America Has a Foreign Worker Problem

Source: iStock

Source: iStock

Each year, the first week of April is a stressful one for thousands of would-be employees in America. Often, these workers have graduated from top-tier colleges and had the chops to get noticed by businesses all across the United States. They accepted job offers and made plans to start their lives contributing to their field, often in science, technology, engineering, or mathematics. While that sounds like the American Dream come true for most college graduates, it’s sometimes not enough for thousands of international students, who are often forced to rely on a lottery system to determine whether they’re allowed to keep that job, and continue living in the country at all.

Each year, April 1 marks the first day that employers around the country can submit applications to the U.S. Citizenship and Immigration Services in order to sponsor an employee for a temporary employment visa. These visas, called H-1Bs, allow foreign workers with specialized skills to continue living in the United States and to begin working for the company that has offered them a job.

There are numerous headaches involved with the process, including the fact that a person can’t begin working on that visa until the October following the application. Often, companies don’t have the luxury of waiting six months to fill a spot so they abstain from the process altogether. But the largest problem, many students and business leaders say, is that the cap of 85,000 visas per year isn’t nearly enough for the demand of jobs those workers fill. Of those visas, 65,000 are for any non-citizen with a bachelor’s degree or higher (not necessarily earned in the United States), and 20,000 are reserved for international students who earned their advanced degree at an American university.

Employers are expected to exhaust this quota within five days during the selection for fiscal year 2016, which prompts a lottery process to determine who starts their jobs and who packs their bags. The chart above shows the number of applications from fiscal year 2015. The lottery wasn’t used as much during the recession, but has since become almost a guarantee as businesses seek to hire employees they claim fill roles other American workers can’t. In past years, according to a Brookings Institute post, it has taken less than a week to reach the quota, with totals of 124,000 applications or more received. The Wall Street Journal reports that 172,500 applications were submitted in 2014.

“October 2014 was a month of haves and have-nots: those who won the lottery in April started work on the visa last month, and the equal number who did not have lost their footing. Everyone in the pool had accepted a skilled job in the U.S., yet half the applicants were dealt a blow to their careers and lives,” wrote Sofia Faruqi, a guest columnist for The Wall Street Journal. Faruqi was one of the lucky lottery winners in 2008, but knows plenty of other workers who were on the wrong side of the random drawing.

Advocates for increasing the number of visas allocated say that the demand for jobs in high-skill fields outweigh the number of American workers who are able to fill them. The Brookings Institute points toward a number of shortages in the Information Technology field, and the Partnership for a New American Economy released a report that shows the disparity between available jobs and qualified workers. According to the organization, denied visas in 2007 and 2008 alone slowed job creation in 200 metropolitan areas, which resulted in a loss of 231,224 technology jobs for American-born workers.

The crux of the argument is that foreign-born employees can fill the gaps of employment and spur innovation, leading to the creation of more jobs for American workers. The U.S. economy is expected to create 120,000 new jobs in computer science each year, by the time 2020 rolls around. Right now, colleges are only awarding diplomas to 51,000 such American-born graduates annually.

This isn’t just a cause being taken up by the workers and special interest groups. Instead, business leaders are often at the forefront of advocating for additional visas. Not surprisingly, business leaders in areas that benefit the most (such as California’s Silicon Valley) staunchly support the efforts. (The map above shows where non-native workers are based after receiving their visas). A website FWD.us, founded by 15 business leaders including Facebook’s Mark Zuckerberg and Microsoft’s Bill Gates, continues to push for additional work visas. Sending international students back home does more to harm American businesses than it helps, said Eric Schmidt, Google’s executive chairman. “We take very, very smart people, bring them into the country, give them a diploma and kick them out where they go on to create companies that compete with us,” Schmidt said, according to the Associated Press. “Brilliant strategy.”

Sen. Orrin Hatch (R-Utah) is sponsoring a bill that would expand the cap of visas to between 115,000 and 195,000, depending on market condition and demand. It’s not the first time such legislation has been proposed, and the Senate has on a few occasions passed bills that would raise the quota to more than 100,000.

But as with all immigration-related issues, there are plenty of people who aren’t sure that raising the cap is good for American workers. During a Senate Judiciary Committee hearing in March, several lawmakers expressed opposition to such measures. “Over the years the program has become a government-assisted way for employers to bring in cheaper foreign labor, and now it appears these foreign workers take over, rather than complement, the U.S. workforce,” said the committee’s chairman, Sen. Chuck Grassley (R-Iowa).

Politicians are not the only ones who aren’t buying the argument that foreign workers boost innovation. A working paper released in November 2014 by the National Bureau of Economic Research claims that firms who receive more foreign workers don’t significantly increase the number of patents produced — the NBER’s tested standard of innovation. Businesses who were permitted more international employees in 2006 and 2007 did show more profits, but the bureau states that could be because the companies also showed evidence of paying those employees less than their American counterparts.

Businesses have long contested this, saying they pay prevailing wage for all of their employees, regardless of visa status. Faruqi, for the Journal, writes that employers take on additional costs for international workers that can total more than $6,000 in legal fees. And according to wage data for some of the top tech companies, workers with H-1B visas consistently make more than $100,000 at companies such as Amazon, Apple, and Facebook.

America has long thrived on the notion of a free market and on competition. So even if international workers are encroaching on the job market (and most sources report they’re not) it should foster greater innovation in the long run anyway. But for now, many businesses point to an ill-prepared American workforce and a cadre of international workers to fill it. What’s the harm in those employees temporarily filling the void until American employees catch up? If nothing else, as the Brookings Institute suggests, the process could be updated so that workers are allocated visas by regions that benefit the most, instead of having it be a random assortment across the nation. Pretty much anything is better than the equivalent of picking names out of a hat.

Follow Nikelle on Twitter @Nikelle_CS

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