Changes to H-1B Program Won’t Solve the Problem

President Trump’s slogan “America First” is in line with the rationality behind the H-1B Visa changes that went into effect on Tuesday, April 18, 2017 with President Trump’s signing of the executive order “Buy American and Hire American.”

The H-1B Visa is used as a way for highly-skilled foreign workers to obtain employment within the US. Highly-skilled is defined by the United States Department of Labor as having at least a bachelor’s degree or its equivalent. Often these foreign workers find employment within the tech industry. 85,000 visas are available to foreign workers per year, to be determined by a lottery on who obtains the permit. 20,000 of these visas are available for those with at least a Master’s degree from an American University.

President Trump’s 24th executive order targets foreign workers who are applying for employment under the H-1B visa program and calls to reform the program to secure American jobs.

The order itself does not propose how to start such reform. Instead, it calls for various agencies to “suggest reforms to help ensure that the H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.” The ‘Hire American’ portion of this executive order is in direct response to the criticism that employers are abusing the program to exploit low wage workers rather than hiring more skilled American citizens.  

What is the real impact to US jobs, considering the program hires 65,000 workers per year, in an industry that hired 6.7 million workers in 2016?

According to the Bureau of Labor Statistics in December 2015, unemployment in IT is at 2.6%.  With an increased demand for higher skilled tech workers, 2017 doesn’t promise to increase unemployment. According to Comptia in the 2017 IT Industry Trends Analysis, the hiring landscape is going to be more difficult for tech industries in 2017. There are going to be problems with finding talented workers in emerging tech fields, in competing with other tech firms for that talent, and there may be insufficient pools of talent in the region in which the employer is located. The shortage in talented labor is what the H-1B visa is meant to fill.

Rosario Marin, Treasurer of the United States under President George W. Bush,  is quoted by CNN as saying, “Without them [H-1B Visa holders], companies struggle to locate the specific people with the specific computer and science skills they need to grow, translating into an inability to expand, to create jobs, to scale up. The United States must work to address our shortage of students graduating with advanced science, math and technology skills, but until it does, American companies need high-skilled international workers, not only to compete, but to survive.” In short, the US should address the lack of highly-skilled graduates and expand the H-1B program in order to supplement the talent pool in the meanwhile.

That doesn’t mean that the H-1B program is without its faults. A 2011 audit by the US Government Accountability Office states that the program’s oversight is “fragmented and restricted” and states that the Department of Homeland Security found 21% of the H-1B petitions involved fraud or technical violations. Additionally, the GAO found that there is a lack of legal provision for holding employers accountable to program requirements when employers obtain workers through a staffing company. Abuse by employers in the H-1B program does exist. The US Citizenship and Immigration Service encourages American workers and other visa holders who see abuse to reach out and report the violation to REPORTH1BABUSE@USCIS.DHS.GOV.

The H1-B program serves to provide highly-skilled workers in an industry that is experiencing a talent-gap. With only 65,000 visas available, and an unemployment rate in IT at 2.6%, it doesn’t seem likely that foreign-workers are stealing American jobs. Although reform may be necessary to prevent abuse of the H1-B program by employers, the fear of the lack of jobs for Americans because of the H1-B program seems unfounded.

President Trump’s executive action calls for reform without a plan of action. Unless the suggestions by various agencies deal with more oversight and regulations for staffing companies, it will do little to stop any abuse of the program.

The bottom line is that the American workforce is experiencing a talent gap and the jobs for which these foreign workers are being hired cannot be filled by domestic labor. If the US wants to rely less on foreign workers, the remedy is investment in STEM recruitment to fill the highly skilled jobs that are currently being filled through the H-1B visa program.

Image courtesy of user @wewon31 via Flickr under Creative Commons License.