President Obama stuck his toe (his little toe, to be sure) into the turbulent waters of immigration policy in the State of the Union speech, arguing in favor of expanding the H-1B visa program. Without specifically citing the controversial visa issue, the president called for a halt to our absurd practice of educating our competitors in our colleges and universities, and then forcing them to go home. “It makes no sense,” said Mr. Obama, and he is completely correct. Unfortunately, his backers in organized labor do not agree.
H-1B visas are available to individuals coming to the U.S. to work in a “specialty” occupation – one that requires a bachelor’s or graduate degree – like engineering, accounting or scientific research. The rationale for expanding the number of H-1B workers starts with the tens of billions of dollars spent by our state and federal governments supporting our universities. Though most foreign students pay full tuition, they are nonetheless getting a bargain – a bargain subsidized by U.S. taxpayers. When we don’t allow them to stay in the U.S. and put their education to work, we are wasting our investment.
It’s a significant investment at that. In the last school year, the U.S. hosted nearly 700,000 foreign college and graduate students – more than any other country in the world. Foreigners make up about 15.5 percent of all graduate students in the U.S. and the number has been growing lately, after sustaining a dip during the recession. By far the greatest number of students – in graduate and undergraduate programs – comes from China, India and South Korea.
Over half of all foreign grad students were
studying engineering, math, computers
or science; only 15 percent of U.S. grad
students were enrolled in these disciplines.
Not only are we educating the best and the brightest of our toughest competitors, we are schooling them in the very disciplines crucial to success. According to a report by Nathan Bell at the Council of Graduate Schools, 55 percent of foreigners new to our graduate programs in 2009 were attending research universities classified as “very high research activity”. Moreover, “Temporary residents comprised the largest share of first-time graduate students in mathematics and computer sciences in fall 2009 (49.3 percent) followed by engineering (48.3 percent).” The report adds that over half of all foreign grad students were studying engineering, math, computers or science; only 15 percent of U.S. grad students were enrolled in these disciplines.
No wonder we’re losing our edge! A 2008 paper by Keith Maskus and Aaditya Mattoo argued that a 10 percent increase in the presence of foreign grad students would raise patent applications by nearly 5 percent; the report links increasing the number of visas available for such workers to U.S. innovation.
Why is there resistance to expanding the number of highly educated foreign workers?
Like all matters to do with immigration, the H-1B visa program is complicated. Even the Obama administration is conflicted about it. At a press briefing last August, reporters pressed Homeland Security chief Janet Napolitano to explain why the cost of stepped-up border security should be paid for by increased H-1B visa fees, or, as one reporter put it, “people doing business with India” instead of people in the country illegally. If they are serious about ramping up H-1B workers, why raise visa prices?
As usual, on one side of the argument stand employers eager to swell the number of candidates available for jobs; on the other we find some American workers, backed by unions, wanting to protect wages and employment. Opposition to the H-1B program has been heightened by the widespread use of the visas by Indian firms in association with outsourcing our tech work, which has been accused of undermining pay for U.S. tech workers. According to a report from the GAO, between 2000 and 2009 47 percent of these visas went to people from India.
If President Obama presses forward with his
effort to keep more foreign college
and graduate students in the U.S.,
he will face opposition from organized labor.
Also, changes in the numbers of visas have lagged demand, exacerbating ups and downs in the fortunes of tech workers. The number of allocated visas tripled during the dot-com boom, only to produce an excess of skilled employees as the industry retrenched. Since then, the number has been cut back, with the maximum number now capped at 65,000, with an added 20,000 available for those earning advanced degrees at U.S. schools. In FY2009, as in most years of the past decade, the visas were snapped up the very first day they were offered. In the most recent year, the recession dampened demand, so that visas ran out just this past month.
Typical of the view of organized labor, the AFL-CIO has been critical of H-1B hires. Its Department for Professional Employees published a report last year, called “Gaming the System,” that criticized the government for inadequately overseeing the program. It accuses employers of mistreating and underpaying H-1B workers, contravening the terms of the visas.
In response, the GAO put out a report this year proposing reforms in the program. It acknowledges that current laws provide minimal tracking of employees and provide little enforcement of the rules. Though the survey was meant to resolve uncertainty about how many visas should be issued (i.e., whether the cap is driving away needed workers) the GAO did not reach any conclusion, and basically tossed this particular hot potato back to Congress.
As the tech industry continues to recover, demand for workers, and for visas, will again become a hot topic, especially with the number of foreign students in the U.S. again on the rise. If President Obama presses forward with his effort to keep more foreign college and graduate students in the U.S., he will face opposition from organized labor. The list of Obama priorities obstructed by labor, which already includes education reform and bilateral trade agreements, continues to grow. The worrisome issue for American employers has to be, where will the Obama administration give ground?