Answers to Your Questions on Skilled Immigration

NEW YORK TIMES (Economix)

By Catherine Rampell

July 25, 2012

http://economix.blogs.nytimes.com/2012/07/25/answers-to-your-questions-on-skilled-immigration/

Last week we asked you to submit questions about skilled immigrants and in particular the H-1B visa program they often work under. Responses from Neil G. Ruiz, Jill H. Wilson and Shyamali Choudhury, who recently wrote about this topic for the Brookings Institution, are shown below.

Q.

I've seen many assertions that H-1B workers work at below-market rates and depress wages in the industry over all. Do you have any data that could speak to this issue?

Chris, Ellicott City, Md.

A.

Under the Immigration and Nationality Act of 1990, employers hiring H-1B workers are required to pay the average wage (or higher) for the occupation and geographical area for which they are hiring. In addition, employers are forbidden to pay H-1B workers less than they pay other workers with similar skills and qualifications.

A 2008 United States government study found that 13 percent of H-1B petitions included some type of fraud, and an additional 7 percent had technical violations. Over all, almost 4 percent of petitions were found to be in violation of the prevailing wage requirement.

Fraud was found to be more prevalent among smaller, less established companies and among occupations in accounting, human resources, business analysis, sales, and advertising. Negotiations are currently under way in Congress to beef up H-1B fraud prevention.

Q.

Do you agree with David Bier from the Competitive Enterprise Institute that highly skilled foreign workers do not take jobs they make jobs and that the hiring of foreign workers makes the economy more efficient and actually increases opportunities for American workers?

rational expectations, Westchester, N.Y.

A.

Our report did not look specifically at the impact of high-skilled foreign workers on employment, so we will defer to the work of others in this answer.

William Kerr at Harvard Business School has shown the connection between high-skilled immigration and innovation. His paper demonstrates that inventions, as measured by the number of patents filed, have increased because of contributions of foreign inventors admitted through programs like the H-1B visa program. It is unclear if there is a direct connection to job creation, but breakthrough patents could have the effect of creating more jobs.

A study by Madeline Zavodny shows that even during the tough economic times of the last few years, immigration on the whole has not hurt the job prospects of native-born Americans and that high-skilled immigrants are correlated with an increase in jobs for natives.

On the other hand, an A.F.L.-C.I.O. study by Paul Almeida argues that programs like the H-1B visa incentivize the displacement of native workers because employers may prefer foreign workers for their lower cost and exploitability. Ron Hira at the Rochester Institute of Technology asserts that H-1B workers are not complements but are direct substitutes for American workers.

We recognize the concerns and limitations of both sides of this debate. The challenge for policy makers is to figure how to meet the demand for high-skilled workers by developing an immigration policy that allows the United States to continue to attract the foreign workers that it needs, while at the same time educating and training American workers for these jobs in the near future.

Q.

I see a lot of concentration of H-1Bs in the Midwest and have read articles noting a counterintuitive trend. Can you elaborate on science, technology, engineering and mathematics, or STEM, H-1B usage outside of Silicon Valley? What are some causes of this trend?

Angela, CA

A.

The demand for H-1B immigrant workers is not just a high-tech Silicon Valley story; rather it is a story of American employers across the country, in metro areas large and small, requesting high-skilled workers in a variety of occupations. This includes American manufacturers searching for specific skills in America's heartland.

Although our research shows that San Jose, Calif., home to Silicon Valley, is the No. 1 metropolitan area in demand for H-1B workers relative to its work force size, Columbus, Ind., ranks second.

This is driven mostly by Cummins Inc., an advanced manufacturer specializing in clean technologies for automotive engines headquartered there. The company has experienced exponential growth over the past several years, even during the recession, and most of its requests for H-1B workers are for engineers.

Other metro areas in the Midwest have a high demand for STEM H-1B workers. For instance, in Bloomington, Ill., 94.8 percent of all H-1B requests are for STEM occupations, the highest share of all metro areas in the country. These are driven by companies like Patni Americas Inc., which provides information-technology services for State Farm.

Columbus, Ind., ranks second for STEM share (88.8 percent) and No. 3 is Peoria, Ill., where the heavy equipment maker Caterpillar is headquartered. Midwestern metros like these are looking to the H-1B visa program to build a skilled labor force.

Q.

Is the H-1B program just a sham to get cheaper foreign labor? The high tech company I worked for, a Pennsylvania firm, moved at least 3,000 jobs to India, and also brought in H-1Bs, all the while laying off American workers. It appears the goal and motivation of the companies is to cut the cost of American labor by hiring cheaper foreign workers both abroad, where they earn 10 percent, and here at home where they earn 50 percent. With so many American I.T. people unemployed or underemployed, it seems only fitting that the H-1B program should either cease, or at least be limited to genuine, provable shortages instead of fraudulently created shortages to get cheap labor.

Austin AI, Austin, TX

A.

Outsourcing is the result of many interrelated factors. United States immigration policy can play a role by making it difficult for American employers to hire foreigners to work here; some companies work around these restrictions by moving operations to a country where it is easier to bring in foreign workers.

Currently, employers who want to hire an H-1B worker are not required to perform labor market tests to ensure there are no available American workers, but only attest that no American worker has been displaced at their company as a result. This oversight process facilitates speedy H-1B approvals but relies on post-admission site visits to detect fraud and abuse.

In 2010 in an effort to discourage H-1B dependence, President Obama signed a law adding $2,000 to the fees that employers are required to pay for an H-1B visa if the employer has at least 50 employees in the United States and more than half of them are in H-1B or L-1 nonimmigrant status.

These and other H-1B visa fees, paid by employers, are used to fund technical skills training and STEM education (at the K-12 and postsecondary levels) in American communities in an effort to train our existing work force to do the jobs that H-1Bs are currently hired to do, as well as help finance fraud prevention and detection.

Q.

Why can Intel not find suitable American-born STEM workers for their approximately 2,800 openings but Lowell and Salzman report that the American STEM graduates each year exceed the number of openings by a factor of 3?

John Gary, Boulder Colo.

A.

The years of education demanded by the average American job is growing, and the educational level of American workers has fallen behind to some extent. However, there is disagreement about the existence of a shortage of science, technology, engineering and mathematics workers in the United States.

Some argue that the American educational system lacks rigor in these fields and that American students lack the interest or ability to pursue these occupations to the extent that our companies need them. Others argue that we are in fact graduating enough students in STEM every year but that they are being diverted to work in other fields. Meanwhile, American companies that report having trouble finding qualified workers among the existing work force are using the H-1B program to fill job openings.

Q.

Does the current United States immigration system, which leans heavily in favor of the employers rather than the H-1B workers, actually enable employers to exploit/arm-twist their employees? Would it help to just move to a more transparent points-based system like other developed countries? Why is this being delayed?

Highly Skilled, NY

A.

H-1B visas are temporary worker visas filed by employers, but they are also dual-intent meaning that with employer sponsorship, these visas can be converted into green cards for legal permanent residency. One significant concern of this structure is that workers on H-1B visas cannot leave their employer while waiting for green-card sponsorship, which can be over a decade for those coming from countries with significant backlogs, because of green-card quotas.

The point-based systems of other countries, including Canada, Australia and Britain, consider economic and business needs when admitting immigrants, and would represent a significant departure from the current United States emphasis on family reunification. Current gridlock in Congress makes the possibility of such systemic reform unlikely in the near future, but smaller reforms are gaining ground.

In an important step toward reducing the green-card backlog, the Fairness for High-Skilled Immigrants Act of 2011, which passed the House in November, is active again after Senator Charles E. Grassley, Republican of Iowa, lifted his hold on the legislation last week.

Q.

I'd like to see it really spelled out exactly how a company specifies that it needs H-1B visa holders to do a job. Because in the STEM fields older workers are finding it difficult to be rehired if laid off, and some of these oft-cited shortages are not real.

Banty, Upstate New York

A.

In order to apply for an H-1B visa, employers are required to attest that no American workers were displaced as a result. There is no actual labor market test required to prove this, and some argue that this process is a relatively weak screening mechanism. The current system relies on post-issuance enforcement through government visits to employers to verify identities, job descriptions, and salaries of H-1B workers.

In general, the existence of a labor shortage in STEM fields is not established, and there is research both in support of, and against, this possibility.

Q.

I understand the need to attract educated professionals to the United States to make up for a lack of home-grown ones. However, isn't this grossly unfair to the countries they come from, where taxpayers invested in educating talented individuals only to see them leave? I am not saying that it should be impossible for educated foreign professionals to work in the United States, just that it should be discouraged. Secondly, importing education reduces the urgency to fix education in the United States, which is the real problem in the end. It hollows out the United States economy and kills the American dream for anyone but educated immigrants. This is a Band-Aid that has hidden a rising problem for decades. Last I checked, Lady Liberty was inviting the poor, the homeless, the wretched refuse to a land where they could better themselves. She wasn't a headhunter.

endorendil, Belgium

A.

The brain-drain issue is a significant concern for many countries that want to retain their own educated professionals for their labor market needs. But many countries see the value of sending their citizens to get trained in American universities so that they return with higher skills.

For example, the Brazilian president set up a scholarship program to send Brazil's best undergraduate students for a year to study at American universities in science, technology, engineering and mathematics programs. Most nations understand that a skilled work force is essential to economic growth. A balance of international immigration policies, educational quality and migration trends plays a large part in determining where high-skilled workers get their education and use their skills.

To train the American work force for highly technical occupations, the fees charged to employers requesting H-1B visas are distributed by the Employment and Training Administration of the Department of Labor and the National Science Foundation to local areas. This provides an opportunity for the existing work force to upgrade their skills so that they can be hired for jobs that employers seek through the H-1B visa program. These H-1B visa fee programs are one method for providing short- and long-term training so that American employers do not have to rely on hiring high-skilled foreigners.