by Stephanie Overby

Contrarian Says U.S. Needs More H-1B Workers

Nov 02, 2010
GovernmentH-1B VisasRegulation

Is the United states wasting its time and playing to the fears of "nativists" with its current H-1B visa policies? Some libertarians say yes--and argue that the U.S. needs to abolish H-1B restrictions.

The U.S. federal government is moving in the wrong direction on H-1B visas, states Alex Nowrasteh, an immigration analyst at the Competitive Enterprise Institute (CEI), a non-profit, libertarian public policy think tank that describes itself as “advancing the principles of limited government, free enterprise, and individual liberty.”

Nowrasteh believes all government quotas, rules and fees associated with temporary skilled worker visas, such as the H-1B and the L-1, should be abolished. Rapid growth in the technology and science sectors of the economy “has forced American firms to scour the world for talent,” he writes in a new policy paper for the CEI. “American businesses should be free to employ the best worker for any job—from anywhere in the world.” asked Nowrasteh why he thinks limitless H-1Bs would lead to more and better jobs for Americans. Many people on the opposing side of the skilled worker visa debate argue that the H-1B, L-1, and other visa programs need more regulation, not less. They claim that both American and foreign multinational corporations use those programs to important temporary skilled labor to replace higher-paid American workers or in lieu of hiring them. What is your response to that claim?

Alex Nowrasteh, Competitive Enterprise Institute: President Obama and Congress placed more fees on some H-1B candidates earlier this year. But they don’t seem to realize that we live in a globalized world where skilled labor is highly prized. Firms like IBM and TCS are going to go where the skilled labor is located. If skilled labor can’t move to the U.S. to work in American firms, those firms will go to where skilled laborers are. That’s economic reality. It’s time our immigration system adapts to it. The government…should stop wasting their time regulating labor markets or assuaging the groundless fears of “nativists.”

What evidence can you provide to support your assertion that there is little direct competition between highly skilled foreign workers and their American counterparts?

The most persuasive evidence comes from econometric models created by [Gianmarco I.P.] Ottaviano and [Giovanni] Peri [“Rethinking the Gains from Immigration: Theory and Evidence from the U.S.,” National Bureau of Economic Research working paper, October 2005]. After tracking employment data and comparing the inflow of foreign workers, the effect [of immigration] on native wages is the opposite of what you would expect for all but the lowest skilled laborers: they went up! You see this especially in geographic regions that experience the most immigration like Silicon Valley. More immigrant engineers require more support staff, like accountants and secretaries, but they also require other engineers trained in different, complementary fields. Often times those engineers are Americans. Since firms typically only hire foreign skilled laborers when they are expanding, the Americans who have worked in these firms for years get more responsibility and move up the chain of command.

IT outsourcing providers argue that Indian-born IT professionals are better able to work as liaisons between their U.S. customers and their offshore workforce. You agree that highly skilled, foreign born workers have “different skill sets” than corresponding U.S. professionals. Can you share some other examples of this?

Another valuable skill set is having business connections overseas and knowledge of other business cultures. For instance, Taiwanese immigrant Nancy Chang co-founded the Texas pharmaceutical company Tanox, which makes enormous sales in East Asia. [Editor’s note: U.S.-based Genentech acquired Tanox for $919 million in 2007; Swiss pharmaceutical company Roche acquired Genentech for $46.8 billlion in 2009.] Ms. Chang’s familiarity with the culture and business practices of Taiwan helped her company succeed over there. That is just one example, but it’s replicated on a smaller scale daily.

What would be the benefit of removing all restrictions, fees and quotas associated with the H-1B and other skilled foreign worker visa categories?

Ideally, anybody with at least some college education who is not a criminal, a suspected or actual terrorist, or a carrier of a deadly and contagious disease would be allowed to enter the U.S. and work here or set up a business. I don’t think the Federal Government, which is incapable of operating a postal monopoly profitably, should be charged with setting arbitrary rules and quotas regarding the number of immigrants that American businesses should be allowed to hire. Employment is a private agreement between American businesses and entrepreneurs and whomever they wish to hire.

One of your arguments for more, not less, H-1B holders it that many go on to start profitable businesses in the U.S. that employ thousands of Americans. Is a temporary visa the route most entrepreneurs take to get a foothold in the U.S.?

H-1B visas are not the only way that foreign entrepreneurs enter the United States. Sergey Brin, co-founder of Google, immigrated to the United States as a child refugee from the Soviet Union. Where would we be without him and such a generous refugee policy? Any immigration system that prevents one entrepreneur or inventor from entering the U.S., whose hard work and discoveries would make our lives better, is too restrictive.

The number of highly skilled and qualified immigrants who would come to the U.S. if it was easier for them to gain entry is many times the current number annually admitted. Estimates of these things are difficult and imprecise, but I would predict at least a five-fold increase in the number of skilled workers in the U.S. in the next decade [if we were to remove] legal barriers. That’s five times as many scientists, engineers, mathematicians and technology workers improving the quality of life for all Americans.

It’s especially difficult in times of high unemployment to make your case that “American businesses should be free to employ the best worker for any job from anywhere in the world.” What’s your message to someone who recently lost an IT services job at say, an HP or an IBM?

Many of the firms started today in the high technology sector were started by highly skilled foreigners. Many opportunities that exist today would be absent without their contributions, not just as entrepreneurs but as scientists and inventors. Everybody is suffering in this economy, but highly skilled foreign workers and immigrants are not to blame. The vast majority of immigrants are decent, law-abiding people who just want the opportunity to work hard in a capitalist economy, like our ancestors did. The government should not harass or impede those people.

If highly skilled foreigners were all deported, those jobs wouldn’t suddenly be filled with unemployed American workers. They would disappear along with the firms, investors, and business people that keep our economy dynamic.

We live in difficult economic times, but America was built by the enterprise, hard work and innovation that immigrants bring. Highly skilled immigrants represent the best attributes of Americans. Americans lose, economically and otherwise, by denying them a chance.