H1B Visas and the American Job Market

This week, as I was searching around for inspiration for our blog, I was feeling extremely uninspired.  I really do try and find a subject that relates to CrossWind’s field (swiss screw machining, manufacturing, medical device components, etc), but also to blog about things that are interesting to people that aren’t in those fields themselves.  Nothing was calling out to me this week and I was feeling very frustrated.   Then I happened to hear a conversation between 2 employees about needing skilled workers and how hard it is to find one that has experience working with the tight tolerances that we do and I started thinking about where other companies find their skilled workers.  Do they take years to find what they’re looking for like CrossWind has?  Do they try staffing firms?  Do they start looking overseas for talent?  This isn’t something that is just limited to our field.  This is a problem that almost all industries face at one point or another.  What is the solution?  Is it hiring an H1B visa employee?  What does that even mean?  Does that take away from American jobs?  Reading up on this, I found different opinions and point of views.

First of all, let me explain what an H1B Visa is.  It is explained as “a non-immigrant visa in the United States...it allows U.S. employers to temporarily employ foreign workers in specialty occupations.  The regulations define a "specialty occupation" as requiring theoretical and practical application of a body of highly specialized knowledge in a field of human endeavor including but not limited to biotechnology, chemistry, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, law, accounting, business specialties, theology, and the arts, and requiring the attainment of a bachelor's degree or its equivalent as a minimum” ("8 U.S. Code § 1184 - Admission of nonimmigrants".).  These visas are good for 3 years, but are extendable to 6 years, with an exception of 10 years in certain circumstance.  Also, there is currently a cap of 65,000 of these visas per fiscal year.

There are quite a few exemptions to this though.  You are exempt if you work at (not necessarily for) a university, non-profit research facility for a university, or a government research facility.  Also, 1,400 of these visas are set aside specifically for Chilean nationals and 5,400 for Singapore nationals due to Free Trade Agreements.  However, whatever visas reserved for this purpose are not used, are rolled over to the following fiscal year and are available to nationals from other countries. This has approximately doubled the amount of H1B visas issued over many years.

How does this affect the American job market?  I read several articles today and there is definitely varying opinions and statistics (as there is with any political issue, right?).  Even reading the comments on the articles it seemed to be a 50/50 split.  Many people were saying that increasing the cap and bringing foreign nationals to the US keeps the larger companies from opening offices in other countries and outsourcing.  They feel that it’s better that foreign nationals come to our country, keep the jobs on our soil, and have them spend their money in our economy.  Another point was that, by bringing over qualified people from other countries, we are expanding our horizons here.  Why not let these brilliant people bring their talent to America and help to better our country?  Many of the CEO’s for high tech companies (like Microsoft and Google) are from other countries so it is benefiting this country in the long run.

The opposing side makes strong arguments also.  By hiring people with H1B visas, some companies are letting go employees that require higher pay due to their years of experience and are being forced to even train their replacements.  Pfizer did this to hundreds of workers a few years back.  Also, according to Computerworld Magazine “the top 10 users of H-1B visas last year were all offshore outsourcing firms such as Tata and Infosys. Together these firms hired nearly half of all H-1B workers, and less than 3 percent of them applied to become permanent residents.”  “The H-1B worker learns the job and then rotates back to the home country and takes the work with him," explains Ron Hira, an immigration expert who teaches at the Rochester Institute of Technology.  With unemployment concerns forever looming this is a big issue.

In 2009 President Obama signed into law the American Recovery and Reinvestment Act (aka the stimulus bill) that limited banks and other financial institutions from hiring H1B workers until they had offered positions to other qualified U.S. workers first.  This also was to help keep them from laying off workers in the U.S. and then hiring H1B workers in their place at a cheaper rate.  However, this only applies to that specific industry.  This does not apply to STEM (science, technology, engineering, mathematics) jobs.  Reuters reports that “Facebook, Apple, Amazon and a host of top technology companies are planning to publicly urge the next US president to support a swath of new regulation that would make it easier for them to hire highly skilled workers from overseas.”

Where do our presidential candidates stand on this topic?

Marco Rubio (who has dropped out of the presidential race) wants to expand the H1B program – back to 195,000 visas a year (which is what is was from 2001-2003) – to make U.S. tech firms more competitive and to attract foreign talent. However, jobs should be advertised for 180 days to privilege U.S. job applicants.

Donald Trump is against this approach and instead proposes to keep the current quota but raise the minimum wage for H1B hires to avoid replacement of U.S. workers by cheap labor.

Bernie Sanders takes a similar view and also urges tech firms to raise (rather than cut) wages to make engineering jobs attractive again.

Hillary Clinton has not contributed to the H1B debate recently – maybe a strategic decision given the difficulty of this subject.

Regardless of where you stand on this issue, it is obviously an important subject to consider when voting later this year.  Do these visas help to grow technological, medical, and educational horizons in America or do they keep U.S. workers who have attained the education and experience that they thought would give them the career they envisioned from having that?  What’s your take?