H-1B Visas

The Center for Immigration Studies (which is not pro-immigration) has a study out of H1B visas here. I don't have enough expertise to tell if these claims they are making are accurate or not:

Technology sector employers, who represent the largest share of H-1B visa users, tell the public that the H-1B program is vital to their ability to find the highly skilled workers they need. Yet Department of Labor data tell a different story. Previous studies have found that the H-1B program is primarily used to import low-wage workers.1 This report examines the most recently available wage data on the H-1B program and finds that the trend of low prevailing wage claims and low wages continues. In addition, while industry spokesmen say these workers bring needed skills to our economy, on the H-1B Labor Condition Applications (LCAs) filed with the Department of Labor, employers classify most of their H-1B workers as being relatively low-skilled for the jobs they are filling. This report compares prevailing wage claims and wages employers reported for H-1B workers in computer programming occupations in FY 2005 to wages for U.S. workers in the same occupation. Although the H-1B program stipulates that employers must pay H-1B workers at least the prevailing wage for their occupation and location, the results of this report clearly demonstrate that the regulation does not produce that result. The findings in this report clearly demonstrate that the legal definition of the prevailing wage requirement does not ensure H-1B workers are paid the actual market prevailing wage. Employer prevailing wage claims and reported wages for H-1B workers are significantly less than those for U.S. workers in the same occupation and location. This suggests that, regardless of the program’s original intent, the H-1B program now operates mainly to supply U.S. employers with cheap workers, rather than with essential skilled workers.

Unlike the illegal aliens who drive down the wages of unskilled or low skilled citizens and legal residents, H-1B workers are driving down the wages of people like myself, who are paid pretty darn well. I'm not asking you to cry for people whose salaries are driven down to $80,000 a year by competition--it's not equivalent to the guy who is trying to raise a family on minimum wage.

Still, there are some unpleasant results, if this is an accurate description of the people that are brought in under H-1B visas. It means that most of these jobs are positions that could be filled by college grads, or people with one or two years of experience. (My experience with my current employer suggests that this is actually the case--some of them bring no more--and in some cases less expertise than I would expect of any recent computer science graduate.) Driving down wages in this entry level or near entry level segment has the effect of discouraging Americans from getting degrees in these fields--or preventing them from getting jobs that will give them the experience that they need. This is bad for them, and probably bad for the American economy in general. We already have a hard enough time getting Americans to major in hard subjects--why provide any encouragement for them to get degrees in fields where, to put it bluntly, we already have more than we usefully employ?

UPDATE: A reader writes:

I am a software engineer that has worked in Silicon Valley and now in the DC area. As far as I'm concerned, the H1B program is a complete sham. During the early days of the web explosion, I worked at Netscape and we hired H1B visa workers like crazy. At that time an H1B worker couldn't switch jobs, which we referred to as "H1B handcuffs". The gov kept ramping up the H1B cap at the behest of business lobbyists. Each time, the cap was met almost immediately. Many of these engineers returned to their country of origins when their visas expired, the majority of whom where Indian. That led to a strong buildup of experienced engineers in India which was followed by pushes to "offshore" development. In other words, we trained our own competition. This meant a double impact on the US software engineering market, first from the pressure of H1B workers, then from efforts to shift the work offshore. The number of US students seeking software engineering degrees dropped as a result. The current H1B program no longer restricts workers to their original sponsors, giving them more leverage in the work market. However, there is still heavy downward pressure on US salaries.

Also, one of the regs for H1B is that the company must be unable to fill the job with a US worker. Some more clever companies satisfied this requirement by simply advertising the job in a different city then the actual job location, thus nearly insuring that no one would respond.

I don't blame the Indian engineers for taking advantage of the program. Overwhelmingly the Indian engineers I've worked with were smart and capable. They acted in their own interests as one would expect. But that is the point. Every time I hear someone explaining how great it will be if we just expand the H1B program again, I think to myself: "This is not in my best interest, and in my opinion, not in the best interest of the rest of US workers." I just read comments by Larry Kudlow on "NRO The Corner" singing the praises of an expanded H1B program. I'm not buying it.