Heritage Foundation calls for more H-1B visas
Heritage Foundation calls for more H-1B visas
Date: Friday, April 17, 2009 3:18 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 2006 -- 4/17/2009 >>>>>
The Heritage Foundation (HF) recently declared that the H-1B cap of 65,000
visas is way too low. They think it should be raised to 195,000. It seems that
calling for more H-1B visas is becoming an annual tradition at the Heritage
Foundation. Go here to read their 2008 rendition:
http://www.heritage.org/Research/Labor/wm1875.cfm
One week after the commencement of the April 1, 2010 H-1B season, the USCIS
announced it had received 42,000 petitions for H-1B visas. In view of the
facts so far this year (please read previous newsletter), why would the
Heritage Foundation feel the need to manufacture a "facts" like this one that
are so easily disproved?
This visa is by far the most-used visa; the USCIS often receives
hundred of thousands of applications within the first couple of days.
Actually there are many types of visas that are issued in far greater numbers
than H-1B, such as green cards and student visas, and L-1s may be surpassing
H-1B in numbers. Furthermore there is no evidence that the USCIS has ever
received so many applications within the first couple of days.
Typically there is a slight rush on April 1st followed by a month or two more
where enough petitions dribble in to meet the cap. They are just totally wrong
about "hundred of thousands of applications" because it just doesn't happen.
The HF writers are knee deep in falsifying the facts and then they compound
their blunders:
There is a popular myth that H-1B workers displace Americans because
foreigners will work for less than Americans even if they have
greater qualifications.
Several paragraphs of convoluted logic follow where they try to justify their
point that employers wouldn't favor H-1Bs just because they are cheaper. These
champions of market based economies try to totally deny that market forces
affect the labor market. It's beyond weird!
Their next blunder is bizarre because generally speaking the HF is libertarian
and they are very critical of centrally planned economies -- and yet they make
a socialist argument that as long as the government can mandate and enforce
prevailing salaries all Americans are protected.
But this notion is entirely false. H-1B visas are provided to
foreign workers only if employers prove that they are paying
prevailing wages (equivalent to American wages for that
occupation). In addition, employers must show that no American
workers with the appropriate qualifications were available.
The term "prevailing salaries" is just a euphemism for price controls on
wages. The HF condemns price controls, so you have to wonder if their
adulation of prevailing wages is a case of hypocrisy or evidence of an
organization that has two left feet. They seem to know something about ancient
history but are blind when it comes to H-1B, and even worse they haven't
learned anything from a book they quote that was written two decades ago.
http://www.heritage.org/Press/Commentary/ed070301.cfm
The Folly of Price Controls
Mere guesswork, critics may respond. Fine, but they can't shrug off
what history teaches us about price caps. It's all laid out in a
book published more than 20 years ago by The Heritage Foundation
titled "Forty Centuries of Wage and Price Controls: How Not to Fight
Inflation," by Robert Schuettinger and Eamonn Butler. The book
outlines the unqualified failure of price controls from ancient
Egypt forward.
The HF should be embarrassed that they accepted this one without verifying its
veracity since it's from the totally discredited NFAP study last year by
Stuart Anderson.
In reality, H-1B visas spur economic growth. The National Foundation
for American Policy showed that, on average, for every H-1B employee
hired, an additional five American employees were also hired.
Actually the NFAP claimed each H-1B created 7 jobs for Americans, so the HF
downplayed the number. Even if it were true that each H-1B generated 5 jobs,
wouldn't we be able to eliminate unemployment in the U.S. just by hiring
enough H-1Bs? All we need to do is to divide the total number of jobless
Americans by 5, and then import enough H-1Bs to put them back to work. Sounds
silly, but that's what the HF and NFAP think!
If it wasn't for the notion that each H-1B generate 5 jobs, I would nominate
this as the dumbest thing that they wrote:
President Obama has promised to cut the deficit in half in five
years. Expanding the H-1B visa would be a relatively small but
beneficial step in that direction.
You heard that right folks! Not only does each H-1B create at least 5 jobs,
but they also decrease our federal deficit! This was another one borrowed from
the NFAP that the Heritage Foundation should have the common sense to know
better about repeating. Their logic if flawed and contradictory because if H-
1Bs were paid the same prevailing salary, as HF claims, then there is no net
gain in tax revenue. What actually happens however is that highly paid
American workers who pay lots of taxes are replaced with lower paid H-1B or L-
1 visa holders who pay little or no taxes. Every H-1B causes tax revenues to
drop, not increase.
The HF purports to be in favor of free markets but they certainly don't apply
their ideology to H-1B. They undercut their entire argument in favor of
raising the cap. Read this:
Make the cap flexible. As the U.S. economy fluctuates through its
business cycles, the demand for H-1B visas will rise and fall.
Congress should establish a quota that, if met, automatically
increases for the next year. In addition, unused visas should
be recaptured for the next fiscal year.
Remember in the previous newsletter I explained that if more demand can
justify a higher cap, then "what is good for the goose is good for the
gander"! In other words, lower demand must mean that a lower cap is needed.
If the Heritage Foundation really believed that the cap should be manipulated
depending on market demand then they should have been calling for a lower
limit, not higher.
On a personal note: About 6 years ago I attended a rather large FAIR meeting
in Washington DC. The two of us made a big stink about H-1B and its connection
to immigration and globalism. We were encouraging FAIR to pay more attention
to this aspect of immigration because it's becoming a hot button populist
issue. A Heritage foundation stooge stood up and told the crowd, while looking
directly at the two of us, that the people who are making a big deal about H-
1B and/or globalism are a fringe element that should ignored by mainstream
immigration reform groups. I wasn't allowed to rebut his point, which was
extremely frustrating to say the least, but as it turned out I didn't need to.
For the most part FAIR ignored his advice and made H-1B a major issue of
theirs. FAIR has talked many times about the connection between immigration
and globalism so the Heritage Foundation even lost on that one.
The Heritage Foundation is actually quite good on illegal immigration, but
they can't seem to break the leash held by their corporate masters when it
comes to H-1B. It's always seemed odd to me that so many libertarians think H-
1B is a good idea. If the Heritage Foundation continues to push for expanded
H-1B programs they may one day be considered a fringe element.
Poetic justice, perhaps?
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.heritage.org/research/immigration/wm2384.cfm
April 7, 2009
Help the Economy and Federal Deficit by Raising H-1B Caps by Jena Baker
McNeill and Diem Nguyen WebMemo #2384 On April 1 of each year, the U.S.
Citizenship and Immigration Services
(USCIS) starts accepting applications for the H-1B visa. For the past several
years, the number of H-1B visa applications has easily surpassed the annual
cap of 65,000, sometimes in a matter of days. Even with the economic downturn,
the USCIS is still expected to receive enough applications to fill the 65,000
cap.
Congress must raise the H-1B cap back to 195,000 visas per year--the maximum
allowed as recently as 2001.Raising the cap for H-1B visas will not steal
American jobs but will help promote economic growth and generate much needed
tax revenue.
More H-1B Visas Helps the Economy
H-1B visas are non-immigrant visas designated for highly skilled foreign
workers with a college degree or higher. This visa is by far the most-used
visa; the USCIS often receives hundred of thousands of applications within the
first couple of days. H-1B visas can be used by a wide range of professions,
from fashion models to nurses, but they are mostly used by high-tech workers
such as engineers or computer programmers.
There is a popular myth that H-1B workers displace Americans because
foreigners will work for less than Americans even if they have greater
qualifications. This notion is so widespread that Congress recently passed an
amendment barring companies receiving TARP money from hiring H-1B employees.
But this notion is entirely false. H-1B visas are provided to foreign workers
only if employers prove that they are paying prevailing wages (equivalent to
American wages for that occupation). In addition, employers must show that no
American workers with the appropriate qualifications were available.
This is self evident when one sees the effects of the H-1B visa shortage on
companies. When companies cannot get H-1B visas for potential employees, they
do not turn around and hire American workers; rather, they leave those jobs
unfilled or expand outside the United States.
This was the case for Microsoft, which in 2008 decided to open a branch in
Vancouver, Canada, to staff the 150 engineers who were not fortunate enough to
get H-1B visas.[1] A survey by the National Foundation for American Policy
found that 65 percent of high-tech companies employed people outside the
United States due to their inability to obtain H-1B visas.[2]
In reality, H-1B visas spur economic growth. The National Foundation for
American Policy showed that, on average, for every H-1B employee hired, an
additional five American employees were also hired. If Microsoft had opened
its branch in the United States rather than Vancouver, they would have hired
American workers to staff and operate the new branch in addition to their H-1B
hires.
H-1B workers are some of the best and brightest in the world. Ensuring that
they work in the United States for American businesses will only help the
economy.
H-1Bs Create Tax Revenue
President Obama has promised to cut the deficit in half in five years.
Expanding the H-1B visa would be a relatively small but beneficial step in
that direction. If Congress were to increase the H-1B cap to 195,000 visas,
the U.S. government would receive an additional $2 billion of tax revenue each
year. That number would significantly increase as H-1B workers finish their
three-year terms and new foreign workers enter the program.[3]
The Time to Act
Congress has failed to raise H-1B caps for several years despite the wide
range of support to do so. Raising H-1B caps will provide businesses the
professionals and skills they need to develop their business when ready.
Congress must:
Raise the cap back to 195,000 visas per year.
Make the cap flexible. As the U.S. economy fluctuates through its business
cycles, the demand for H-1B visas will rise and fall. Congress should
establish a quota that, if met, automatically increases for the next year.
In addition, unused visas should be recaptured for the next fiscal year.
Allowing the appropriate levels of high skilled workers into the United States
helps the American worker, the economy, and America's federal budget. There is
no good reason not to act.
Jena Baker McNeill is Policy Analyst for Homeland Security, and Diem Nguyen is
a Research Assistant, in the Douglas and Sarah Allison Center for Foreign
Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute
for International Studies, at The Heritage Foundation.
[1]Peter Whoriskey, "Skilled-Worker Visa Demand Expected to Far Exceed
Supply," The Washington Post, April 1, 2008, athttp://www.washingtonpost
.com/wp-dyn/content/article/2008/03/31/AR2008033102581.html (April 6, 2009).
[2]National Foundation for American Policy, "H-1B Visas and Job Creation,"
March 2008, p. 8, at http://www.nfap.com/pdf/080311h1b.pdf (April 6, 2009).
[3]James Sherk and Guinevere Nell, "More H-1B Visas, More American Jobs, A
Better Economy," Heritage Foundation Center for Data Analysis Report No.
CDA08-01, April 30, 2008, at http://www.heritage.org/ Research/Labor/cda08-
01.cfm.
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