Published May 18, 2012
Sen. John Cornyn (R-Texas) introduced a bill Tuesday that would allow more Ph.Ds, scientists, and other high-skilled workers trained at U.S. universities to remain in America. The bill (S. 3185) would increase the H-1B visa quota by 55,000, but for some, the proposal doesn’t go far enough.
Speaking at a California economic conference this month, former-President Bill Clinton proposed taking “the lid of the H-1B Visas”—to finally remove the decades-old quota system entirely. “It’s easier to start a business here,” he said. “And we’re still the center of [research and development] in the world.”
The former-president is right—to remain on top, America needs access to the skilled talent its businesses need. The current H-1B program is woefully inadequate to meet the highly skilled labor needs of a country that wants to compete internationally.
On April 2, the U.S. Citizenship and Immigration Service started receiving H-1B applications for next year, and they are already more than half gone.
Trends indicate that by June 25, the Master’s degree quota will be filled, and by July 12, the regular quota will be exhausted.
All this indicates that the economy is ready to grow, but quotas and restrictions hinder growth.
As Microsoft founder Bill Gates told Congress back in 2008, “The jobs are going to exist somewhere, and the jobs around them are going to be created wherever those uniquely talented people are, so even though it may not be realistic, I don’t think there should be any limit [on H-1Bs].”
Gates knows firsthand how immigration restrictions can send jobs elsewhere. Back in 2007, H-1B restrictions forced Microsoft to open a campus in Vancouver, British Columbia, calling it a “home to software developers from around the world.”
Microsoft employees aren’t the only highly skilled workers heading north. Canada has also claimed thousands of other skilled U.S. workers over the last decade.
From 1998 to 2008, Ottawa alone has seen the number of U.S. skilled workers double from 1,969 to 4,085. And in 2008, Alberta made H-1B visa holders automatically eligible for permanent residency. By contrast, America expels foreign skilled workers after just six years.
Simply put, America cannot cut itself from the international labor market and succeed.
In 2009, the Technology Policy Institute (TPI) found that restrictions forced 300,000 H-1B visa holders out of the country during 2004-2007, lowering GDP by $23 billion in 2008 and cutting tax revenues by about $5 billion. In addition, TPI found that 182,000 science, technology, engineering, and math students left due to restrictions, costing the economy an additional $13.6 billion in lost GDP and $3 billion in uncollected taxes.
These workers are not taking American jobs—they are helping companies expand and pull the economy out of a recession. A 2009 National Foundation for American Policy study found that, “each H-1B request in labor condition applications was associated with an increase of employment of 5 workers.”
And that’s just for large firms.
For small firms with less than 5,000 employees, NFAP found a 7.5 employee increase. In other words, companies don’t use H-1Bs to downsize and replace American workers—they use them to grow.
Burdensome regulations are making access to H-1B visas even more difficult. The Obama administration recently raised the H-1B fee from $325 to over $2,000 for large employers.
Employers usually need to hire a lawyer—typically for about $3,000 per applicant—to ensure that the application is submitted correctly, and then wait three to four months to hear if it’s been approved, which it often is not.
In other words, the government forces businesses to take risks with thousands of dollars just to get these workers to come to the United States. Then, if the worker is dismissed—even in cases of negligence—employers must pay for the worker’s return trip.
America’s job market has changed a lot in the four decades ago since the quota system was first created. Manufacturing employment has given way to software engineering, finance, education, and health care.
Today, America’s most important resources don’t come from the Earth, but from the human mind. The president who occupied the White House during the prosperous 1990s is right. To continue to prevent American employers from obtaining this human capital wouldn’t just be a policy mistake—it would be an economic disaster.
David Bier is a policy analyst at the Competitive Enterprise Institute.