H-1B Quota: Economy Vs Politics

The fate of H-1B quota, which is being debated currently in the US Senate, is directly linked to the fate of thousands of professional aliens who dream of working and making it big in the land of opportunities. However, the land of opportunities seems to have come to the conclusion that it has given too many opportunities to the outsiders and that the aliens are abusing their generosity.

However, during the current congressional debate on Immigration issues, it has become quite clear that very few representatives have a clear idea about the actually economic pros and cons of the work visas and are more focused on the vote bank’s opinion. Of course, it is natural that with the elections looming the issue will be more politicized than practically debated. But if this chance to address this very important immigration issue passes by, then it will probably take years before another chance comes in.

At present, pros and cons of H1B quota increase are being tossed around too liberally for the lay man to even understand what the real issues are. The U.S. is literally divided on this issue, with both groups lobbying hard.

Points in Favor of H1B quota Increase

  1. U.S. does not have enough local IT workers to cover the current demand
  2. Only a small percentage of U.S. college students pursue degrees in science or engineering
  3. U.S. economy needs the input of H1Bs to stay ahead of global economy
  4. If the H1B quota is not increased, in order to keep ahead of the competition, U.S. firms are most likely to start outsourcing work outside.

Points against H1B quota Increase

  1. Shortage of U.S. IT Worker is a myth. Employers prefer H1Bs as it is cheap labor
  2. H1B is harming local candidates and U.S. economy
  3. Foreign firms are abusing the H1B visa and using it to draw work offshore
  4. H1B visa system requires serious overhaul to stop its abuse before the quota increase.

Are H1B holders a threat to US workers?

This remains the million dollar question in this debate. While some studies (by Compete America) indicate that H1B “specialized” jobs are rarely coveted by native U.S. candidates and as such poses no threat to U.S. employment, other studies (namely by Rand) have concluded that U.S. faces no shortage in the area of science or technology and are local jobs are being snatched by H1B workers. This brings us to the next question.

Why would US employers prefer H1Bs over local candidates?

The anti-H1B lobbyists insist the reason for employers preferring H1Bs in that they are cheap. It is said that with the threat of job loss as well as loss of visa status hanging over them, most H1B employees do not complain against step-motherly behavior by companies against them and put up with less pay and lesser benefits.

In a recent move, Senators have also cornered a few Indian firms which are reportedly the highest H1B users, alleging abuse of H1B benefits. Ironically, none of the U.S. firms which outsource heavily have been put under and scrutiny at all on issue of pay and benefits.

On the other hand, lobbyists for H1B insist that the employers prefer H1Bs because its easier to get qualified candidates from abroad then locally. Studies conducted by these groups show that most local candidates are High School Graduates, whose technical skill level is much below those of a Bachelors Degree holder from a foreign country. Moreover, these studies indicate that not only does a large percentage of school graduates do not pursue college, only 5% of those who do actually opt for science or engineering subjects.

Additionally, smaller IT firms who are more willing to hire U.S. candidates as employees, often find themselves short of candidates as they cannot afford to pay the high salary that most local candidates demand. Consequently, H1Bs are now filtering into these companies as well, showing a definite hike in demand for the visa.

Again, both parties have put forward studies that back their claims, leaving the truth to guess work or individual opinion.

What are the possible solutions?

The political, social and economic lobby seems to have all different ideas on this issue. While politicians believe U.S. immigration policy needs to be tightened to ensure H1B practices are properly followed, the economic lobby is quoting the sports wear makers and saying just do it! American corporate feels the solution lies in increasing the quota, which will cover their shortage increase their profits. On the social front, lobbyists believe the fault lies with the U.S.  education system which does not encourage college level education for a job.

The Politics of H1B

This brings us back to the issue in question – will the H1B quota be increased or not. In general, the Republicans are more inclined towards a tougher stand against immigrants, whereas the Democratic Party has always been immigrant friendly.

But when it comes to business immigration issues, like H1B, the boundaries are often blurred. Republicans have a more pro-corporate stand and have in return enjoyed the financial backing of major corporations during election campaigns. Consequently, the Republican Party can very well decide to lean towards the corporations who are in favor of a hike in H1B quota.

Similarly the Democrats, who are generally in favor of increasing immigration numbers, are being forced to take a more restrictive stand under pressure from Labor Unions who are there major election supporters.

To all this, add the individual US congress man and US Senator’s position and you have a completely complex scenario. The first round of Immigration debates show that more and more republicans are voting against increase for H1B quota as the base republicans are against it.

Here is a few highlights of the first round of Immigration debate (Source: AILA)

  1. Amendment to strike the temporary worker program was defeated by a vote of 31 to 65.
  2. Amendment to reduce the cap on temporary workers to 200,000 was agreed to by a vote of 74 to 24.
  3. Amendment having to do with rules applicable to immigrants employed as dairy workers, was agreed to by unanimous consent.
  4. Amendment to sunset the temporary worker program after five years was rejected by a vote of 48 to 49.
  5. Amendment to establish the American Competitiveness Scholarship Program by increasing the H-1B User Fee from $1500 to $5000, passed by a vote of 59 to 35.
  6. Amendment to strike the legalization program was defeated by a vote of 29 to 66.