Economic Policy Institute, February 28, 2013
H-1B guest worker visas are not a useful way to drive U.S. innovation, a new EPI paper finds. In Are foreign students the ‘best and brightest’? Data and implications for immigration policy, Norman Matloff, a professor of computer science at the University of California, Davis, discusses the H-1B program, which allows employers to temporarily hire foreign STEM workers.
H-1B visas are often described as a way to attract the “best and brightest” to American shores, but many employers use the H-1B program as a source of cheap, compliant labor.
Contrary to the claims of industry lobbyists, H-1B workers are no more distinguished than their U.S. peers. Instead, employers prefer to hire foreign workers over similarly qualified U.S. workers, because legal loopholes in how the “prevailing wage” is calculated let them save on labor costs. The H-1B visa also ties workers to their employer, effectively rendering them captive for the duration of their visa. The H-1B program does not encourage U.S. employers to hire outstanding talent or the best and brightest workers.
For example, Matloff finds that by several measures, foreign students in computer science now working in the U.S. are on average less talented than Americans. Compared to Americans of the same age and education level, the foreign students filed fewer patent applications, attended less-selective U.S. universities and were less likely to work in research and development positions.
“Ironically, the biggest victims of the industry obsession with H-1B visas are the technology companies themselves,” said Matloff. “Their ‘penny wise, pound foolish’ policy means they are often not hiring the best talent.”
Proponents of H-1B visas argue that tech firms are unable to find qualified U.S. applicants for STEM positions, but stagnant wages in these fields refute claims of a labor shortage. Indeed, flat wages are discouraging talented U.S. workers with STEM degrees from pursuing graduate study or even careers in the field — causing an internal “brain drain.” Since the foreign workers displacing U.S. workers are not more talented, this internal brain drain endangers the country’s ability to retain its worldwide lead in technological innovation.
Current reform proposals to grant special visas and green cards to all foreign STEM graduate students at U.S. schools would exacerbate this internal brain drain. Instead, the federal government must ensure that programs like the H-1B visa are truly attracting the best and brightest or remedying genuine labor shortages. Reform must change the way prevailing wages are calculated so that H-1B visa holders are paid a genuine market wage for their education and skill sets. At the same time, policymakers could expand the EB-1 and O-1 visa programs (for workers of “extraordinary ability”) as a means of more reliably attracting the best and brightest workers without crowding out U.S. graduates.