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Greg Siskind on Immigration Law and Policy

WHY WE NEED THE H-1B PROGRAM NOW MORE THAN EVER

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During the Great Depression, Congress and President Hoover responded to strong public pressure and did the one thing the wisest economists warned against - they enacted massive new trade barriers to protect US companies from competition. Countries around the world did the same and the result was a decline in world trade that many believe made the Depression much worse. Today there are more global trade agreements in place that make this less likely, but we're hearing that many of the antis out there are smelling an opportunity to try and kill the valuable H-1B program (though that would be very hard given our treaty obligations).

The American Immigration Lawyers Association has just released a helpful essay explaining the importance of the program that is worth republishing in whole:

Maintaining America's Global Competitiveness in a Time of World Economic Crisis

WASHINGTON, DC -- America's economy is in a tailspin. As our nation struggles to reverse the downward spiral and get back on course, America's H-1B program has come under fire. And when H-1B's are discussed, emotions run high. Recent articles have targeted the program as 'anti-American" and "unpatriotic," but what exactly is America's H-1B program designed to do? Let's set the record straight!

The H-1B program is a long-standing part of our nation's business immigration system. It was developed to give U.S. employers access to highly skilled, professional foreign talent (often students who have been educated here in U.S. universities) for up to six years and as a means for U.S. companies to stay ahead in their respective global markets. Data proves that H-1B petitions track the economy. When hiring is down, the number of H-1B petitions goes down. The program is self-adjusting. However, when the economy improves, there is no corresponding escalator. Thus, during the boom years, businesses were hamstrung by a quota that did not take into account the needs of the international marketplace. The program remained capped at 65,000 visas per year for bachelor's degree positions, with another 20,000 for advanced degree holders who graduated from U.S. universities.

Now that the economy is not booming, judicious admission of international professionals is more important than ever. Where the program was used to fill in labor shortages that no longer exist, companies have stopped using H-1B workers in those occupations. But even companies that have been laying off workers need isolated, specific skills to better compete in the international marketplace and effect their own recovery. U.S. businesses MUST have access to specialty skills without having to locate operations outside the U.S. to obtain them. Otherwise, the entire nation's economic recovery will be severely hobbled.

There remain vital areas that require that our system make adequate provision for future needs. Studies have shown that over the next ten years, the U.S. may need two million more K-12 teachers in this country. We will also need 250,000 new math and science teachers by the end of 2010. Further, nearly 80 million baby boomers are expected to leave the workforce sometime soon.  In 2004, the U.S. produced 137,000 new engineers, compared to China's 352,000. It is well-documented that America is well behind the curve in producing sufficient skilled professionals to make our country "tomorrow's center" for innovation. Recent economic events have not changed these facts; they have made it all the more important that we deal with them.

The H-1B visa category is used by universities, school districts, hospitals, research organizations, and businesses competing in our global marketplace to fill needed specialty occupations. "Let's say a school district in rural Iowa or in poor urban area of Chicago needs a math or science teacher to help students be prepared to compete and innovate in our global economy," said Charles H. Kuck, President of the American Immigration Lawyers Association (AILA). "Does it really make sense for our children to go without, or should we encourage the entry of qualified educators from abroad? What about our research institutions developing new medical cures or our hospitals trying to care for an increasingly large aging population? We have to recognize that while not a panacea, the H-1B visas program, when used according to law, provides a critical resource to help drive our future economic success."

Hiring the H-1B professional seems like a good solution so long as the reason for lack of interest by U.S. workers is not low pay and as long as protections are in place to ensure that qualified U.S. workers are not replaced by foreign labor. In fact, H-1B regulations require that workers on these visas are paid the HIGHER of the prevailing wage or the actual wages of comparable U.S. workers within the company. This wage protection insures that H-1B professionals are not used as "cheap labor. In addition, H-1B regulations do not allow a company to use the H-1B category to break a strike or lockout - or to replace U.S. workers laid off the same job," Kuck stated. "In other words," Kuck noted, "protections against those abuses already are in the law."

In addition to the wage protections in the law, the fact is that H-1Bs cannot be "cheap labor." H-1Bs are hired at a high transaction cost. The government charges most employers $2,320 per application, on top of the additional legal and human resource expenses that come with an H-1B hire. Also, if the H-1B worker is fired, the employer must buy his plane ticket home--an often expensive proposition.

To put the impact of H-1B professionals in perspective, with a U.S. workforce of about 145 million, H-1B employees account for less than one-tenth of one percent of the U.S. workforce.

Enforcement of the H-1B protections and requirements is critical to create a level playing field for employers and employees alike, which is why part of the fees paid by H-1B sponsoring employers are used to fund the enforcement of the H-1B regulations, as well as training programs for U.S. workers. Penalties for failing to comply with the labor protections of the H-1B category as to wages, posting requirements, etc. include a provision that a company may be barred from serving as an H-1B petitioner in the future. The typical legally compliant company uses the H-1B category because it needs skilled professionals to enhance competitiveness. This need continues in specific specialty niches in our economy, even when economic times are tough. 
   
What is the predictable result of a reduction or loss of the H-1B category? Companies will be forced to locate overseas, where a high skilled worker pool is available, or outsource needed labor. "We need an H-1B reality check," said Kuck.  "The simple solution is not cutting off an aid to our economic independence, but instead continuing to use legal immigration tools that help us improve our children's and our country's future."

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  1. George Chell's Avatar
    Why do we need a H1-B program more than ever? Because of this:

    "Studies suggest that the United States could fall 16 million degree-holders short of its workforce needs by 2025."

    http://www.washingtonpost.com/wp-dyn/content/article/2009/02/02/AR2009020202820.html

    It is a tragedy that the antis, AP, Grassley and Durbin instead of addressing the education budget cuts are more interested in going after foreigners working in the US. Such an attitude will only lead to more jobs moving abroad in search of skills.
  2. Legal and no longer waiting's Avatar
    The best thing they can do to take incentives out of abusing H1s is to make it easily portable, like EAD, and extendable by the holder. Would also help if one could file an EB visa based on employment history and not on future job. Just like it's done in countries with contemporary immigration systems.
  3. JoeF's Avatar
    Seems the anti-immigrants are getting a bit upset over the choice of Judd Gregg as Commerce Secretary, since he apparently is a supporter of the H1.
  4. Jack's Avatar
    Are you implying that we can't reap the benefits of free trade except with imported labor via, e.g., H1? You can trade like crazy and simultaneously have restrictive immigration and non-immigrant work visas. It's the 'buy [i.e., goods, commodities, etc.] American' refrain which the economists are warning against when the Great Depression is brought up.

    Essays about skilled labor 'shortages' are unconvincing because it's not like America is lacking the knowledge and technology to educate/train any type of worker there is. It's a very flexible, adaptive labor market (with or without H1). In other words, if a shortage were to arise, there's no impediment which would cause it to become permanent. As if it's somehow impossible for America to train, e.g., nurses. Absurd. How much the presence of H1 type visas distorts the incentives of the domestic labor market is an interesting question but hard to measure. Importing foreign labor into a field precludes the domestic labor market from adapting as it otherwise would--it's no longer the same labor supply. A shortage is claimed but is the imported labor ameliorating shortage or just creating the appearance of one--a pseudo-shortage? How can you know when the imported labor is always present? If U.S. workers in a field think there will always be new non-immigrant labor presence in that field and thus go into that field in fewer numbers, is that really a shortage? Similarly, if a market wage is to be paid but the market is already distorted, as time goes on we can't know what the market wage (minus imported labor) would be. Thus, is it fair and honest to claim that the 'market' wage is being paid if the new wage is really lower than what it would have been?

    Maybe H1 isn't as devastating to American workers as some claim, but maybe if there were no H1 (and immigrant labor in general), the domestic labor market, without imported labor, would fill the need much better than H1 proponents (those who get beyond 'end of the world' scare talk) claim. Maybe proponents don't want America to ever find out in case they find things satisfactory without it. They are told that importing labor is an economic necessity. What if it proved not to be?

    'Further, nearly 80 million baby boomers are expected to leave the workforce sometime soon.'

    They aren't just expected to--they will, because even though they want to work longer than traditional retirement age (something these type of articles don't like to mention), nobody lives forever. But it's not like they are leaving all at once. If you're really that concerned about this, guess what? America's population would keep growing right through this period even if there were zero net immigration. The Gen Y baby boomlet will continue to enter the workforce for years. It won't be the end of the world if (gasp) America doesn't have as many engineers (or anything) as China or India. They're a lot more populous, after all, and it's more about quality than quantity. Since when do you have to be huge to have an advanced economy? There's an implication that capitalism only works with an increasing labor supply/can't work with a flat or shrinking labor supply. Based on what economic theory?

    Being a special interest, the AILA has a pecuniary interest in more immigration and non-immigrant visas so it's no surprise they peddle the same old cult of growth mantra--'more is better', 'bigger is better' with zero consideration of the negative aspects of growth or an acknowledgement that there are limits to growth. More is just more and 'sustainable growth' is an oxymoron. An example: California is facing a prolonged water crisis. Agriculture uses a ton of water. Non-agricultural business needs a ton of water. The population consumes a ton of water. None, let alone all three, can grow forever due to the limiting factor of water supply. If the population keeps growing and consuming a greater share of the water, that puts a squeeze on economic activity which also needs water. Prime farmland continues to be paved over to make room for more housing. The land owners get rich in the short term but how can this practice be good for the agriculture industry in the long term?

    Greg, you have expressed concern over imported food. Can you see that population growth (which is primarily due to immigration) will lead to more food importation because the bigger California gets, the more mouths there will be to feed and the less farmland to grow the food and the less share of water to water the crops? Your side likes to talk about a portion of the fruit dying on the vine from lack of pickers. What about fruit dying on the vine due to the *entire* crop being abandoned from not enough water to go around?

    Greg, you seem to like economic and free market arguments so I'll skip the ecological appeals such as 'How can you justify adding population to this country when its ecological footprint is already in overshoot?' Here's a case for a more stable population in order to preserve a free market: the scarcer a resource becomes due to demand caused by increased population, the more various industries will have to fight against each other and with residential users. The government will become ever more intrusive and involved in allocating the resource rather than the more efficient market. The resource will not be put to the best economic use but rather to whoever has the most influential lobbyists, makes the highest campaign donations, etc. There is greater wiggle room for free economic activity the less we get to this point. If the situation becomes dire enough, resource rationing will result in constrained economic activity. Like a hidden tax, the price of the necessary resource might not be cost effective for a business to start or continue operation (if their industry is allowed enough of the resource at all by the government). Just the uncertainty of such a situation will deter investment and economic activity. In this way, overpopulation can 'crowd out' the economy. This is what California faces--today. Growers are getting cut off and California heading fast to 50 million exacerbates such problems. Maybe you don't experience this as much in Memphis, but your home state of Florida faces similar land and resource issues caused by high population growth.
  5. Marvin's Avatar
    As someone who trained my H1-B replacements on two jobs before being let go, I find the claims in this article laughable.
  6. George Chell's Avatar
    "Are you implying that we can't reap the benefits of free trade except with imported labor via, e.g., H1? You can trade like crazy and simultaneously have restrictive immigration and non-immigrant work visas. It's the 'buy [i.e., goods, commodities, etc.] American' refrain which the economists are warning against when the Great Depression is brought up."

    Incorrect argument in the global economy, where jobs move abroad faster than you can say outsourcing. And good luck trying to sell the surplus homes to Americans who cannot afford to buy them!

    "Similarly, if a market wage is to be paid but the market is already distorted, as time goes on we can't know what the market wage (minus imported labor) would be."

    Market wage today is the global market wage. Try paying the American market wage and raising the prices. See who buys our products in other countries. So this argument is even more laughable.

    "Maybe H1 isn't as devastating to American workers as some claim, but maybe if there were no H1 (and immigrant labor in general), the domestic labor market, without imported labor, would fill the need much better than H1 proponents (those who get beyond 'end of the world' scare talk) claim. Maybe proponents don't want America to ever find out in case they find things satisfactory without it. They are told that importing labor is an economic necessity. What if it proved not to be?"

    May be try to spell quality of the workforce and ask yourselves the New Orleans levees and the Minneapolis Bridge..all built by Americans. May be we may not be able to export our products to other countries because it is no longer cheap due to higher wages.

    "They're a lot more populous, after all, and it's more about quality than quantity."

    Indded! That is why foreign students outperform American students in Engineering and there are plenty of Americans who cannot count 2+2 = 4 without a calculator!

    "More is just more and 'sustainable growth' is an oxymoron. An example: California is facing a prolonged water crisis. Agriculture uses a ton of water. Non-agricultural business needs a ton of water. The population consumes a ton of water."

    All because of ag subsidies to good old boys.

    "The population consumes a ton of water. None, let alone all three, can grow forever due to the limiting factor of water supply. If the population keeps growing and consuming a greater share of the water, that puts a squeeze on economic activity which also needs water."

    Foolish argument. Has not happened in densely populated Asia where the economy and population are growing faster than in the US.

    "Prime farmland continues to be paved over to make room for more housing. The land owners get rich in the short term but how can this practice be good for the agriculture industry in the long term?"

    These farms exist mostly due to Ag subsidies, not due to the efficiency of the farmers or the prime farmland.

    "Greg, you have expressed concern over imported food. Can you see that population growth (which is primarily due to immigration) will lead to more food importation because the bigger California gets, the more mouths there will be to feed and the less farmland to grow the food and the less share of water to water the crops? Your side likes to talk about a portion of the fruit dying on the vine from lack of pickers. What about fruit dying on the vine due to the *entire* crop being abandoned from not enough water to go around?"

    Perhaps we need to remove ag subsidies, put our inefficient farms out of business and import more food and need to hire more food inspectors at USDA.

    "Greg, you seem to like economic and free market arguments so I'll skip the ecological appeals such as 'How can you justify adding population to this country when its ecological footprint is already in overshoot?' Here's a case for a more stable population in order to preserve a free market: the scarcer a resource becomes due to demand caused by increased population, the more various industries will have to fight against each other and with residential users. The government will become ever more intrusive and involved in allocating the resource rather than the more efficient market. The resource will not be put to the best economic use but rather to whoever has the most influential lobbyists, makes the highest campaign donations, etc. There is greater wiggle room for free economic activity the less we get to this point. If the situation becomes dire enough, resource rationing will result in constrained economic activity. Like a hidden tax, the price of the necessary resource might not be cost effective for a business to start or continue operation (if their industry is allowed enough of the resource at all by the government). Just the uncertainty of such a situation will deter investment and economic activity. In this way, overpopulation can 'crowd out' the economy. This is what California faces--today. Growers are getting cut off and California heading fast to 50 million exacerbates such problems. Maybe you don't experience this as much in Memphis, but your home state of Florida faces similar land and resource issues caused by high population growth."

    NONSENSE!! By your argument Singapore, Hong Kong and Taiwan will be the poorest in the world facing ecological disasters and Russia, Belarus and Ukraine would be the richest in the world with great environment and plenty of food production. In reality it is the other way around regarding economic growth. Singapore and others have been importing food for a long time and they are not economic disasters.

    Your argument is no different from those who support Affirmative Action. The only difference is those folks ask to be given privilege for past discrimination, while you want privilege to protect yourselves against competition and better competition. Your economics is full of nonsense and should not fool anyone with a degree in economics. As far as nurses I have a solution. Double the wages of nurses, let the health care cost increase, let the insurance refuse to pay and put our seniors on the street or force them to go to Thailand for medical care and presto to modify a Keynesian addage, in the short run we all will be dead!







  7. George Chell's Avatar
    "As someone who trained my H1-B replacements on two jobs before being let go, I find the claims in this article laughable."

    As someone who has seen loads of tax revenues being lost to other countries as a result of restrictions on skilled migration (jobs being transferred as well as Americans being transferred), I find your statement even more hilarious!
  8. sw enginneer's Avatar
    make perfect sense to me since all the smart Americans smart enough not to choose engineering.
  9. George Chell's Avatar
    "As far as nurses I have a solution. Double the wages of nurses, let the health care cost increase, let the insurance refuse to pay and put our seniors on the street or force them to go to Thailand for medical care and presto to modify a Keynesian addage, in the short run we all will be dead!"

    This was meant to be sarcasm. Perhaps twenty years ago, that is what Richard Lamm meant that all seniors should roll over and die. Putting his immigration views together with his views on seniors it does add up!

    The only way for Americans to compete in the global economy other than skilled immigration is to train American workers. And when I look at the education budget cuts, I dont see that happening. Four years from now we will be facing even more severe shortage during the next potential economic boom and you will here all the antis shouting that we need to train more American workers..strange I dont see them demonstrating in front of the California State Capitol in Sacramento protesting education budget cuts. Dont see position papers from CIS or FAIR saying that budget cuts will lead to even more dependence on foreign workers or jobs moving abroad and I dont see people like Jack raising a hue and cry against it either. The folks who argue against foreign competition dont want any competition either from other Americans or from foreigners...and this includes FAIR and CIS.
  10. JoeF's Avatar
    "Essays about skilled labor 'shortages' are unconvincing because it's not like America is lacking the knowledge and technology to educate/train any type of worker there is."

    The issue is that you can't train people who don't want to be trained.
    We don't have enough engineers, and Americans don't want to do the hard stuff and actually learn about engineering. Tell the kids that they need to do hard work to learn this, and they laugh at you.
    And yes, I know this first-hand. I have worked as a TA in a good computer science curriculum at a good university.
  11. George Chell's Avatar
    "And yes, I know this first-hand. I have worked as a TA in a good computer science curriculum at a good university."

    Of the ten or so universities I have been associate with, only here at the University of Hawaii have I seen not use calcualtors for simple arithmetic..May be because they happen to be either immigrants or first generation?

  12. Legal and no longer waiting's Avatar
    Well, obviously, most Americans would rather choose to pursue an MBA and a career with little hard science and much art (sales, marketing, accounting, finance, HR etc.), that pays well and often list "social/golf skills" as a preference. But the truth is that you can't build a contemporary economy on "soft skills", because it would implode just like the overblown financial and auto industries have done recently. Immigrants offer complimentary set of skills to the bell curve of American skill-set, on both low-skill blue collar end, and high skill hard science end. However, there will be some Americans from the middle of the bell curve who honestly believe that it is possible for the whole country to work in finance/marketing/HR.
  13. Legal and no longer waiting's Avatar
    "As someone who trained my H1-B replacements on two jobs before being let go,"

    Maybe you are better at training than doing the job.
  14. George Chell's Avatar
    Problem is not Americans wanting to go to MBA or Sciences or even landscaping. My concern is that the Americans who complain about Affirmative Action asking the minoriites to compete are more likely the same Americans who are whining about better qualified and better quality foreigners! In other words, it is all about maintaining the privilege, be it Looser Dobbs or the Looser Guild!
  15. StudyShmudy's Avatar
    Anybody can do a "study".

    Right now we are graduating more people in every decipline than the workforce can absorb. There is no need for the H-1B program. It should be scrapped.
  16. c_Nova's Avatar
    Can someone explain, please , why are people arguing over H1 visas , and not for the green card lottery?
    Why is it OK to give the privilege of permanent residency to people who didn't do anything for it? Was it ever considered to scrap the green card lottery and give those numbers of visas to specialists?
  17. Legal and no longer waiting's Avatar
    "Right now we are graduating more people in every decipline than the workforce can absorb. "

    And anybody can have an "opinion", even if they pull it out of their behind with no referece to reality.
  18. TunnelRat's Avatar
    Here's they type of conditions Mr. Suskind perpetuates:

    "In Bloomington at an apartment I was renting was a group of Indians living next door. I spoke with one of the occupants seen on occasion at State Farm, an IT Analyst. As he spoke in broken English he explained there are four of them living in a one bedroom apartment all working for the same Indian outsourcing firm Satyam. It was out of necessity for them to pool their money in order to afford housing. The prevailing wages for a typical IT Analyst in Bloomington, Illinois (2002-2004) averaged in the $40-50 per hour range and he stated he was making $18 per hour less than half of what the going rate was for an American worker (4). Digging deeper I discovered an ugliness where multiple Indian people were living in squalor, in cramped small apartments unable to afford decent affordable housing. It was kept quiet among the H-1Bs one saying the living conditions were far better with four living in a small apartment than they were back home in India."

    Mr. Suskind and the whole H-1B industry are modern day slave merchants, using political bribes and loopholes in our system to make tons of money off of the backs of exploited foreign programmers and displaced American developers.
  19. Greg Siskind's Avatar
    TunnelRat - I actually am a little more sympathetic with your example than you might think. My basic belief is that there should not be an H-1B cap at all and that the market should determine the number. I've never been thrilled with how some of the large overseas-based IT contractors operate, though I think that the portability option for H-1B workers takes some of the power to exploit away. But I also think that if we're stuck with a cap, we ought to have a more fair way to distribute. A huge percentage of the H-1Bs go to a handful of these contractor firms. Perhaps we should either set limits on the number that any company can use or impose higher fees as companies go over a certain threshold number of H-1B workers. A whole lot of employers just need a key person or two and are shut out of the H-1B process because all the numbers get used up so quickly. Maybe we could also look at removing the caps all together for the companies that only hire 1 to 3 H-1Bs over the course of a year.
  20. Legal and no longer waiting's Avatar
    Oh, another one of those fake H1 stories. The problem with your story is that even it were true, it just does not check out withing itself. Bloomington, Illinois has a average per capita income of $24,751 (http://en.wikipedia.org/wiki/Bloomington,_Illinois), and your fake poor people who were "cramped small apartments unable to afford decent affordable housing" were actually making $36,000 a year, or almost 50% more than per capita income. So, please, next time do not underestimate the intelligence of the people around you - at least come up with a plausible lie.
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