Why H-1B Visa Workers Aren't Stealing U.S. Jobs
On April 3, 2017, U.S. Citizenship and Immigration Services (USCIS) started accepting H-1B petitions for Fiscal Year 2018. Each year, 85,000 highly coveted H-1B visas are processed (20,000 of which are reserved for master’s or doctoral degree holders). Last year, 236,000 foreign workers applied for the H-1B. It is likely that, just as it has in the past five consecutive years, USCIS will receive more than the 85,000 available H-1B visas in the first few days of April.
Historically, H-1B applicants could opt for “premium processing” of their visa, which allowed skilled workers to pay extra to expedite the visa approval process. On March 3, USCIS announced that it will remove this option on the same day it started accepting petitions.
In addition to the suspension of premium processing for H-1B visas, legislation has been introduced in the House of Representatives calling for a new $130,000 minimum salary for H-1B visa holders, a dramatic increase from the current $60,000 minimum salary. This new salary cap effectively doubles the cost of hiring foreign skilled workers.
These waves of changes are being introduced to a visa program that has not changed substantively since the early 2000s. The H-1B was created in 1990 under section 101(a)(15)(H) of the Immigration and Nationality Act. The non-immigrant visa allows U.S. employers to temporarily employ foreign workers in “specialty occupations,” which the regulation defines as requiring a “theoretical and practical application of a body of highly specialized knowledge” as well as attainment of a bachelor’s degree, or equivalent, in the specific specialty as a minimum. For all intents and purposes, the H-1B was (and is) partial to foreign workers in STEM fields (though there is a curious exception for fashion models “of distinguished merit and ability”). In fact, roughly 99% of all H-1B visa workers have at least a Bachelor’s degree, while over half have advanced degrees.
These changes to the H-1B visa come at a time when protectionist and anti-globalization rhetoric has a strong foothold in American politics. Perhaps the most common criticism of the H-1B is that it is robbing Americans of their jobs. Critics assert that foreign workers are paid less than American workers, making foreign workers more desirable to U.S. companies. However, this critique is a mischaracterization of the U.S. labor market.
H-1B workers are not occupying the positions many of its critics are concerned with. While outsourcing certainly affects U.S. jobs, the jobs “taken” by traditional outsourcing tend to require less specialization, often called “unskilled” labor. It may be valid to accuse globalization for the decline in U.S. manufacturing jobs (even though automation and artificial intelligence may be the real culprits), but H-1B workers are not filling these positions. H-1B visa holders typically end up at Silicon Valley tech firms or consulting firms, often filling computer programming and engineering positions.
Many H-1B critics also lament the job security of individuals at tech firms and consultancies. Some worry that these U.S. companies are taking advantage of the H-1B program, using it to hire cheap labor at the expense of equally qualified Americans. While this is a well-intentioned concern, it is misguided. The Bush administration introduced the H-1B in 1990 in an attempt to address the alarming STEM labor shortage. A 2015 study conducted by the Bureau of Labor Statistics reveals a significant heterogeneity in the STEM labor market: although the academic sector is generally oversupplied, the government sector and private industry have a shortage of qualified talent in key areas. The fields experiencing the most severe shortages are engineering fields, particularly nuclear, aeronautical, software, and electrical engineering. These specialized STEM fields are the very areas many H-1B workers are filling. For instance, on average, the U.S. labor market demands approximately 120,000 new computer engineers per year. U.S. universities only produce one-third of that number, while the remaining two-thirds is satisfied by H-1B workers. The H-1B visa program is not hurting the U.S. economy or stealing U.S. jobs; in fact, H-1B workers are remedying labor shortages in fields that are at the frontier of U.S. innovation, allowing U.S. businesses to maintain their position as some of the most significant players in the global economy.
H-1B visa holders pay the same taxes on income as U.S. workers as well as the same social security, unemployment, and state taxes. These workers neither harm nor exploit the U.S. economy. In reality, these individuals are contributing to the American economy while addressing the labor shortages in important and specialized U.S. industries.
More can be done to address some of the shortcomings of the U.S. labor market. Many groups have been neglected as the country shifts its priorities toward service industries and technology-enabled production processes. However, placing the blame for these frictions on the H-1B visa program is not only problematic, but also dangerous and irresponsible, which, in turn, willharm the U.S. and jeopardize the nation’s reputation for innovation.
- Patrick Lin