NFAP Study Rebuts Numerous Criticisms of H1B Program

Earlier this month, the National Foundation for American Policy (NFAP) released the results of a new study on the use of H1B workers by Indian-based companies that undercuts many of the claims made by politicians critical of the H1B program. The study, which focuses on cap cases filed for fiscal year 2016 (FY16), finds that there was a 37 percent drop from the previous fiscal year in the number of H1B cap cases approved for the top Indian-based companies. The study also criticizes some of the actions taken by President Trump and the rhetoric by some members of Congress related to the H1B program.

Largest Indian-Based Companies Significantly Reducing Use of H1B Workers

The study finds that, in FY16, there were 9,356 new H1B cap cases approved for the top seven Indian-based companies (i.e. U.S. companies owned by Indian entities), which was a 37 percent decrease from the previous fiscal year. FY16 petitions were filed in April 2015, so this decrease was unrelated to the election of President Trump. Rather, the study concludes that the drop was due to “industry trends toward digital services … which require fewer workers, and a choice by companies to rely less on visas and to build up their domestic workforces in the U.S.”

Criticisms of ‘Hire American’ Executive Order

President Trump signed an executive order (EO), entitled Hire American, Buy American, on April 18, 2017, which proposed, among other things, to change immigration policy in a manner that “help[s] ensure that H1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.” The NFAP criticizes this portion of the EO, noting that, because recent graduates typically are not able to demand top salaries, “an effort to change the system to one where only those with the highest salaries receive H1B petitions could prevent international students from being able to stay and work in the United States after graduation.”

Also, in releasing this EO, the Trump Administration claimed that some 80 percent of H1B workers earn less than the medium wage within their respective fields of employment. The NFAP study concludes that this claim by the Trump Administration, which was based solely on data collected from labor condition applications (LCAs), is misleading for two reasons. First, it assumes that each LCA was filed for a separate H1B worker. But, as the study notes, many LCAs may be filed for the same worker, and this occurs especially often with younger, lower paid H1B workers. Secondly, the salary listed in an LCA is the minimum salary the H1B worker can be paid; but many H1B workers are paid more than the wage listed on the LCA.

According to this study, “the Government Accountability Office found H1B professionals generally earn the same or more than their U.S. counterparts after comparing the median reported salaries of U.S. workers and H1B professionals in the same fields and age groups. In addition, the median salary in 2015 for H1B computer-related recipients who have worked about three years … was about $7,000 higher than the median salary in the industry.”

Liberalize Immigration Rules to Prevent Outsourcing

The study explains that, contrary to the assertions from many in Washington who wish to reduce the number of immigrants allowed into the United States, the evidence shows that the U.S. needs to increase immigration limits in order to help reduce outsourcing. Per the NFAP study, greater restrictions on immigration are pushing companies to invest more heavily in overseas offices so that the work can be done from abroad. The report cites economic research that determined that an increase in the number of H1B workers allowed into the U.S. would actually create significant gains in the number of jobs available for U.S. workers. The study also notes the extensive wait time for workers from India to become lawful permanent resident (i.e. “green card” holders), and advocates in favor of increasing the annual limit on employment-based green cards, and eliminating the per-country limit.

Conclusion

There is no question that there are flaws within the U.S. immigration system, including the H1B program. But, pursuing a more isolationist policy in the United States is not the answer. Making it easier for companies to bring in high-skilled workers – and, changing immigration rules to eliminate the extensive wait time for green cards – are keys to ensuring that the U.S. remains a global leader.

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