Bill to tighten H-1B US work visas could backfire

Summary:Amid proposals to tighten requirements, the National Foundation for American Policy argues doing so could be a "serious mistake" since the H-1B temporary visas allow high-skilled foreign nationals to work in the U.S. and benefit the overall economy.

Even as the United States Senate's "Gang of 8" immigration bill seeks to dramatically tighten its employment-based immigration policy by discouraging and in some cases prohibiting the use of H-1B visas, there is a study that says this could be a serious mistake that would shift more work and resources outside the United States and harm the competitiveness of U.S.

WHAT ARE H-1B VISAS?

H-1B visas are temporary visas that allow foreign nationals to work in the United States on short-term projects, for longer-term work or as a prelude to a green card (permanent residence). H-1B status is generally good for up to 6 years (with a renewal after three years).

A reason H-1Bs visas are economically important is that without such visas skilled foreign nationals generally could not work or remain in the United States.

(source: NFAP)

While Indian IT firms operating in the U.S. have long maintained the H-1B visas do not lead to outsourcing of jobs or shrink the job market for Americans, few were willing to pay heed to their arguments. This new study by the National Foundation for America Policy (NFAP) argues H-1B visas are actually good for the U.S. economy.

The study by Stuart Anderson, executive director of the NFAP, was put up the NFAP Web site on May 1. Here are a few excerpts:

"… Rather than harming U.S. workers or the U.S. economy, H-1B visa holders contributed 'between 10 and 25 percent of the aggregate productivity growth… that took place in the United States from 1990 to 2010,' according to economists Giovanni Peri, Kevin Shih and Chad Sparber."

"[Then-research economist at the Federal Reserve Bank of Atlanta] Madeline Zavodny found each added 100 approved H-1B workers were associated with an additional 183 jobs among U.S. natives."

The study attacks the basic premise of the H-1B outsourcing argument that the foreign workers are cheaper. The bill would artificially inflate the minimum required wage paid to H-1B visa holders under the belief that H-1B professionals are generally paid below that of comparable U.S. workers.

The study said: "In fact, the law already requires employers to pay H-1B professionals at least as much as comparable U.S. workers. Moreover, the Government Accountability Office found the median salary for H-1B visa holders age 20-39 was US$80,000 compared to US$75,000 for U.S. workers in electrical/electronics engineering, and US$60,000 for H-1B professionals age 20-29 in systems analysis/programming vs. US$58,000 for U.S. workers."

Topics: IT Employment, India, IT Policies, Outsourcing

About

Swati Prasad is a New Delhi-based freelance journalist who spent much of the mid-1990s and 2000s covering brick-and-mortar industries for some of India's leading publications. Seven years back when she took to freelancing, India was at the peak of its "outsourcing hub" glory and the world of Indian IT, telecom and Internet fascinated her.... Full Bio

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