A review of H-1B reform finds a series of incomplete plans to repair the busted system.
The topic of illegal immigration often dominates the U.S. immigration debate, and with good reason. The fate of thousands of undocumented families hangs in the balance while laws remain in limbo. But an overlooked issue in the national discussion entails America’s legal immigration pipeline, which is badly in need of an upgrade itself.
To get a sense of just how complex the legal immigration and naturalization process is, take a look at this flowchart, compiled by the Reason Foundation and the National Foundation for American Policy. In the best-case scenario, a potential immigrant who has a permanent resident family member can take up to six or seven years to reach citizenship. Some successful scenarios can still involve nearly three decades of effort, and many attempts end in failure. Even for skilled immigrants, unless you’re an extremely wealthy investor or you’ve made extraordinary achievements in your field of work, there are a lot of barriers along the way.
The failures of this system are especially acute for skilled workers, who economists generally agree contribute significantly to the U.S. economy and create jobs for native-born Americans. “A strong case can be made that the economic well-being of natives would improve most if the country adopted an immigration policy that favored the entry of high-skill workers,” testified Harvard economist George Borjas, often cited as an opponent of immigration, in a 2006 Senate committee hearing. But in 2011, for instance, those who immigrated through their immediate family made up 65 percent of the lawful U.S. permanent immigrants, while just 13 percent were awarded a green card on the basis of their employment after years of waiting.
That outcome isn’t in America’s own best interests, and it’s not just economists who recognize it. There’s bipartisan political support in favor of making it easier for the U.S. to retain skilled labor. Even Donald Trump, generally no friend to new arrivals, is on board with this one (although his immigration plan and subsequent statements have been contradictory):
When foreigners attend our great colleges & want to stay in the U.S., they should not be thrown out of our country.— Donald J. Trump (@realDonaldTrump) August 18, 2015
I want talented people to come into this country—to work hard and to become citizens. Silicon Valley needs engineers, etc.— Donald J. Trump (@realDonaldTrump) August 18, 2015
The now-controversial H-1B program
One of the main pathways to U.S. citizenship for educated skilled immigrants is the H-1B visa program, which allows foreigners to temporarily stay and work in the country. But it’s not an easy, quick, or certain path by any measure (as the flow chart above shows)—it can take more than a decade, thousands of dollars in application and legal fees, and a whole lot of luck to get from a student visa to H-1B to green card status. The many obstacles force these prospective U.S. citizens to give up and leave the country, and work either in their home country or in places like Singapore or Dubai. Wall Street Journal’s Michael S. Malone calls this trend a “self-inflicted U.S. brain drain.”
But the H-1B program has come under fire in the last couple of years because the bulk of these limited visas have been going to temporary workers from India-based IT companies with operations in the U.S., instead of potentially retainable high-skilled immigrants. The fear that U.S.-based companies, like Disney, abuse the H-1B program to replace American workers with cheaper, foreign labor is also at a high. (A 2013 report published by the Brookings Institution found that H-1B visa holders tend to earn more than their U.S native-born counterparts, but Ron Hira at the pro-labor think tank Economic Policy Institute disagrees.)
This year, several pieces of legislation have addressed the H-1B worker program in small and big ways, hoping to strike a balance between the justifiable need to protect American workers with the desire to import skilled labor to the country where it’s needed.
The Omnibus spending bill
One provision addressing the H-1B program was tucked into the $1.8 trillion spending package that President Obama recently signed into law. It doubles the petitioning fees for the H-1B and the L-1 visa (which allows multinational companies to send foreign employees to their American offices) from companies who employ more than 50 percent of their employees on these visas.
So to petition for the H-1B on behalf of an employee, such employers would now have to pay $4,000 instead of the $2,000 instituted in 2010. And for each L-1 petitions, they’d be paying $4,500 instead of $2,250, as per the new spending budget. These new fees will go towards amping up the country’s biometric and border-exit technology. (In the same bill, the H-2B worker’s visa program for low-wage non-agricultural seasonal workers in jobs at hotels, theme parks, ski resorts, landscaping was greatly expanded.)
This rule mainly targets the Indian IT companies operating in the U.S. that have been accused of hijacking the H-1B program in recent years. It’s a move in the right direction, EPI’s Hira, who has long criticized the H-1B program, tells CityLab. At the same time, the new fees may dissuade U.S.-based large tech and business companies, such as IBM, Microsoft, Deloitte, from displacing American workers, but probably also from hiring specialized foreign workers with the skills they need.
Two December bills
Presidential hopeful Ted Cruz introduced the “American Jobs First” bill earlier this month. Among other things, the bill proposes the lowering of the total amount of H-1B visas given out from 85,000 to 70,000.
If applicants for these visa exceed the available spots, as they have in recent years, the recipients are chosen through randomized lottery—not on the basis of their academic institution, wages, or role in the U.S. labor force. The Cruz bill proposes that workers earning the highest wages should get these spot because that’s one of the indicators of their place in the U.S. economy. (In 2013, incidentally, Cruz introduced Senate amendments that encouraged skilled immigrants, including one that proposed increasing the H-1B cap to 325,000.)
“This legislation aligns the program with its original intent, does more to prevent employers from using the program to replace hard-working American men and women with cheaper foreign labor,” he said in a statement. Cruz’s new bill wants U.S. companies to establish a “layoff cool-off,” a two-year moratorium on hiring H-1B workers after layoffs or furloughs. It also seeks to end the Optional Protocol Training program, which allows foreign students in the U.S. to work there for up to two years after they complete their studies. The OPT program is currently a crucial stepping stone from a student visa to H-1B status for foreign students at American universities.
Another bill, introduced by Senator Bill Nelson, a Democrat from Florida, also introduced earlier this month is very similar to Cruz’s.
The November bipartisan bill
This bill, introduced by Senators Chuck Grassley (a Republican) and Dick Durbin (a Democrat), requires companies seeking to hire foreign workers to reinforce their good faith agreement to recruit American workers first. Notably, this bill straight-up forbids companies where more than 50 employees are on such visas from applying for more. Again, this one is meant to crack down on the big IT firms.
The “I-Squared” bill
“America deserves an immigration system that works for our economy, drives innovation, and creates good paying jobs for our people,” Rubio said in a statement at the time. “An immigration system for the 21st century will be judged by whether it provides the conditions for both security and economic growth.”
The bill proposes an extended but flexible cap on the H-1B visas, which would expand and contract depending on the U.S. economy and demand for foreign labor. Neil Ruiz, the executive director of the Center for Law, Economics, and Finance at George Washington University has praised the idea of a flexible H1-B cap, which was also a part of the 2013 Gang of Eight Immigration bill that Rubio later distanced himself from. (Gary Beach, the author of The U.S. Technology Skills Gap, has advocated doing away with the cap altogether for a year to gauge demand for labor, and adjusting it accordingly afterward.)
As per the “I-Squared Act of 2015,” between 115,000 and 195,000 H-1B visas would be given out. EPI’s Hira, however, doesn’t believe that raising the cap is a good idea, or that this bill contains enough protections for American workers overall—and he’s not the only one.
The problem with H-1Bs and the legal immigration system
These ad hoc legislative efforts tackle bits and pieces of the H-1B program. But none of them balance the need for legal high-skilled immigrants with rights of American workers. And part of the issue here is the limited scope of the H-1B visa itself. “One of the problems is the with the H-1B is that it’s become a catch-all visa for different types of workers,” Ruiz tells Citylab. Both prospective immigrants and temporary guest workers apply for it.
If legislators want to distill it down to a guest worker program, rather than a pipeline to citizenship, that’s fine. But if they are serious about wanting to retain foreign skills, then perhaps a separate, clearer path to immigration for highly skilled foreign workers in the U.S. needs to be created.
“The clean fix,” Ruiz suggests, would be to have eligible U.S.-educated foreign students be eligible for a green card so they can live and work in the parts of the country where they’re needed.
That, perhaps, is in the purview of comprehensive immigration reform that’s not going to be taken up until the next president takes office. In the meantime, Rubio is all for the idea of a piece-by-piece approach to immigration reform. Edward Alden at the Council on Foreign Relations, on the other hand, argues that each incomplete legislation chips away at a holistic solution to the broken immigration system. Here’s Alden, in a blog post:
The problem with piecemeal reform—apart from its susceptibility to the worst of pork barrel, interest group politicking—is that the challenges in the immigration system cannot be properly addressed one-by-one.
Whatever the approach turns out to be, it’s clear that America’s immigration system is ridden with problems that need urgent solutions. Currently it benefits neither native-born Americans nor prospective immigrants. But it could work for both—that is, if the anti-immigrant sentiment currently dominating the airwaves doesn’t reorient the positions of lawmakers on skilled immigration as well.