Immigration Compass
Historically, skilled foreign workers, such as those admitted under the H-1B and L-1 programs, have supplemented the U.S. workforce and been beneficial to the U.S. economy. Recently, the dialogue surrounding these programs has become increasingly negative. Specifically, a series of New York Times articles and legislation proposed by Senators Durbin and Grassley have fostered feelings of skepticism and distrust of these programs, and to visa sponsorship as a whole. While the programs do have their shortcomings, the discussion of these visa programs must take into account the many benefits they generate in order to create positive reform.
The recently proposed H-1B and L-1 Visa Reform Act (Durbin-Grassley) is, in our view, a step in the negative direction. Proponents of Durbin-Grassley seek to combat abuse of these programs and ultimately prevent companies from outsourcing labor and depressing U.S. wages. To this end, Durbin-Grassley would keep the current 65,000 cap for H-1B visas, despite high demand from U.S. employers, and implement a preference system for visa allocation that almost exclusively favors positions with high remuneration and U.S. degree holders, potentially leaving out highly skilled workers from prestigious international institutions. Durbin-Grassley would also reduce the maximum H-1B period from six to three years and impose a slew of additional requirements on U.S. employers.
Although it is unlikely to become law, this restrictive approach would perpetuate the current H-1B usage patterns that have developed precisely because of the unavailability of visas. As it stands, H-1B employers who cannot find qualified workers in the U.S. workforce must project labor needs six months out and expend resources on foreign candidates who may not receive visas. Further restricting the availability of H-1B visas means that employers may be more likely to send positions overseas rather than expend resources on uncertain prospects.
Furthermore, Durbin-Grassley would give DHS and DOL the legal authority to audit U.S. employers without cause. DOL would also receive broad powers to subpoena employers, seek injunctions, and initiate labor condition application (LCA) investigations without notice and without being subject to judicial review, making it difficult to put a check on government intrusion. Turning to the L-1 program, Durbin-Grassley would prevent employers from placing L-1B workers at second-party work sites for more than a year and impose a restrictive definition of specialized knowledge, the main requirement for an L-1B application, effectively preventing many intracompany transfers. In sum, Durbin-Grassley would make it exceedingly difficult and costly for employers to fill labor shortages in the U.S.
Durbin-Grassley is especially troubling because it is a major departure from more balanced reform efforts. Specifically, the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, a bipartisan reform proposal that passed the Senate 68 to 32, including a yea vote from Senator Durbin. The act would have increased the H-1B quota to at least 115,000, along with an advanced degree exemption for 25,000 workers with STEM backgrounds. The act also incorporated aspects of Senator Grassley’s previous proposals by requiring H-1B employers to engage in good faith recruitment efforts, among other requirements. Furthermore, the act would have authorized DHS to conduct compliance audits. Unfortunately, the act stalled in the House and renewed efforts have not gained significant traction in the Senate.
A return to balanced reform is unlikely to happen unless discussion reflects the benefits of the visa programs, as well as the shortcomings. Durbin-Grassley proponents justify the restrictive legislation by stating that recent media reports are validating the notion that visa programs take jobs from U.S. workers and depress wages. However, setting aside the issue of whether a protectionist economic and jobs policy should be pursued through immigration reform, the rationale behind Durbin-Grassley is belied by the substantial evidence that the visa programs are increasing the wages of U.S. workers, creating jobs and driving innovation within the U.S.
More specifically, there is a general consensus among leading immigration experts and employers that U.S. economic growth is stunted when visas are unavailable to skilled foreign workers.1 Under the current program, the quota of available H-1Bs is miniscule compared with the 5.4 million job openings as of August 2015.2 Data shows, however, that increased H-1B admissions correlate with increased patenting in cities and firms dependent upon the program.3 In addition, foreign-born graduates of U.S. universities working in STEM fields create an average of 2.62 positions for U.S. workers, and science and engineering employment increases in cities that take advantage of the H-1B program.4 Not only do employment rates increase but H-1B driven increases in STEM workers correlate with significant increases in wages paid to both STEM and non-STEM educated U.S. workers,5 and H-1B workers, on average, earn more than their U.S. worker counterparts.6 It is clear, and experts agree, that as technologies and modern business practices change so should our sponsorship programs.7
As the debate surrounding the H-1B and L-1 programs continues, the substantial benefits that foreign skilled workers provide to the U.S. must be taken into account. Reform should address the shortcomings of the current visa programs while maximizing the benefit to U.S. workers and employers.
Michael D. Patrick, Partner at Fragomen, Del Rey, Bernsen & Loewy, LLP, resident in its New York office. [email protected]
[1] 1 Closing Economic Windows: How H-1B Visa Denials Cost U.S. –Born Tech Workers Jobs and Wages during the Great Recession, http://www.renewoureconomy.org/wp-content/uploads/2014/06/pnae_h1b.pdf
[1] 2 CFGI, Improvements needed for H1-B program, http://cfgi.org/NWSRM_Improvements_Needed_H1B_Program
[1] 3 Kerr, William R. and William F. Lincoln, The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention, http://www.nber.org/papers/w15768.pdf
[1] 4 Help Wanted: The Role of Foreign Workers in the Innovation Economy, http://www.renewoureconomy.org/sites/all/themes/pnae/stem-report.pdf
[1] 5 American Immigration Council, High-Skilled Workers and Twenty-First Century Innovation: The H-1B Program’s Impact on Wages, Jobs and the Economy, http://www.immigrationpolicy.org/sites/default/files/docs/factsheet_h1b_...
[1] 6 Rothwell, Jonathan and Neil G. Ruiz, H-1B Visas and the STEM Shortage, http://www.brookings.edu/research/papers/2013/05/10-h1b-visas-stem-rothw...
[1] 7 CFGI, A different side to the H-1B debate, http://cfgi.org/NWSRM_Different_Side_H1B
Published January 5, 2016.
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