Is the U.S. high-skilled visa program, known as H-1B, an essential contributor to the innovation economy or a way for companies to replace American IT workers with immigrants at lower salaries?
It’s a debate as old as the program itself, which began in 1990. The Trump administration on Tuesday joined the fray with a long-anticipated executive order that provides little insight into how the H-1B visa program would be reformed, or when.
Speaking Tuesday at Snap-on tools in Kenosha, WI, in front of an American flag made of wrenches, President Trump stuck to the “America first” message that was a hallmark of his campaign and policies since taking office.
“We believe jobs must be offered to American workers first,” Trump said, before signing his “Buy American, Hire American” executive order. “Does that make sense? Right now widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for sometimes less pay. This will stop. American workers have long called for reforms to end these visa abuses and today their calls are being answered for the first time.
“That includes taking the first steps to set in motion a long overdue reform of H-1B visas. Right now H-1B visas are awarded in a totally random lottery and that’s wrong. Instead they should be given to the most skilled and highest-paid applicants and they should never be used to replace Americans. No one can compete with American workers when they are given a fair and level playing field, which has not happened for decades.”
How and whether that rhetoric becomes policy remains to be seen. There are limits to reforms that can be implemented by an administrative order, and the executive order Trump signed after the speech only starts the reform process. Trump would need action from Congress for other potential changes to truly happen.
In the meantime, the nation’s immigration attorneys, human resources professionals, and H-1B holders and applicants are left to parse the language of the order and prepare for changes.
The executive order directs relevant federal agencies to suggest reforms “as soon as practicable” to ensure H-1B visas are awarded to the most-skilled or highest-paid applicants. That’s in contrast to “buy American” provisions of the order which have firm timelines. Another part of the order calls for new rules and guidance to protect the interests of U.S. workers in the administration of the immigration system, with fraud and abuse given special attention.
“I’m not concerned right this moment, but I am very concerned about what may come,” says Tahmina Watson, whose Seattle-based firm Watson Immigration Law, represents companies and individuals. She notes that the increased focus on fraud and abuse is no surprise, as the U.S. Citizenship and Immigration Service and Department of Justice sent out messages earlier this month signaling stepped-up scrutiny.
That said, she does not see evidence of fraud and abuse in her practice. Even though they’re not required to, the majority of her clients try to hire someone locally first before engaging in the “laborious and expensive” process of applying for one of the 85,000 H-1B visas issued annually. “There is nothing cheap about an H-1B,” she adds.
It’s an uncertain process, too. When applications exceed the 85,000 visa cap (with several thousand extra visas allotted for educational institutions), they are awarded by a lottery—the “totally random” system Trump referred to Tuesday.
What about claims that the H-1B visa program exposes workers to potential abuse in that their U.S. residency is contingent upon continued employment with the sponsoring company?
To the extent that does happen, Watson says it’s a symptom of the broken immigration system broadly. People wait years or decades “in the so-called invisible line” to get a green card and legal, permanent residency. Reforming H-1B is important, she says, but doing so in isolation will not resolve these issues.
“Taking one aspect because it’s a sound byte that works well for what the election rhetoric was is not actually doing justice to the reform that’s necessary,” Watson says, adding that the actions the Trump administration has taken are causing “trepidation and anxiety” among her clients.
Debate about the high-skilled immigration visa program often centers on tech giants based in innovation hotbeds such as Seattle, Silicon Valley, and Boston. Microsoft and Amazon applied for 4,294 and 2,552 H-1B visas last year, the two largest applicants based in Washington state. Nationally, the largest applicants are IT outsourcing firms, such as Infosys, Capgemini, and Tata Consultancy. The program may be of even greater importance to emerging innovation clusters, which have smaller talent pools to draw from.
Steve Tobocman, executive director of Global Detroit, says the Metro Detroit area employs more H-1B visa holders than Boston, Seattle, Houston, Philadelphia, Atlanta, or Research Triangle, NC, citing Brookings Institution research on H-1B visa approvals in 2013.
“Highly-skilled immigrant labor, be it international students, green card holders, or H-1B workers help local companies fill talent shortages, especially in hard-to-fill STEM positions and fields where there is full employment,” Tobocman says in a statement. “The vast majority of H-1B visas are used in this fashion.”
He adds that while efforts to crack down on fraud and abuse are welcome, the underlying anti-immigrant rhetoric of the Trump administration paints an incorrect picture of how the H-1B program operates.
The reality of this large, complex program that’s touched by several federal bureaucracies, including the departments of Labor, State, and Homeland Security, depends on where you look, and who’s looking.
For example, an Associated Press analysis finds a very different wage dynamic for computer science and mathematical occupations—which make up about three-quarters of issued H-1B visas—where H-1B workers earned a median salary of $75,000, compared to a median of $84,400 for all workers in those jobs. H-1B workers in life, physical, and social sciences, and community and social services, were also paid less than all workers in those occupations.
Meanwhile, H-1B workers in management, law, sales, architecture and engineering, healthcare, and several other fields were paid more than all workers, according to the AP analysis of fiscal year 2016 H-1B applicants.
Wage rates for the H-1B program are set by the Department of Labor, not directly by the sponsoring companies, and must be at or above the prevailing wage for a given occupation, experience level, and geography. But critics of the program say employers circumvent this by defining H-1B jobs at the lowest experience level they can—something the Department of Justice already has on its radar. In March it raised the experience requirement for computer programmers hired under H-1B.
Amid increasing uncertainty around H-1B and other immigration programs, Watson and other observers note a counter-intuitive trend. H-1B visa applications were down substantially this year to 199,000 from a record 236,000 last year. Though still well above the 85,000 visa cap, this year’s downturn departs from the typical trend of a surging economy matching a surge in applications.
“With the economy flourishing, as well as changes perhaps coming, I would have expected to see higher numbers of H-1Bs, not lower,” Watson says. “But the only explanation is there is anxiety and apprehension.”
Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com.