Raise the H-1B visa cap

Rupert Murdoch’s and Michael Bloomberg’s testimony Thursday on Capitol Hill about immigration reform missed one timely and important mention.  October 1st marks the beginning of the term for newly issued H-1B visas.  H-1Bs are employer-sponsored visas designed to allow highly skilled workers temporary entry into the United States.  It runs for three years and can be renewed for another three years.  The problems with the H-1B visa plague the rest of America’s immigration system.

U.S. Citizenship and Immigration Services began accepting applications on April 1 for the 85,000 available slots for highly skilled foreigners.  In most recent years, all 85,000 spots been filled in one day!

It took longer to reach the quota in 2009 because of the moribund economy.  The quota may not be filled in 2010 because new restrictions and regulations that clog the application process have further depressed demand.  As of mid-September, only 52,000 applications have been accepted.

But the current number of applications does not obviate the need for reform. Many skilled foreigners and talent-starved companies skipped the H-1B application altogether because of the bureaucratic hoops put in their way, including more than $5,000 in lawyer and regulatory fees per applicant.  These burdens should be lifted.

The most persistent argument against allowing more highly skilled foreign workers into the country is that they “take” American jobs.  That characterization is wrong.  There is no fixed number of jobs to be divided among Americans.

Foreign skilled workers don’t “take” American’s job; they complement them. Foreigners are not substitutes for U.S.-born workers even when they have similar skills and experience.  In many situations, H-1B workers push Americans into managerial or other higher positions.

The argument that H-1B workers decrease American wages is also wrong.  If cash-strapped businesses could drastically cut wages by hiring more H1-B workers instead of native-born workers, then applications for H-1B visas would increase during recessions as businesses cut costs.  The opposite is true.  H-1B applications fall dramatically during recessions.

Firms that employ H-1B visa workers do so when they are expanding production and have trouble meeting their labor requirements domestically.  Observing this effect, the National Foundation for American Policy reported in 2009 that for every H-1B position requested, U.S. technology firms increase their employment by five workers.

H-1B workers do not put a strain on the public finances.  They cannot receive federal welfare payments. H-1B workers are mostly male, young, and healthy.  The American welfare state assists mainly the elderly, women, and the sick. Relative to the population and to their own age and demographic group, immigrants and H-1B visa holders under-consume all government social services and pay far more in taxes.

However, H-1B visas are not a long-term solution.  There should be an unlimited number of green cards available for highly skilled or educated foreigners. Movement between firms should be free.  But in the short term, H-1Bs are a valuable way to augment the nation’s skilled workforce.

Murdoch and Bloomberg neglected mention of H-1Bs and other highly skilled foreigners, preferring to focus on the more politically sensitive issue of undocumented and, on average, lower skilled immigrants.  Advocates of immigration reform should not forget that law-abiding foreigners of all skills and education are harmed by our restrictive immigration laws.

Tens of thousands of intelligent, hard-working, and educated foreigners have been denied the opportunity to contribute to our economy due to our Byzantine immigration system.  All H-1B visa slots may not be filled this year, but a recovering economy is sure to render the 85,000 cap insufficient again.  The quota should be eliminated and the application process streamlined.  For firms trying to expand, October 1 should be just another day.

Alex Nowrasteh is a policy analyst at the Competitive Enterprise Institute.

  • burnstagger

    Looks NASSCOM is ramping up the PR again with some paid-for PR called news. It’s kind of obvious when a raft of the same stories with the same theme pops up all over the media at the same time. This was how we originally got conned in 1998 at the height of the U.S. boom – NASSCOM hired D.C. PR/lobby firm Hill & Knowlton to push “worker shortages” stories into U.S. media. The result was a crash in 2000 and a long slide into the present mess with 10 million workers from India flooding the U.S. Our economy has collapsed since these people have come here. Before they came here, the U.S. was experiencing its biggest boom in U.S. history. More guest workers? That’s suicide.

    And what have all those workers created for America? The biggest depression in 70 years.

    Stop the invasion now.

    Apple CLOSED their R&D in India in 2006 and Apple is about to become the largest company in the U.S. by market cap. And they hire mostly Americans. Apple only employs 1300 H-1Bs compared to Microsoft’s 35,000. Get the message?

    National Foundation for American Policy sounds like a typical Communist front think tank in America. Probably full of America-hating communists. Globalization is the new communism and they are pushing it.

    Companies ruined or almost ruined by India, Inc:

    AIG (signed outsourcing deal in 2007 in Europe with Accenture Indian frauds, collapsed in 2009)
    AirBus (Qantas plane plunged 650 feet injuring passengers when its computer system written by India disengaged the auto-pilot).
    Apple R&D CLOSED in India in 2006
    Bell Labs (Arun Netravalli took over, closed, turned into a shopping mall)
    Boeing Dreamliner ES software (written by HCL, banned by FAA)
    Caymas – Startup run by Indian CEO, French director of dev, Chinese tech lead. Closed after 5 years of sucking VC out of America.
    ComAir crew system run by 100% Indian IT workers caused the 12/25/05 U.S. airport shutdown when they used a short int instead of a long int
    Dell – call center (closed in India because Premji’s conmen don’t even know how to use telephones, let alone computers)
    Delta call centers (closed in India because Premji’s conmen don’t even know how to use telephones, let alone computers)
    HSBC ATMs (software taken over by Indians, failed in 2006)
    Intel Whitefield processor project (cancelled, Indian staff canned)
    MIT Media Lab Asia (canceled)
    Lehman (Spectramind software bought by Wipro, ruined, trashed by Indian programmers)
    PeopleSoft (Taken over by Indians in 2000, collapsed).
    Qantas – See AirBus above
    Quark (Alukah Kamar CEO, fired)
    Skype (Madhu Yarlagadda fired)
    State of Indiana $867 billion FAILED IBM project, IBM being sued
    State of Texas failed IBM project.
    Sun Micro (Taken over by Indian and Chinese workers in 2001, collapsed, has to be sold off to Oracle).
    United – call center (closed in India because Premji’s conmen don’t even know how to use telephones, let alone computers)
    Virgin Atlantic (software written in India caused cloud IT failure)
    World Bank (Indian fraudsters BANNED for 3 years because they stole data)

    I could post the whole list here but I don’t want to crash any servers.

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