Dear Colleagues,

Our e-mail newsletters focus on issues concerning admission of foreign students as well as foreign scientists to the U.S. to study and work. This e-mail update, the third by the Merage Foundation for the American Dream and UCI, describes important legislative and administrative actions (or inaction) that will affect the ability of foreign students and scientist and engineers to study, live and secure employment in U.S.  It also notes trends with respect to salaries of new engineering, and commuter science graduates and suggests that the entry of highly skilled immigrants is not a zero sum game. The e-mail records the importance of patents generated by foreign born individuals and calls attention to a reverse brain drain facing the U.S.  The e-mail describes some new regulations concerning “substitution” that will make it more difficult for employers to navigate the existing immigration system. Finally, it includes an interview with Aman Kappor, executive director of Immigration Voice-a nonpartisan group advocating solutions to green card problems, particularly problems faced by highly skilled immigrants.   

We know you are interested in the outcome of current discussions in Congress and the Administration.  A special thanks to Stuart Anderson, head of the National Foundation for American Policy, “our man in Washington,” for providing key narrative support to develop the e-mail. We welcome your feedback.

—Paul Merage, Founder and President, Merage Foundation for the American Dream
—Michael Gottfredson, Executive Vice Chancellor and Provost, UC Irvine
—Marshall Kaplan, Executive Director, Merage Foundation for the American Dream

Uncertain Prospects for New Legislation to Boost Immigration of Highly Skilled Workers

Representatives of high tech companies and business trade associations are “pessimistic”  that any legislation will pass this year to increase immigration quotas for skilled immigrants. The failure of “comprehensive” immigration reform to pass the Senate earlier this year has created apprehension on the part of legislators to revisit immigration measures. Moreover, the only viable way to pass even smaller immigration measures would be as part of larger spending bills. However, they often run into procedural obstacles, particularly in the Senate. For example, Senator Richard Durbin (D-IL) was unsuccessful in an effort to attach to a defense appropriations bill the DREAM Act. It which would have provided legal status to many children who entered the country illegally with their parents.

The 2007 Senate bill was in many ways worse than current law for international students, skilled immigrants and employers. It is useful to review some of the key provisions of the 2007 Senate immigration bill because some form of these provisions could return in the future:

H-1B Visas: The bill would have raised the annual cap on H-1B temporary visas from 65,000 to 115,000. The visas would be renewable for two three-year periods. The bill would have included an “escalator” clause. After three or four years, the cap could have been raised to180,000.

It is unlikely that the proposed H-1B increase would have been sufficient given the current demand for skilled professionals in the U.S. economy. On the first day alone that companies could apply for H-1B visas this year (April 1, 2007), U.S. Citizenship and Immigration Services received about 120,000 H-1B applications, more than the 115,000 ceiling proposed in the Senate bill.

New labor Requirements: In addition to the likely inadequate increase in visas, at the behest of Senators Richard Durbin and Charles Grassley (R-IA), the bill would have imposed a variety of new labor mandates that many companies indicate would have made it difficult to use H-1B visas. The new requirements included a mandate that U.S. companies before being able to hire an individual on an H-1B visa would have had to prove extensive recruitment for the position. Similarly, the bill would have forbid the displacement or layoff of workers in similar positions that were later filled by H-1B visa holders. The problem with these provisions, attorneys and companies note, rests with legal ambiguities in certain terms contained in the legislation like “essentially equivalent” jobs.  They are difficult to interpret.  Companies would have little assurance that they could prove to government enforcement agencies that they complied with the law.   Companies feared that visas would be vastly more cumbersome to use, encouraging more companies to locate employment outside the United States. In this context, the proposed bill would have significantly expanded the investigative authority of both the Department of Labor and the Department of Homeland Security.

Hefty Proposed Fee: Senator Bernard Sanders (I-VT) successfully sponsored an amendment that would have increased the current scholarship/training fee that employers pay each time they hire (or renew a visa) for an H-1B professional from the current $1,500 to $5,000. The National Foundation for American Policy estimated the Sanders amendment would have been the equivalent of a $4.8 billion tax increase over 5 years on companies hiring skilled foreign-born professionals.

Replacing Current Employment-Based Immigration System with a Point System: As part of a deal to support legalization for many of those here illegally, Sen. Jon Kyl (R-AZ) and the Bush Administration pushed to replace key components of the current family and employment-based immigration system with a point system that would award “points” and the ability to stay permanently in America based on age, education, intended job category and other factors. Companies were not consulted about jettisoning the current “green card” system, which provides for permanent residence and is separate from H-1B temporary visas. Nor were any hearings held to discuss the ramifications of a point system. When the details of the legislation emerged it soon became clear that the new system would have eliminated employers’ ability to sponsor individual professionals.  They would have to hope that prospective valued employees would gain enough points to be allowed to stay in the country. But in light of the inadequate quotas, the vagaries of the system’s design, and a per country limit that would have barred providing green cards to even “high-scoring” individuals from high-volume countries like China and India, many analysts indicated that the proposed system was a poor fit given the diverse needs of employers and the U.S. economy.

A positive sign with respect to high skill immigration was reflected in a October 2, 2007 letter to House Speaker Nancy Pelosi (D-CA) from members of the Republican House leadership and a GOP Congressional high tech task force. The letter called for movement before the end of the year on four legislative priorities of high tech companies, including the need for more visas for high skilled professionals. It included the following passage: “We must enact legislation that allows U.S. companies to attract and retain high-skilled workers to contribute and excel in the U.S. economy without unnecessary delays and waiting periods. Members on both sides of the aisle have supported this in the past, and, we’re confident they will again.”

Overall, many astute immigration watchers in the media and elsewhere suggested that the intensity of the immigration debate would result in continued Congressional inaction concerning legislation to increase the ability of U.S. employers to hire foreign-born scientists and engineers.

Salaries for New Graduates Are Up

One of the arguments made against the entry of foreign-born scientists and engineers is that they harm the job prospects of Americans. The latest news is that new U.S. college graduates are doing just fine.

Engineering graduates will receive the highest salaries of any major, according to a study by the National Association of Colleges and Employers (NACE), including a strong increase over last year. Salaries for chemical and civil engineers are up 5.4 percent, with increases ranging from 4.8 percent for computer engineers and 4.6 percent for mechanical engineers.

Computer science degree holders who graduated in Spring 2007 can expect a 4.1 percent increase over last year, up to $53,396, while information sciences graduates can anticipate average offers of over $50,000, an increase of 4.6 percent. (Source: CareerBuilder.com)

The NACE study provides further evidence that the U.S. economy is not a zero-sum game, meaning the entry of immigrants does not foreclose job opportunities for Americans, even those new to the job market, such as recent college graduates. Some might argue that salaries for new graduates would be even higher if not for the entry of immigrants into the labor market. However, this ignores important factors.

First, even if the United States accepted no immigrants into the country U.S. graduates in technical fields would still be competing on a global basis against foreign nationals in technical fields. That’s because the market (and hence the workers to serve the market) for technology-related goods and services is global. Second, there is little conclusive evidence that immigrants in technical fields are undercutting the wages of similarly skilled Americans by being paid less. Third, when immigrants enter the U.S. labor market they help make the economic pie bigger, so there really is not just a fixed number of jobs available. Immigrants not only fill jobs but also create jobs through consumer spending, innovation (see newsletter article on patents) and entrepreneurship (see earlier Merage newsletter article on immigrant entrepreneurs).

Reverse Brain Drain Underway Says New Kaufman Study

Research for the Kaufman Foundation conducted by Vivek Wadhwa and his students at the Pratt School of Engineering at Duke University concludes the United States may be facing a “reverse” brain drain. In the past, some have argued that America was skimming off the world’s best talent and then allowing them to stay and create their innovations in the United States. But tight green card quotas for employment-based immigrants may be altering this equation.

“Based on a 2003 study of new legal immigrants to the U.S. called the New Immigrant Survey, we estimate that in 2003, about 1 in 3 professionals who had been through the immigration process either planned to leave the U.S. or were uncertain about remaining. Media reports and other anecdotal evidence indicate that many skilled workers have indeed begun to return home,” writes Wadhwa. “More than 1 million highly skilled professionals such as engineers, scientists, doctors, researchers, and their families are in line for a yearly allotment of only around 120,000 permanent-resident visas for employment-based principals and their families in the three main employment visa categories (EB-1, EB-2, and EB-3).”

Wadhwa notes: “These individuals entered the country legally to study or to work. They contributed to U.S. economic growth and global competitiveness. Now we've set the stage for them to return to countries such as India and China, where the economies are booming and their skills are in great demand. U.S. businesses large and small stand to lose critical talent, and workers who have gained valuable experience and knowledge of American industry may become potential competitors. The problem is simple. There aren't enough permanent-resident visas available each year for skilled workers and their families. And there is a limit of fewer than 10,000 visas that can be issued to immigrants from any single country. So countries with the largest populations such as India and China are allocated the same number of visas as Iceland and Mongolia.”

The study’s authors conclude: “Professor Richard Devon of Pennsylvania State University estimates that in the U.S. about $200,000 is invested in a child by the time they gain a bachelor's degree in engineering. That means that the U.S. gains billions of dollars in benefit from educated professionals who leave other countries to come here. And we lose billions when they return home.”

A copy of the study can be found at http://www.globalizationresearch.com/.

Foreign-Born a Significant Source of Patents

A second Kaufman Foundation study authored by Vivek Wadhwa and his students at the Pratt School of Engineering at Duke University found “1 in every 4 patent applications from the U.S. in 2006 listed a foreign national residing in the U.S. as an inventor. This number had increased threefold over an eight-year period and  it doesn’t take into account inventors who had become U.S. citizens before applying for a patent.”

The study found:

• Foreign nationals contributed to more than half of the international patents filed by companies such as Qualcomm (72%), Merck (65%), General Electric (64%), Siemens (63%), and Cisco) (60%). Interestingly, 41% of the patents filed by the U.S. government listed foreign nationals as inventors.

• Foreign nationals contributed to 25.6% of all U.S. international patent applications in 2006, but the numbers were much higher in New Jersey (37%), California (36%), and Massachusetts (32%).

• In 2006, 16.8% of international patent applications from America had inventors with Chinese names and 36% of these (or 5.5% of the total) were foreign nationals. Also, 13.7% had Indian names and 40% (or 6.2% of the total) were foreign nationals.

• Indian and Chinese inventors filed patents mostly in the fields of medicine, pharmaceuticals, semiconductors, and electronics. (Source: Vivek Wadhwa, “The Reverse Brain Drain,” Business Week, August 22, 2007)

Substitution Regulation is Finalized, Likely Will Make it Harder for Employers to Navigate Existing Immigration System

Labor certification is a test of the labor market that is designed to show (through posting advertisements and other methods) that no similarly skilled American is willing and able to fill the job at the market wage for the position. Labor certification is a prerequisite for most employment-based green cards. Substitution is when an employer uses an already approved labor certification for a different employee than originally intended because the original employee is no longer being sponsored for immigration, perhaps because he or she took a different job. In other words, an employer uses a certification originally intended for person number 1, who he will not end up sponsoring, and uses it for person number 2. From the employer’s perspective, it has already gone through the required process and paid the legal and other fees associated with the certification, so as long as the replacement employee fits the same profile it shouldn’t matter to the Department of Labor. However, DOL did not agree.

In attempting to respond to perceived fraud in the labor certification process, the Department of Labor (DOL) sent to the Office of Management and Budget (OMB) a regulation on “substitution” that concerned employers and immigrants. That regulation has now been finalized.

Prior to the new regulation an approved labor certification application remained valid indefinitely. Under the new regulation, labor certification applications will expire after a short period of time. One reason the issue is important is the priority date for a green card is affected by the date of filing for labor certification. An individual with a labor certification filed on January 2004 will likely receive a green card far earlier than a worker with a certification approved in January 2007. Under current practice an individual could use a labor certification application approved years earlier so long as he or she meets the eligibility requirements and is seeking the same position as the person for whom the original application was filed.

In a particularly controversial measure, the regulation prohibits immigrants from paying for an attorney as part of the labor certification process. There are concerns that this provision could dissuade smaller firms from sponsoring skilled foreign nationals for immigration. The regulation may be subject to a court challenge. If it stands, the impact is expected to be reduced flexibility for employers and immigrants navigating the green card process.

INTERVIEW-Aman Kapoor, Executive Director of Immigration Voice

Aman Kapoor is executive director of Immigration Voice (www.immigrationvoice.org), a nonpartisan group advocating for solutions to the green card problems affecting, in particular, highly skilled immigrants. Immigration Voice recently organized a march and lobby day in Washington, D.C. that attracted news coverage in the New York Times and elsewhere. The Foundation recently interviewed Mr. Kapoor.

Merage Foundation for the American Dream: What was the purpose of the march and do you think it achieved its objective?

Aman Kapoor: Immigration Voice is working to find a solution to the massive backlogs in the employment based green card category. These backlogs result in a wait time of anywhere between 6 to 10 years for an estimated 700,000 to 800,000 highly skilled immigrants and their family members. They are stuck in the current backlogs. The current backlogs cause a reverse brain drain affecting American competitiveness and innovation. At the same time, these green card backlogs create severe quality of life issues for the applicants and their families.

The purpose of the rally was to increase the profile of the issue of employment based green card backlogs and long delays, and to draw the attention of Congress towards the involved issues. The issues were almost forgotten in the daily debates over immigration. We have waited for Congress to do a comprehensive immigration bill. Congress believe that the nation is not ready for a comprehensive bill. So we were rallying and petitioning Congress to address the issue of high-skilled green card backlogs, which as an issue has widespread support in both chambers of Congress and within both parties. We hope that Congress will not hold the issue hostage to a comprehensive bill.

Immigration Voice members flew in from almost every state in the country. We had around 140 meetings with lawmakers.  We have received very positive responses from many members of the Congress.

We think the rally and the lobby day was extremely successful..

Merage Foundation for the American Dream: When people hear about long waits for green cards they assume that’s because of slow processing by the agencies, but is that the real problem?

Aman Kapoor: There are many reasons for long green card waits. Slow processing is just one of the reasons, and may not be the most important one. The primary reason for long wait for green cards is the huge backlogs created because of (1) the low number of green cards in the annual quota and (2) per-country ceilings, which limits the number of green cards given to a particular country in a visa category each year.

Currently, there is a quota of 140,000 employment-based green cards every year. Half of these visa numbers are generally used for dependents (spouses and children) of high-skilled immigrants. So, in effect, only 70,000 green cards are allocated to the skilled immigrants. Then there is a further limitation. No single country may secure more than 7% of the total number of annual employment based green cards. It means that applicants from countries where there are many many applicants and demand for applicants from the U.S are severely penalized resulting in huge backlogs for applicants (e.g., countries like India, China, Philippines and Mexico). We believe the per-country ceilings in the employment-based category have exacerbated the backlogs and delays. We believe that employment based green card process should have nothing to do with the country of origin of the applicants. This category should be purely based on skill, talent, educational and professional background. It doesn’t make any difference to the patients if the doctor is from Madagascar or China so long as he or she is qualified. Artificially imposing a per-country ceiling has increased the intensity of the backlogs.

Merage Foundation for the American Dream: Can you explain what happened after the State Department Visa Bulletin listed employment-based immigration categories as “current”? What did that mean and how did your group respond?

Aman Kapoor: The Department of Labor (DOL) certification means that no willing and qualified U.S. citizen was available for the job at the prevailing wage rate. In the June 2007 Visa Bulletin, the State Department announced that all categories for all countries were “current,” meaning applicants with approved labor certification could file for adjustment of status (meaning an individual can be processed for a green card inside the United States, rather than having to leave the country.).

On the first day when the Department of State Visa Bulletin was supposed to go into effect (July 2, 2007), USCIS announced that visa numbers for the year had already been used up. This caused the Department of State to “reverse” its pronouncements in the July Visa Bulletin and announce all categories had gone from “current” to “unavailable.” This meant that even after spending thousands of dollars preparing an adjustment of status, individuals could not file for adjustment of status applications.  This posed problems for a lot of employers and their employees, generally highly skilled immigrants (and their families).

Immigration Voice’s members were severely affected by the sudden reversal of July visa bulletin. After internal discussions, we began continuous communications with the Bush Administration, clearly relaying the effects of the untimely reversal of the visa bulletin on the high-skilled community and the possible ways to resolve the crisis situation. We also asked Immigration Voice members to request our employers to speak to the Administration and Members of Congress. We wanted to fix and reverse the negative impact of the July Visa Bulletin fiasco quickly.

As you know, in the end, the Administration accepted our request to re-instate the July Visa Bulletin so that applicants with approved Department of Labor certifications could apply for adjustment of status. To make up for the lost time for applicants, the Administration allowed the filing of applications for an additional 17 days.

Recently, we learned from DHS that there were 380,000 adjustment of status applications received during July and August of 2007. This was extremely consequential for many individuals. Applying for adjustment of status allows applicants to change employers and also provides travel documents for easy travel in-and-out of the country. These are both extremely important to the high-skilled community.
  
Merage Foundation for the American Dream: What are the most damaging impacts of the long waits for green cards for skilled immigrants?

Aman Kapoor: Long green card waits cause severe quality of life issues for the skilled immigrants and act like a slow poison pill. Green card delays force an employee to stay in the same job title, job occupation code and same salary during the wait time. If an employee leaves an employer within 6 months of filing an adjustment of status application, then the applicant has to start the process over again from the beginning.

As the result, high-skilled immigrants must reject promotions and salary increases. They see others around them progressing in their careers. This is extremely damaging to an employee’s morale and productivity. Additionally, there are severe quality of life issues. Professionally qualified spouses cannot work, children cannot get scholarships even when schools are willing to award the scholarships to the deserving candidates, skilled immigrants are not able to extend drivers licenses causing further frustration with the system, and skilled immigrants cannot start their own ventures even when venture capitalists are willing to provide funding for new and innovative ideas that would create more jobs.

By preventing any promotion for long periods of time, the green card long wait times converts the high-skilled immigrant into an underachiever. It can destroy much of the zeal and enthusiasm inherent in most immigrants with respect to their American Dream.

Merage Foundation for the American Dream: What would you like to see lawmakers do to address this problem?

Aman Kapoor: We are petitioning lawmakers to consider common sense provisions that would eliminate employment based green card backlogs. We want to make the wait time shorter and to make it more bearable to wait. First and foremost, we urge Congress to increase the green card quota to 290,000 and exempt dependents, medical doctors and STEM advance degree holders from the cap. (This green card cap is separate from the H-1B temporary visa cap, which also needs to be increased.) Prominent lawmakers have expressed overwhelming support to recapture unused visa numbers. (“Unused visas” are visas that were allocated under the 140,000 annual employment-based immigration quota but went unused during a fiscal year primarily because of government processing delays.)

We urge Congress to eliminate the discriminatory practice of per-country ceiling in employment-based green card categories. Congress should clearly allow adjustment of status applications even when the visa number is not available and allow people to change jobs to a “related field or area” after applying for adjustment of status.