During the Great Depression, Congress and President Hoover responded to strong public pressure and did the one thing the wisest economists warned against - they enacted massive new trade barriers to protect US companies from competition. Countries around the world did the same and the result was a decline in world trade that many believe made the Depression much worse. Today there are more global trade agreements in place that make this less likely, but we're hearing that many of the antis out there are smelling an opportunity to try and kill the valuable H-1B program (though that would be very hard given our treaty obligations).
The American Immigration Lawyers Association has just released a helpful essay explaining the importance of the program that is worth republishing in whole:
WASHINGTON, DC -- America’s economy is in a tailspin. As our nation struggles to reverse the downward spiral and get back on course, America’s H-1B program has come under fire. And when H-1B’s are discussed, emotions run high. Recent articles have targeted the program as ‘anti-American” and “unpatriotic,” but what exactly is America’s H-1B program designed to do? Let’s set the record straight!
The H-1B program is a long-standing part of our nation’s business immigration system. It was developed to give U.S. employers access to highly skilled, professional foreign talent (often students who have been educated here in U.S. universities) for up to six years and as a means for U.S. companies to stay ahead in their respective global markets. Data proves that H-1B petitions track the economy. When hiring is down, the number of H-1B petitions goes down. The program is self-adjusting. However, when the economy improves, there is no corresponding escalator. Thus, during the boom years, businesses were hamstrung by a quota that did not take into account the needs of the international marketplace. The program remained capped at 65,000 visas per year for bachelor’s degree positions, with another 20,000 for advanced degree holders who graduated from U.S. universities.
Now that the economy is not booming, judicious admission of international professionals is more important than ever. Where the program was used to fill in labor shortages that no longer exist, companies have stopped using H-1B workers in those occupations. But even companies that have been laying off workers need isolated, specific skills to better compete in the international marketplace and effect their own recovery. U.S. businesses MUST have access to specialty skills without having to locate operations outside the U.S. to obtain them. Otherwise, the entire nation’s economic recovery will be severely hobbled.
There remain vital areas that require that our system make adequate provision for future needs. Studies have shown that over the next ten years, the U.S. may need two million more K-12 teachers in this country. We will also need 250,000 new math and science teachers by the end of 2010. Further, nearly 80 million baby boomers are expected to leave the workforce sometime soon. In 2004, the U.S. produced 137,000 new engineers, compared to China’s 352,000. It is well-documented that America is well behind the curve in producing sufficient skilled professionals to make our country “tomorrow’s center” for innovation. Recent economic events have not changed these facts; they have made it all the more important that we deal with them.
The H-1B visa category is used by universities, school districts, hospitals, research organizations, and businesses competing in our global marketplace to fill needed specialty occupations. “Let’s say a school district in rural Iowa or in poor urban area of Chicago needs a math or science teacher to help students be prepared to compete and innovate in our global economy,” said Charles H. Kuck, President of the American Immigration Lawyers Association (AILA). “Does it really make sense for our children to go without, or should we encourage the entry of qualified educators from abroad? What about our research institutions developing new medical cures or our hospitals trying to care for an increasingly large aging population? We have to recognize that while not a panacea, the H-1B visas program, when used according to law, provides a critical resource to help drive our future economic success.”
Hiring the H-1B professional seems like a good solution so long as the reason for lack of interest by U.S. workers is not low pay and as long as protections are in place to ensure that qualified U.S. workers are not replaced by foreign labor. In fact, H-1B regulations require that workers on these visas are paid the HIGHER of the prevailing wage or the actual wages of comparable U.S. workers within the company. This wage protection insures that H-1B professionals are not used as “cheap labor. In addition, H-1B regulations do not allow a company to use the H-1B category to break a strike or lockout - or to replace U.S. workers laid off the same job,” Kuck stated. “In other words,” Kuck noted, “protections against those abuses already are in the law.”
In addition to the wage protections in the law, the fact is that H-1Bs cannot be “cheap labor.” H-1Bs are hired at a high transaction cost. The government charges most employers $2,320 per application, on top of the additional legal and human resource expenses that come with an H-1B hire. Also, if the H-1B worker is fired, the employer must buy his plane ticket home—an often expensive proposition.
To put the impact of H-1B professionals in perspective, with a U.S. workforce of about 145 million, H-1B employees account for less than one-tenth of one percent of the U.S. workforce.
Enforcement of the H-1B protections and requirements is critical to create a level playing field for employers and employees alike, which is why part of the fees paid by H-1B sponsoring employers are used to fund the enforcement of the H-1B regulations, as well as training programs for U.S. workers. Penalties for failing to comply with the labor protections of the H-1B category as to wages, posting requirements, etc. include a provision that a company may be barred from serving as an H-1B petitioner in the future. The typical legally compliant company uses the H-1B category because it needs skilled professionals to enhance competitiveness. This need continues in specific specialty niches in our economy, even when economic times are tough.
What is the predictable result of a reduction or loss of the H-1B category? Companies will be forced to locate overseas, where a high skilled worker pool is available, or outsource needed labor. “We need an H-1B reality check,” said Kuck. “The simple solution is not cutting off an aid to our economic independence, but instead continuing to use legal immigration tools that help us improve our children’s and our country’s future.”