In Trump era, tech visas get a hard look
Does the technology industry have such a shortage of qualified Americans that it needs to import thousands of workers from halfway around the world?
For years, that’s been the sector’s central argument in favor of the federal H-1B visa program, which lets US employers hire up to 85,000 skilled guest workers each year, mostly in high-tech fields.
But some economists and labor experts say the numbers simply do not support claims of a broad talent squeeze. Rather, these skeptics argue, data suggest that the H-1B program is often a source of captive, lower-wage labor that displaces American workers.
“The notion that there just aren’t enough decently qualified people in the US, and that’s why you have to go overseas, I think is hype,” said John Bound, a University of Michigan economist.
On Monday, employers begin their annual scramble for H-1B visas, submitting applications for the upcoming federal fiscal year, which begins Oct. 1. Companies typically submit so many applications that officials must hold a lottery to determine which ones get the visas.
The process is under heightened political pressure this year as the Trump administration seeks to implement immigration and economic policies that create or protect American jobs. And that’s putting a new spotlight on the tech industry’s claims of a talent crunch.
Critics of the program have pushed for more regulations, including higher pay requirements, arguing that could keep H-1B workers from weighing down overall wages.
President Trump has seemed sympathetic to that argument, saying during the campaign that he would “end forever the use of the H-1B as a cheap labor program.”
Many economists who are skeptical of the tech industry’s assertions still say the H-1B program is a net positive for the economy, allowing companies to grow quickly, keep prices lower, and produce software and gadgets that make other fields more productive.
But they also say there’s evidence of a large, underused pool of domestic workers who could be tapped instead of guest workers.
Census figures, for example, show that half of the nearly 2 million college graduates with degrees in computers, math, or statistics do not work in STEM, the sector that encompasses science, tech, engineering, and mathematics jobs.
Wages in some key tech jobs haven’t grown dramatically in years, indicating the industry isn’t holding on to pricey, experienced workers or jacking up pay across the board to woo employees from other fields, experts said.
Moreover, tech companies routinely lay off thousands of workers each year, creating a large potential surplus of workers who could be retrained. And the industry has made little progress in diversifying its mostly white, male employee base.
While there are probably tight supplies of qualified workers in certain technical subfields, experts said many H-1B workers are performing less specialized work that could easily be done by US employees.
“What the tech companies mean is ‘there aren’t enough domestic workers to fill the jobs at the current wage,’ ” Rutgers University economist Jennifer Hunt said. “They could find more native workers by raising wages, but at some point raising wages becomes unprofitable.”
Industry leaders maintain there are gaps in US workers’ skills, pointing to thousands of unfilled job openings and employer surveys listing hiring as a top concern. And there are economists who argue H-1Bs don’t necessarily crowd out US workers or depress wages.
But the tech industry also thinks criticism of the visa has become overheated, since the program amounts to 85,000 additional workers each year in a sector that employed more than 6.7 million people in 2016.
“We’re sometimes kind of shaking our heads about the consternation over this small fraction of the potential workforce that’s being impacted,” said Todd Thibodeaux, chief executive of the Computing Technology Industry Association, an influential trade group. “These people are not here taking any large numbers of jobs.”
The H-1B program requires applicants to have a bachelor’s degree and “highly specialized knowledge.” The visa allows companies to keep overseas workers in the United States for up to six years.
The government caps the number of H-1B visas for commercial employers at 65,000 annually, with another 20,000 available for workers who have a master’s degree from a US college. The cap, which has been higher in the past, has not changed since 2004.
The tech industry has lobbied to increase the visa cap and boost the domestic labor pool by improving US education and training programs. CompTIA, the trade group, recently called the shortage of qualified tech workers “our industry’s paramount challenge.”
The problem, skeptics say, is the numbers don’t necessarily back that up. For example:
■ In 2014-2015, the average unemployment rate for recent college graduates with computer science degrees was 4.2 percent, roughly the same as for philosophy majors, according to the Federal Reserve Bank of New York.
■ Tech companies also are prolific job-cutters. Challenger Gray & Christmas Inc., a job-search firm that compiles data on workforce reductions, found that technology companies have cut more than 413,000 jobs since 2012, including more than 96,000 in 2016.
■ Despite years of discussion about the industry’s lack of diversity, women are still being left behind. Although they make up about half of the overall labor force, women hold just 25 percent of IT jobs, census figures show — and their share of the tech workforce has actually declined since 1990.
■ Tech-industry wages, generous compared with those of other professions, haven’t shown dramatic growth.
Census figures compiled by William Lazonick, an economist at the University of Massachusetts Lowell, show that average inflation-adjusted pay for software publishing and computer system design jobs increased just 5.3 percent and 4 percent, respectively, between 2001 and 2014.
Pay for computer programming dropped 1.2 percent over the same span.
Average income for all households, meanwhile, dropped by 2.7 percent.
In a dire labor shortage, with companies desperate for workers, you instead might see much higher wages, higher worker retention and retraining, lower unemployment rates for recent graduates, and a rising number of women, said Ron Hira, an associate professor at Howard University.
“You’re not seeing any of that kind of corporate behavior,” said Hira, a prominent critic of the H-1B program.
Instead, some academics say, the tech industry’s claim of a talent shortage is mostly political cover for guest-worker programs that deliver tens of thousands of overseas workers who are paid low wages and crowd out domestic workers.
A 2011 Government Accountability Office audit of the H-1B program, the most recent such report, showed that 54 percent of prospective H-1B workers in 2009-2010 were considered entry-level, qualifying for the lowest possible pay. Another 29 percent were in the second-lowest of four pay brackets. Just 6 percent were considered “fully competent,” the highest pay grade.
Experts note the largest number of H-1B visa requests often comes from IT outsourcing firms, not employers seeking to build in-house talent. Outsourcing companies made 13 percent of the H-1B visa requests in New England from 2010 to 2012, higher than the national rate, according to a 2014 study by the Boston Federal Reserve.
Employers also benefit from the fact H-1B workers can’t easily change jobs because the company, not the worker, controls the visa.
“Claiming shortages works, politically,” said Michael S. Teitelbaum, a Harvard Law School demographer. “If you just say, ‘Well, we think it would be great to have more H-1B visas because it would increase our profits,’ that’s not going to work very well.”
Despite the arguments, employers still say restrictions can force them into expensive work-arounds.
Mohamad Ali, CEO of the Boston data-backup company Carbonite, said he hired about 250 people in 2016. This year, he plans to hire around 200 more. But if he can’t get them admitted to the United States, he’ll staff up at Carbonite offices in Canada and Europe. “If we are forced to have to do that, it’s bad for America,” he said.