H-1B reform right on time

Last week, a bipartisan pair of senators, Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.), introduced a pro-American H-1B reform bill aimed at ending the chronic abuses of the long-compromised guest-worker program. The timing could not have been better. Not only has the New York Times just begun a new series of reports on H-1B abuse, but also just released is Michelle Malkin's latest tour de force Sold Out which skewers the program and looks to be one of the more important books this presidential cycle. Even traders on Wall Street think the Grassley-Durbin bill's serious. H-1B outsourcer Tata Consulting declined 3 percent last week after it was introduced.

Numerous provisions of the bill would offer big changes to the status quo. Sections 101(b) and 121 would require H-1B-using companies to make a good faith effort to hire American professionals first. Contrary to popular belief, this has never been a requirement under the program. It does currently apply to H-1B-using companies seeking to obtain green cards for their existing H-1B employees, however, this is a smaller part of the overall problem. As H-1B expert, Norm Matloff has written, this change would "bring an absolute sea change to the business of importing foreign programmers and engineers." Companies wishing to import foreign professionals would now be required to list available positions on a Department of Labor website for 30 days before submitting a visa petition. Matloff guesses this alone would shrink H-1B usage by "maybe 70-80 percent." Such a requirement would finally confirm whether or not a "skills shortage" really does exist. Recently exited Democratic presidential candidate, Jim Webb agrees such claims from industry are bogus telling a trade paper in 2007, "I do not support guest worker programs...I do not believe the myth of the tech worker shortage."

Another key provision is section 101(a) which would redefine the program's prevailing wage requirements. Although we're often told the program's designed to attract the "best and brightest", employers are allowed to pay foreign professionals the prevailing wage in a given industry for "entry level" positions. Companies can pay H-1B professionals at one of four wage-levels prevailing in the industry according to their experience. As a result companies are allowed to hire younger and therefore cheaper workers lacking in experience - This is the H-1B's "dirty little secret", says Matloff. In Malkin's book she quotes cosmetic surgeons in San Francisco saying their clientele is mostly anxious American tech professionals. The Grassley-Durbin bill would set the prevailing wage to be the median of all workers in the occupation, regardless of their experience level. This would dramatically reduce the incentives to discriminate against American job applicants whether by age or national origin.

Section 101(d), meanwhile, will restrict employers from hiring H-1Bs within 180 days of a layoff of American workers (expanded from the old 90-day requirement). This would be too little too late from those tens of thousands who've been laid off this year from Disney, Intel and Cisco, but it's nonetheless a welcome improvement.

Title II of the bill would overhaul the L-1B visa, a program increasingly criticized as a way to circumvent the annual caps on H-1Bs. The L-1B applies to so-called "specialized knowledge" employees, usually in the IT industry, who may be transferred to the U.S. from their foreign affiliated employer to work here for up to five years. By executive fiat, President Obama recently expanded the term "specialized knowledge" handing a big subsidy to the IT industry in the form of "hundreds of thousands" of new foreign professionals. In a strongly worded letter to Obama's immigration authorities this past summer, Senator Grassley stated Congress's original intent was to ensure that the class of persons eligible for such visas would be "narrowly drawn." His bill would return the program to its congressional moorings and reign in its displacement effects.

Section 110 would eliminate abuse of the B-1visa. Designed for short-term business stays, the type of work allowed on the visa is limited to average business trip matters, like scouting for a new office. But the only requirements are that the applicant tells their consulate he or she promises to return after the visa expires and that all work-related payments will come from abroad (And yes, being paying from abroad means US income taxes are evaded). Unsurprisingly, the program's perennially exploited. The immigration attorney industry is so fully engaged in this type of fraud they've given the practice its own shorthand acronym, "BILOH" or "B-1 visa in lieu of H-1B."

Although the visas generally only last for 6 months, many nationalities, including Indians, are allowed to restart the clock by simply exiting and re-entering the country. Infosys was caught in 2013 exploiting the program when it was found explaining in company memos that when staff address US immigration officials, "do not tell them your [sic] working." The company managed to avoid being banned from the program likely due to the legal consultant who worked on their settlement: former DHS secretary under George Bush, Michael Chertoff.

Pressure to dull the better parts of the bill and fold in H-1B cap increases will be fierce. The bill's overhaul of the program would do much to curb the billions in immigration subsidies going to the trillion-dollar tech industry annually - an industry already largely founded by taxpayer funded military and university grants. Supporters must remember that the whole goal of the program is to AVOID hiring the American middle class. The Grassley-Durbin bill would end this practice and put Americans first.

Then we will have to respectfully disagree. I do see a need, although rare, for H-1B visas to be used to meet domestic market imbalance. I gave a very real world example where, via government professional licensing issues conflicting with government requirements for providers, demand could not be met no matter what salary was being paid. The total number of licensed professionals in the US was less than the total number of openings in the US.

Even where professional licensing is not an issue, there have been times where industry growth created a number of openings that could not be met by the domestic labor market. Hampering industry would be detrimental to the US being competitive in the world market. It is not a common situation, and the current H-1B system is too broad and open and does not adjust to true need. H-1B visas should be used to keep the US competitive by meeting shortages of high demand professionals, not to depress wages where there is already a sufficient supply.

H-1B visas should be used to keep the US competitive

H-1B do the opposite, it weakens incentive to study STEM in college knowing that quislings are going to undercut them in the market place by cheap foreign imports.

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