That Giant Sucking Sound? Talent Drain from the Northwest (and Rest of the Nation)

4/23/09Follow @gthuang

If you want to understand the important local and national trends in talent flow, you need to know Davis Bae. The founder and managing attorney of the Bae Law Group in Seattle, which specializes in immigration law, works with many local startups and employers in the tech community on their immigration and recruiting plans.

I’ve been hearing rumblings lately that high-tech talent is leaving the Seattle scene at an ever-faster pace, in part because of layoffs of foreign workers. Foreign nationals on H-1B visas are having a particularly hard time in this recession. That’s because if they get laid off, they (and their families) usually have to leave the country immediately. What’s more, getting the visas in the first place has become such a pain that companies are increasingly opening offices in places like Vancouver, BC—where Microsoft and Big Fish Games have recently set up shop, to name a couple of cases I’ve previously reported on.

Bae emphasized that the situation is indeed dire, but the issue is much bigger than Seattle—in fact, the Northwest actually has it pretty good compared to other parts of the country. “We have been creating a brain drain in the U.S. for innovation,” Bae says. “A key way to stimulate the economy again is by embracing talent from other countries.” As for the Seattle area, he says, “my clients and the region are reasonably stable. But the real problem we have is that the entrepreneurial community is the most locked out. They can’t wait six months for a visa.”

He is referring to the process by which companies can apply for H-1B visas for their employees as early as April 1, but have to wait until October 1 to get the results. Which brings us to the big trend Bae is seeing now. In 2009, the demand for new H-1B visas has dropped around the U.S, he says. There is an annual quota of 65,000 new visas available for the whole country, and in recent years there have been around 150,000 applications for those slots. “For the first time in many years, usage was so low they didn’t run out on Day 1,” Bae says. “It’s a huge drop.”

Nationwide, the number of H-1B visa applications is down to around 30 percent of what it has been in recent years, but Bae says he has still filed 60 to 70 percent of his usual business, mostly for companies based in the Northwest. Although that may be an encouraging sign for the Seattle area, it could mask a bigger and more serious problem.

“A lot of people don’t want to live here anymore. They’re waiting an unpredictable number of years for a green card. There’s a whole group of people who are unhappy, leaving, or finding other ways to get status,” Bae says. “People are saying, ‘I give up. If I knew how hard it would be, I never would have come.’” He points out he’s not just hearing this from one or two main immigrant groups, like Indian or Chinese workers—it’s from across the board, including British and other European workers.

Reactions to visa studies such as the one published in the Social Science Research Network—claiming that the use of H-1B visas cuts U.S. engineer wages by up to 6 percent—don’t help the perception of foreign workers and their work visas, either. That study was written up in ComputerWorld, the Seattle Times, and other news outlets last week. (Other studies have shown that foreign workers aid the competitiveness of the U.S. and the growth of U.S. companies.)

So what’s to be done about the talent drain? “We need to stop blaming immigrants for the economy. They’re going to stimulate the economy,” Bae says. “Even though companies in the Northwest are knowledgeable of the value of foreign talent, there are still many misperceptions in the region. Hopefully, people will see the immediate upside to the foreign talent pool.”

Back in February and March, Bae’s team put on a series of free seminars around Seattle to advise foreign workers on their rights. “There are more solutions than they realize. If your employer is downsizing you, it’s not as dire as you think,” Bae says. His recommendations include having your resume, educational papers, and previous immigration documents ready to go at the first sign of trouble. (For most workers, of course, that time has long since passed.)

While he may not have all the answers, Bae stresses the importance of continuing to attract and retain top foreign workers. “We don’t have the organic talent here,” he says. “If they can’t do it here, companies are going to do it somewhere else. Eighty percent of our economy comes from international trade. We need to be intelligent about the human resources element.”

There’s also a strong personal element to Bae’s work. An immigrant himself, he originally came to the U.S. from South Korea in 1971, and has kept track of the number of people and families he has helped immigrate to the States through his law practice. “Since 1995, my law firm has brought in over 10,000 people who’ve helped grow our economy and strengthen America,” he says. “I live for this every day.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • Karma

    “We don’t have the organic talent here,”
    This is a big lie!!!!