Some say they steal American jobs. Others say they spur the economy. But there is one thing immigration experts across the board agree on: the rules to bring and keep high-skilled immigrants to the US need to change.
The demand for high-skilled worker visas, called the H1-B, reached a record high last April in only five business days: while in 2015 there were 233,000 requests for H1-Bs, the number was 175,000 in 2014 and 124,000 two years ago.
But there is an annual cap on the H1-Bs, set at 85,000. When applications exceed it, a lottery is drawn, which means that two-thirds of the 2015 requests won’t be granted.
Source: US Citizenship and Immigration Service
This surge demand for H1-Bs is good news in the sense that it shows that the job marketing is warming up again, but it happens in a politically charged moment: right after the House stalled Obama’s comprehensive immigration bill and a little before the impending 2016 election, in which the subject should play an important role in the presidential candidates’ platforms.
Part of Obama’s plan was to raise the H1-Bs to up to 180,000 depending on the demand from companies, but the president wouldn’t push a law that wouldn’t address other immigration issues as well, according to Neil Ruiz, senior policy analyst in the Brookings Institute. “The high-skilled immigration was the chip holding everything together,” he says. When the Representatives couldn’t agree on the rest of the bill, the H1-B proposal went down with it.
Senator Orrin Hatch (R-Utah) is trying to salvage the H1-B part of the bill. He reintroduced his I-Squared Act in late January, which proposes more flexible rules and also raises the visa cap according to business demands and economic activity.
As it is right now, both advocates and opponents of raising the visa cap say the law as it is doesn’t help neither businesses nor American workers.
That’s the view of the Economic Policy Institute, a left-wing Washington think tank that works closely with unions. Vice-president Ross Eisenbrey says that the H1-Bs are often used to outsource American workers with cheaper and more docile labor.
Eisenbrey is against raising the visa cap, but the law needs changes nevertheless. “The program should not allow American employees to be replaced with H1-Bs, the H1-Bs should be allowed to move on to other companies and they should be hired at higher salaries than the Americans,” he said, in a phone interview from Washington.
Others say that raising the cap and giving more freedom to companies to hire whomever they want is only going to help the economy.
“People don’t shoot for the most mediocre person for the job, they look for the best person for the job,” says Neena Dutta, a corporation immigration attorney based in New York, who is strongly in favor of lifting the cap. “This regulations are getting in the way of U.S. companies’ growth.”
Source: US Citizenship and Immigration Service
Take the case of Andres Blank, a MIT MBA graduate in his second startup. He sponsored over 20 H1-Bs while he headed his first company Pixable, a social network aggregator from 2009 to 2012, which he later sold to Singtel. “Back then, you had a 100% chance of getting the visa,” he remembers. “Now, it’s only about 30%. It’s risky and time consuming.”
For his new company, Caliber, a business messaging app, he said he didn’t bother sponsoring, although he prefers to work with foreigners. He says they are just as skilled as Americans, but are more motivated and loyal.
He might have given up on sponsoring visas, but that didn’t mean he hired locally. Right now, Caliber consists of five people and himself. Four of them, his development team, work remotely from their native Argentina — jobs that didn’t go to American works as EPI hoped for.
The Partnership for a New American Economy, a lobby group of businessmen and politicians led by Michael Bloomberg and Rupert Murdoch to reform the H1-B visa regulations, argues that each H1-B awarded between 1995 to 2008 brought three more jobs for US-born workers at the same company during that period and 1.83 more jobs for Americans in the following seven years.
And many of the visa applicants are not outside looking in as one might expect.
Andrey Morozov came from Russia on a tennis undergraduate scholarship, and finished his Master’s degree in Marketing at Temple University in 2014. He was allowed to work one year after graduation on his student visa, and then he would have to try get a company to sponsor his H1-B. Insurance startup Goodscout offered him a job, but the weeks leading up to the lottery were unnerving.
In mid-April, the good news came: his application was picked in the lottery. “I probably got into the masters reserve,” he explained, mentioning the 20,000 visas reserved in the cap for applicants who hold a master’s degree from an American university.
For Ruiz from Brookings Institute, U.S.- educated workers and entrepreneurs starting companies in the U.S. are the ones being hurt by the current H1-B law. “We need a smarter visa system to retain those immigrants, and that can be adjusted to our economic needs.”
While that doesn’t happen, some states, like Massachusetts, are trying to work around the visa restriction by setting up programs that sponsor visas for US-educated foreign entrepreneurs that wish to set up companies in the country. There is a loophole in the law that allows universities, nonprofits and government agencies to sponsor H1-B visas without being subject to the cap.
“There are a lot of advantages to keeping someone here as part of the economic fabric,” says Dutta. “The person that comes rents a house, buys a car, milk, groceries. They also pay U.S taxes,” says Dutta.
The U.S government loses money in the process as well. The filing fees for each H1-B application run from $1,575 to $3,550, and they are returned in case the applications are not drawn in the lottery, which means that the United States Citizenship and Immigration Services will return $344 million to rejected applicants. That is a waste of money, according to Dutta. “That money could have paid for a few federal jobs.”