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The H-1B Visa Problem Is Easy to Fix, In Theory...

Irwin M. Stelzer

Employers’ requests for the limited number of H1-B visas that allow foreign skilled workers to work and live here has wildly exceeded the supply. After all, the visas allow employers to hire foreigners, rather than bid up wage rates to attract American citizens, or incur the cost of training Americans to do the job. And the visas are free.

Any institution other than government would decide that the way to bring supply and demand into balance is a.) issue more visas, or b.) auction off the existing supply to the highest bidders. Not our government, which has decided on a lottery: “A computer-generated process will randomly select the number of petitions needed to meet the caps…” No need to decide which company would benefit the most-in saved cost or added product value. And no need to confront the longer-run problem that sooner or later these foreign workers are supposed to go home. On the other hand, limiting the number of visas keeps Silicon Valley millionaires and billionaires in the position of supplicants, annually petitioning contribution-hungry Congress and the president to increase the number of H1-B visas available, each one hoping to win the inevitable lottery.

It is the position of these high-tech businesses that there is no price that will call forth an additional supply of workers with the needed skills. And that there is no amount of training that will bring any American workers up to snuff. Different from the fracking industry, where highly skilled workers are flocking to jobs in places considerably less appealing than Silicon Valley because six-figure salaries are on offer. Different from the law business, where anticipation of excessive salaries called forth an excess supply of highly schooled workers, and the end of the salary boom has cut the number of men and women willing to invest in three years of expensive training. Different from construction trades, where shortages of skilled workers are driving up wages so that workers unemployed by the Great Recession will return to the labor force. Different from almost every other product and labor market.

If having employers bid cash for visas is not sufficiently attractive to the government, which is anyhow insensitive to its own red ink, it could have employers agree to train an American worker for each foreign worker it is allowed to employ. Or pay for such training, and commit to hire the newly skilled worker when the foreigner’s H-1B visa expires. Or reimburse local governments for any social costs that might be associated with the hiring of skilled foreigners.

Better any of those alternatives than giving a free gift to a high-tech company so that it can increase its profits by failing to fork some cash over to the U.S. taxpayer.

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