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

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.

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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, Outsourcing, India, IT Policies

Swati Prasad

About Swati Prasad

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. A self-proclaimed technophobic, Swati loves to report on anything that's remotely alien to her--be it cloud computing, telecom, BPOs, social media, e-government or software and hardware, and also how high-tech sectors impact the Indian economy.

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28 comments
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  • Immigration "reform"

    Immigration "reform" is about gaining more voters for the Democrat party, not actually reforming anything.

    Aside from providing citizenship to a huge Latino voting bloc, it throws a bone to the 18-29 age group, especially those struggling with crushing student loan debt, by limiting job competition from H-1B visa holders who have less expensive and often advanced degrees as compared to Americans.
    ancientprogrammer
    • Absolutely right

      The Dems could care less about anything except for the votes they receive. Amnest (opps I mean Immigration), gay marriage, Jihadists, spending money like water without a budget, it's all good.

      The transformation of America must move forward at all costs.....
      pizzaman7
    • Another reason...

      ...is that social security will be going into the negative in a few years. By pumping in more bodies into the labor force paying SS taxes, they will boost the program. Of course this is very short sighted as it pushed the dimise of the program out but makes the final cost far more expensive since most immigrants will be of lower income and drawing more SS, Medicare, welfare, food stamps, etc.

      But as been noted, liberals only care about votes, not actually about the state of the country.
      Rann Xeroxx
    • Re:Immigration "reform"

      So why do all those illegal immigrants come to the United States; pray-tell? You know the answer, but conveniently omitted this truth. To satisfy the insatiable demand by the "job creators" for easily exploitable, rock-bottom wage workers. And you will notice that these employers exploiting this labor are THE primary constituents of the Republican Party... As for the advanced degree argument; I'm sure you are aware that many foreign workers have these advanced degrees because they were largely subsidized by their country's governments while attending school. Something that a vast majority of governments do to benefit from this "brain trust"; except here in the United States. We pretty much make these kids pay the "full freight" for a top-drawer education. I believe this is one of the primary reasons why we "have" to import H1B s.. We as a country are "too cheap" to pay for and grow our own..
      jonesboro500@...
  • Purpose is just to lower salaries.

    The H -1b visa is just a way to lower salaries of technical workers by bringing in cheap foreign labor. The benefit is not to the country but to the !% wealthy and the corporations.
    gertruded
    • Pay

      If you believe the numbers in the article, our employers are paying the H-1B worker 3.5 - 6.6% more than the American worker. That alone should be reason enough to curtail the program.
      Bill4
      • But the numbers are wrong

        It is not true that a H1-b holder makes more money.
        I was an H1-B visa holder for almost 9 freaking long years, and I was during those years seeing how other coworkers with a lot less knowledge and experience were doing a lot more money than me.
        Don't lie, help the Americans and immigrants forcing the companies to pay more to those H1-B holders.
        Diego Pietruszka
      • I was an H-1B engeneer and my salary was...

        $28/hour with 20 years of experience when I started in 2000

        The things are much (approximately twice) better now, but I am not an H-1B for almost 10 years...

        I understand author's concern since Indian outsourcing companies will be hit badly as per the following article:
        http://www.zdnet.com/in/global-forces-changing-rules-of-indias-outsourcing-game-7000014415/

        But this is because they pay next to nothing to the majority of engineers they bring to US.

        About quality - I saw another article on this site where author said that out of 350,000 Indian engineersonly 5%(do not remember exact number) are qualified to work for companies like Microsoft/Facebook/Google

        To be honest I know about this quality firsthand - four on my team of eight are from India. Only one of them is good to be called software engineer. I convinced my boss to fire another two Indian engineers since after trying for months to teach them they progressed nowhere. :-(
        Solid Water
    • Agree about the numbers

      Let's look at the quote that is supposed to prove that H1B recipients are paid more: "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." In order for this to demonstrate what it claims, it would be necessary for all H1B workers to be either workers in electrical/electronics engineering or systems analysis/programming. If this is not the case, then the comparison is invalid since you'd be comparing different populations. And, of course, you'd have to take things like experience and qualifications into account. None of this is mentioned, which makes me suspect that this is a classic case of cherry-picking data.
      the_doge
    • just ask any high school student

      how many of his/her classmates are going to be engineers or God forbid scientists. at best the answer will be 1. the h1 visa is such a hot topic for tech companies is not because they see in their dreams how to screw Americans but because they can't find qualified people
      vpupkin
  • helpful advice

    and I just got a call from the National Burglar's Alliance, warning me of the dangers of locking my doors at night

    LOL
    tim8342
    • but seriously

      the h-1b visa issue has completely changed my view of society

      prior to 1998, I actually believed this country had something called 'journalism', and while skeptical of many of their lofty self-descriptions, I really thought therre was at least *something* to it.

      but no, there really isn't. ABC, CBS, NBC, AP, Fox, NPR etc, all speak from the marching orders of whoever has enough money. If Bill Gates says 'East, is West', then East is West, with a straight face and without a blink (there are a few exceptions, such as Pat at Computerworld - but they are the exception, not the rule)

      when I was a kid, people joked about the credibility of 'Pravda', but turns out the joke is on us
      tim8342
    • Superb!

      Here we have an indian "journalist" writing from New Delhi about what is good for the US. Thanks for the KoolAid but no thanks.

      That also goes for all the studies that show that gayness is totally normal throughout the species or that gay adoptive parents are as good or better that normal ones. That covering 40 million new people with health insurance will lower the costs of insurance for everyone. That giving citizenship to 14 (or 19 or 20 whatever the number is this week) million illegal immigrants will make them come "out of the shadows" and pay taxes (yeah right).
      When you have an Attorney General of Massachusetts Martha Coakley saying "it's not illegal to be illegal in Massachusetts" then ... anything goes.
      Ernesto Ledesma
      • Tea Party people

        They are like fleas. Always showing up and changing the subject to something they think is really, really important.

        If only they could learn to stay on topic.
        fldbryan@...
  • Thank you, Swati!

    "About Swati Prasad
    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"

    As an American, I feel truly blessed that there is a journalist in India, that is so concerned with the policy of the USA, and what is best for me as an American. Without her to clear up the myths that I have about what I experience, my wrong ideas could lead me astray in my communication with my representatives. Where would I be, without her selfless advice?

    I feel I've made a new friend
    tim8342
    • Now that is some good Sarcasm

      NT
      Burger Meister
    • The air is thick tonight

      You would be a welcome guest at any events I hold. I appreciate how refined your sarcasm has become.
      relawson@...
  • I have seen both sides of this...

    h1-b holders that didn't have a clue about what they should be doing but were protected by English as second language concept to justify their inability to perform as management would expect. Others that would excel anybody in the field, and would work longer hours as much as anybody in the shop.
    The same can be said about local workers. We'll always find people that get attracted in the field just because of the 'supposedly' high paying, or the existence of jobs in IT, but we all know that to operate in this field it is required training and skills, talent, etc... And, of course, I have seen locals so capable of what was to be done that it was a pleasure just see them operating.
    Ultimately, the economics would make that decision. If the law set limits and establish enforcement rules, those better prepared for the job, and willing to work for less will win the bid and get jobs. One thing the recession did on this market is to trim incompetency. I don't think any company will ever contract a bad worker just because it is cheap. At least where I work, they prefer having less but very efficient workers and pay salaries that would keep these people loyal...
    FuzzyIce
  • Voting Bloc

    Immigration reform is about ensuring the Democrats have enough voters for another generation. While the Democrats are doing well on the national level, Republicans have been winning state and local elections. Bringing in high-salary workers will lead to resentment on their part for paying for the American welfare state. Soon, these high-salary works may start voting Republican. And that isn’t going to be allowed to happen. The goal is to increase low salary workers in the theory those most invested in the welfare state will continue to vote for the democratic welfare party.
    mperkins@...
  • You will get a kick out this.

    Go to http://www.nfap.com/about/missionstatement/

    Notice the fine print at the bottom.

    National Foundation for American Policy
    2111 Wilson Blvd., Suite 700
    Arlington, VA 22201
    (703) 351-5042

    Website development and hosting provided by International Web Solutions.

    Humm, International Web Solutions, never heard of them, lets check it out.

    go to:
    http://www.intwebsol.com/company/

    Fine print at the bottom

    International Web Solutions, Inc 2006
    2111 Wilson Boulevard · Suite 700 · Arlington, Virginia 22201
    t: 703.822.4959
    f: 703.940.1060

    What The F... International Web Solutions and the National Foundation for American Policy have the exact same address? I wonder how many H1-B(s) are in use by International Web Solutions and I really wonder if the National Foundation for American Policy was created to make sure the pool never runs dry.

    What a coincidence!
    YaBaby