Why the Judiciary Committee Should Side with Orrin Hatch on H-1Bs

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The Senate Judiciary Committee’s work this week on the Gang of 8 (G8) immigration reform bill could include an energetic debate on two competing views about temporary skilled visas – the H-1B (for those with Bachelor’s degrees or higher) and the L-1 (for managers, executives and those with specialized knowledge) – and how they impact U.S. workers and the U.S. economy. These views are represented in two sets of amendments from two Senators, Charles Grassley, R-Iowa, and Orrin Hatch, R-Utah, and the amendments that prevail are likely to impact future U.S. competitiveness, innovation, investment and economic growth in the years ahead.

One Senator must be wrong, and in this case, it’s Senator Grassley.

Both Senators Grassley and Hatch appeal to higher goals – economic vitality and prosperity for starters -- but hold very different perspectives on how temporary skilled visas get us there.  Senator Grassley seeks to apply a tough set of unworkable requirements on all H-1B employers because he believes the H-1B visa generally works to harm U.S. workers and undermine economic opportunity.  By contrast, Senator Hatch seeks to make H-1B visas more available but targeted to better complement U.S. workers, expand U.S.-based business operations, and fuel U.S. job creation.

Senator Grassley’s views on H-1B visas have an emotional appeal and are buttressed with anecdotal examples of abuse.  I am not discounting the anecdotes, as I will note below, but the key question is simple:  Are Senator Grassley’s assertions so systemic that they warrant severe and substantial restrictions on all H-1B employers?   

The answer is simple:  No.

The most compelling evidence supports Senator Hatch’s point of view, and the data come from a diverse array of experts and analysts from across the ideological spectrum.  Their collective conclusion:  temporary skilled workers 1) generally add value to the U.S. economy and overwhelmingly complement our domestic workforce; 2) are essential to meet the high demand for professional services, including many science, technology, engineering and math (STEM) occupations; and, 3) are paid comparable to if not more than U.S. workers in jobs that pay good wages.  Here’s a brief elaboration:

Temporary high-skilled workers complement our U.S. workforce.  Stuart Anderson of the National Foundation for American Policy notes that H-1B demand rises and falls with the economy, citing the 2001-03 recession, when a combined 230,000 H-1B visas went unused during a two year period.  Economist Madeline Zavodny also found that from 2001-10, every 100 approved H-1B workers were associated with an additional 183 jobs among U.S. natives. Generally, the data suggest H-1B workers supplement, not supplant, U.S. workers, and contribute to increased economic activity.

Score one for Senator Hatch.

Temporary high-skilled workers are essential to U.S. STEM demand. Take your pick:  1) Real-world accounts of unfilled high-skilled jobs in the tens of thousands; 2) Extensive U.S. employer surveys and analyses that show skilled professionals are hardest to find for jobs most often filled by H-1B workers; 3) Unemployment data for many STEM sectors that suggest a STEM skills shortage.; or 5) public and private labor forecasts that warn STEM supply may not keep up with demand in the U.S., which increases the risk that more work will be pushed offshore to meet that demand.

That’s two for Senator Hatch.

Temporary high-skilled workers are paid comparable to, if not more than, U.S. workers.  A just-released Brookings Institution report made apples-to-apples comparisons of H-1B and native-born U.S. workers, and found that among the 20 occupations most commonly filled by H-1B workers, H-1B wages were significantly higher in 17 of these occupations, and were comparable for the other three. The Brookings report also noted that U.S. STEM workers today earn a 25% compensation premium relative to non-STEM workers, and have seen earnings rise by 3% to 6% relative to all other U.S. occupations during the past decade.

The Brookings report’s conclusion:  “The evidence suggests that the H-1B program does help fill a shortage in labor supply for the occupations most frequently requested by employers.”

That’s a hat trick for Senator Hatch.

I am not suggesting the H-1B visa is abuse free.  A 2008 U.S. Citizenship and Immigration Services (USCIS) report found fraud does exist, and since then, USCIS ramped up anti-fraud staffing from under 10 to more than 800, and now conducts more than 15,000 site visits annually to investigate H-1B employers, including the Labor Condition Applications they file regarding wages.  All of that has made a difference.

The G8 bill would further expand anti-fraud authority and resources – a more targeted approach more likely to ensure that H and L visas both work to benefit both U.S. workers and the U.S. economy. 

Senator Hatch’s much-needed improvements to the G8 bill are based on a fundamental principle: When most U.S. employers opt to pursue H-1B visas for skilled workers, they are making decisions to invest and strengthen their U.S. workforce and operations, as well as the U.S. economy overall. This principle is at the heart of Senator Hatch’s Immigration Innovation (I-Squared) Act, which today has 25 bipartisan cosponsors.  In debates like these, it’s important to have strong data and bipartisan support on your side.  Let’s hope the Judiciary Committee sides with Senator Hatch as well.

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8 comments
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  • Mannu Tue., December 17, 12:25 AM
    I can't imagine a bigegr waste of time than listening to this prototypical member of the statist political class blowing smoke. And here I thought the RGF was a non partisan organization.
  • Vince Tue., May 21, 7:06 PM
    Funny. Ive seen over 15 years, Americans laid off in the tech industry, only to have the job given to people from Bangalore and other cities. But then they claim there is a labor shortage ... shameful.
  • Sudhir Kumar Sun., May 19, 2:51 PM
    Robert Hoffman where are you pulling these stats on H1Bs are getting paid significantly higher than US employees, out of your rear.
  • Jason Tue., May 14, 3:24 PM
    As a tech worker, I'm disgusted by the practices of the tech industry to continue to repeat the false claim that we don't have enough tech workers in this country. The reality is these companies simply want cheap labor. In basic economics, if there was such a huge demand for IT experts wages would have gone up. However, every report written states that wages have flat-lined for the last ten years! When will we have a public debate over the need for a new class of "C" visas, visas for C class executives that allow us to toss out the overpaid, exploitative executive class in favor of immigrants that can do these jobs much better for less money? This is beyond disgusting. Most H1-B visas go to Indian outsourcing companies.
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