transferees
given the various legislative proposals relating to the L-1
program. As noted earlier in my remarks, U.S. businesses need
and use both programs to meet their global competition.
Intel's use of the L-1 visa for intra-company transferees
is quite different than our use of the H-1B visa. In the vast
majority of cases, when we sponsor an employee for an L-1
visa, it is in connection with a temporary assignment in the
U.S., rather than to fill a shortage of highly educated engineers
as with do with the H-1B visa. These L-1 temporary assignments
are primarily for employees who are working on new products
where we have worldwide collaborative design efforts. Our
use of L-1 visas is consistent with the legislative intent
of the L-1 program: Key personnel who are employed by and
do work only for Intel abroad are brought to the U.S. for
temporary assignments at Intel and only Intel.
Last year more than 95 percent of the employees we sponsored
for L-1 visas came to the U.S. on temporary assignments and
when their assignments ended they returned to their home sites
to work for Intel as Intel employees. In the rare instances
that we use L-1 visas to fill a U.S.-based position, it is
usually to transfer a key manager or executive to the U.S.
because our domestic operations or corporate headquarters
require their global experience and knowledge. These are,
in fact, the same reasons we place U.S. employees in other
countries. The need to consider key workers as part of a global
work force rather than tied to any one site, whether foreign
or domestic, is a new and urgent dynamic in our industry.
We design, manufacture, and sell to a world market. We know
that our human capital, our critical skills workers, needs
to be as easily transferred as our products in order to compete
in that world market. U.S. policies that isolate and obstruct
the transferability of our human resources seriously compromise
our success. And our failure is certainly not good for either
the U.S. economy or U.S. workers.
We have a very proprietary reason to need the L-1 program
to continue as a robust part of U.S. immigration law. The
participation of engineers and technicians from our non-U.S.
sites in development activities and factory implementation
plans occurring within the U.S. is part of our Copy Exactly
methodology. Copy Exactly, in turn, is the key to our having
seamless global operation.
Copy Exactly allows us to rapidly move newly developed technology
to high volume manufacturing by preparing employees for the
technology transfer through temporary assignments exposing
them to the new tools and processes. The Copy Exactly model
vastly reduces the time a new factory takes to move from construction
and tooling to high volume manufacturing. This Copy Exactly
model is employed by Intel for our factory ramps in the U.S.
and at our international sites. We want to continue to make
the U.S. the centerpiece in R&D and in manufacturing processes
and tools, but unless we can easily move our international
employees into the U.S. for short term assignments to learn
and practice the latest technology, we will have to find alternative
sites to continue the crucial Copy Exactly program.
Perspective About the H-1B Training Program
In our opinion, the current usage of the H-1B training funds
represent a disconnect if the intent in allocating these funds
is to eliminate the U.S.' need for and reliance on H-1B workers.
The purpose of the H-1B program is to give companies such
as Intel access to advanced university level talent in the
hard sciences and engineering field. The need for the H-1B
program is rooted in the lack of educated U.S. workers, particularly
in engineering and other hard sciences.
The current allocation of the training funds is not directed
to solving the shortage of U.S. students in the advanced degree
engineering and hard sciences programs. Rather, the grants
so far have largely been directed to unemployed or underemployed
workers. The training programs are intended to teach basic,
entry level skills mostly in the nature of vocational training,
not to provide advanced, university level education that is
the H-1B program's key benefit to U.S. employers.
If the allocation of training funds is to be truly successful
in replacing the need for the H-1B program, then the funding
must focus on academics. The grants must be tied to formal
university education in math, chemistry, physics, and engineering
at the bachelors degree level at a minimum, but more urgently
at the advanced university degree level.
We think that part of the disconnect is that the agency in
charge of these grants is not involved in formal academics
to prepare people for the workplace, but with people who have
become unemployed or underemployed. As long as the grant program
is initiated through the Department of Labor, an agency dedicated
to improving the existing workforce, it will miss the mark.
The need for the H-1B program in this country is rooted in
the lack of the formally educated worker in the hard sciences,
particularly math and engineering, and no ancillary training
can cure that void. Perhaps the Department of Education is
a better umbrella agency to develop grant programs that are
geared towards U.S. students acquiring the necessary academics
required for a career in engineering at a very sophisticated
level.
Legislative Proposals
We respectfully urge members of Congress to proceed cautiously
before implementing any legislation that hinders the ability
of U.S. businesses to compete in the global marketplace.
There is wisdom in continuing the status quo rather than
doing something in haste. The need for evaluating careful,
wise alternatives is especially acute now as we begin an economic
recovery. We certainly do not want to do something that artificially
impedes that recovery since either a slower recovery or an
impeded recovery will harm the U.S. worker.
If we are going to allow ourselves to address the H-1B program
more thoroughly and carefully, there are a number of factors
that ought to considered at the outset, including: (1) Given
its historical inaccuracy, is there a need for a cap on H-1Bs
at all or can select economic indicators be used to better
reflect actual market conditions and needs? (2) What is the
best way to induce American students to pursue education and
careers in the hard sciences, especially, math, chemistry,
physics, and engineering? (3) How can the Department of Labor
better track the positive economic benefits to the U.S. economy
of the H-1B program? (4) If the "H-1B replacement grant program"
is to continue, where should it be housed, and what should
its focus be? (5) For U.S. businesses, what is the relationship
between the H-1B and the L programs; can one be divorced from
the other? (6) What evidence/hard data exists that demonstrates
there is a problem with the current H-1B (or current L) program?
Is there a solid economic basis for the popular assumption
that hiring an H-1B harms U.S. workers?
Conclusion
If immigration law and regulations create barriers to our
ability to hire H-1B workers with the advanced, university
level education in engineering and the hard sciences, Intel
and other companies will be required to move to those countries
where the talent resides since we have not been able to find
enough U.S. workers with the advanced engineering degrees
we need. Similarly, restrictions on our ability to move our
international personnel into and out of the U.S. under the
L program, will force us to consider whether we must move
our U.S. development activities to those regions where immigration
policies enable multinational companies to compete in a global
marketplace. To state Intel's position as simply as possible,
as an engineering company, we simply cannot operate without
engineers.
The puzzle for our company is why the U.S. government would
seriously consider eliminating a program that only brings
value to the U.S. economy. While there are anecdotes about
laid off U.S. workers, the hiring requirements at Intel are
so demanding that they ensure H-1B, with their highly developed
skills and advanced education, will contribute and expand
the U.S. work force, not replace it. And it is well known
that the same H-1B individuals that some of the proposed legislation
would exclude from the U.S. are highly sought after by our
foreign competitors. How does it help U.S. workers or the
U.S. economy to create a playing field that is tilted in favor
of foreign competition? Even Alan Greenspan acknowledged that
the immigration of highly educated individuals is directly
and positively related to our nation's economic growth.
Moreover, the vast majority of H-1B workers we hire are educated
at U.S. universities. We do not understand why the U.S. would
not want to keep the fruits of that very valuable education
in the U.S. By forcing these individuals outside of the U.S.,
we are in effect educating the talent for our global competitors.
It is important to note that Intel does not just compete
with other U.S. businesses. Reducing or eliminating the H-1B
visa category does not level the playing field for us. Rather,
it gives foreign competitors a huge advantage. We already
see Korean, Singaporean, Taiwanese, Chinese, German, and French
companies going after the same highly educated talent. If
U.S. companies are to compete in this global race for educated
engineering skills, it makes no sense for our own government
to set up impediments to our success.
The irony here is clear. Although the political rhetoric
is about protecting U.S. workers, when played to its conclusion,
eliminating or reducing H-1B visas gives foreign countries
and companies an advantage in our markets with resulting U.S.
job loss.
It also is important to remember that we are not dealing
with a group of foreign nationals who have a short term stake
in the U.S. Rather, in the engineering field, H-1B workers
are usually on the way to becoming full U.S. workers themselves.
The Immigration law wisely allows a U.S. employer to obtain
permanent residence for H-1B workers if the employer can demonstrate
that there is a shortage of qualified U.S. workers for the
position. So today's H-1B worker is tomorrow's U.S. worker
whose advanced education and talent will be available to the
U.S. economy permanently. Why would we want to reject this
talent at the outset or force it to leave after the individual
has acquired U.S. experience? All developed or developing
nations are pursuing this same pool of talent aggressively.
The U.S. has the advantage of being the first choice of most
of the world's greatest engineering and science talent, but
our nation's current anti-immigration attitude puts that historical
advantage at great risk.
We do recognize the economic downturn of the last few years
has created layoffs of U.S. workers. We also recognize that
there will be pressure on the U.S. job market for the foreseeable
future as U.S. businesses deal with the pressures created
by globalization.
We can deal with this challenge in one of two ways. First,
we can try to hide from it by artificially protecting jobs
and eliminating business immigration. In my opinion, this
is the wrong choice and is not in the long-term interests
of our shareholders, or our employees, or the U.S.
Eliminating our access to advanced degreed engineering talent
in the U.S. will not work for obvious reasons. By eliminating
access of U.S. businesses to this talent, you lessen our ability
to innovate (invest in R&D and manufacturing capacity) and
therefore we become less competitive. Setting aside the obvious
issue of shareholder concerns about profitability, the lifeblood
of our industry is new product creation. By eliminating our
access to highly educated engineering talent, you take away
the option of investing more in R&D.
The other alternative is to accept the challenge of growing
the skills of the U.S. workforce, increasing the number of
students at the advanced degree level studying the hard sciences
and engineering, increasing the productivity of employees,
and leading the way in innovation and technology. Only by
doing so will we be able to create more jobs and higher end
jobs in the U.S.
The keys here are the productivity and innovation of our
employees and these, in turn, are directly related to three
key factors: education, infrastructure, and R&D investments.
Intel can contribute some in these areas, but much of the
responsibility for creating an environment where U.S. workers
can effectively compete with their international counterparts
rests with the U.S. Government. Hopefully our national leaders
will recognize this challenge and forcefully respond with
policies and investments to maintain the U.S. as the most
productive industrial power in the world.
Thank you for the opportunity to share our perspective with
you today.
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