Economics, U.S. Economy

High-skill immigration spurs US job growth

Image Credit: Shutterstock

Image Credit: Shutterstock

Do visa programs help or hurt US workers? Variations of this simple question sparked several debates in the Senate Judiciary Committee markup up the Gang of Eight’s immigration proposal this week. The issues at play are complex and the amendments myriad, but as the bill moves to the Senate floor, a key number can help guide lawmakers in the right direction: 183.

Between 2001 and 2010, each influx of 100 high-skilled H-1B workers was associated with 183 more jobs for US natives.

Some advocates and interest groups have contended that expanding visa programs will hurt US workers — and that with the national unemployment rate hovering at 7.5%, expanding work visas just doesn’t make sense.

With respect to H-1B visas in particular, this notion is misguided and counterproductive to the goal of creating jobs for Americans.

What are H-1B visas?

H-1B visas allow US employers to sponsor and temporarily employ (for an initial period of three years) highly skilled foreign workers in “specialty occupations.” Since these jobs generally require a bachelor’s degree at the minimum, H-1B workers are highly-educated—better than half have either master’s or doctoral degrees.

These workers help alleviate a good problem that the US economy faces: the demand for highly-specialized and educated workers—especially within STEM fields —far outstrips domestic supply. US companies in these industries are growing so rapidly that the US education system can’t keep up.

How do they benefit the economy?

H-1B workers generally fill jobs that complement native workers rather than compete against them. As a result, H-1B workers boost job growth for US native workers by enabling companies to grow more quickly. In her 2011 report, “Immigration and American Jobs,” AEI visiting scholar Madeline Zavodny shows that 100 additional H-1Bs are associated with 183 more jobs among US natives, and that a 10 percent increase in H-1B workers increased native employment by .11 percent.

These workers purchase cars. They eat at restaurants. They hire accountants to help them navigate a complex tax code. And they increase the earnings of the companies they work for. All of these activities all create jobs for US natives.

What’s the problem?

There aren’t enough H-1Bs to meet employer needs. The annual cap of 65,000 (85,000 if you count the 20,000 dedicated to foreign graduates of US universities) was hit in the first week of filing in FY 2014. The improving economy promises to further shrink that window.

What to do about it?

It is clear that the H-1B program must be expanded. Current policy hamstrings growing companies and denies US native workers the benefits of that growth.

The Gang of Eight proposal takes a substantial step in the right direction, raising the annual H-1B cap to 110,000 (plus 25,000 for graduates of US universities with advanced degrees in STEM fields). This would go a long way toward addressing the labor shortages of US companies, while also boosting employment for native workers. H-1B expansion would be a win—for US workers, for US companies, and for the best and brightest minds intent on honing their craft in America.

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