For many international students, the possibility of finding work in America after graduation is a large part of their decision to attend school here. Many international students are able to stay and work in the United States for several years after graduation via the H-1B visa program, which allows employers to hire skilled foreign workers.
Right now, about 460,000 H-1B visa workers are employed in the United States, predominantly in high-tech sectors like information technology and software development, with up to 85,000 new visas awarded by a random lottery each year.
However, on April 17th, President Trump issued an executive order calling on his federal agencies to conduct a review of the H-1B visa program.
What is the H-1B visa program?
The H-1B visa program has been used since 1990 by American firms who want to hire foreign talents or keep American-educated international students in the United States after graduation. About 85,000 total H-1B visas are awarded each year. Candidates are randomly selected by the United States Citizenship and Immigration Services (USCIS) agency.
Candidates with a bachelor degree can participate in the first round, in which 65,000 visas are awarded. If a candidate has an advanced degree, they are automatically placed in a second round where an additional 20,000 visas are given to candidates. Also, if a candidate has a degree in a STEM major (Science, Technology, Engineering, Math) they enjoy a 24-month optional practical training (OPT) extension. Everyone else has a 12-month OPT, meaning they can only enter the H-1B lottery once.
Criticism of the H-1B
The H-1B visa program was originally set up as a way for American firms to keep the brightest minds filling in gaps in fields that have a tremendous shortage of American-born labor. But companies have found loopholes in the lottery system, and visas are no longer going exclusively to the cream of the crop, as it was originally intended.
The program has been criticized as a way for United States-based companies to pass over skilled American workers and instead hire foreign workers at far lower salary rates than their American counterparts. Increasingly the program has also been dominated by companies that use the program to outsource American jobs.
But it is offshore outsourcing companies who are profiting even more than Silicon Valley. These mainly Indian firms are playing the probability game: The more applications they submit, the more chances they have at securing visas. The plan seems to be working, according to the BBC, as 70% of H-1B visas went to Indians last year. And these companies tend to hire workers from outside of the country who may not be American-educated. Infosys is India’s largest IT outsourcing firm, and they filed more than 33,000 applications last year. By comparison, Microsoft only submitted around 4,500.
According to the Economic Policy Institute, the top 10 sponsors for H-1B visas received more than 25,000 visas, accounting for nearly 30% of the total quota in 2014. Among these firms, half of them have their headquarters in India. Some companies have been exploiting other policy loopholes by filing several applications for the same employee to increase the chance of getting visas—squeezing out small firms who do not have the capacities to do so.
In 2014 Southern California Edison laid off 500 American IT employees and replaced them with Infosys’ Indian workers who were paid far less. An IT worker for SCE earned an average salary of $110,000, Infosys’s average salary is around $70,000. Disney did the same thing in 2014. In this case, those laid off were asked to train the new foreign employees as part of their severance agreements.
The Trump solution
During his presidential campaign, Trump continually pointed to the H-1B program as an instance where Washington put politics before the needs of Americans. President Trump has said that he wants the H-1B program to be a way for America to recruit the “best and the brightest” and not as a way for companies to offshore American jobs. As a result, he pledged to reform visa programs in the United States as part of his America First platform.
“I will direct the Department of Labor to investigate all abuses of visa programs that undercut American workers,” Trump said in a video message in April. Attorney General Jeff Sessions is a known hardliner on visa programs and aims to cut available visas to outsourcing companies.
Good news for international students
A crackdown on visa program abuses will be a good thing for international students as it will open up more job opportunities to them in the United States after graduation.
In an earlier article, I touched upon how the United States is not producing enough American-born graduates from the STEM fields (Science, Technology, Engineering, and Math) to maintain our country’s economic growth and technological innovation. This is where the focus of the H-1B visa program reform should be, and I believe what President Trump would also like to focus on.
A three-pronged solution
So what do we need to do?
- Eliminate the loopholes that outsourcing firms are currently exploiting that are costing American workers their jobs.
- Continue to enroll the best and the brightest in the STEM fields in our American universities.
- Give these candidates even greater preference to continue to work here in America where their skills are in great demand for the ever-changing global tech economy.