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Drop the Limits! Limits on Foreign Technology Workers Hurt America

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Drop the Limits! Limits on Foreign Technology Workers Hurt America

The technology sector accounts for close to one-third of the productivity growth in today’s economy, but the pool of qualified American tech workers isn’t keeping pace.

Despite the increased demand for employees in the industry, the number of college students graduating with IT-related degrees in the US has declined every year since 1988. This means that businesses are forced to look overseas for qualified candidates. Unfortunately, the congressionally-determined number of foreign high-tech workers allowed into the US every year has been consistently insufficient to meet demand. And this year is no exception.

This fiscal year’s cap of 115,000 visas has already been met (more than five months early) and high-tech firms report a current shortage of 269,000 workers. In 1999, the cap was reached three months early and in 1998, five months too soon. These employment deficits costs technology firms untold millions in productivity every year.

So why doesn’t Congress simply lift the cap on these visas?

In part, because some politicians and protectionist labor groups argue that increasing the cap on H1-B visas will displace American workers. This concern is without merit. There is substantial economic evidence to suggest that increased immigration does not contribute to increased unemployment for native workers. In fact, many studies show that just the opposite is true.

Immigrants founded one out of five firms in California’s Silicon Valley and are currently running one-quarter of the high-technology companies there. In 1998, these firms provided more than 58,000 jobs and accounted for almost $17 billion in sales. A recent study by the Cato Institute shows that an extra 50,000 H1-B workers would mean $5.5 billion in transferred wealth from other nations to the United States.

Faulty economic theory isn’t the only thing responsible for Congress’ unwillingness to remove restrictions on high-tech immigration.

Unfortunately, politicians are especially eager to leverage the hearts and wallets of technology executives in this, an election year. Savvy lawmakers know that if they can keep a government hand in the issue, industry leaders have reason to look to Washington for favors.

Right now, there are a number of bills on Capitol Hill proposing an increase in the number of visas for high-tech workers. They differ in how much that increase would be and one, from Rep. Lamar Smith (R-Texas), would even remove the cap entirely, but only for a period of three years.

While some bills may be better than others, the fate of the technology industry should not hinge on politicking. Demand, not lobbying, should determine the amount of high-skilled immigration.

Industry leaders should be asking government for only one thing: to be left alone. This means settling for nothing less than an indefinite removal of all caps on H1-B visas. It’s only when market demand determines how many high-skilled immigrants join the American work force that industry and consumers will enjoy the full potential of the technology boom.

Jessica Melugin (jmelugin@cei.org) is a policy analyst at CEI.