Immigration Limits Set Before Tech Boom Don’t Work

Stuart Anderson Executive Director, National Foundation for American Policy
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Are Members of Congress psychic? While few elected officials ever utter the phrase “That’s beyond my area of expertise,” in my years in Washington I have never heard anyone claim an ability to predict the future. For that reason it’s not surprising that those who voted for the Immigration Act of 1990 never foresaw the enormous demand for high-skilled labor generated by the technological revolution of the past 25 years.

In 1990, back when Congress set the numerical levels for high-skilled immigration that have endured, with almost no change, for 25 years, people kept in touch with each other via letter, no one owned a smartphone and the World Wide Web did not exist for individuals across the globe. Reed Hastings had yet to create Netflix and Mark Zuckerberg was still in kindergarten. In short, the world of 1990 bears only a superficial resemblance to the world of 2015.

The Immigration Act of 1990 established a 140,000 annual limit on employment-based green cards for permanent residence, which included a “per country” limit. Green card backlogs developed relatively quickly after the 1990 Act was passed and today the typical wait is 6 to 10 years for skilled immigrants, with a theoretical wait time of seven decades for Indian immigrants in the third preference.

The 1990 Act also restricted the number of skilled foreign nationals on H-1B temporary visas to 65,000 a year. (An earlier House version would have limited the annual quota to only 25,000.) Contrary to popular belief, Congress did not “create the H-1B program” in 1990. For years, employers could use H-1 visas to petition for workers, particularly skilled professionals. But prior to the 1990 Act, there was no numerical limit on such workers. However, for the past 12 years, the 65,000 annual supply of H-1B visas, along with a 20,000 exemption for graduate students, has been reached before the end of every fiscal year, leading companies to hire more people outside of the country.

To provide some context, the reason H-1B visas are important is that they remain generally the only practical way to hire skilled foreign nationals, including international students, to work long-term in the United States.

While some have argued companies hire high-skilled foreign nationals because they work for less money, and while that is undoubtedly true in some cases, it is really advances in technology that have driven the desire and need to hire these workers. Between 1990 and 2013, the number of computer scientists and systems analysts in the U.S. labor force increased by 381 percent to over 2.3 million (and government data likely underestimates the increase).

Although high-skilled professionals are economically important, the annual flow of new H-1B visa holders comes to less than 0.08 percent of the U.S. labor force. Despite the relatively low quotas, high-skilled foreign nationals and immigrants have played an important role in developing innovations and filling the demand for skilled tech labor over the past two decades.

Perhaps the most surprising data I uncovered in a recent report our organization released is that the number of U.S. citizens who earned PhDs and master’s degrees in electrical engineering has actually declined over the past two decades. But importantly, at the same time, the number of international students between 1995 and 2013 who earned such degrees increased by over 100 percent.

Today, almost 80 percent of the full-time graduate students in electrical engineering in the U.S. are international students. In computer science, foreign nationals make up more than 70 percent of the full-time graduate students.

A January 2015 report from the Conference Board concluded there are more than five vacancies advertised online for every one unemployed person in a “computer and mathematical science” occupation, with a total of 599,800 such advertisements. Among individuals who received master’s degrees within the previous five years (as of 2010, the latest year available) in computer and mathematical sciences only 1.4 percent reported being involuntarily out of their field, according to the National Science Foundation.

Before the existence of the iPhone, the iPad, YouTube and Google is when Congress passed its last major piece of legislation on high-skill immigration. Keeping in place numerical limits established 25 years ago, before smartphones, mobile apps and the World Wide Web, compels highly skilled people to make their careers in other countries and encourages U.S. companies to expand overseas, rather than creating more jobs and innovations in the United States.

Stuart Anderson, former staff director of the Senate Immigration Subcommittee and counselor to the Commissioner of the Immigration and Naturalization Service, is Executive Director of the National Foundation for American Policy, an Arlington, Va.-based policy research organization.