Last month, President Trump talked about H1B visas. Here’s the summary according to NBC News:
President Donald Trump defende H-1B visas during an interview that aired Tuesday night, arguing foreign labor is needed at times because U.S. workers do not have “certain talents.”
That last phrase – ‘… U.S. workers do not have “certain talents”’ – has been widely misinterpreted. For one thing, it would be helpful to know the specific talents the President is referring to. But most of the controversy is Mr. Trump’s claim that U.S. workers don’t have those talents. Short version: U.S. workers educated in public U.S. schools by and large lack certain skills, most related to math and science. Read on for details.
What Is an H1B Visa?
An H1B visa grants a foreigner the right to work in the U.S. for a specified time period. Needless to say, these visas are highly valued by residents of other countries who want to relocate here. The allocation process has been controversial. Currently it is a lottery. From the office of Griffith Immigration Law (usual disclaimers, emphasis added):
The H-1B visa lottery exists because demand for H-1B visas far exceeds what U.S. law allows each year. Currently, the United States Citizenship & Immigration Services (USCIS) issues 65,000 general H-1B visas and 20,000 additional visas to advanced degree holders from U.S. institutions annually. Historically, the number of applications has been several times greater than the annual cap. To manage this overflow, the government uses a random, computerized selection process—commonly known as the lottery—to determine which applicants can move forward in the process. This system prevents a rush for visas by timing alone and is intended to make access as fair as possible under the law.
This process does very little to solve the underlying problem. Admitting unskilled workers will not increase the supply of workers in areas requiring technical skills.
A Suggested Compromise
One suggested compromise is a weighted lottery. Here’s the proposal from the U.S. Customs and Immigration Services (USCIS). Again from their web page.
Under this proposed lottery system, employers would receive the following number of entries (per petition):
- Level IV Pay = 4 lottery entries
- Level III Pay = 3 lottery entries
- Level II Pay = 2 lottery entries
- Level I Pay = 1 lottery entry
Figure 1
…
Figure 2
The second part of the table is instructive. Under the current system, each group has the same probability of being drawn as the others, 29.59%. Under the proposed new system, Level IV applicants would have a 61.16% probability of any given draw being from their group. Meanwhile, Level I would have a 15.29% probability. The weighted draw tilts pretty heavily to the higher pay group.
Does This Meet Our Goal?
While this is an improvement, does it really meet the goal of filling jobs that most U.S. college graduates can’t do? No, but it’s a step in the right direction.
There is a correlation between pay and job qualifications. Economics tells us if there are not enough workers to fill job openings at the current wage, the wage rate should rise. Many have misinterpreted this result to mean more H1B holders are being admitted to force wages down. At most, the wage will drop to the current wage. More likely the wage rate will fall somewhat but level out at a rate higher than the previous equilibrium.
The economic analysis is interesting and would be a useful tool for immigration policy. I doubt that it has much relevance to current actions. Immigration policy is set by politicians, most of whom have little, if any, knowledge of my chosen field. They are mainly concerned with their re-election.
