TABLE OF CONTENTS
Timing for Immigration Reform Remains Up in Air as H-1B Visas and Employer-Sponsored Green Cards Are Down
A full legislative calendar, poor U.S. economic conditions and the political tension surrounding the health care debate have left the status of immigration reform legislation uncertain. Still, in recent remarks political leaders have sought to dispel fears the issue will be shelved indefinitely. “I would anticipate that before the year is out, we will have draft (immigration) legislation, along with sponsors potentially in the House and the Senate who are ready to move this forward,” declared President Barack Obama in remarks made in Guadalajara, Mexico in August 2009. “And when we come back next year, that we should be in a position to start acting.”
Earlier in the summer, Senator Charles Schumer (D-NY), who chairs the Senate’s immigration subcommittee, announced he expected to have legislation ready around Labor Day. However, it now appears more probable that only an outline or discussion draft would become available in September or later.
During the spring, in remarks before the Technology Policy Institute in Washington, D.C., Rep. Zoe Lofgren, (D-CA), chair of the House Subcommittee on Immigration, Citizenship, Refugees, Border Security and International Law, announced it would be unlikely Congress would move or pass separate legislation dealing only with green cards for skilled immigrations or reform of agricultural guest worker visas. Such issues would need to be addressed in the context of broader immigration reform legislation, she said. It is for this reason business and immigration advocates have focused on the fate of a comprehensive immigration bill, rather than on pursuing other legislative measures.
While Congress considers its next steps on immigration, economic conditions have led employers to apply for far fewer H-1B visas than at any time in recent years. On April 1, 2009, U.S. Citizenship and Immigration Services (USCIS) started receiving H-1B visa applications for FY 2010. Filings for these temporary visas, which are used by companies to hire international students and professionals from abroad, dropped by more than half at the beginning of April compared to the same period the year before.
USCIS spokesmen said in April 2009 that while it had received enough applications to fill the 20,000 quota (for FY 2010) for those with advanced degrees the agency had additional room for petitions (approved applications) that would count against the 65,000 numerical limit. In August, USCIS announced, “As of August 7, 2009, approximately 44,900 H-1B cap-subject petitions and approximately 20,000 petitions qualifying for the advanced degree cap exemption had been filed. USCIS will continue to accept both cap-subject petitions and advanced degree petitions until a sufficient number of H-1B petitions have been received to reach the statutory limits, taking into account the fact that some of these petitions may be denied, revoked, or withdrawn.” Since FY 2010 does not start until October 1, 2009 and lasts until September 30, 2010, it is still possible the full allotment of H-1B visas would be reached at some point during the fiscal year. The decline in H-1B filings has given support to those who have argued employers hire skilled foreign-born professionals based on business need and market conditions.
In a related development, filings for employer-sponsored green cards (for permanent residence) have also declined. “With the nation facing a deep recession and high unemployment, the government has received about half the number of employer-sponsored applications for work-based green cards in fiscal years 2008 and 2009 than it did in each of the previous years,” according to the Associated Press. “There were almost 235,000 applications submitted in fiscal 2007, almost 104,000 the following year, and fewer than 36,000 through the first eight months of fiscal 2009, according to data obtained by the AP.”
“What this tells us is that the market works,” writes Greg Siskind, an attorney with Siskind Susser Bland. “Visa petitions increase when it is hard to find qualified American workers. When Americans are available, employers don't bother with recruiting overseas workers. And it also tells us that employers - properly - perceive that foreign workers are MORE expensive than American workers. Expensive visa fees, prevailing wage requirements, lawyer fees, travel costs, communication challenges and more all make foreign workers an expensive proposition best utilized when addressing a serious worker shortage.”
Earlier this year, U.S. Citizenship and Immigration Services began conducting random audits (inspections) of H-1B employers as part of its Administrative Site Visit and Verification Program. This is in response to Congressional criticism of H-1B visas and an October 2008 USCIS report that found fraud or technical violations particularly among smaller employers of foreign nationals. The onsite audits, which have caused consternation among immigration attorneys, respond to allegations that the federal government has not done enough to ensure the proper wages to those hired on H-1B visas.
It remains the case that there is more Congressional support for making it easier for those with advanced degrees in science and engineering to obtain employer-sponsored green cards than for increasing the quotas for H-1B temporary visas. This is because green card holders enjoy full mobility in labor market, whereas H-1B visa holders, even though they commonly change jobs, may hesitate to do so if, for example, they have green card applications pending with a current employer. Businesses believe there is a real threat that comprehensive immigration reform legislation could include new conditions on hiring foreign nationals on H-1B visas.
Impact of H-1B Restrictions Concerns Educators, Others
As part of the stimulus bill passed by Congress earlier this year, Senator Bernard Sanders (I-VT) included an amendment that imposed restrictions on recipients of TARP (Troubled Asset Relief Program) funds in the hiring of H-1B visa holders. Such financial institutions would need to comply with the strict set of rules imposed on the heaviest users of H-1B visas (so-called H-1B “dependent” companies). For example, employers could not hire an individual if the firm had laid off an employee in “essentially the equivalent of the job” 90 days before or after filing a petition for an H-1B visa holder. A similar requirement is in place for the recruitment of U.S. workers over foreign nationals.
For employers one concern is whether they could justify after the fact to the Department of Labor (DOL) they were in compliance with the law. Attorneys point out that a term such as “essentially the equivalent of the job” may be interpreted quite differently by DOL investigators than by a bank’s human resources department.
Bank of America decided it could not meet the new law’s requirements and withdrew job offers to 50 international student graduates of U.S. universities. The Bank of America announcement made news across the globe and inspired additional criticism of the Congressional action.
The Wall Street Journal (March 11, 2009) editorialized: “Protectionists will applaud, no doubt. But denying companies access to talented workers born outside the U.S. will neither jump-start the economy nor serve the nation's long-term interests . . . America must compete in a global economy, and if U.S. companies can't hire these skilled workers – many of whom graduate from U.S. universities, by the way -- you can bet foreign competitors will.”
In the same edition of the Wall Street Journal, Dartmouth’s Tuck School of Business Dean Paul Danos and Associate Deans Matthew Slaughter and Robert Hansen, wrote, “Turning away skilled immigrants will hurt, not help, the U.S. It is unlikely that supporters of the Employ American Workers Act saw the link from jobs at companies receiving TARP money to enrollments at American universities and graduate schools. But we ignore at our peril the indirect yet significant harm done by laws that try to wall America off from the global economy. Today U.S. colleges and universities are suffering. Who will be next? And who in Washington will have the wisdom and courage to change course?” A chief concern among U.S. educators is that an inability to work in the United States after graduation, due to H-1B restrictions or long waits for green cards, may lead a larger number of international students in the future to pursue their degrees in other countries.
Survey Finds Foreign Nationals Leaving America
One of the more worrisome aspects of current immigration policy is its impact on outstanding international students and other temporary visa holders who leave the United States – and take their skills with them. A new survey illustrates that foreign-born professionals may be motivated by more than one factor in choosing whether to establish their career in the United States or at home. The results of the survey reflect the multifaceted reasoning behind the difficult decisions faced by foreign-born professionals.
The March 2009 report from Duke University and University of California, Berkeley surveyed more than 1,000 Indian and Chinese professionals who left the United States and returned to their native countries. The study, “A Reverse Brain Drain,” found many individuals perceive greater opportunities in their countries of birth than ever before. The research shows it is no longer a given that outstanding international students, researchers and professionals from around the world will want to stay and work in America.
“The responses to our survey seemed to indicate that returnees’ departures were not related solely to preferences for starting a business in their home countries or to perceptions of possibilities of further professional advancement in their home countries,” concluded co-authors Vivek Wadhwa (Duke University), AnnaLee Saxenian (University of California, Berkeley), Richard Freeman (Harvard University), Gary Gereffi (Duke University) and Alex Salkever (Duke University). “Returnees showed a strong preference for their home country because of family and personal considerations.”
However the research also showed that visa considerations can play a role in decision-making. “A majority of respondents indicated that they would at least consider returning to the U.S. if they could get a visa and a good job. Most likely the good job is the key here, as visa considerations did not weigh heavily in their decision to leave. Fewer than one-third of respondents had permanent-residency status, however, and it is possible that, though visa issues may not be perceived as a major reason to leave, job difficulties resulting from restrictive visa policies could be playing a major role in spurring the exodus,” the authors concluded.
“Restrictive visa policies” refers to the 6 to 10 year wait for employer-sponsored green cards and the difficulty of securing temporary H-1B visas, the supply of which were exhausted before or during the past 6 fiscal years. About one-third of Indian temporary visa holders (32.6 percent) said U.S. immigration issues contributed to their choice to return to India, according to the survey. Twenty-two percent of Chinese said visa issues contributed to their decision to leave America and return to China.
The bottom line is that highly educated professionals are faced with many options. If the United States wishes to encourage more of these professionals to choose a career in America, then it is important to provide a more open legal regime for both temporary visas and green cards.
The research is available at http://www.globalizationresearch.com/.
The Economist Points to Key Role of Immigrants in Entrepreneurship
An economy thrives from jobs and innovations created by new businesses, some of which start small and grow large. In many ways, entrepreneurs are the driving force of any market-based economy. The Economist magazine (March 14, 2009) labeled America as still the leading place for entrepreneurial activity, pointing to immigration as a leading reason. “America has found the transition to a more entrepreneurial economy easier than its competitors because entrepreneurialism is so deeply rooted in its history,” noted the magazine. “It was founded and then settled by innovators and risk-takers who were willing to sacrifice old certainties for new opportunities.”
The Economist concluded that the world’s most mature venture capital industry, historically close relations between universities and business, and immigration are the factors that have allowed America to remain the top country for entrepreneurship.
The analysis explained that “openness to outsiders” is a key to countries creating an environment that creates new businesses: “Emigres have always been more entrepreneurial than their stay-at-home cousins: the three most entrepreneurial spaces in modern history have been the ones inhabited by the Jewish, Chinese and Indian diasporas. In today’s knowledge economy educated emigres are at the cutting edge of innovation. They create more firms than regular folk; they circulate ideas, money and skills; they fill skills gaps; and they mix and match knowledge from different parts of the world.”
Long waiting times for green cards and the low quota on H-1B visas is threatening America’s historic openness on the immigration of high skill professionals and researchers, according to The Economist.
Studies by the National Foundation for American Policy and Duke University have found that 1 in 4 publicly traded technology companies in the United States had at least one immigrant founder.
The Economist series on entrepreneurship can be found at:
http://www.economist.com/specialreports/displaystory.cfm?story_id=13216037
New Research on Patents and H-1B Visas
An indicator used to determine the growth of innovation in a society is the level of patents filed. Research from economists William R. Kerr (Harvard Business School) and William F. Lincoln (University of Michigan) revealed that H-1B visas help increase innovation in America by leading to an increase in patent filings.
Kerr and Lincoln concluded, “We find that fluctuations in H-1B admissions levels significantly influence the rate of Indian and Chinese patenting in cities and firms dependent upon the program relative to their peers. . . . We conclude that total invention increases with higher admission levels primarily through the direct contributions of immigrant inventors.”
The researchers found little evidence that foreign-born inventors were inhibiting the filing of patents by native-born scientists and engineers: “Most of our specifications [also] find weak crowding-in effects or no effects at all for native patenting.” Kerr and Lincoln concluded that “A 10 percent growth in H-1B admissions correlates with an 8 percent growth in Indian invention.” The research focused on Indian and Chinese H-1B visa holders, since they annually make up the majority of H-1B admissions.
These results complement the findings of earlier research on patents by McGill University economist Jennifer Hunt, who found in a May 2008 paper: “The 2003 National Survey of College Graduates (NSCG) shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 7.7%.”
The two studies can be found at:
http://www.hbs.edu/research/pdf/09-005.pdf
http://www.iza.org/conference_files/TAM_08/hunt_j136.pdf
Study Finds Skilled Immigrants a Fiscal Boon
An area of skilled immigration that has received little attention is its fiscal impact. While much of the debate on H-1B visas has focused on whether foreign nationals reduce job opportunities for Americans, there has been little research on the budgetary impact of H-1B visa holders and employment-based green card recipients. A March 2009 study by Arlene Holen for the Technology Policy Institute concluded, “Highly skilled immigrants pay substantially more in taxes than they receive in federal benefits.” Holen reached her estimates utilizing the same methodology used by the Congressional Budget Office to evaluate the fiscal impact of legislation.
Holen examined the fiscal impact of the 2006 and 2007 comprehensive immigration bills, which would have increased the quotas for both H-1B visas and employment-based green cards. The research found: “The relaxation of green card constraints proposed in the Comprehensive Immigration Reform Act of 2006 could have increased labor earnings and GDP by approximately $34 billion in the tenth year following enactment and had a net positive effect on the budget of $34 to $47 billion over ten years. . . . Relaxation of H-1B caps under the Comprehensive Immigration Reform Act of 2007 could have increased labor earnings and GDP by $60 billion in the tenth year following enactment and improved the federal budget’s bottom line by $64 to $86 billion over ten years.”
The research can be found at:
http://www.techpolicyinstitute.org/files/the%20budgetary%20effects%20of%20high-skilled%20immigration%20reform.pdf
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