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How H-1B Visas Help the U.S. Economy and Specifically the Tech Industry

Silicon_Valley_P1190057.jpgMany of the readers are aware that the H-1B visa – which is critical to allowing U.S. companies to employ talented foreign workers – comes with multiple obstacles, the most obvious obstacle being the “H-1B cap.” Congress has allotted a yearly maximum of 65,000 H-1B visas (with an additional 20,000 visas reserved for foreign workers who obtained a Master’s degree at a U.S. university).

Nearly every year the demand for H-1B visas far exceeds the supply. In 2014 alone, U.S. Citizenship and Immigration Services (USCIS), which is the government agency that reviews and approves H-1B visa petitions, received an estimated 124,000 petitions. Because of the congressionally mandate cap, several thousand H-1B hopefuls did not receive their visas in 2014.

Due to the H-1B supply and demand disconnect, employers and immigration advocates frequently lobby Congress to increase the yearly maximum (or do away with it altogether). However, Congress continually refuses to do so.

This Congressional refusal is hurting the U.S. economy and the nation’s businesses. A recent article revealed that members of the American high-tech industry claim that Congress’s refusal to increase the H-1B cap is directly responsible for costing the U.S. the ability to make a new job every 43 seconds.

To better illustrate this claim, an organization called Compete America created a calculator that keeps track of the jobs that are lost or not created due to restrictions on visas.

And it is not just Compete America that is making the claim that visa restrictions are hampering the U.S. economy. Mr. Matthew Slaughter, an economist at Dartmouth College, has also stated that the H-1B cap has cost the American economy approximately 100,000 new jobs in the past year alone – and that this figure increases to 500,000 if one adds the number of indirect jobs lost as well.

Of course, like all immigration-related debates, there are those who disagree with Compete America and Mr. Slaughter. A number of detractors rail against the claim that there is a shortage of talent in the U.S. and point to lay-off statistics to prove their point. The organization called the Economic Policy Institute states that foreign workers are typically younger than those U.S. workers who are laid off, thereby offering employers with a large supply of eager and lower-paid employees who can replace the older employees.

Perhaps contributing to this debate are the H-1B requirements themselves (which Congress also creates). Unlike the green card sponsorship process, employers who sponsor foreign workers for H-1B visas do not have to first attempt to hire U.S. workers. Instead, the employer simply files a Labor Condition Application (LCA) with the U.S. Department of Labor which outlines the terms and conditions of the worker’s employment. Once the DOL certifies the LCA, the employer send a copy of the LCA, an explanation of the job offered to the foreign worker, and the foreign worker’s credentials to USCIS.

The Rant

Immigration advocates and U.S. companies are completely right in their efforts to lobby Congress to increase the H-1B cap. Due to this arbitrary numerical restriction, U.S. businesses are not able to maximize their company operations which results in decreased profits, slowed growth, and other detrimental consequences. Keep checking back with our blog as we provide the most up to date information on the H-1B cap and other immigration issues.

Additional Blog Posts

The Possible Impact of Sequestration for Employers and Immigrant Workers, ImmigRantings, April 22, 2013
More States Expected to Exert Control Regarding Illegal Immigration Problems, ImmigRantings, August 3, 2013