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Immigration is at the center of an intense U.S. policy debate. And the next big political fight may focus on H-1B visas — which allow U.S. companies to hire college-educated foreign workers.
Legislation to overhaul the H-1B program has already been introduced in Congress. And in January, a draft executive order from the Trump administration began circulating online.
Tech companies often say they struggle to find talent locally and depend on H-1B visas to hire thousands of skilled foreign workers each year. But some people argue that companies are gaming the system to bring in cheaper workers — pushing Americans out of well-paying jobs.
Are H-1B visas stealing American jobs or a solution to a tech shortage?
Last month, we found that the answer to the H-1B debate largely depends on where you live. So, we're taking a closer look now at where we live — Massachusetts — and what the data tells us about the visa program.
Here’s what to know about H-1B visas:
What is an H-1B visa?
An H-1B visa allows foreign workers to fill specialty jobs in the U.S. — typically highly skilled positions, such as engineers or computer programmers. The jobs also require a bachelor's degree or higher. And with an H-1B visa, foreign workers can stay in the U.S. for up to three years, with the possibility of extending the visa for a total of six years.
Who is getting these H-1B visas?
An overwhelming majority of H-1B visas go to young people from India. Here's a look at the number of visas issued by nationality, according to recent data from the U.S. Department of State:
In fiscal year 2015, 71 percent of all the H-1B applications approved were for workers between the ages of 25 and 34, according to a separate U.S. Citizenship and Immigration Services (USCIS) report. The median salary in 2015 was $79,000, according to the report.
In Massachusetts, employers are mostly hiring programmers, software engineers, consultants and analysts, according to data from the U.S. Labor Department.
How do you get an H-1B visa?
Basically, the H-1B visa is a way for a U.S. employer to sponsor a professional foreign worker. Employers file the application and typically cover all fees associated with obtaining an H-1B.
OK, so how does an employer file for an H-1B visa?
An employer has to submit a Labor Condition Application (LCA) with the U.S. Department of Labor and file an H-1B application with USCIS. The LCA is the first step in the process. It indicates the job, salary, and length and location of employment. The LCA also specifies if a company is an "H-1B dependent company" — which means at least 15 percent of its U.S. workforce is made up of foreign workers.
Employers must agree to pay the worker a fair market wage for the job, which differs depending on the company's location. A "fair wage" is open to interpretation. Employers define the job. So, for example, a company could hire two computer programmers and pay them vastly different salaries.
How many H-1B visas are actually being issued?
The number of new H-1B visas issued each year is capped at 65,000, with an additional 20,000 set aside for workers with a master's degree or higher. Since demand usually far exceeds supply, USCIS uses a lottery to determine who gets a visa.
But each year there are also a lot of H-1B extensions and job transfers, so the total number of visas issued is much higher. For example, there were 275,317 H-1B applications approved in fiscal year 2015, according to USCIS.
Most H-1B data is not publicly available. But as mentioned above, employers who want H-1B workers have to file an LCA -- and that data is publicly available. Each year, there are more LCAs approved than actual H-1B visas, but it provides a picture of this opaque process. The LCA indicates the jobs a company hopes to fill. So in that sense, LCAs show demand for H-1B workers.
The federal government approved LCAs for 1,175,124 workers nationwide in fiscal year 2016. In Massachusetts, LCAs were approved for 41,182 workers — the ninth-highest of any state:
(Note: Data includes H-1B1 Chile and H-1B1 Singapore, which are special H-1B visas for those countries.)
What companies are pursuing H-1B workers?
Nationally, a lot of tech and financial services companies pursue H-1B workers. This is also true in Massachusetts — though here hospitals and universities are also on the list.
Some of the strongest demand, however, has come from consulting companies and outsourcing firms. In fact, outsourcing companies like Wipro, Infosys and Tata Consulting rank among the top 10 companies pursuing H-1B workers in the U.S. These companies are based in India but have contracts with many American companies. They typically hire IT workers from India to do jobs already being done by Americans. (This is a big point of contention when it comes to H-1B visas. More on that below.)
Outsourcing firms also appear among the companies in Massachusetts seeking H-1B workers. Here's a look at the top 10 companies in the state that pursued H-1B workers in fiscal year 2016:
(Note: Some companies, like Deloitte, are calculated to include subsidiaries.)
Companies in Boston sought the highest number of H-1B workers, followed by companies in Cambridge. LCAs were filed for 15,614 workers in Boston, while LCAs were filed for 2,784 workers in Cambridge.
And if you want to see how much demand there is for high-skilled foreign labor in your city, here's a town-by-town view:
(Note: For a deeper dive into the companies pursuing H-1B workers in Massachusetts, take a look at the table at the bottom of this post.)
What does all this mean for American workers — are they affected by H-1B visas?
It depends on who you ask. Critics of the H-1B program say companies exploit the system. They say outsourcing companies in particular use H-1B visas to import cheaper foreign labor.
On the other hand, many tech companies say they need the program to access the best talent in the world. They say there aren’t enough highly skilled American workers to fill the jobs they have open.
"Because the United States doesn’t produce enough STEM [science, technology, engineering, math] graduates coming out of universities, we rely on foreign workers," said Chris Anderson, president of the Massachusetts High Tech Council.
Anderson wants the annual U.S. visa cap increased to at least 250,000. He points out the unemployment rate in Massachusetts is low, and so he says it’s difficult for companies to find talented workers.
But Ron Hira, a public policy professor at Howard University, has researched economic policy and immigration for years, and he’s doubtful there's a real American tech scarcity.
"If there was really a shortage, you would see wages going through the roof. Instead, wages have been flat," he said.
Hira said of course it's possible there’s a shortage of "the 4.0 MIT graduate," but there’s no shortage of "ordinary skilled people in the IT sector." He thinks the hunger for more H-1B visas is tied to age discrimination and a desire for cheaper workers.
Are there proposals to reform the system?
Yes. There are a few bills in Congress aimed at overhauling the H-1B program. These measures generally try to crack down on outsourcing companies.
-- A bipartisan bill, sponsored by Sens. Chuck Grassley of Iowa and Dick Durbin of Illinois, calls for annual audits of "H-1B dependent" companies. It also would give foreign workers who graduate from a U.S. university with an advanced degree in a STEM field first priority for H-1B visas. And it would limit the total time a foreign worker can stay in the U.S. from six years to three years — with a three-year extension available to those "with extraordinary ability."
-- Another bill, sponsored by Republican Rep. Darrell Issa of California, aims to make it more expensive for companies to hire H-1B workers. It would increases the wage threshold from $60,000 to $100,000 for H-1B dependent companies — which tend to be outsourcing companies. And it would require salaries to be adjusted for inflation every three years. The goal here is to ensure American workers aren’t being replaced by low-cost foreign workers. Under current law, if an H-1B dependent company agrees to pay its employees $60,000 or more, they’re exempt from fulfilling additional promises that they will not displace American workers.
-- A bill, sponsored by Democratic Rep. Zoe Lofgren of California (whose district covers part of Silicon Valley) is more sweeping. It replaces the H-1B visa lottery system with one that gives preference to companies that pay the highest wages. For example, employers who pay a salary that’s twice the prevailing wage for a job would get first priority for an H-1B visa. Lofgren's bill also sets aside 20 percent of H-1B visas for startups (defined as companies with less than 50 employees).
There are critics who say some of these measures won’t necessarily stop a company from outsourcing jobs because there is little government oversight to ensure a company is upholding its wage promises.
Meanwhile, President Trump has said he wants to stop American workers from being pushed out by what he called "a cheap labor program." A leaked draft executive order earlier this year mentioned there would be a review of the H-1B visa program.
But Anderson, with the Massachusetts High Tech Council, is worried that any changes that make it harder for a foreigner to work in America could hurt the booming innovation economy. He worries that plugging up the talent pipeline could be disastrous for Massachusetts.
"Foreign talent is an important part of that pipeline process," Anderson said.
Experts say, with key elements of the H-1B program written into statute, major reform will depend on Congress.
Here's that deeper look at the Massachusetts companies pursuing the most H-1B workers:
Notes on the above table:
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