Government, Human Resources, and Law

Scarcity of H1B visas presents employers with conundrum

Most would rather hire U.S. workers, but skills are hard to find.

March 15, 2013
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If the Immigration Innovation Act of 2013 makes its way into law, it would nearly double the number of H1B visas available annually, something that would make a lot of companies in the United States very happy.

Since the early 2000s, H1B visas have been a hot item, and one that can be hard to come by.

H1B visas are provided to highly skilled foreign nationals with expertise in fields such as the sciences, technology, medicine, business, education, law and the arts. To obtain an H1B visa for a worker, the company sponsoring the applicant must be filling a position that requires a bachelor's degree. Companies typically only initiate the process when they cannot find a U.S. citizen or resident of equal skill and experience for the specialty occupation.

Under current law, 65,000 H1B visas are allocated each year and another 20,000 are provided for foreign nationals holding U.S. master’s degrees. Nonprofits and higher education employers are exempt from the cap.

“We have a lot of clients who use the H1B program for technical positions,” said Angela Jenkins, senior counsel at Warner Norcross. In her experience, she typically sees H1B visas used for engineers and information technology positions.

Demand for H1B visas rose in the late 1990s and early 2000s mainly due the rise in technology sector employment. In response, the U.S. Congress increased the cap on the visas to between 100,000 and 200,000 during those years. In 2004, the cap dropped back down to 65,000 and has not been increased since.

Demand for the visas, however, remains high.

“It really depends on the job market,” Jenkins said, regarding the request for H1B visas.

She pointed out that as the economy slowed in 2009 and 2010, the visas were available for a longer time, but when the economy is flourishing, the visa cap is reached quickly.

“Last year they were gone by early June,” she said. “The filing season opens on April 1 every year, so last year they were gone in about 10 weeks.”

Jenkins pointed out that demand for the visas was so high in 2007 and 2008 that a lottery system was used in doling them out. In 2008, she said, 163,000 petitions were received in the first week of April for 85,000 H1Bs available.

Laszlo Boch, senior vice president of People Operations at Google, is also a vocal supporter of increasing access to H1B visas.

In a post on the Google Public Policy blog, Boch wrote: “Immigrants have founded 40 percent of companies in the tech sector that were financed by venture capital and went on to become public in the United States, among them Yahoo, eBay, Intel and Google.”

Boch also cited a Kauffman Foundation study that found nearly a quarter of the engineering and technology companies founded in the U.S. between 2006 and 2012 had at least one founder who was foreign born.

The Immigration Innovation Act of 2013 seeks to remedy the H1B visa shortage by increasing the cap to 115,000 annually. It would also allow for a market-based increase, letting the cap adjust up or down depending on the need, with a ceiling of 300,000.

Jenkins thinks that while an increased cap tied to the market is a better solution than the current static cap, an even better solution would be to do away with a cap altogether.

“It really isn’t something that employers embark on lightly,” she said. “If they could find a U.S. worker for these positions, they would gladly hire them because they could skip all this H1B fiasco.”

The most common opposition to increasing the cap is the belief that H1B visas allow foreign workers to take jobs away from U.S. workers.

“There is this perception by the general public that these H1B employees are taking away U.S. jobs, but that is just not what I see,” Jenkins said. “This program is such a hassle and so expensive for the employers that they only use it if they truly can’t find a U.S. worker, because it would be easier to just hire a U.S. worker if you could find one with the skills you needed.”

She also noted that the U.S. Department of Labor governs the H1B visa program and ensures H1B workers are treated the same as their U.S. citizen and resident counterparts in areas such as pay and benefits.

Also, a study conducted by University of California-Davis professors Giovanni Peri and Kevin Shih and Colgate University professor Chad Sparber found that “in a metro area, an increase of foreign STEM workers during a decade by 1 percent of total employment increased wages of native college educated by 4-6 percent with small effects on their employment.”

Additional concerns are that the H1B program decreases the need for U.S. investment in the STEM educational areas — science, technology, engineering and math — because employers can simply dip into the talent pool abroad rather than focus financial resources on improving U.S. talent.

“A lot of H1B employees got their STEM education here in the U.S.,” Jenkins said. “So the flip side of that is, do we want to be educating these foreign nationals at our universities but then forcing them to go home to use those skills we gave them and increasing the talent pool abroad instead of keeping it here? If we embraced those people and gave them H1Bs and green cards more freely, they would most likely become U.S. citizens and be part of our talent pool.”

The Immigration Innovation Act of 2013 attempts to ensure that investment in STEM education within the U.S. is not hampered by the H1B visa program; the legislation requires that money from both the H1B visa program and employment-based green cards are used to fund a grant program to promote STEM education and worker retraining.

The Immigration and Innovation Act of 2013 has bipartisan support and will likely make its way to center stage later this year.

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