President Obama, Tech Industry Continue Press for Visa Reform

Earlier this summer, President Obama announced that his administration would be taking executive action to reform immigration policy, working to improve the entirety of the immigration system by tweaking individual components. This week, at a startup incubator in Los Angeles, the President revealed at least one of those components: the H1B system. As part of his remarks at a town hall meeting on innovation, the president declared his intentions to make the H1B system more efficient so that it encourages more people to stay in the United States. Capped at 65,000 visas for private-sector workers each year, the H1B (H-1B) visa program is the main visa used to bring high-skilled, foreign-born, talent into the United States. With the current cap unable to meet employer demand for H1B visas, and recent studies suggesting the United States may be losing competitive advantages as a result, more attention is being paid to the important role these foreign-born, high-skilled workers play in the economy.

Since their establishment in 1990, H1B visas are the primary avenue for employers to temporarily hire foreign workers for up to three years in specialty occupations such as medicine or engineering. For an individual to acquire an H1B visa several steps are required. First, the hiring firm must file a Labor Condition Application (LCA) with the Department of Labor to outline the details of their open job position. After a prospective H1B visa holder has applied for and secured an approved LCA with the employer, they can apply for an H1B visa using an I-129 form, a document submitted to U.S. Citizenship and Immigration Services (USCIS).

A major problem with the H1B program lies not necessarily in the application system, but rather in the large gap between the number of visas sought and the number granted. In every year since 2004, the cap has remained at 65,000 with an additional 20,000 visas reserved for workers who have earned a master’s degree or Ph.D. from a U.S. college or university (85,000 total). In each of those years, the cap has been met before the close of the fiscal year, and in many cases, the cap was exhausted in less than a month, according to a report released by The Partnership for a New Economy. In the most recent application period, USCIS received 172,500 H-1B visas in just over a week – a nearly 30 percent increase over last year’s total.

As a result of an inability to find enough qualified workers in the United States, the tech industry has become one of the biggest interests lobbying for immigration reform, with a focus on H-1B visas. Organizations such as FWD.us, founded by Facebook’s Mark Zuckerberg, have built a variety of tools to pressure Congress on reform such as hackathons with “dreamers” (undocumented immigrants who were brought to the U.S. as children), the app Push4Reform, which catalogues congressional members on where they stand on immigration, or releasing videos. In general, the tech industry interest lies in high-skilled immigration, prompting disagreement about whether or not the industry is concerned with comprehensive reform as a whole.  

A major limitation of the H1B visa, especially in evaluating the program, is the lack of quality data on the recipient population, according to a 2011 Government Accountability Office report.  Information regarding the total number of H-1B workers in the United States at any given time and details about their length of stay are unknown because data systems across multiple government agencies are not linked, and because H1B workers are not tracked over time, prompting most research to instead focus on measures obtained from various points in the application process. But, if highly skilled, foreign-born workers play such an integral part in the national economy, and the demand for positions far exceeds the caps placed by Congress, more research should be performed about the source of this demand.

Most analyses of H1B visas posit that if the Labor Condition Application (LCA) indicates an employer’s interest in hiring a guest worker, the number of applications would, in theory, be indicative of the area’s dependency on or demand for H1B workers. Using detailed geographic data from the LCA, authors at the New England Public Policy Center at the Federal Reserve Bank of Boston produce a measure to determine the intensity of H1B demand: LCA requests per 1,000 payroll employees. The authors also examine the breakdown of requests for STEM workers across geographies.

Overall, the report finds that requests for H1B visas were concentrated around employers in just a few states. California, New York, and Texas alone accounted for half of the total LCA requests in 2012, while the top 10 states combined for more than two-thirds of the total LCA requests.  In measuring the intensity of demand, the report finds that New Jersey, Delaware, District of Columbia had the most LCA requests per 1,000 jobs. Between 2008 and 2012, states such as Montana, Wyoming, Mississippi, West Virginia, and South Dakota generally had the lowest intensity of demand for H1B visas. At the regional level, MSAs such as San Jose/Silicon Valley, Columbus, IN, Bloomington, IL, and Trenton, NJ, had the highest intensity of demand for foreign-born, high-skilled labor.

Estimates suggest that the concentration of H-1B workers in STEM occupations ranges anywhere from fewer than 65 percent to as high as 90 percent, according to the report. As a way of breaking down STEM occupations further, the authors examine three groups: computer and mathematical (C&M), scientists and engineers (S&E), and all others. Both regionally and nationally, they find, over half of the requests for H-1B workers were in computer and mathematics fields between FY 10 and FY 12.

H-1B visas are not only limited as a result of poor evaluation methodology or a low cap, but also because of ambiguity in the policy discussion. Because H1Bs are framed within immigration as a whole, they are inherently controversial, as any reform is oftentimes packaged in an all-or-nothing type manner. An issue with this approach, however, is that although immigration requires systematic reformation, this does not mean its individual parts should not receive individual considerations. This is one likely reason for the tech industry’s involvement in this particular issue. Furthermore, perhaps more than any other visa, the H1B receives criticism as a poacher of American jobs. Instead, U.S.-born workers without bachelor’s degrees were disproportionately hurt by the elimination of some applications in 2007-2008 as a result of the valuable support roles these less educated tech workers play, according to the Partnership for a New American Economy report released this summer.

In order to maintain its global competitiveness, foreign workers must continue to play a role in the national economy. Despite the limitations of the visa, for highly skilled, foreign-born workers, the H1B remains a principal pathway to the United States.  Over the course of his final two years in office, it seems likely that the president will continue to press for immigration reform, even if it is no longer on the table for this year. And, with increased pressure from the tech industry and additional research on the H1B’s limitations, reformation may be imminent.