H-1 B-Ware
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If there is one point about immigration above controversy, the cliché goes, it is the need for more high-skilled immigrants. Apploi CEO Adam Lewis called lifting the 65,000 per year cap on H-1B visas, which give work authorization to foreigners in “specialty” occupations, “an immigration fix we can agree on”; the Cato Institute’s Alex Nowrasteh called skilled immigration “the new common ground in the reform debate.” 

Somebody forgot to tell Sen. Jeff Sessions, the Alabama Republican who has led the fight against expansive immigration legislation during the Obama era. He has not just opposed amnesty, as most Republicans have. He has spoken out against the new visas in the Gang of Eight bill, including a higher cap on H-1B and other guest workers.

Iowa Republican Sen. Charles Grassley hasn’t gotten the memo either. “Somewhere along the line, the H-1B program got side-tracked,” he said in a statement last May. “The program was never meant to replace qualified American workers, but it was instead intended as a means to fill gaps in highly specialized areas of employment.”

Grassley has been arguing for years that H-1B and similar programs are no longer fulfilling this original purpose. In 2007, he made an impolitic observation: “Unfortunately, the H-1B program is so popular that it’s now replacing the U.S. labor force.” He’s been willing to expand the number of available visas, but only if accompanied by reform ensuring that companies make a good-faith effort to hire American workers first.

Many conservatives have feared to go where Sessions and Grassley have traveled. High-skilled immigration doesn’t raise the same issues that low-skilled immigration does. And the latter is most of what America gets. Legal immigration to the U.S. today is primarily a based on family reunification as opposed to skills or potential for employment; illegal immigrants tend to be less skilled relative to the U.S. labor force.

The National Research Council’s exhaustive 1997 study on the subject concluded that recent immigration had raised the United States’ overall economic output, but the aggregate net benefit to the native-born was vanishingly small and overwhelmed by the costs of government transfer payments to the immigrants.

Done correctly, high-skilled immigration can produce economic growth that doesn’t just benefit employers and the immigrants themselves. When the Heritage Foundation’s Robert Rector made his controversial estimate that the Gang of Eight bill would end up costing taxpayers $6.3 trillion, he was largely referring to entitlement spending that would flow to newly legalized lower-skilled workers.

Moreover, many conservatives and most libertarians dislike talking about high-skilled immigration because the arguments against increasing it sound embarrassingly protectionist. Grover Norquist has contended in these pages that those who favor stricter immigration controls owe more to Samuel Gompers than Ronald Reagan—that skepticism about guest-worker programs is the last gasp of organized labor’s historic immigration restrictionism among today’s unions, which have largely gotten on board with the Democratic Party’s enthusiasm for granting amnesty to illegal immigrants and welcoming millions of additional legal immigrants.

But if we’ve learned anything from recent investigations into crony capitalism, what is pro-business is not always pro-free market. And while many “There shall be open borders” types champion H-1B and the similar L-1 visa programs, such visas do not represent a pure free market in labor. These are in fact government programs subject to political manipulation. If the government has discretion in how it exercises its legitimate authority over who comes and who goes, a prerequisite for national sovereignty, then shouldn’t it exercise such discretion in a way that minimizes the impoverishment of Americans?

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Impoverishment, imshmoverishment, comes the reply. Most holders of these specialized visas have college degrees. The unemployment rate for college graduates remains fairly low nationwide, even after the Great Recession. So letting in more of the “best and the brightest” from abroad doesn’t really hurt anything, and can only help.

There are several problems with this cavalier argument. First is that even though holders of bachelor’s degrees are usually also holders of jobs, the employment picture for young Americans even in their late 20s remains bleak. Their unemployment rate in 2013 was 8.8 percent, up from 5.7 percent in 2007. Underemployment stood at 18.8 percent. It was less than 10 percent five years ago.

And those are just the official statistics. The New York Federal Reserve Bank concluded that as of 2012, 44 percent of recent college graduates were unemployed. Immigration and non-immigrant visas are certainly not to blame for these trends. But it simply won’t do to argue that we can open the floodgates because the kids are all right.

It also makes sense to look at the specific sectors impacted by visa-holders. The government itself argued in court filings for an H-1B visa fraud case that “in January of 2009, the total number of workers employed in the information technology occupation under the H-1B program substantially exceeded the 241,000 unemployed U.S. citizen workers within the same occupation.”

Patrick Thibodeau reported in Computer World at the time that, “Estimates of the size of the tech labor force depend on what government labor categories are included.” India-based IT and outsourcing services companies are found near the top of the list of H-1B visa recipients each year.

So if H-1B workers outnumber unemployed techies, and if companies that outsource tech jobs overseas are gobbling up these visas, fears about the domestic employment impact don’t look so unfounded. Note that these figures also don’t take into account the number of people deterred from entering information technology in the first place. IEEE-USA, an organization of electrical and electronics engineers, has asserted there is a strong connection between unemployment in their field and the number of visas issued.

For example, the group notes that the unemployment rate among computer software engineers was 5.2 percent in 2003, back when the annual visa cap was still 195,000. When the cap was lowered sharply to 65,000 in 2004, the unemployment rate for computer software engineers fell rapidly too, all the way down to 3.3 percent.

“Although a number of factors are affecting high-tech employment, including an improving economy and the migration of engineers out of the technical workforce, statistics indicate that U.S. professionals have benefited from a reduction in H-1B visas,” IEEE-USA President John Steadman said in a statement at the time. “Because U.S. industry has been more restricted in its ability to bring overseas guest workers into the country, it has had to hire more U.S. citizens to fill open positions. This is good news for U.S. technical professionals.”

If this is union special pleading, it is hardly worse than the Whitney Houston tributes tech CEOs croon at every opportunity: I believe H-1B visas are the future/grant them often and let them lead the way.

This attitude occasionally even percolates into congressional offices. “There are American workers who, for lack of a better term, can’t cut it,” an aide to Marco Rubio was quoted as saying by the New Yorker. “There shouldn’t be a presumption that every American worker is a star performer. There are people who just can’t get it, can’t do it, don’t want to do it. And so you can’t obviously discuss that publicly.”

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The publication of that quote led to embarrassed denials and may not reflect the Florida senator’s views (though Rubio is indisputably not in the Sessions-Grassley camp on H-1Bs). But it’s an opinion one occasionally hears—in private—among advocates for more foreign workers.

Tom Davis, then a Republican congressman from Virginia, once summed up the H-1B visas debate nicely: “This is not a popular bill with the public. It’s popular with the CEOs.… This is a very important issue for the high-tech executives who give the money.”

Robert Bennett, a Utah Republican later bounced from the Senate for voting for a Wall Street bailout that was very important to the executives who give the money, was also refreshingly candid on this issue. “Once it’s clear [the visa bill] is going to get through, everybody signs up so nobody can be in the position of being accused of being against high tech,” he reportedly said. “There were, in fact, a whole lot of folks against it, but because they are tapping the high-tech community for campaign contributions, they don’t want to admit that in public.”

Norm Matloff, a professor of computer science at the University of California, Davis, has in fact been pounding the drums in a very public fashion on a few things that IT professionals (I was one a decade ago) frequently say privately. H-1B visa holders frequently don’t have more advanced skills than what is available in the domestic labor market. At least some of the visa craze reflects a reluctance to hire older technicians. And there is scant evidence of a tech labor shortage, with most—if not all—of the studies purporting to show one either originating in or funded by the industry itself.

“The H-1B work visa is fundamentally about cheap, de facto indentured labor,” Matloff has written. “The vast majority of H-1Bs, including those hired from U.S. universities, are ordinary people doing ordinary work, not the best and the brightest.” Their employers exercise strong control over these workers, who find it exceedingly difficult to change jobs or companies.

Matloff is a liberal and, outside of some immigration restrictionists, his warnings on this subject have not gotten much of a hearing on the right. But honest tech proponents often say much the same thing. “I know from my experience as a tech CEO that H-1Bs are cheaper than domestic hires,” wrote Vivek Wadhwa in rhe American, a magazine published by the American Enterprise Institute. “Technically, these workers are supposed to be paid a ‘prevailing wage,’ but this mechanism is riddled with loopholes.”

Rep. Zoe Lofgren, the Democrat who represents Silicon Valley in Congress and a staunch defender of the H-1B program, admitted in 2011 that the federal government’s prevailing wage requirement for H-1B computer systems analysts was $40,000 less than the average wage for the same job in her district. “Small wonder there’s a problem here,” she said after receiving this data from the Department of Labor.

No less a free-market economist than Milton Friedman acknowledged the H-1B “program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy.” But are conservatives willing to extend their critique of corporate welfare to this practice beloved by tech companies?

Sessions has gone so far as to invoke the tech unions concerned about H-1B and L-1 visas in his opposition to the Gang of Eight immigration bill. “Congress should listen to the warning from the engineers’ union,” he said in a statement. “For the most part, those in the H-1B program do not become business owners and job creators and do not become immigrants,” he continued. “Rather, they are temporary workers who take jobs at lower pay until they are sent home.”

“Republicans should seize this issue as a crucial moment in history to stand up for the working people of this county, and to defend them against elite Washington interests,” Sessions told the Daily Caller after a closed-door White House meeting between the president and tech executives. “This is an issue that ought to make natural allies out of the GOP, union workers and even the unions themselves… [it’s] also an important moment for a number of Democrats who were elected on the promise of defending workers: Will they side the economic interests of the workers in their states or will they side with the powerful interests meeting at the White House?”

Sessions went on to cite the “$15-an-hour legal worker who doesn’t want to lose his job to federally subsidized illegal labor.” The senator concluded, “Somehow I doubt Goldman Sachs or La Raza is speaking for these Americans.”

That rhetoric may sound uncomfortably like Samuel Gompers to some conservatives. But Richard Nixon and Ronald Reagan won votes from millions of rank-and-file union members even as big labor’s bosses mostly opposed them. And if the libertarian populism that has become all the rage among some center-right political thinkers is to ever become a serious political movement, it will have to move beyond the Export-Import Bank to less arcane matters—like unemployed programmers.

Indeed, a tight labor market might be the best—and most free-market—way to stave off growing demands for minimum wage increases and an economically unsustainable “living wage.” But that can only occur if conservatives don’t manufacture an immigration reform consensus that doesn’t really exist.

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