H1-B visas: Would lifting the cap really attract the 'brightest and best' to the US?

There needs to be a bigger discussion about whether H1-B visas are good for the tech industry and not just tech companies.

Former US Secretary of State Condoleezza Rice is baffled: perplexed at why people oppose lifting restrictions on the number of skilled foreign workers employed in the US.

Speaking at the 2014 VentureScape conference last week she said: "Forty percent of the startups in this area have one foreign founder. That says something about the power of attracting the best and brightest. And, I just don't get it when people want to make immigrants, somehow, the enemy."

Rice was discussing H1-B worker visas, which are used by companies to employ foreign workers in the US for up to six years. The visas are reserved for "specialized" roles - requiring a Bachelor's degree or higher - and while they are used to recruit for professions from biotechnology to medicine, are most commonly used by IT services firms. The base cap limits the number of workers approved for these visas to 65,000 each financial year, with a further 20,000 granted to those who have earned a master's degree of higher.

Rice believes this cap should be loosened. But her reduction of anti-H1-B sentiment to a desire to make immigrants "the enemy" flies in the face of genuine concern about how these visas are used by large companies.

More than 50 percent of the H-1Bs granted in the 2013 financial year went to offshore outsourcing firms like Cognizant, Infosys, Accenture, said Ron Hira, associate professor of public policy at the Rochester Institute of Technology.

Hira has been studying high skill immigration policy for more than a decade and has gathered data using FOI requests that points to H1-B workers being paid less on average than their American counterparts.

The figures show the median wage paid by offshoring firms to H1-B workers between the financial years 2010 and 2012 was between $54,000 and $69,000. In contrast wages for Computer Systems Analysts stood at around $82,000, he said.

And while evidence of how H1-B hiring affects the job prospects of domestic workers is hard to come by, Hira has collected figures that he says show IT services firms massively favouring H1-B workers when hiring in the US.

According to this data the offshore outsourcing firm Cognizant hired nearly 18,000 new H-1B workers between the financial years 2010 and 2012, a period when Hira said the firm took on very few new American workers.

The justification for turning to foreign workers to fill roles in the US is that these skills are not available domestically. But whether or not there is a skills shortage is also a matter of contention. Wage levels for IT workers have risen broadly in line with other professional groups, according to Hira, which is not what you would expect to see in an industry with pronounced talent shortfall.

And if foreign workers are truly filling a skills gap that can't be met domestically then, as Hira pointed out in his written testimony to a hearing at the US Senate, these non-US nationals should be paid more, not less, than their American counterparts.

"H-1B advocates have claimed H-1B workers they seek possess superior skills. If this is the case, then those workers should be paid at least the average wage," he wrote.

The best and the brightest

The idea that companies are hunting out the most talented individuals to work in the US was picked up by Rice, who evoked the phrase the "best and the brightest" to describe those granted H1-B visas.

But painting these individuals as exceptional, rather than degree-educated workers of the type available in the US, is questionable. Hira's FOI request data revealed the education levels of H1-B workers at the 20 companies hiring the largest number of H1-B workers between the 2010 and 2012 financial years. The figures show that in all these firms the majority of H1-B employees held no more than a Bachelor of Science (BS), and in the case of Cognizant, the largest employer of H1-B workers, four-fifth of workers were educated to BS-level. Cognizant declined to comment.

Rice also attempted to link the debate on H1-B's to attracting entrepreneurs to the US, mentioning that "forty percent of the startups in this area have one foreign founder".

But if Rice wants to encourage more foreign self-starters to the states there is scant evidence that lifting the cap on H1-B's will do so, said Hira.

"Foreign workers cannot self-sponsor - they require an employer to sponsor them. The work permit is controlled by the employer. This means that H-1Bs cannot start their own business and self-employ. The people who wish to see more foreigners become entrepreneurs in the US should be pushing for more green cards, not H-1Bs. "

And when it comes to firms sponsoring foreign workers for a green card to enable them to become permanent residents and set up a business, Hira said companies are generally not forthcoming.

"Firms do not sponsor their workers for green cards. For example, Accenture sponsored a mere one green card for every 500 H-1Bs it got in FY12." Accenture had not responded to a request for comment at the time of publication.

If the intention truly is to attract the most capable workers to the US then the answer is not to lift the cap on H1-B visa, but to put in place mechanisms to allow them to stay in the country, Hira said.

"We should be encouraging the "best and brightest" to come to the US and stay permanently. We should have some sensible public policy discussion about the ways in which to encourage would-be entrepreneurs to stay in the country but almost all of the public discussion has been fluff and rhetorical."


Nick Heath is chief reporter for TechRepublic. He writes about the technology that IT decision makers need to know about, and the latest happenings in the European tech scene.

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