Needed: Skilled Immigrants

Oct. 1 marked the beginning of the new term for recently issued H-1B visas for highly skilled workers.

H-1B visas are three-year, once-renewable, employer-sponsored visas designed to allow highly skilled specialty workers into the country for employment. Only 85,000 H-1Bs are issued every year, but as of early September barely more than half of them have been snatched up.

Escalating visa fees and unnecessary workplace inspections that catch few fraudsters but impose large costs on businesses are resulting in fewer H-1B petitions being filed, while increasing number of H-1B visa petitions are being rejected by bureaucrats sensitive to political pressures to decrease the number of foreign workers.

Combined with the lousy economy, and H-1Bs are more underused than they’ve been in years.

H-1B rules and regulations should be loosened in a poor economy. Highly skilled foreign workers generally create employment opportunities for Americans at large. There is almost no economic displacement of U.S. workers by highly skilled foreign workers. Rather, the substantial technological and productive benefits of more highly skilled workers increase overall employment substantially.

In a globalized economy, it might seem that moving skilled foreigners to the U.S. doesn’t matter so much. The argument is thus, “If we can trade across borders why can’t people stay in their own countries, invent there, and trade their technology afterwards?” But that’s not the way the world works.

The U.S. still has some of the best capitalist institutions in the world. Property and contract rights, while admittedly imperfect, are substantially better than almost anywhere else.

America’s research and development industry, while under regulatory pressure, is still a vast wealth-producing enterprise. Highly skilled foreigners know this, and they also know they will be much more productive working in the U.S. than in their home countries. Locking them out wastes their skills, not only for themselves, but for the U.S. at large.

H-1B visa fees typically cost between $2,300 and $8,500. Legal fees on top of that can cost tens of thousands of dollars per H-1B worker. These fees are a tax on expanding firms.

Moreover, H-1Bs are entirely contingent upon continued employment with the company that sponsored the visa, so the worker becomes unable to take advantage of other opportunities when those arise.

The needed H-1B reforms are straightforward. The fees should be lowered to cover the cost of administration. The visa should no longer be company-sponsored, but attached to the worker. Intrusive workplace inspections should end. The quota should be removed.

Foreign highly skilled workers and American employers should bargain over acceptable wages and working conditions, with the worker’s ability to work elsewhere as the best check on employer abuse.

H-1Bs aren’t the only way for highly skilled foreigners to come to the U.S. Employment-based green cards are another.

Unfortunately, they limited to a paltry 140,000 a year (plus any unused family-sponsored green cards from the previous year), and the system for issuing them is hamstrung by onerous rules.

Here again, the needed reforms are straightforward. The per-country limits for employment-based green cards should be lifted. Currently, no more than 7% annually can go to recipients from a single country. This makes it more difficult for skilled workers from China and India, two large countries with a growing human capital base, to come to the U.S. The terribly low overall cap of 140,000 employment-based green cards also has to increase or be unlimited.

At this time of year, when new H-1B workers are beginning their careers in the U.S., we should be mindful of all the regulatory burdens that stand in the way of legal immigration for highly skilled immigrants. For the sake of our prosperity and American traditions of immigration openness, more H-1Bs and employment-based green cards need to be issued, the process simplified and the fees dramatically lowered.