H-1B Visas

Introduction

The H-1B visa is a nonimmigrant (i.e., temporary) visa that allows U.S. companies to hire a foreign “specialty” worker for up to 6 years. H-1B workers must be sponsored by an employer, and if the visa holder either quits or is dismissed by that employer, he or she has three options: to find another sponsoring employer, to apply for and receive a change of status to another nonimmigrant status, or to leave the United States. As of 2012, the number of H-1B visas was capped at 65,000 per year.

While widely used in the U.S. computer industry, H-1B visas are also used to fill a variety of other specialty occupations. Requiring theoretical or technical expertise, specialty occupations are understood to be those requiring at least a bachelor's degree. Employers have used these visas to sponsor workers in occupations such as computer programming, engineering, medicine, higher education, and even fashion modeling.

Political support for H-1B visas results from the widespread perception that high-skilled immigrants benefit the economy directly by providing key, relatively scarce, knowledge. Perceived benefits also derive from an understanding that higher-skilled immigrants are unlikely to make demands on the social safety net, and are therefore seen as a net fiscal benefit to the country. Further, public concern about shortcomings of the U.S. education system in producing students proficient in science, technology, engineering, and mathematics (STEM subjects), creates a sense of urgency for acquiring these needed skills from immigrants.

While the features and factors underlying the H-1B program may seem benign to many, debates do surround its use. First is the issue of competition in the labor market. In the Counterpoint essay, Norman Matloff argues that the visa program is used by employers—particularly in technology industries—to hire lower-wage workers. Using computer-related industries as his main example, he disputes claims of a labor shortage in computer fields. He also suggests that certain features of the H-1B program encourage guest workers to accept lower wages. For example, according to the rules of the visa program, foreign-born workers must be sponsored by a U.S. company; given this rule, foreign workers are not highly mobile in the job market as they must rely on the company that sponsored them for legal status, and this undermines their ability to seek higher-paying jobs with other employers.

The wage effects of the relative immobility of the H-1B worker are compounded by details of the law concerning setting wages. According to the program, employers are required to pay the “prevailing wage,” based on job type, geographic location, and experience level, but they are not required to take into account specific skills, such as those necessary for [Page 268]working with a new programming language. As Matloff describes it, not having to factor in premiums for such special skills allows employers to hire H-1B workers at wages frequently 10 percent below the market rate.

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