H-1Bs: Still Not the Best and the Brightest

Norman Matloff, Center for Immigration Studies, May 2008

In pressuring Congress to expand the H-1B work visa and employment-based green card programs, industry lobbyists have recently adopted a new tack. Seeing that their past cries of a tech labor shortage are contradicted by stagnant or declining wages, their new buzzword is innovation. Building on their perennial assertion that the foreign workers are “the best and the brightest,” they now say that continued U.S. leadership in science, technology, engineering, and mathematics (STEM) hinges on our ability to import the world’s best engineers and scientists. Yet, this Backgrounder will present new data analysis showing that the vast majority of the foreign workers—including those at most major tech firms—are people of just ordinary talent, doing ordinary work. They are not the innovators the industry lobbyists portray them to be.

{snip} If the foreign workers are indeed outstanding talents, they would be paid accordingly. We can thus easily determine whether a foreign worker is among “the best and the brightest” by computing the ratio of his salary to the prevailing wage figure stated by the employer. Let’s call this the Talent Measure (TM). Keep in mind that a TM value of 1.0 means that the worker is merely average, not of outstanding talent.

I computed median TM values for various subgroups of interest. A summary of the results is:

* The median TM value over all foreign workers studied was just a hair over 1.0.

* The median TM value was also essentially 1.0 in each of the tech professions studied.

* Median TM was near 1.0 for almost all prominent tech firms that were analyzed.

* Contrary to the constant hyperbole in the press that “Johnnie can’t do math” in comparison with kids in Asia, TM values for workers from Western European countries tend to be much higher than those of their Asian counterparts.

Again noting that a TM value of 1.0 means just average, the data show dramatically that most foreign workers, the vast majority of whom are from Asia, are in fact not “the best and the brightest.”

This article also presents further data showing an equally important point:

* Most foreign workers work at or near entry level, described by the Department of Labor in terms akin to apprenticeship. This counters the industry’s claim that they hire the workers as key innovators, and again we will see a stark difference between the Asians and Europeans.

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Talent Measure Analysis

Again, I take as our Talent Measure (TM) the ratio of a worker’s salary to the prevailing wage claimed by the employer. The employer is legally required to pay at least the prevailing wage, and must state on the PERM application how that wage level was determined.3 Since the application will be rejected if the wage offered is below the prevailing wage, by definition all values of TM will be at least 1.0. The latter value means “the average worker,” i.e. of average talent, so if most workers have TM values close to 1.0, then most are probably not “the best and the brightest.”

{snip}

The trend, both general and for STEM occupations, is clear: Most TM values are only a little higher than 1.0, indicating that most of the foreign workers are not outstanding talents.

{snip}

Lobbyists for the big firms often claim that abuse of the H-1B program occurs mainly in Indian-owned “bodyshops” (firms that subcontract H-1Bs to larger companies), while by contrast the big firms are hiring “the best and the brightest.” Yet neither this scapegoating of the Indians nor the claim of hiring the top talents is warranted. Consider the TM values after disaggregation by firm:

Though these figures are slightly above the overall figures we saw earlier, they still show that the firms are not paying salaries indicating top talents.

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East vs. West

The lobbyists love to claim that the industry resorts to hiring foreign workers because Americans are weak in math and science. Various international comparisons of math/science test scores at the K-12 level are offered as “evidence.” The claims are specious—after all, both major sources of foreign tech workers, India and China, refuse to participate in those tests, and India continues to be plagued with a high illiteracy rate. Serious educational research, including an earlier Arizona State university report4 and a recent major study by the Urban Institute5 show clearly that mainstream American kids are doing fine in STEM.

Nevertheless, the “Asian mystique” persists. The image is that our tech industry owes its success to armies of mathematical geniuses arriving to U.S. graduate schools from Asia. Once again, though, the data do not support this perception. Here is a comparison of TM values for foreign workers from the major Asian countries and their counterparts in Europe and Canada:

The differences here are not large, but nevertheless, all of the Western nations have higher median TM values than all the Asian nations—quite the opposite of the portrayal by the industry lobbyists.

Taking a closer look, let’s tabulate median TM for the major worker-sending nations in both hemispheres, against the major occupations:

While still mild, the trend again indicates that the Western foreign workers are the more talented ones.

{snip}

Level of Hire

As noted, recently the industry lobbyists have adopted an innovation theme, in which they claim that the U.S. lead in tech depends on hiring innovators from abroad. The analysis above demonstrates that the foreign workers are in fact generally not outstanding talents, thus casting serious doubt on the claim that innovators are being hired. Here we pursue this point further, by examining the level at which the imported workers are hired.

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The results first show, once again, that rather few of the foreign workers are at Level IV, the level of real expertise whose description is associated with innovation. Most are in fact in Levels I and II, whose DOL definitions are for apprentice-like positions with only “limited exercise of judgment,” clearly not jobs for innovators.

Second, this pattern also holds individually for the most common job titles.

Third, the East-vs.-West pattern observed earlier for the TM data also holds for levels of expertise, with Asians typically being hired into non-innovative jobs while more Europeans are in the types of positions that could involve innovation.

{snip}

Conclusions

The lobbyists know that crying educational doom-and-gloom sells. Even though it was mainly “Johnnie,” rather than Arvind or Qing-Ling, who originally developed the computer industry, and even though all major East Asian governments have lamented their educational systems’ stifling of creativity, the lobbyists have convinced Congress that the industry needs foreign workers from Asia in order to innovate.

The facts show otherwise. Most foreign tech workers, particularly those from Asia, are in fact not “the best and the brightest.” This is true both overall and in the key tech occupations, and most importantly, in the firms most stridently demanding that Congress admit more foreign workers. Expansion of the guest worker programs—both H-1B visas and green cards—is unwarranted.

End Notes

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[Editor’s Note: Readers are encouraged to see the charts in the original article, which can be found here.]

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