The H1-B Visa program is a lightning rod. Conceptually it’s a great idea: Find a way to bring productive, skilled people into the United States to boost our economy. In practice it’s become a mess of big government micromanagement, which has made it an easy target for anti-immigration critics.
Here’s how we need to fix H1-B, and mollify the (somewhat legitimate) fears of those in high-tech industries, without attacking legal immigration.
First off, don’t forget that the H1-B program is working as advertised. In 2014, of the 315,857 H1-B petitions that were approved, 404 of them were given to people with less than a Bachelor’s Degree. And that number includes all the fashion models which are included in the program. The idea that H1-B is being used to bring in janitors or underqualified individuals is silly.
Look at the firms that are the biggest users of the program. All the firms bringing in large numbers of them are big business consultancies, IT services firms, or big Internet companies. Some critics of H1-B would lead us to believe that a Google, a Deloitte, or an IBM are going to damage their reputations or risk major contracts by bringing in substandard labor at nice salaries. That asks us to pretend the entire market system doesn’t work, and I reject that.
The top H1-B firms are Indian, or already have Indian or other foreign subsidiaries. What do you think would happen if we ended the program? Do you think they’d just shrug and stop hiring foreigners? No, they’d just close offices in America and open them in Bangalore, Shanghai, and other countries. America would lose out, and other countries would gain investment. That’s bad for all Americans. H1-B is the opposite of Ex-Im: In Ex-Im companies make money as the government ships money overseas. With H1-B, companies pay the government to bring salaries from abroad instead to be paid here in America.
So then what is the problem with the H1-B program? Simply, the problem is that it’s too regulated. Government micromanages the program, bringing in multiple agencies, watching out for union interests at every step, and preventing enough of a free flow of labor. How do we fix that? The solution is to let H1-B visa holders enter the marketplace for labor.
That idea would get pushback from those big consultancies. You see, they’re paying $2,000 per person per year. Which means Infosys gave the US government $12.5MM last year just to have the right to bring and hire 6,250 (primarily Indian) professionals. If they spent that kind of money, only to have the visa holders be able to walk away and get another job, they’d be unhappy.
I say, tough. The concept of the H1-B program is that we have a shortage of talent for certain growing sectors of our economy, and we don’t want companies to have to set up shop overseas in order to keep growing. So we let companies come here, and bring talent here, enriching America. That’s an important idea. But if this talent being imported is in such demand, then we need to make sure that market forces are acting on the salaries.
Reform H1-B by letting visa holders, on their own, find new jobs if they see fit to do so. Let the visa holders renew their visas on their own dimes. Sever the tie between employer and employee after the initial hiring and approval. Let the full free market come to bear on professional service labor.
That’s how you fix H1-B without sounding like a South Park sketch.
Photo by Baigal Byamba on Flickr