Weak revisions to skilled worker visas do little for US businesses
On Oct. 23, the U.S. Department of Homeland Security released proposed revisions to the H-1B visa program to “modernize and improve the efficiency of the H-1B program, add benefits and flexibilities and improve integrity measures.”
This is good news, but these changes don’t address the bigger problem, which is that the number of H-1B visas issued is woefully inadequate to support America’s economic future and the financial health of our colleges and universities.
The U.S. economy’s unrivaled strength is fueled by the constant influx of skilled foreign workers from its top-notch colleges and universities. New companies, industries and innovations have sprung from this flow of talent from other countries. However, this vital lifeline is facing a dire threat due to outdated H-1B work visa limitations coupled with anti-immigration sentiment that gets nastier with each new global conflict.
The H-1B visa was originally designed in 1990 to address the nation's need for skilled workers. At the time, Congress allowed 65,000 of these temporary work visas to be issued a year. Applicants needed to have graduated from an accredited college or university and have a job offer from a U.S. company or non-profit organization.
However, the H-1B cap has failed to keep pace with the exponential growth of the U.S. economy, leaving skilled workers in short supply. Specifically, while the U.S. economy grew nearly five-fold from $5.5 trillion in 1990 to $26.85 trillion in 2023, the number of H-1B visas has increased only by 20,000 to 85,000.
Despite the proposed amendments, our H-1B program endangers America’s position as the number one economy in the world in several ways.
First, the American economy is suffering from a shortage of skilled workers in some industries with unemployment at 3.9 percent. This labor shortage is hurting businesses and restricting U.S. economic growth. Overall, there are 9.6 million job openings. Even if every unemployed U.S. citizen is hired, there would still be approximately 3 million unfilled unfilled positions. Skilled workers are in high demand, as shown by more than 60 percent of unfilled job openings in professional and business services according to the U.S. Chamber of Commerce.
Countries that do not have enough workers find their economies quickly falling behind. One example is Japan, where the country’s low birthrate and high longevity have led to an aging population and serious employment problems, which limit growth and the necessary income tax revenues to support its infrastructure.
Today, the United States is beginning to face a similar “demographic stagnation.” The workforce of the future is already looking skimpy: According to the 2020 Census, the number of babies born in the U.S. is the lowest since 1979. Overall, the population of 331.4 million grew by 7.4 percent between 2010 and 2020, the smallest growth since the Great Depression in the 1930s. Notably, the number of Americans over 55 grew 27 percent, compared to only 1.3 percent growth among people under 55.
Second, H-1B restrictions strangle the country’s creation of new companies and the jobs they produce. According to the American Immigration Council, nearly half, 224, of the Fortune 500 companies were founded by immigrants or their children. Foreign-born entrepreneurs, engineers and other talented individuals play an integral role in creating future industries and fostering innovation.
A study by the National Foundation for American Policy found that 50 of our $1 billion dollar start-ups, referred to as “unicorns,” have at least one immigrant founder. This includes CrowdStrike, Tesla, Uber, Zoom, Alphabet (parent of Google), Biogen and Warby Parker. Each employs thousands of people who pay U.S. taxes, which help fund public education, infrastructure, military and other social programs for American citizens.
Third, the H-1B visa cap negatively impacts the U.S. higher education industry and our economic balance of trade. Increasingly, international students choose not to gamble on a U.S. education that might not lead to employment. In the recent H-1B lottery, eligible registrations had less than a 15 percent chance of receiving a temporary work visa according to U.S. Citizenship and Immigration Services. This makes it difficult for foreigners graduating from U.S. schools, as employers are reluctant to invest the cost and time in skilled workers who might not get an H-1B and have to leave the country.
As adjunct professors at New York University and Columbia University, we hear international students complain about limited H-1B visas and the value of American education. An NYU graduate student from Indonesia asked, “Why should I study here when there is little chance of staying after graduation? I’d be better off going to school in Canada or Australia.”
Students tell us they feel unwelcome in America due to an undercurrent of hostility towards foreigners. Disturbingly, instances of violence targeting immigrants have risen in recent years, particularly against Asians in the wake of the COVID-19 virus. Columbia University’s China Center for Social Policy found that 55 percent of Chinese Americans are worried about their safety related to hate crimes and harassment.
Our country is already experiencing the impact. From the peak of 1.1 million in 2018-2019, the number of international students has declined by 13 percent to 948,500 in 2021-2022. This hurts the financial health of many colleges and universities, as most international students pay full tuition. It also hurts our balance of trade, as education is considered an export service.
The H-1B visa cap, coupled with negative sentiments towards immigrants, is suffocating the U.S. economy, dampening innovation and preventing the nation from harnessing the full potential of skilled workers. The proposed reforms need to include increasing the number of visas to unshackle the American economy, preserve its global leadership and strengthen our education industry.
Marcela Miguel Berland is the founder and president of Latin Insights and an adjunct professor at New York University.
Matthew Lee Sawyer is the founder of USAccelerator.biz and an adjunct professor at Columbia University and New York University. He is the author of the 2022 book, “Make It In America; How International Companies and Entrepreneurs Can Successfully Enter and Scale in U.S. Markets.”
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