It’s that time of year again. Companies from around the United States once again petitioned the federal government to bring highly skilled foreign workers to fill job vacancies through the H1-B visa program. This year, the government closed the application window in under a week and 148,000 workers will be denied a job under an archaic lottery process. Unfortunately, America’s outdated immigration policies will once again prevent the supply of these coveted visas from matching the demand from American companies.
A lift of the existing cap on H-1B visas, which has largely remained steady since before the internet revolution of the 1990s, would enhance America’s global economic competitiveness and spur rapid economic growth. Any further delay in expanding this critical program will only mean lost jobs and lower wages for American workers.
The information technology sector is the fastest-growing segment of the U.S. economy. And yet the lack of skilled workers threatens to undermine this sector’s transformational impact. Tens of thousands of jobs that require specialized science, technology, engineering and mathematics (STEM) skills go unfilled in American corporations every single year. In 2012 alone IBM, Intel, Microsoft and Oracle had a combined 10,000 job openings they had difficulty filling.
Despite the acute need for specialized, skilled workers from abroad, the government has established an arbitrary cap of 85,000 H1-B visas it grants ever year. This year alone, there were 233,000 petitions.
Economists understand the stakes in this debate. A new white paper released by the American Competitiveness Alliance, which I co-chair, and written by Matthew Slaughter, the associate dean of the Tuck School of Business, lays out a clear case about how a failure to reform the H-1B visa program will dramatically impact the American economy in the years to come.
In his paper, Slaughter outlines how access to global talent enabled the United States to lead the information technology revolution that began in the early 1990s. Companies that have successfully integrated global talent, he argues, have developed new products and services that companies have been able to harness to innovate, maximize their efficiency, grow their business, and create jobs.
Those who argue that high-skilled immigrants simply take jobs from willing American workers do not take into account the profound downstream economic impact that their work provides. Here again, Slaughter asserts that since 1990, skilled immigrants in STEM fields have increased wages for American workers by several percentage points. His paper also reveals that these workers have accounted for at least a third of American economic productivity growth. And a separate study determined that every job created for a skilled immigrant creates five additional jobs – both white and blue collar – throughout the economy.
Although attempts to pass a comprehensive immigration bill fell short in the past two years, efforts continue to address the skilled immigration issue in the new Congress. Representatives Bob Goodlatte, a Republican from Virginia, and Darrell Issa, a Republican from California, have reintroduced their bill that would increase the general cap of H-1B visas to 155,000 and provide an additional 40,000 more for advanced degree holders.
They argue their bill would reduce American budget deficits by $110 billion over the next 10 years, and $400 billion in the 10 years after that. These fiscal benefits compound when you consider, as Slaughter does in his paper, that the new information economy centered around the “internet of things,” social media, big data, etc. is poised to add trillions of new dollars into the economy in the coming years.
There are tens of thousands of entrepreneurial, motivated, and highly skilled immigrants who want nothing more than to come to America and contribute to our economy, but can’t because of short-sighted policymaking.
By lifting the cap on H1-B visas, we can grow wages for American workers, create tens of thousands of new jobs throughout the economy, and take full advantage of the information technology revolution that is transforming the country.
All we lack is the political will to change it.