The H-1B Visa: Helping America’s economy, hurting America’s workers

By Steve Brachmann
March 17, 2016

visaDemand for the H-1B visa for skilled foreign workers coming to live and work temporarily in the United States has been exploding in recent years. U.S. Citizenship and Immigration Services (USCIS) reported that during the 2015 filing period, it received almost 233,000 applications for the H-1B visa. That number is nearly double the 124,000 H-1B visa applications received by USCIS in 2013 and up starkly from the 172,500 applications filed in 2014. Only a maximum of 85,000 H-1B visas will be awarded to foreign workers owing to a federally mandated cap of 65,000 visas for each fiscal year; the first 20,000 applicants with a U.S. master’s degree are accepted without counting against this cap.

There is evidence to suggest that the H-1B visa program for skilled workers has proven itself effective in helping the U.S. economy. The H-1B visa is intended to enable companies to hire skilled workers where there is no pool of talent capable of filling a new job. Demand for H-1B visa workers is highest in metropolitan areas where tech sector activity is heavy and where unemployment for engineers is already low, places such as New York City, Silicon Valley, Boston and Chicago, according to the Harvard Business Review. Further, those jobs exhibit stronger wage growth than jobs taken by native workers, at least in part because of wage requirements mandating a high wage for H-1B workers, but that still proves that American businesses are willing to pay more for talent.

Exports and foreign markets are also of increasing importance to American businesses. U.S. exports hit a record $2.35 trillion in 2014, having increased by more than $760 billion since 2009 according to the U.S. Department of Commerce. There is some anecdotal evidence which suggests that foreign workers have shown some ability in improving foreign sales for U.S. companies by being more knowledgeable of the economies in which American businesses want to compete.

Of course, if we’re to explore the good inherent in the H-1B visa program, we must also expose the bad and speak to the at-times heartbreaking effects of this program on American workers, especially in instances where alleged abuses of the H-1B visa are involved. Large American companies like Disney (NYSE:DIS) and Toys “R” Us have been accused in recent months of using workers coming over on H-1B visas to aid in the outsourcing of American jobs. In some cases, there are stories of employees being shadowed by foreign employees whose only job was to copy everything the U.S. employee was doing, raising questions over the skill levels those workers are bringing here. The New York Times quotes unnamed sources in an article from last September indicating that American companies were using these foreign workers to transfer knowledge to sites in India or elsewhere and then laying off the American counterparts.

The H-1B visa is coming under the media crosshairs during the current election cycle. Here at IPWatchdog, we’ve already taken a look at the contributions of immigrant inventors to American innovation. Over the next few weeks, we’ll be running a series of posts to deeply explore this issue and how these workers affect both the American economy as well as U.S. employees.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than seven years. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments. Join the discussion.

  1. A Rational Person March 17, 2016 1:27 pm

    One logical way to take care of the “shortage” of H-1B would be for the companies to “bid” salaries for the workers for a time period of say 5 years (to minimize gaming the system with a high 1-year contract that is subsequently reduced), and then assign the 65,000 visa based on the highest 65,000 bids. Why not make the assignment of the visas more marketplace driven?

    In other words, why not have companies bid for H-1B visa slots like sports teams bid for the services of free agent players?

  2. JR March 17, 2016 4:46 pm

    It’s not “Skilled” workers employers are after….it’s CHEAP and DOCILE

  3. Gene Quinn March 17, 2016 5:23 pm

    JR-

    Depends on the company. I think there is no doubt that you are right to say that at least some companies are looking for captive workers who can’t go work for the competition. That seems to be an abuse of the system and should be stopped.

    -Gene

  4. Benny March 18, 2016 5:54 am

    A non-US born engineer is far less likely than his equally talented US citizen peer to go job-hopping up the career ladder, and the reduced turnover is an incentive to employers to prefer such applicants.

  5. Sam March 18, 2016 6:13 am

    What on earth is this anti-immigrant article doing on a patent website!?! It shows good research but does not belong on this forum…

  6. Troup March 18, 2016 7:05 am

    as a former trainer of foreign replacements I know exactly what these programs are used for.

    14 years ago, we were replaced after corp mgmt ordered us to TRAIN our replacements from TATA Inc, India. Once trained the well-educated American employees were given a small severance and a pink slip while foreigners on visas lived and worked in Lake Mary, FL.

    I had 3 trainees; each learned a different facet of my job. None of them had near the experience nor knowledge as I did. They were all within a few years out of school (if they really went, who knows with the college mills in India)

    The H-1b and L-1b programs are nothing but cheap labor programs; gifts to corporate execs, in return for corporate campaign donations.

    #TRUMP

  7. T2 March 18, 2016 7:15 am

    The H-1B visa also provides for a relatively easy path to a green card (which is not necessarily a bad thing), though one must wonder how many individuals are actually “temporary,” as congress supposedly intended.

  8. Steve Postle March 18, 2016 9:38 am

    ‘Fessing up as a former H1B visa holder (now a fully-paid up member of Club USA). I think a huge (and probably unquantifiable) benefit to the US economy, in bringing over the likes of me, is that US senior management gets a more detailed view on culture and business modus operandi in (principally) Asia and Europe, and thus how to succeed better, globally. Counteracts the isolationist tendencies in some political circles.

  9. Gene Quinn March 18, 2016 10:27 am

    Sam-

    I’m sorry you don’t like reading about H-1B visa’s on IPWatchdog. I guess you are not familiar with the fact that we are not a patent only website. We write primarily about patents, but also more generally about innovation, technology and intellectual property (including trade secrets, copyrights and trademarks). We write about the economics of innovation quite a bit and even have guest contributors that focus on that topic. We write about interesting technology and innovation even when no patents have been applied for. We write about University research and development. We also write about legislation and rulemaking, including on topics relating to trade secrets, drones, data privacy, drones and a variety of other issues.

    H-1B visas are a very important issue raised time and time again by technology companies. Since we write about technology companies, technology and technology law and policy, H-1B visas does fit within the coverage we provide.

    I invite you to read our articles and notice the breadth of our coverage.

    -Gene

  10. Titus Corleone March 18, 2016 5:05 pm

    I am glad you have at least addressed the dark side of H1B’s. However, it is an absolute myth that there are not enough Americans to fill nearly all of these positions. I have seen company after company abusing this system, and the only reason it is important to the multi-nationals is a means of pushing Americans in favor of those willing to accept lower pay and residency in America for our jobs. Sorry, but we’re not taking the Kool-Aid anymore. The program is a sham. Large corporations are simply looking at the bottom line and have zero allegiance to thier American employees

  11. Silence Dogood March 23, 2016 4:54 pm

    This is not an immigration comparable to the past, these non-immigrants are being brought over for the single purpose of taking Americans jobs at lower wages. Now visa expansion is the goal of our bought politicians and the corporate lobby; even the trade agreements (TPP) are loaded with language meant to expand foreign guest workers taking what’s left of American jobs.

    Hiring only foreign workers, even though an intermediary, is discrimination at its worst. With H-1B visa, diversity doesn’t apply: http://www.computerworld.com/article/2956584/it-outsourcing/with-h-1b-visa-diversity-doesnt-apply.html

    There is and never has been a shortage of qualified American workers! In Connecticut, companies such as Aetna, Cigna, Hartford Financial Services (all in on Indian H-1b’s and offshore India), Travelers, Anthem BCBS, United Healthcare, UTC, Voya, GE, pretty much ALL US companies are firing Americans and replacing them with offshore or onshore visa (H-1b, L-1a &b, OPT, B-1, O-1 etc.) guest workers (IBM, Accenture, TCS, Cognizant, Infosys, Wipro, etc). It is NOT just IT, it’s Finance, and any other operations they can source. The American people do not want illegal immigrants and visa guest-workers taking our jobs! We don’t want corporations bringing over millions of Indian guest-workers so that they can have cheap labor and claim Americans can’t or won’t do the work-when we held the jobs and had to train our replacements when we were laid off! We don’t want every city or state giving documentation and driver’s licenses to assist illegal immigrant’s access to services (free) or employment (our jobs)! We don’t want corporations to be allowed to screw with retirees or anybody else’s pensions that were EARNED, or eliminate retiree health insurance that was PROMISED! We don’t want to be screwed on our taxes because corporations (so called job creators-NOT) don’t want to pay US\State taxes and they keep Billions of dollars offshore! Now visa expansion is the goal of our bought politicians and the corporate lobby; even the trade agreements (TPP) are loaded with language meant to expand foreign guest workers taking what’s left of American jobs. Our representatives are complicit in propagating the lie that America needs visa guest-workers. Our representatives say they love America, but they seem to hate Americans.

  12. AmyInNH March 25, 2016 11:48 am

    “Skills shortage” isn’t. If there was, they’d be given green cards on their way in the door. If it was, we wouldn’t have unemployed STEM, who’re asked to train them before being laid off.
    “Skills shortage” is shortage of captive and cheap labor. There is nothing “temporary” about this visa, it’s designed by bypass hiring of citizens. Up to 10 years is not “temporary”.
    It does not “help” the economy. It helps record profits.
    As for the bogus numbers above, they contradict the 800,000 visas certified in the official 2015 federal database. The absurd numbers found in reports are “cleaned” of exempt from cap, renewals and extensions.

  13. Troup March 25, 2016 6:56 pm

    And with all that (800k) there is the infamous l-1b visa.

    Absolutely no salary rules with l-1b visas

    Absolutely no Quantity limits either

    I trained my 3 l-1b visa holders, TATA India Inc employees. Once trained the well-educated American employees were given a small severance and a pink slip while foreigners on visas lived and worked in Lake Mary, Fl

    http://commdocs.house.gov/committees/intlrel/hfa91679.000/hfa91679_0.HTM#104

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